Vat Legal System

Today taxation has gone deep into every field of our life directly or indirectly. Where is tax system, where is law, which has been a truth proved by Chinese and foreign, ancient and modern history development of tax system. While, what is regretting is that at present, Chinese tax law is still wandering at the fairly low level. Being the biggest tax category, value-added tax law also exists varied abuse. Chinese value-added tax law is based on Value-added Tax Temporary Ordinance of PRC (which was enacted by the State Council in 1994). Since it carried out, it has get obvious effects. While Chinese marketing economy has been developing continuously, now, it is on the key stage of changing.On the one hand, as the further adjustment and perfection of economic structure and the faster of asset reorganization and technology improvement, it needs timely continuous perfection of present value-added tax system. On the other hand, to increase domestic demand and to guarantee economic enhancing quickly, it is sure that we must increase the government investing expense continuous, which 1imit the reformation of value-added tax system from the finance point. Being highest cost, biggest influential project of our tax system reformation, whether the value-added tax reforming is successful is concerning the whole situation and it is the most important thing.At first, the paper analyzes the history and relative theory of value-added tax law system and confers it at the guidance of theory. The value-added tax is a high effect and neutrality tax category, which owns superiority of broad tax foundation, eliminating repeated taxation and strict internal controlling system, as well as effective protecting the competition power of domestic products in international market and bringing integrated and active effect on the aspect of one country's finance, economy and external trade. So, it has gradually accepted by the whole world and has become an international tax category. Since the importing of value-added tax at the end of 1970s, Chinese value-added tax has fairly well exploited its advantage and has become the most important tax category. It has played an important role in improving economy development, deepening enterprise reformation, strengthening national macro-controlling ability.How ever, as the continuous changing of marketing situation, the old value-added tax law has not adapted present economic environment on many points. The main four defects are: production-style value-added tax has been back of present economic situation, the value-added taxation field is expected to be enlarged, the standard to establish the tax payer's identity disobeys equity principle; receipt administrating system is in great need of perfecting. The tax system reformation of this time is the fourth Chinese tax system reformation after the new tax system establishment in 1950, the substitution of tax payment for profit delivery of enterprise in 1983 and the complete unite in 1994. Chinese value-added tax law system has basically reached the demand of the establishment and development of socialist marketing economy. But during its enacting, there are series of problems, which makes the reformation be imperative. In connection with the above four flaws and the relative tax system reformation of this year, the paper brings out the solution: to transit from production-style value-added tax to the consumption -style, to enlarge the taxation field to service industry such as communications and transportation, construction, invisible assets transition, realty sale and gradually enlarge to agricultural produce, to reduce the taxation rate of small scale tax payer; to create model of "connection of accounts and tickets" and to employ the second-class tax system as the cooperation with value-added.