Tax Competition Under The Global Economic Development

The globalization of economic increases the possibility of a country tax policy having an effect on the other countries. If a government gives foreign investors a much more favorite tax policy, generally speaking, the other governments will follow under the great pressure of developing economy. During 1980s,The countries all try to offer competitive tax policies, which forms what we called harmful tax competition. Harmful tax competition leads to the necessity of coordination.however, the most feasible way is to build regulations against international tax avoidance conducted by multinational enterprises on the basis of respecting national sovereignty. This thesis is composed of introduction, epilogue and text, this essay defines harmful tax competition and two forms of harmful tax competition and discusses the harmful results. This also illustrates the necessity of counteracting harmful tax competition. It then analyzes two form of harmful tax competition practices. Harmful tax competition practices includes two forms, which are harmful preferential tax regimes and tax haven. The way of utilization and determination standard are mainly stated.the legal measures of fighting tax competition practices was also talked, Unilateral legal measures are controlled foreign company legislation and transfer pricing tax rules.Bilateral legal measures include prevention of tax treaty shopping and exchange of tax information.Multilateral lagal measure include multinational cooperation in tax matters.it also talked the insufficiency of current legal measures and the suggestion of changes of the negative influence of harmful tax competition practices in china.reconsiders of chinese current preferential tax regimes and find out many defects, at the same time, states several improving suggestions.