| The income taxation systems of domestic enterprises and foreign enterprises in China coexist for more than 20 years, which maintains up to 2006. Meeting the necessity of our national economic development and social development, we design the system, market competition conditions that are uniform, canonical and fair, must be established to compete between equals for the foreign-funded enterprises and the domestic ones. An innovative type of tax that has a uniform of applicable scope, tax ratio, standard deduction and preferential policy, should be set up. February 15,2006, the ministry of finance held in China accounting auditing standards system conference, issued 39 accounting standards 48 of certified public accountants and auditing standards. The new accounting standards and the implementation of China’s accounting in 2006 marks the establishment of Enterprise Accounting Systems and Certified Public Accountants and Auditing Standards, which are adapted to the requests of our market economy and tend with international usual practice. The release of new accounting and auditing standards have a far-reaching impact on enterprise accounting activities, and bring great influence on constituting Ming Dynasty law, because Income Tax Accounting is an important part of Enterprise Financial Accounting. Comparing with the old accounting standards of income tax, the new one has changed a lot, which has a great influence on the income tax accounting method of China. March 8,2007, the Fifth Session of the 10th National People’s Congress was hold in Beijing, at which the Enterprise Income Tax Law of the People’s Republic of China (hereafter the "EIT Law") was discussed. And on the March 16, enterprises income tax law were approved by voting by an overwhelming majority, and implemented formally since January 1,2008. And before it, income tax system are made up of internal and external capital enterprise ones. The Income Tax Law of the People’s Republic of China for Enterprises with Foreign Investment and Foreign Enterprises voted through at the Forth Session of the 7th National People’s Congress, and the Provisional Regulations of Income Tax Law of the People’s Republic of China issued by the State Council on December 13,2009, were repealed.But, the debut of the new enterprises income tax law sets off an animated discussion about its lingering influence. What are on earth the new enterprises income tax law’s effects on China’s foreign direct investment? How will the "false foreign capital" phenomenon will be affected? The problems, existing in the variations of Tax Ratio and Deductions Method, the engagement of tax preferential policy, and so on, make the relevant tax and accounting problem more complex, and increase the difficulty of tax actual practice. Under the background of the important reform this tax law and the accounting policy, what can enterprises, as a main part of market, do actively to achieve the uniform between tax compliance and reasonable avoidance, has became an important strategic subject. After the two taxes were merged, in this paper the core problem to solve is that how to maintain the consistency and stability of our foreign direct investment policy, which also the aims of this paper. Secondly, it makes China economics depend on external capital and aggravate the unbalance of domestic and foreign economy. Thirdly, the fundamental reason why false foreign investment prevails is super-national treatment policy of the old income tax law. In the new enterprises income tax system, super-national treatment tax policy for the external capital enterprises plays a very important role in attracting amounts of foreign investment, increasing job opportunities, increasing domestic supply of capital, promote economic growth, and so on. But the most of external capital introduced by tax preference are labor intensive industry of small investment scale, and concentrates in the domain-specific of economic development zones, high and new technology industrial development zones, and littoral with tax preferences, which leads to some defects of inferior quality foreign investment, irrational structure of foreign investment, the gap expansion of regional economy. The merger process of the two types of tax is a benefit gambling process among the internal and external capital enterprise, Commerce Department, Ministry of Finance. There is a general idea that the debut of the new enterprises income tax law conforms to the objective requirements of China’s economic situation and economic main development, which advantages outweighs the disadvantages. The vast majority of our foreign investment comes from the famous tax havens of Hong Kong, Cayman Islands, British Virgin Islands, and so on. There is a popular belief that about a third of foreign investment belongs to return on investment. False foreign investment not only makes tax imposed erosion, reducing the revenue, but also influence negatively the health and order development of our foreign economy. What impacts the new income tax law will exert on internal and external capital enterprise Finance, and what’s the different would it be for the ones of different trades. These research problems are very important, and the thesis discussed in this paper.In the reform of enterprise income tax in 2007, the relevant government authorities, according to the general requirements of scientific development concept and full-fledged socialist market economy, on the basis of the tax system reform principle of "simple tax system, the wide tax base, low tax rate and the strict tax collection and management", referencing the international experience, establish the uniform applicable specification of enterprises and the scientific enterprise income tax system, which creating the fair market environment of competition for every modern business. the debut of the new enterprises income tax law is an important monumental moment of the socialist market economy gradually improvement in the process of Chinese economic construction, which will have deep effect on both internal and external capital enterprises.The implementation of new enterprise income tax law marks that the laws relative revenue has been further improved, which passed by National People’s Congress in the legislation form. Comparing the old tax law issued by Department of State in the form of administrative rules and regulations, its legislation level is enhanced. The new tax law does a great deal of revision for the old one, such as, redefining of the taxpayer, making the main classification equal, reducing tax rate, which have different influences on internal and external capital enterprises, different trades, different region, and so on. Firstly, we introduce the background of new enterprise income tax law reform, compare the difference between the new enterprise income tax law and the old one, and analyze the advantages of the two laws, and the significance of implementing it is proposed, legislative principles is put forward further, based on which, we finds that the new law has many advantages, which are supplying the level playing field for all enterprises, promoting change in the main source of economic growth and upgrading of an industrial structure, promoting the coordinated development of China regional economy, enhancing business investment ability and e the independent innovative ability, improving the quality and level of utilization of foreign capital, diminishing the policy arbitrage of false foreign investment, and so on. We discuss its impact on internal and external capital enterprise finance, and some advises are proposed to improve the new enterprise income tax law. They are conducive to adapt the new tax law better. Then, we introduce the three principles in the new enterprise income tax law, namely, tax principle of legality, principle of tax equity and taxation efficiency principles. Therewith, we analyze the different impact of the new enterprises income tax law on all types of enterprises in detail, especially, the effect on domestic enterprises finance and external enterprises. Finally, some advises are proposed to improved the new enterprise income tax law. One is solve the problems that itself of the tax law, including tax preferential policy, the problems in the transitional period, the problem about the concept of taxpayer, management of tax avoidance; The other is to solve the problem about relative measures, including converting administrative law enforcement idea, controlling enterprise cost, administrating authority of taxation, and so on. So, it is obvious that the new enterprise income tax law will has a tremendous impact on various aspects of national economy, and most of which, are positive for market economy, domestic enterprises and most of external ones, and promote the attractiveness of FDI. On the other hand, it has produced some negative influences, involving some external enterprises and some economic spheres like tax revenue. Generally, implementation of the new enterprise income tax law has the benefits outweigh the risks for our economy development. The negative effects, the new law generated on our economy, are analyzed, and the main reason came from many aspects. The other is that the tax law itself is imperfect; one is that the relative supporting measures are short; therefore, we should find a solution depending on the concrete situation to diminish the cost of reform..Theory is the foundation of the research. We study a large number of domestic and foreign literatures, absorb the essence, and then analyze concretely a series of problems in the process of the reform of enterprise income tax law, especially, study the impact prediction after reform and the further improvement. At the same time, we analyzed empirically the above theory with the help of the first-hand data from practice, integrating theory with practice, integrating cases and criterions, integrating static analysis and dynamic analysis. In the process of this research, we analyze by the data from the literatures of domestic and abroad at macro levels, and by the ones from practice at micro levels, which achieved good effect. However, because of personal knowledge level and objective conditions constraints, although we try to be perfect, some satisfying accepts still exists. One is that the knowledge in quantity statistics is limited; we encountered difficulties in analysis of data and empirical results were biased, generally, they are practical. One is that due to the restrictions of objective conditions, some data are not enough new and overall, especially, all correlative major data about Foreign-funded enterprise can’t be achieved, which results in absence extent and depth in the research. Finally, due to limitations of knowledge and insufficiency of practical experience, we analyze the problem on its deep level, not explore the reasons concealing in this problem back. So the proposed policy suggestion lacks conviction and maneuverability. |
PDF Full Text Request