Research On Anti Avoidance System In Cross-border Equity Acquisition

Experts in the field of laws and business have always concerned aboutcross-border acquisitions between the US and Chinese enterprises. Concerning taxincidences, equity acquisition is generally accepted in the globalization strategy.However due to the increase of tax-avoidance, Chinese legal system should consideradapting from the more sophisticated US legislation on principle of economic lawsand taxation, in order to balance the interests among different parties.To build our preferential tax system in the field of cross-border equity acquisitionby learning from the more advanced US legislation (partially from British and Indianlegislation), the author is trying to conduct research on the ongoing policies. And allthe efforts are made for the challenge of legal transplant. The author accomplishes thisthesis by mainly researching for the first hand materials in US and China for thereason that the author is seeking to present the original policies. The thesis includesfollowing four parts apart from the introduction and conclusion.In Part1, the author overviews the legal system for anti-avoidance in taxpreferential treatment of cross-border acquisition. The author breaks down and definesthe concept of anti-avoidance in tax preferential treatment of cross-border acquisition.Furthermore, the author looks back through the legislative history and tries to conclude the current concerns.In Part2, the author introduces the systemized legislation in US on taxpreferential treatment and the tax avoidance. The author compares the US andChinese systems, including the actual controller，50%restriction, active trade orbusiness, continuity, GRA, pseudo outbound equity acquisition and CFC.In Part3, the author analyzes the feasibility of legal transplant regarding the USanti-avoidance system. The author goes through three different perspectives, whichare legislative history of US, economic law principle and taxation policies, and tries toexplore the methods of anti-avoidance in China.In Part4, as a conclusion, the author summarizes the above mentioned methodsand measures of anti-avoidance. The author points out that it is plausible to buildspecific foreign acquisition standard system in China by adapting tax preferentialpolicies. Thus we can improve the social taxation environment, complete thehierarchy, coordinate the autonomy of the will and taxation, strengthen theinternational cooperation and legalize the VIE for outbound acquisition.