On Denial System In The Field Of Tax Law Applicable

The system of corporate independent Personality and shareholder limited liability make the company develop quickly, produce huge economic and social benefits. At the same time, it also provides an opportunity of the abuse of corporate personality and limited liability for shareholders, and becomes a means and tool to avoid contractual obligations and infringement. When shareholders pay taxes to tax administrative bureaus, they begin to do tax avoidance through the corporate personality. As a result, they harm the benefits of the special creditors which are the country’s tax benefits. The current tax law on the regulation of tax avoidance through the corporate personality is limited in range, however, it is becoming increasingly complex in the form of tax avoidance through the corporate personality. On the regulation of tax avoidance through the corporate personality, different countries have formed their own regulatory measures. Application of disregard of corporate personality to the field of tax law is one of the important measures.According to the status of research in the application of disregard of corporate personality to the field of tax law, there are two very different points of views:Negative Theory and Positive Theory. However, it is all known that scholars are against the abuse of corporate personality to obtain inappropriate tax benefits. The difference of two sides is that the former believe that Substantive Taxation Principle is sufficient to resolve the problem. Disregard of corporate personality is unnecessary to be applied to the field of tax law. However, whether Substantive Taxation Principle is sufficient to resolve the problem of tax avoidance under all circumstances, the answer is no.The prevalence and severity of tax avoidance through the corporate personality, the defects of Substantive Taxation Principle all determine it is necessary to introduce the system of disregarding of corporate personality to our tax law. Based on the theory of tax obligation distribution relationship, and under China’s circumstance of Legal construction process, to adapt to the development of China’s tax law, considering the correlation between the legal value of disregard of corporate personality and functions of our tax laws, it is feasible to apply disregard of corporate personality to the field of tax law in China. However, based on the particularity of tax law, applicable elements of disregard of corporate personality in the field of tax law and commercial law must be of qualitative difference. Seeing from the main element, the application of disregard of corporate personality in the field of tax law not only includes judicial office, but also tax administrative bureaus. However, the infinite expansion of executive powers is not suitable for its application, it is necessary to strictly limit the law enforcement power of tax administrative bureaus. People who abuse the corporate personality still do not become an advocate of disregard of corporate personality. From the behavior element, the standard of abuse requires further research. From the result element, you need to remove the pre-procedure which means claim the rights to the formal debtor. Otherwise tax administrative bureaus have the power expressly granted by law to levy taxes from the real taxpayers which is the abuse party.To apply disregard of corporate personality to the field of our tax law, considering from the substantive law, establishing the system through legislating is still the optimal choice, and the legislative mode should be Special Anti-Avoidance Rules which fits the actual situation in China. Considering from the procedural law, because disregard of corporate personality is applied to tax administrative bureaus and judicial office, it clearly needs to make provisions separately from the administrative procedures and judicial procedures, and here is the shallow design of the provisions. Under the operating mechanism based on good procedures, it also needs to improve the supervision and the relief system. Considering separately from the administrative procedures and judicial procedures, to construct disregard of corporate personality suit for the field of our tax law, is the supreme choice.