Extraterritorial Jurisdiction Applicable Taxes

With the process of global economic integration accelerating, transnational capitalflow is becoming more frequent and more diverse. Multinational Corporation as a maincarrier of transnational capital flow, has not only accelerates its numbers but also plays amore significant role in Economic exchanges between countries. Tax laws, in accordancewith different countries’ interests, were drafted based on their own rights and economies,will inevitably lead to conflicts between tax laws among countries. As multinational taxpayers, Multinational Corporations’ business behavior has crossed national boundaries andwas under the jurisdiction of two or more State Taxation Administrations. Extraterritorialapplication of tax jurisdiction is a reflection of a country’s extraterritorial jurisdiction in taxlaw area, which performs as a taxation object is under tax jurisdiction and is taxed in thesame taxation form at the same time by two or more countries. The conflicts between taxjurisdiction in a country’s extraterritorial application and other country’s territorialapplication lead to international tax duplication issue. Just because tax avoidance is a mainfactor that affects financial revenue of overall countries, anti-tax-avoidance has alwaysbeen a major subject of study in most countries of the world. According to differentcircumstances, many countries have made their own anti-tax-avoidance measures. Thoughthese measures have prevented international tax avoidance somehow, it couldn’t eliminatetax-avoidance activities fundamentally. In order to remove the conflicts between differenttax laws, every country should be restricted by the principles of international communityand international law.Under these domestic and international circumstances,“VODAFONE TAXCASE”-one of the classics in the world and China’s “JIANGDU CASE” has caused moreand more concern from specialists in theoretic and academic area. By theoretic studyingthe extraterritorial application of tax law and tax jurisdiction, analyzing multinationalcorporation’s international tax avoidance measures, from exploring the relations between“international tax avoidance” and “extraterritorial application of tax law and taxjurisdiction”, this article has concluded specific ways of international tax payer avoidinginternational tax by taking shorts of the extraterritorial application system in tax laws.Based on those international experiences, this article also analyzed China’s NO.698DOCUMENT, offered suggestions in how to prevent “international tax avoidance” and inissues we should concern in our construction of anti-tax-avoidance system.