Study On Dividend Economic Double Taxation In China

Economic double taxation on dividend is always a universal problem of tax law faced with countries all over the world. All the countries, especially western developed countries, have constantly exploring and revolute to eliminate dividends economic double taxation according to the domestic actual conditions and international economic environment, in order to promote the development of their country’s economies. Among the whole amount of economic investment in China, private investment accounts for nearly half of the domestic investment. The tax revenue of corporation income tax and individual income tax are growing year by year, the problems of dividend economic double taxation become more and more serious, and the negative effects of dividend economic double taxation on economy are gradually emerging. At the same time, because the income tax can not be transferred to other subjects, the pain of the subjects being taxed is the most. And individual income tax is one of the best illustrations of human rights protection for a country’taxation. So this paper plans to use the principles of tax law to analyze economic double taxation on dividends. To eliminate the economic double taxation can not only meet the need of economic development, thus enhance the competitiveness of Chinese corporations, but also can promote the development of the tax system of our country, and protect private property and human rights.This paper contains four parts:Part1introduces and analyzes the development of the laws and regulations concerning dividend economic double taxation of China. Part2applies principles of tax law, including ability to pay principle, actual taxation principle, competition neutrality principles, macroeconomic regulation principle, to analyze the new rule about individual income tax on dividend. Part3introduces some models, like modified classical system, partial inclusion system, no shareholder of taxation of dividend system, imputation system, split rate system, corporation deduction system and partnership system, concerning eliminating dividend economic double taxation in other countries or areas. Part4analyzes the reason, background and negative effects of economic double taxation, and on the basis of that analysis, this paper learns from experiences abroad and combines the actual conditions of China, at last makes suggestions of combining partial inclusion system and split rate system to eliminate dividend economic double taxation.This paper embodies innovation in the following aspects:First, this paper will apply some important principles of tax law to analyze dividend economic double taxation, especially use the basic principles of tax law to analyze. At the same time, this paper also applies economic method to analyze the new rule and give suggestions. Second, this paper refers to the experience of Taiwan and make a comparison research thus to decide which model to use for eliminating dividend economic double taxation in China.