The Study Of Disregard Of Corporate Personality In Tax Law

In the early2008there was happened a case that Chongqing State Revenuedenied the existence of holding company of a Singapore company to recourseenterprises income tax, which is the first practical application of disregard ofcorporate personality Principle in the field of anti-tax-avoidance tax in our country.Soon after in order to cope with such serious tax avoidance situation and endless taxavoidance methods, The State Administration of Taxation published No.698document in December2009which was a kind of Regulatory Documents，so far it hasestablished a tax regime of disregard of corporate personality in the PRC Tax Law.Before the disregard of corporate personality was introduced in PRC Tax Law,there is significant difference among theorists, compared pros with cons，it is quitewise to introducing this principle. And based on the practical needs of theinternational anti-tax-avoidance, there has special significance establishing disregardof corporate personality in Tax Law. As its theoretical basis of tax debtor-creditorrelationship and principle of tax equity, there has full reasonable and legitimate reasonand therefore it can also be well rooted in the soil of PRC law. there are both closedcontact and much similarities between this principle and disregard of corporatepersonality in PRC Company Law, material imposition principle, but there arecharacteristics itself, which is a special tax regime. when The State Administration ofTaxation has taken the introduction of this regime into account, they nipped problemsin the bud as carefully as possible to apply this regime in practice.Although the current Tax law has specified the tax authorities can make use ofthe regime of disregard of corporate personality to anti-tax-avoidance activities, butapplication scope of this regime in domestic tax system is not clear, even in somecases, there is only few guiding cases that released by The State Administration ofTaxation, which is far away from dealing with the vagaries of corporate tax avoidanceactivities. Therefore, it can be better clear the application scope of disregard ofcorporate personality application by combining it with specific cases, and point outappropriate direction for anti-tax-avoidance activities of domestic tax authoritiesnecessarily.There are four years when disregard of corporate personality has been written inthe PRC Tax Law and there are a few cases in the practice that tax authority using the regime to the field of anti-tax-avoidance, but in order to make better use of thisregime, it still need to be improved in many ways, such as legislative basis, applicableprocedures, remedies measures, in which there has much defects. On this, it is the firstneed to improve the system of legislative rank, which can provide a basis oflegitimacy and rationality for tax authorities’ power of disregard of corporatepersonality. Then it is necessary to introduce more specific normative documents torefine with the applicable standards and applicable conditions, so that it can bettercontrol the free judgment of the tax authority to avoid the result of benefit unbalanceand the opposite effect. Finally, not only empowering or limiting the power of taxauthority but also giving the taxpayers the right of effective remedy in the proceed ofthe tax enforcement,“where there are remedies there are rights”, only by this way itcan ensure the taxpayers right of effective remedy from the legal system and judicialsystem. In addition when considering improving the above relevant system problems,we can studying and referring the foreign tax legislation and enforcement, recognizingthe advantages and disadvantages of the domestic tax legislation and practice, andthen make best use of the advantages and bypass the disadvantages to improveDisregard of Corporate Personality of our tax system from multiple angles.