Construction Of Anti-avoidance System Of Loss Trafficking In Companies

Loss trading is the arrangement of the company in order to obtain the tax benefitin the market, which is different from the normal behavior of the company. Becausethis arrangement is out of a reasonable business behaviour, violates the law of the tax,and becomes the challenge to the legal tolerance. In order to prevent abnormaltransactions between the companies, the major market economic countries in theworld have recognized the mechanism of such abnormal trading behavior, and havedone the relevant restrictions on the company when it makes up for losses carriedforward. However, in China, there are some problems in the regulation of the taxavoidance for Many person, government agencies and enterprises. First of all, theboundary itself is unable to be clarified between the reasonable tax avoidance and taxsaving boundaries. Moreover, there are many legal loopholes in the legal systemwhich is designed to prevent the loss trading between the companies. On thelegislation, there is legislative confusion in the articles of law and the existing law isof lower level. On the enforcement, enforcement usually is out of of the cautioussupervision and timely execution. In addition, the specific tax incentive guidance isbeing absent.This paper is focused on the behavior of loss transactions, with the comparativeanalysis, empirical analysis, qualitative analysis and other multiple analysis methods,to discuss the relevant issues, clarify the concepts and discuss the relevant system. With the reflection on the system of our country, and other foreign institutionalregulations, this paper is to provide suggestions for improving the system of makingup for losses carried forward between our companies. In short, this article is totallydivided into six parts:The first part is the introduction, which simply discussed the background andsignificance of this paper. In this part, the research methods and literature review inthis article between the loss of trading behavior will be introduced.The second part introduces the cause of loss of transactions between thecompany and unique features of this arrangement. Then the reasons for allowingcompensate for losses carried forward and the specific way of compensate for lossescarried forward will be told. Finally, the application boundary of provisions to coverlosses carried forward as well as the reason for setting a valid anti-avoidance ruleswill be discussed.The third part introduces the current regulations and the restrictions of ourcountry on the loss transaction between the companies. And the analysis of theseprovisions deficiencies will be given.The fourth part is the comparative study, which introduced the relevant system ofthe Germany,United States, Australia and Singapore and other countries. With acomparative analysis of national systems, this paper is trying to find some inspirationand experience.The fifth part is to clarify the concept of tax avoidance and the differencesbetween tax evasion and tax efficient in the beginning. Then discussing of the natureof tax avoidance and cases will be followed. Finally, the construction andimprovement of the anti-avoidance system in loss transactions between companieswill be given.The sixth part is the conclusion of this article, which summarizes some ideasand thoughts of this paper, and some shortcomings of the paper will be pointed out inthe final section.