On The Trust Tax-related Information Transparency Legal System

Trust, stemming from Britain, is a very flexible economic behavior to administer property for others. It mainly refers to the trustee commissioned by the client to be engaged in property management, mortgage, sell, inheritance, and management of heritage and other such matters, and the engagement in the establishment, reorganization, consolidation, merger, dissolution and liquidation of company, the issue of securities, debt service, etc. Both the trustee engaged in these economic activities, and other main body directly involved in the economic activities are bound by the corresponding laws. With regard to trust, when the trustee is engaged in the economic behavior of trust, the prerequisite is credit-based. It involves three parties, including the client, the trustee, and the beneficiary. The trust relationship is established among the three parties. This is a special relationship and behavior. In China, “The Law of Trust” has been made to adjust and regulate this relationship and behavior, however, specific trust tax law system is still in absence. The emergence of trust brought the difficulty of application of the current tax law system, for example, the subject of trust tax payment is not clear, a tax object is difficult to define, tax link is unclear, applicable tax rate cannot be unified. Because the trust is designed to be flexible, the use of the trust can effectively reduce the tax burden of the parties. It caused people to avoid tax via trust to make big profits, brought the loss of national tax and the reduction of the taxpayers tax compliance, and to some extent, hindered the development of economy and society. With the speeding up of economic globalization, China has joined the WTO, participated in the international anti-avoidance action within the framework of the G20, acknowledged and accepted the OECD international tax transparency standards and principles of information exchange. In this context, we should fully understand and inherit the essence of the trust system and make trust to serve the needs of economic and social development. We should also improve tax-related information transparency and to consummate the trust legal system such as the trust tax law system, safeguard the rights and interests of state tax and taxpayers. It requires us to correctly define the meaning of trust tax-related information transparency, to master its characteristics, to clarify its relationship with the anti-trust tax avoidance, to make a detailed analysis of the necessity of building up the legal system of tax-related information transparency, and on this basis, to put forward the ideas on building up the legal system of tax-related information transparency. To build up the trust legal system of tax-related information transparency, it shall determine its target, including the form of objectives and goals; It shall set the principles of tax fair, substantial tax, convenient access to trust tax related information, trust tax benefit balance, trust tax related information sharing; It shall build up specific systems supporting legal system of tax-related information transparency, including the ownership of information, information records, legal access to information, information exchange system, and putting forward the design scheme.