The Construction Of Advance Tax Rulings In China

Ever since Sweden established advance tax rulings in last 1950 s, until now 104 countries and regions all over the world have set up this system. The main purpose of the ruling is to resolve tax-related risks caused by the uncertainties of the tax law and reduce the tax-related litigation.Although in some States the number of application is not very much every year, it can’t erase the important role that played in parts of the tax-related issues.Advance tax ruling wasn’t established until 2012.State Administration Of Taxation sighed an agreement with the following three companies,including China National offshore oil Corporation, China life insurance(Group) company and the Siemens(China) limited company, in the agreement both parts agreed to strengthen cooperation to jointly prevent taxation risks and the agreement stipulated in the large companies can apply for an advance ruling for the first time. End of 2013 Masteel group first put this ruling into practice, which caused concern and discussion of the system in theoretical and practice cycle. 46 th article of the draft amendments to the taxation law(draft for soliciting opinions) attempt to introduce the ruling legislatively.With the increasingly complex of tax laws,uncertainty during the tax practice is enhanced, thereby increasing the taxpayers ’ tax-related risks and against taxpayers ’ interests. For the purpose of deepening the fiscal and taxation system, strengthening tax collection and management, and safeguarding the interests of taxpayers, the author believe that introduction of advance ruling system is necessary. In view of that the current specific provisions has not been issued in China,through comparison and analysis of foreign experience and also based on the situation of our country,the author attempt to give some little suggestion to the construction of advance tax rulings.To make the research more convincing, the author collects data directly by visiting the taxation website of other countries and regions, such as US,Japan and Hong Kong.The author mainly adopts two methods in this article: one is the comparative research. By comparing the system between United States, India, Hong Kong and other countries, we can absorb the advantages of the advance rulings in other countries and at the same time, put forward some related Suggestions; The second is case analysis. Based on the research of the specific case,the author tries to analyze the controversial problems of the system in practice.The article is divided into five parts:The introduction part of the article discusses the research background and research significance, the existing research both at home and abroad, and the structure of the thesis thought, etc.;Chapter1 is an overview of the ruling, including the advance ruling concept definition, characteristics and the domestic and foreign development present situation, etc.Chapter2 first makes a brief introduction of the international legislation,focus on the legislation of America,Hong Kong and India,including its content and procedure.Further compares the similarities and differences between the countries(regions) in advance tax ruling system, in order to figure out the common rules for China’s reference. Research mainly refers to the publication in the national tax official website and the OECD reports in 2008.Chapter3 first analyzes the current practice and the controversial problems of advance tax rulings in China based on the research of the specific case.Then in combination with foreign practice, points out the possible problems in practice, including that the application fee is too high, tax audit and inspection rate is higher and the risk of the commercial secrets and personal privacy leak. Finally,combined with China’s conditions,the author poses some suggestion to the ruling.The last part makes a summary of the whole essay,and also expressed the author’s wish to continually focus on the latest achievements in theory and practice circle and make further improvement suggestions to advance tax ruling system.