The Comparative Analysis Research Of Life Insurance Proceeds In The Inheritance Tax Law

Most countries in the world carry out the inheritance tax, which is not an important source of government revenue. But inheritance tax has very important significance in regulating the social income distribution and ensuring the equitability of taxes. China had planned to levy inheritance tax and released the draft of Inheritance Tax Act in 2012.But the stipulation that life insurance proceeds are exempted from inheritance tax generates much discussion. According to the China Individual Income Law, life insurance proceeds are exempted from IIT. It doesn’t make a difference between fixed-term insurance and whole-life insurance. With the rapid development of life insurance market, there are so many new type of life insurance, such as universal insurance, risk sharing and connection postal insurance. In the background, we should reform the tax system and make sure that the life insurance can’t be exempted form inheritance tax.The part one of this article focuses on the concept, the nature, characteristics and function of the life insurance, and then analyzes the inheritance taxability of it. The qualitative analysis of the life insurance explains the mutual relation between life insurance and inheritance tax. On the one hand, life insurance proceeds should be taxed. On the other hand some people expect life insurance be helpful in tax avoidance.Considering development history of the inheritance tax system is long enough in America and England, and our country is similar with Germany and Japan in genealogy of law. It’s necessary to learn from abroad and the successful experience. The part two starts from four parts because of the four states. Each one introduces the tax object, the taxpayer, the taxes and tariff, preferential tax.So the main content of part three is the comparative analysis research on aforementioned four states, expect to summarize beneficial experience and realize the purpose of reference. Firstly sum up the common features of life insurance in foreign inheritance law. Secondly introduce the distinction of their inheritance tax set purpose and preferential tax. America and England are more neutral, nevertheless Germany and Japan tend to make more concessional policy for encourage consumers to purchase life insurance. It is necessary to research and analysis on life insurance proceeds in inheritance tax law, to find out problems and deficiencies in our own tax system, to guarantee the equitability of taxes.My paper mainly used the comparative analysis and integrating theory with practice in the process of researching. Based on China’s national conditions, the paper puts forward inheritance tax system solutions to conform to China’s actual situation, finally to expect to provide valuable reference suggestions for the future tax system reform.