Research On The Legal Regulation Of Unfair Tax Competition Between Local Governments In China

Since the reform of tax distribution system, our local government independent interests mechanism has gradually formed. In order to meet the development of local economy and attract resources and labor, tax competition has gradually become the important means of local competition. And tax competition has positive externality and negative externality. Events in recent years such as Foxconn's migration, Chengdu headquarters' economy show that the effect of positive externality of tax competition does not fully revealed, but the negative external effect is widespread. As a result, how to regulate the improper tax competition and truly realize healthy competition among local governments become the focus of common concern. The main way of tax competition is to formulate and implement tax preferential policies; the scope and strength of tax preferential policies directly affect the extent of tax competition. We noticed that the tax reform with the center of tax preferential policies has been launched. In September 2014 the State Council promulgated Decision on Deepening Reform of Budget Management System, proposing the policies of strengthen revenue management, standardize tax preferential policies; in November the State Council issued Notices of Standardizing the Tax Preferential Policies"( Guo Fa [2014] No. 62), which requires a comprehensive specification tax and other preferential policies,and maintain a fair competitive market environment; in 2015 the revising Tax Administration Law stipulates that local governments, governments at all levels of authorities, institutions and individuals made decision of tax reduction and tax exemption in violation of laws and administrative regulations, and those decisions shall not be carried out by tax authorities and should be reported the higher tax authorities; in the same year, aiming to fully implement the tax relief policy, standardize tax relief matters, the State Administration of Taxation issued Tax Relief Policy Code Directory(2015 73 rd announcement), which shall be updated monthly. Nevertheless, overall, China's legal regulation system of unfair tax competition is still missing and needs to be improved.This thesis took the tax competition theory as the cornerstone, took the preferential tax policies as the entry point, around the concentrated tax competition of economic development zone's real situation, made comment on the practical problems aroused by the current unfair tax competition among local governments and its legal reasons. Many suggestions of improving the unfair tax competition among local governments have been proposed by the thesis.This thesis is composed of four parts.The first part introduces the definition of tax competition and its double effect, the relationship between tax competition and tax incentives, the definition and characteristics of tax unfair competition.The second part combines the background and status of the unfair tax competition among local governments in China, analyzing the specific performance and practical consequences of unfair tax competition.The third part analyzes the causes of system of unfair tax competition among local governments, including incomplete fiscal decentralization, irregular local financial autonomy, and the lag of tax competition accountability mechanisms.The fourth part proposes some reasonable suggestions based on the three parts above, reference through legal means to regulate the government tax competition between outside experience, including perfecting fiscal decentralization system, regulating the local fiscal autonomy rights, improving the tax competition accountability mechanism.