The Research On Tax Law's Regulation Of Thin Capitalization

Thin capitalization is a means of tax avoidance taken by enterprises.In recent years,thin capitalization is adopted widely by enterprises because of its flexibility and imperceptibility,and thus brings about many-sided drawbacks,which lead to loss of tax sources,impact financial revenues and even threaten national sovereignty of our country when involving transnational enterprises.Besides,thin capitalization could distort spontaneous adjustments,disturb normal orders of the market,and do harm to fair competitions among enterprises.Although related systems to regulate thin capitalization have been established in our country,there are still lots of problems existing in these unsound systems to deal with,which include mainly three aspects.First of all,related systems on thin capitalization in our country don't correspond with values of basic principles of tax law;second,there are also some defects in the structure;and third,the specific designs of present systems need to be improved further as well.The problems mentioned above lead to the results that the effects of their implementations are far from ideals.So this article tries to analyze present situations of tax law's regulation of thin capitalization in our country and existing problems on the basis of explaining related theories,and at the same time investigate related foreign systems and draw lessons from them,in order to put forward targeted countermeasures.Besides introduction and conclusion,this article can be divided into four parts:Part One is mainly about legal analysis about thin capitalization and tax law's regulation of it.This part on the one side introduces the concept,causes,operating mechanism and harmful consequences of thin capitalization,and on the other side analyze theoretical basis of tax law's regulation of thin capitalization.Part Two mainly discusses the present situation of tax law's regulations of thin capitalization in our country and existent problems.This part firstly shows the framework of present systems regulating thin capitalization in tax law in our country by arranging related regulations,and then points out the disadvantages in present systems from three levels: values of systems,structures,and specific technologies.Part Three is about practical investigation to foreign tax law's regulation of thin capitalization and enlightenment got from it.More concretely,this part selects America,England,Italy and Germany to analyze and compare their regulating systems of thin capitalization in tax law to draw lessons that should be learned by our country.Part Four puts forward strategies to improve tax law's regulations of thin capitalization in our country.This part proposes strategies from four aspects aiming at the problems mentioned.First,upholding appropriate values of systems,which must be attained through basic principles of tax law,protection of tax payers' interests,and preservation of social public interests;second,constructing rigorous system of tax law's regulation;third,designing specific systems scientifically;strengthening international communication and cooperation.