Study On The Tax Attributes Of "Debt Investment With Equity Character"

"Debt investment with equity character" with its special form of the transaction structure attract a large number of investors,making it difficult to affirm its tax attributes.In the paper,some cases about " debt investment with equity character" in civil law are used as reference,and commercial law,civil law and tax law as the legal reference.Combined with the theory and judicial practice of distinguishing debt and equity,the paper tries to solve the " Debt investment with equity character" problems in tax attributes by constructing the judgment standard of tax law to distinguish debt and equity,.In the first part of the paper analyzes the definition of the "debt investment with equity character" by analyzing the background of the "debt investment with equity character" and summarizes the views in the distinction of the tax law,to clear the debate of affirming tax attributes in enterprise income tax law.The "debt investment with equity character" with different tax attributes has different tax burden.Because the "debt investment with equity character" is a kind of hybrid financial instruments and the enterprise income tax law is difficult to clearly define the nature,the second part of the article seeks to solve the problem in identifying the tax attributes of "debt investment with equity character" by following the rules of the tax law.Provided that there is no provision of the tax law and relationships between tax law and private law in the process of fact-finding,whether substantive taxation principle applied or not is a question that the article need find.Only when a transaction is a tax avoidance,the substantive taxation principle applied.First of all,according to the "Enterprise Income Tax Law","Implementing Measures for Special Tax Adjustment(Trial)" and " The General anti-avoidance measures(Trial)" determine whether the "debt investment with equity character" avoid tax or not? Based on the reasonable business purposes and the economic substance standards,the paper finds that the "debt investment with equity character" has its reasonable business purposes.It is clear that affirming tax attributes should be based on the form of law rather than the substantive taxation principle.The third part of the article improves the rules in tax law by summarizing the theory and practice of distinguishing the debt-equity hybrid financial instruments.At last,the paper solves the problem about affirming the tax attributes of the "debt investment with equity character".