Research On China's VAT Legislation

Value added tax(VAT)as the major tax in China,it plays an important role in ensuring financial revenue,stabilizing economic growth and regulating the allocation of resources.To summarize the VAT reform over the past thirty years: it was officially introduced in 1994;it underwent "transformation" reform in 2009;And it comprehensively replaced business tax in 2016.The reform of VAT focused on improving the tax system and tax administration system;however the reform has not been written in law,which does not meet the requirements of the current stage of the"tax by law".On October 30,2017,the State Council executive meeting adopted the"State Council on the abolition of the" People's Republic of China Business Tax Provisional Regulations "and the revision of the" People's Republic of China VAT Provisional Regulations in Accordance with the Decision(Draft)",which promoted the replacing business tax with VAT as official outcome of the law,opened up the credit chain,expanded tax base,built a mutually beneficial relationship between upstream and downstream enterprises;and cleared obstacles in the way of establishing value-added tax legislation system.Promoting the previously mentioned laws is able to consolidate and enhance the outcome of replacing business tax with VAT,which makes VAT legislation urgent task,In the third Plenary Session of the 18 th CPC Central Committee,it clearly stated the principle of "implementing the principle of tax revenue".Besides,the Standing Committee of the National People's Congress determined the schedule and roadmap of the tax legislation process.It is required that all taxes in China should be legalized by 2020.With less than two years remaining,the VAT system is not yet comprehensive and it is at a low legal level.Time has become one major obstacle to the process of promoting VAT legislation.This paper intends to hoping to provide constructive suggestions for VAT legislation process.What needs to be emphasized is that the VAT legislation is the combination ofimproving the legal system and raising the legal level.Those two processes act as one and are indivisible.The legislation acts as guide to the reform process;however,it is based on the outcome of the reform process.The common goal of those two is to modernize both the tax management and national governance.Based on the above ideas,this paper discusses the of VAT legislation from both the "legislation" and "reform" perspectives.The main contents of this paper are as follows:Firstly,a theoretical analysis is conducted on the issue of VAT legislation.This paper reviews the legislation process of value-added tax in China for more than 30 years,expounds the principle and connotation of tax revenue,and analyzes the necessity and feasibility of VAT legislation.Secondly,the current situation and obstacles to VAT legislation are discussed.This paper sorts out the limitation and authority of the tax legislation,explains the tax legislation procedure,discloses the historical reasons for the VAT as Provisional Regulation;and discovers the obstacles and difficulties of the VAT legislation.Thirdly,the extraterritorial investigation of the VAT legislation is discussed.The legislative contents of the foreign VAT countries and the framework of VAT laws are examined in order to provide reference for the value-added tax law of China.Finally,countermeasures and suggestions for China's VAT legislation are proposed: improving the legal hierarchy,standardizing the authorized legislation,distributing the national VAT revenue,improving the VAT system and strengthening the VAT invoice management process.In addition,a framework design of VAT law is also suggested,hoping to contribute to the process of promoting relevant tax laws in China.