The Enlightenment Of OECD Mixed Mismatch Rules To Improve China's Taxation System

Nowadays,with the fasten speed of the globalization and development of the economy,multinational companies(MNCs)become more active within countries.MNCs good at shifting their profits and loss through variety of financial arrangements throughout the world in order to avoid tax,which leads to the outcome of Base Erosion and Profit Shifting(BEPS).One of the methods they use is called Hybrid Mismatch.In this way,since there have been defferent ideas of financial instrument and hybrid entities,which cause the result that the income be deducted in one tax jurisdictions and exempted in another jurisdiction.Finally it's been double non-taxation.At present hybrid mismatch has become a very important way of avoiding tax,and has caused serious tax evasion.Since BEPS have already become the mutual enemy of all the economies,OECD together with Group 20 published a report to fight against it.Through variety of methods proposed by OECDthis report become a valuable model for countries to corporate to face the tax problems.‘Neutralize the Influence of Hybrid Mismatch' is second achievement of the BEPS action,OECD put forward a number of suggestions to neutralize the influence of hybrid mismatch.As the victim of BEPS activities,China also take part in the action of the BEPS project.In facing the new challenge of current situation,China published a series of Tax Act to strengthen the anti-tax avoidance work.This paper is mean to recognize the main structure of hybrid mismatch through the research of this issue.I will be on the base of practice of deferent countries,and gather experience for solving the similar problems according to the specific national conditions of China.This article will start from the research background and importance ofthe issue,and introduce the recent research of the world in the part of literature review.And then I'd like to introduce the basic knowledge of hybrid mismatch,which is focused on it's concept,harm,and outcome of the hybrid mismatch.After that I will use a number of cases to analyses the primary method of hybrid mismatch arrangement that MNCs often used,at the sametime I will find the suggestions that OECD proposed and the way the tax bureaucracies of different countries to eliminate negtive outcome of hybrid mismatch.Finally,,I am supposed to summarize the experiences and combined the actual situation of China to come up with new ideas to neutralise the effection of hybrid mismatch.