Research On The Interest Deductions Limits Rules From The Perspective Of The Latest Rules Of OECD

With the increasing level of cross-border integration,transnational groups can easily raise the level of debt of individual group companies through intra-group financing and use the special tax treatment of interest expenses to transfer profits,such as the group tends to transfer more debts to high tax rates countries,deducts the interest from the actual third party interest expense through the internal loan,and uses the financing of the third party or group to finance the production of tax-free income.These acts seriously violate the national tax base and affect the country's tax revenue,tax sovereignty and tax fairness.This paper aims at proposing a series of recommendations to improve our interest deduction restrictions rules.The thesis is consisted of the following four parts.The first part is the introduction,The main content of this part are the research background,the research significance,the research method and the literature review;The second part is about the principles of interest deduction.Firstly,the interest and interest deduction are defined,and then the differences between interest deduction restrictions rules and thin capitalization rules are analyzed.Furthermore,in-depth analysis of the interest shifting caused by the tax base erosion of the theoretical reasons,including legal reasons,economic reasons,and an example is used to analyze the transnational groups using the financing arrangements to erode the tax base of a class of specific operations;then,the interest deduction restrictions rules' purpose and the risk of prevention is introduced;Finally,the source of law of interest deduction restrictions rules are introduced,including international origin and national origin.The third part is the analysis of the rules of interest deduction restriction in transnational tax.Firstly,the rules of interest deduction in representative countries are classified and analyzed.The relevant rules of each country can be divided into six categories.Principles,strengths and weaknesses,and the ability to curb BEPS risk are analyzed;and the use of these interest deduction restrictions rules in most countries is not a single application,but a combination of several types of rules;secondly,analyzing the report of BEPS action 4 deeply.Finally,the legal practice of some countries and regions studying from the OECD's latest interest deduction restriction rules are introduced.In the end,the thesis puts forward some examples of the rules and regulations of the OECD.The fourth part is the suggestion of improving the rules of interest deduction in our country.Firstly,it explains the necessity of improving the rules of deduction of interest.Then,from the bilateral tax treaty signed by our country and the relevant provisions of our domestic law,it can be concluded that the current anti-tax avoidance clause is divided into special anti-tax avoidance clause and general anti-avoidance clause,the interest deduction restriction rule belongs to the special anti-tax avoidance clause,our general anti-avoidance clause as the purse clause still has many deficiencies to be improved.Finally,the writer puts forward some suggestions on how to improve the specific rules of interest deduction combined with the actual situation in China.It is suggested that the fixed ratio rule should be linked with the profit index,and then the interest rate deduction limit is more important.Introducing the group rules is important,it's necessary to improve China's relevant tax legal system.At the same time,to enhance our interest deduction limits rules' Law stage is also very necessary.