Research Of Corporation Income Tax On Equity Transfer Of Non-resident Enterprise

Since the reform and opening up,China's economy has maintained a rapid growth.A considerable part wealth of dividend during the economic development is cumulating to the equity and other equity assets.Huge amount of capital appreciation has become significant cross-border tax sources.The issues of income tax on equity transfer of non-resident enterprise can be divided into two different sides-the direct equity transfer and the indirect equity transfer.In the theoretical research and practical operation,there have been a lot of detailed discussions about the two topics.However,most of the discussions either talk about the direct equity transfer or the indirect equity transfer.There is little research that is for these two issues in common.This rises the author's further thinking which the specification of the writing is also.Through in-depth study of the two typical cases,the article analyses their respective special problems and try to find out the common problems of the cases.Compared with the mature experience,the article tries to explore perfect,feasible,practical,detailed legal advice.For a non-resident enterprise equity transfer of income tax,this article along the thinking frame of writing like as following.The research mainly divides into three parts.The first part and second part are both in the form of case analysis to explore the non-resident enterprise equity transfer process through two controversial tax law cases.The third part is to discuss the common problems.The first part is a case mainly about directly transferring equity which should be considered as special restructuring.First of all,the article focuses on the tax authorities in the case of a controversial deal,and emphatically expounds the business combination have different connotation,thus further analysis of applicable laws and regulations particularity is harsh restructuring the conditions stipulated in conclusion,and correct the tax authorities in the case that equity transfer behavior does not belong to merge,which cannot apply special treatment of restructuring.It also compares the differences between different laws and regulations,and points out its shortcomings.The “reasonable business purpose” factor will play an important role in whether the transfer can apply to special treatment Tt plays a key role in restructuring which also brings uncertainty.Finally,the tax legislative suggestions are trying to make it perfect in view of the special restructuring.The second part is mainly about indirect equity transfer of tax.Based on deep understanding,this part tries to explore the way to make the relevant tax system better.Based on the analysis of specific case,the author confirms the taxation rights.Then the article discusses the understanding of “economic substance” and “reasonable business purpose” which are two key factors in the basic theory of tax law.Finally,the legal suggestions are for the perfection of indirect equity transfer regulation.After the analysis of the above two cases,the third part is the discussion of the common problems.First,the two cases are mainly concentrated on the generality of the principle of reasonable business purpose which is based on the application of “substance over form”.“Reasonable business purpose” principle is the source of enforcement discretion.Always depending on whether the action has reasonable business purpose which is a fuzzy concept to judge the economic essence of equity transfer,this brings great uncertainly.Law can only play a role after the transfer.There is a general hysteresis which makes it unable to use to judge the essence of all forms of trades.Based in this,the article further analyzes the tax legal doctrine and issues of “substance over form” principle and how the legal principle and the rule of law should cooperate to work together to solve problems in actual operation.In this paper,I use the case study method and comparative research method for analysis.On the use of case study method,this paper selected the two relatively typical non-resident enterprise equity transfer tax cases,and the integrated use of data,charts is to aid analyze related issues.In addition,this paper compares the mainstream theories of “merger” and “division”,“tax avoidance” and “tax evasion” and studies the definition of theory.The use of comparison research method is not just in order to compare,the pose is to study and draw lessons from it.First of all,this paper demonstrates the two types of equity transfer tax situation of the non-resident enterprise and introduces the relevant legislative system respectively;Second of all,the analysis of direct and indirect transfer of equity summary anti-avoidance legislation in common;Thirdly,this paper analyze the applying condition of the principle of reasonable business purposes and the economic standards,and provides the improvement ideas;Finally,this paper analyzes the value essence embodied in the principle of tax legislation in order to draw practical significance in specific cases.There are some shortcomings of this article.The two cases this paper chooses are both overseas.Especially for the part of direct transfer of equity,this paper only discusses its problem from the perspective of corporate restructuring,which cannot reflect more problems inequity transaction.Second,enterprise reorganization involves a large number of accounting principles.The author lacks the detailed knowledge of accounting,so the relevant content cannot be involved in the case analysis.