An Empirical Research On Cases Of Advance Tax Ruling In Mainland And Hong Kong

There are basically three options when constructing the theoretical basis for the advance tax ruling(ATR)in mainland China,namely to derive it from the pure administrative law,the combination of administrative law and private law,or pure private law.The theories of "tax service","administrative explanation" and "quasi-administrative act" feature in the scope of pure administrative law.When administrative law combines with private law,the latter provides a more adequate theoretical source,resulting in mainstream theories of "administrative contracts" and "administrative promises",From the perspective of pure private law,the tax contract is the typical theory.ATR in Hong Kong follows the "user-pays principle" in public economics.Based on these theories,the mainland and Hong Kong form "tax management-oriented" and "market-oriented"models respectively.Currently,the cases of ATR in the mainland can be divided into policy-oriented and specific rulings.The ATR cases in Hong Kong can be divided into several subject headings,including definition of profits and taxability-related issue,changes of accounting date,tax treatment for losses and tax issues of employer and employee.Under the statutory principle of taxation,ATR in Hong Kong does not form a solid basis for legality due to the absence of the regulatory measures from the Board of Inland Revenue.And the amendments to the Law on the Administration of Tax Collection should,as compliant as possible,implement the statutory principle of taxation.While ATR will inevitably challenge the principle of tax equity,we can utilize the open mechanism of ATR borrowed from the experience of Hong Kong to maintain the balance.From the angle of the principle of tax efficiency,with the cross-regional rulings and the rulings from National Tax Bureau and Local Tax Bureau combined,the costs of tax collection and management can be reduced to some extent.The amendment to the Law on the Administration of Tax Collection is an opportunity for the mainland to deal with the relationship between ATR and tax compliance agreement,tax case approval system,and advance pricing arrangement.With the improvement of the information disclosure mechanism and the administrative examination and approval system,the mainland can form a complete system of taxpayer rights protection,and thus build a harmonious relationship between tax authorities and taxpayers,and improve the certainty of application of tax law.