On The Legal Regulation In Weakening Capitalization Of Tax Avoidance

In developed countries with higher social and economic development,market demand for capital is higher and the capital structure of enterprises has been paid attention earlier.It has gone through a long journey from the corporate taxpayer's maximization of enterprise's value to the enterprise capital design,to the emergence of the tax shield theory,from the national legal level to the capital weakening tax avoidance regulation,which has provided a lot of lessons and experience for the current international legal regulation of capital weakening taxIn 2008 China established the new "Enterprise Income Tax Law," on the capital weakening tax avoidance regulation in the legal system,which borrowed from the international practice in the capital weakening the identification and regulation of tax avoidance In the definition of capital weakening tax avoidance,we distinguish the weakening structure of capital and the tax avoidance of capital weakening,which means the attitude of the law to the weakening structure of capital is to control but not eliminate completely.The state allows enterprise taxpayers to deduct the interest of the enterprise's creditor's rights in the scope stipulated by the rules,before the amount of taxable income of the enterprise is approved.The state has resolutely combated the weakening of capital that is recognized by the law as a tax-avoidance objective when it is beyond its prescribed scope.In the capital weakening tax avoidance mode,the International mode is chosen,one is safe harbor mode and the other is normal trading mode.Safe Harbor Mode is also called fixed transaction mode,which refers to the degree that the State stipulates enterprise taxpayer's capital weakening in advance,in the range stipulated by law,the enterprise's capital weakening arrangement is safe.But if the degree is more than the rule designed,the enterprise should accept the adjustment of the state capital weakening tax avoidance rules.The normal mode of trading is also called independent trading mode,which is to compare the operating activities of enterprise taxpayers with non controlled party,or whether the unrelated party has a special advantage,if there is a special advantage in the debt,the enterprise will be considered to violate the independent trading mode,The interest generated would not be deducted from the financial costs prior to the approved taxable income.In our country,we adopt the eclectic approach in capital weakening tax avoidance mode,taking the safe Harbor mode as the main mode and the normal trading mode.In 2008,when we adopted the capital weakening tax avoidance,we took into account the domestic demand for capital,on the other hand,in order to guarantee the national tax,in the enactment of laws,we adopted an abstract generalization in the provisions of the key elements of capital weakening tax avoidance.In accordance with social and economic development and the theory research on practising capital weakening tax avoidance,the law enforcement department has quantified the key elements of capital weakening tax avoidance,but all of them are in the lower level departments ' regulations,which are dispersed and failed to form a unified system.After 10 years of accumulation and exploration,as well as the changes in social and economic development,the old law of the weakening of capital is not competent,so perfecting the legal provisions of the weakening of our capital tax avoidance is imminent.This paper embarks from the general capital weakening structure theory,then carries on the systematic analysis to the enterprise taxpayer using the capital weakening tax avoidance.From the intention of tax avoidance which the enterprise taxpayer takes the advantage of capital weakening to the external performance of the capital weakening tax avoidance,we can confirm the quantification standard of the capital weakening tax avoidance law.We can analyze and study the law enforcement penalty of the weakening of tax avoidance.By summing up the foundation of our current capital weakening tax avoidance laws and regulations,the paper illustrates the problems existing in the regulation of capital weakening tax avoidance in our country's law,and makes some comments on the provisions of some developed countries ' laws in the capital weakening tax avoidance as well as puts forward some suggestions on perfecting our country's legal regulations of weakening tax avoidance.The thesis is divided into four parts.In the first part the paper expounds the concept of capital weakening tax avoidance,including the connotation and denotation of capital weakening,including the causes of the weakening of capital,the influence of capital weakening tax avoidance and the necessity of capital weakening tax avoidance regulation.In the second part the paper sums up the specific stipulations and existing problems of our country's law on the weakening of capital tax avoidance.In the third part the paper analyzes the legal provisions of the capital weakening tax avoidance in Britain,America,Germany and France,and sums up the lessons and the significance of tax avoidance of capital weakening in China.In art four,the paper puts forward some suggestions on perfecting our country's capital weakening tax avoidance legal regulation through the analysis above.