Legal Thinking On The Construction Of Advance Tax Ruling System In China

The advance ruling of tax is an explanatory document on how tax laws should be applied to future transactions by tax authorities on the basis of a taxpayer’s application.It can control risks from the source and reduce the transaction cost of business activities.Tax authorities can establish a trusted relationship with taxpayers and promote tax collection effectively as well.Nowadays,there are three obstacles,being not compatible with our legal system,difficult to guarantee our tax revenue and a complement to the existing system,to establish tax advance ruling system in our country.The author analyzes these from a similar foundation of practice in our country,a clear distinction between advance rulings and tax planning and a balance between fairness and efficiency,proving that it is work to build the advance tax ruling in our country.And to build this system specifically,the main difficulties in how to construct this system are content of system and effectiveness of decisions and remedy.The author discusses these through foreign experiment and the balance between fairness and efficiency,combining with our country’s reality.The conclusions are choice of administrative model,adjudication by provincial tax authorities,pilot of enterprises for the time being,making a strict delimitation of the scope of a ruling while leaving room for discretion,an explicit ruling being binding only on the tax authorities and the entity ruled that there was no remedy,but procedural issues could be remedied.