Research On Legal Problems Of Tax Incentives Of Employee Stock Ownership Plans

The employee stock ownership plans(ESOPs)originated in the United States in the1950 s.In the early 1980 s,China's employee stock ownership system is obviously affected by the West.With the development of the socialist market economy,ESOPs combined with financial innovation shows different patterns and characteristics,such as ESOPs,Restricted stock and Stock appreciation rights which have already demonstrated their institutional superiority and are of great significance to improving the efficiency of production and operation of enterprises and giving full play to the value and role of human capital.Therefore,in order to make ESOPs develop in China,government continues to implement ESOPs through fiscal and tax regulations and financial measures in the next decade.Unfortunately,there are still a series of problems in the current policy of tax incentives.For example,tax law and regulations which are detailed and operational are mainly formulated for listed companies rather than non-listed companies,the policy difference between the two is larger,current tax rate's design is difficult to motivate long-term shareholding and deferred tax incentives have limited effectiveness,etc.So,on the basis of in-depth analysis of the nature and consequences of these problems,the author use the case design method and learn from the advanced experience of the employee shareholding tax system in other countries to provide suggestions on the problems existing in China's current tax incentives.In a word,firstly,the author believes that the concept of listed companies and non-listed companies should be weakened in the classification criteria for employees' shareholding tax incentives and tax incentives are only for incentive ESOPs according to the nature.Secondly,we should expand the coverage of tax incentives and take financial intermediaries,companies that hold employee stocks and shareholding platforms into consideration.Thirdly,implement excessive progressive tax rate according to the length of holding may be worth using to encourage employees to hold shares for a long time.Fourthly,it is recommended to apply the deferred taxation policy with conditions in a unified manner and strengthen the connection with the social security system such as the pension system.In addition to the introduction and abstract,this article is divided into four parts.After expounding the overall construction of China's current employee share tax system and thestatus quo of tax incentives,the first part focuses on the main issues of current employee share tax incentives that are combined with case design to demonstrate.The second part analyzes the problems from the perspective of legal theory,using the principle of tax fairness and tax neutrality,so as to emphasize the necessity of perfecting the tax incentives for ESOPs.The third part adopts the method of comparative to examine the mature experience of the preferential taxation policies of ESOPs in the United States and France in the design of preferential objects and the design of preferential systems to seek the highlights to learn in China.The fourth part is mainly about the author's legal thinking and suggestions for improving the tax incentives for ESOPs in China.It is hoped that through these suggestions and the considerations in the article,it will provide useful ideas for improving the tax incentives for ESOPs in China and alleviating the tax burden of individual income tax for employees,so as to promote the healthy and sustainable development of ESOPs in China.