The Study On Legal Issues Of Effectively Dealing With Tax Avoidance Of Controlled Foreign Companies In China

In the context of economic globalization,China has continuously made new achievements in the development of its foreign-oriented economy.China has ranked among the top three in terms of global outbound direct investment flows for seven consecutive years.However,the huge annual outflows of China 's foreign investment have not been transferred back to China in time.And a considerable part of them stay in the world's recognized tax havens.On the one hand,these huge direct investment stocks have eroded China's tax base,on the other hand,it is not conducive to the legitimate competition of "going out" enterprises,and it has a negative impact on China's tax sovereignty and the healthy development of the national economy It poses a serious challenge.While China further develops its foreign economy,it should pay sufficient attention to the issue of tax evasion in the international tax havens by resident taxpayers in the form of controlled foreign companies.The release of the BEPS action plan provides a good reference model for improving the anti-tax avoidance system of China 's controlled foreign companies.China 's successive accession to the International Tax Administration and Mutual Assistance Convention and CRS have provided opportunities for China to regulate the use of controlled foreign companies for tax avoidance.Our country should implement the latest results of the BEPS action plan in a timely manner,improve the anti-tax avoidance system of controlled foreign companies as soon as possible,and protect our tax base from erosion while helping enterprises further develop abroad.This article first introduces the background and theoretical basis of the controlled foreign company,and introduces the basic content of the controlled foreign company.Secondly,this article introduces the existing problems of the anti-tax avoidance system of controlled foreign companies in China in the form of cases: in terms of control determination,the standard of "control" is not clear;on the subject of tax payment,the anti-tax avoidance system with individuals as the main body needs to be improved;In terms of taxation objects,China has not clarified the negative income,and the existing substantive law is difficult to adapt to the development requirements;in the determination of reasonable business needs,there is a lack of specific and clear identification standards;in the exemption clause,the existing exemption clause is too simplified,And has not been updated and adjusted for a long time.Thirdly,this article uses a comparative analysis method to analyze and compare the anti-avoidance systems of controlled foreign companies in the US,Japan,and the BEPS action plan,and summarizes relevant experiences that can be used for reference in China.Finally,this article combines advanced overseas legislative experience with China's national conditions,and makes the following suggestions for the improvement of China's controlled foreign company anti-avoidance system: introducing presumed shareholding rules and detailed substantive control standards for China's control standards;Legislation on tax avoidance;clarifying the criteria for identifying reasonable business needs;clarifying the attribution of burden of proof;refining the types and identification of taxable objects;updating the "white list",introducing fixed-rate micro-exemptions,etc.At the same time,this article proposes to introduce a grace period system,The exemption period exemption system and the detailed form of the tax department's responsibilities strengthen the effective protection of taxpayer's rights to achieve a balance between the country's tax sovereignty and the taxpayer's legal rights.