Study On The Rules Of Controlled Foreign Companies In China's Individual Income Tax Law

In the process of globalization of economic development,transnational corporations play an important role in international service trade.However,multinational companies use deferred tax rules to set up subsidiaries in low-tax areas and hoard the profits of the parent company in the subsidiaries under the control of the subsidiaries so as to reduce or evade the property tax or income tax levied by the resident countries.This way directly leads to a large loss of domestic tax revenue.In order to crack down on such tax avoidance,China has introduced the rule of controlled foreign companies in its anti-tax avoidance legislation.The "Enterprise Income Tax Law of the People's Republic of China" promulgated in 2008 provides the rules for controlled foreign companies for the first time.This principle is systematically explained in the "Implementation Measures for Special Tax Adjustment(Trial)" passed in 2009.In 2019,the rule of controlled foreign companies was added to the new Individual Income Tax Law,which combated the tax avoidance behavior of Chinese taxpayers who used the control of foreign companies to shift China's tax base to controlled foreign companies.The rules of controlled foreign companies in the tax law copy the rules of controlled foreign companies in the enterprise income tax law in content,but the rules of controlled foreigncompanies in the enterprise income tax law itself have the problem of weak operability,and the tax law has its own characteristics,it needs to belong to a tailor-made supporting clause belonging to the tax law itself.Therefore,we should establish a scientific and comprehensive individual income tax anti-avoidance rule management system in the process of perfecting the rules of controlled foreign companies in the Individual Income Tax Law.Through analyzing the defects of the rules of controlled foreign companies in China's Individual Income Tax Law,this paper puts forward suggestions on improving the relevant policies and contents of the rules of controlled foreign companies in China's Individual Income Tax Law in the process of combing the rules of controlled foreign companies in various countries.The text of this article is structured as follows:The first chapter summarizes the rules of controlled foreign companies in China's individual tax laws.This chapter focuses on the anti-tax avoidance theory of controlled foreign companies,the background of the emergence of controlled foreign company rules in China's Individual Income Tax Law and the basic contents of controlled foreign company rules in China's Individual Income Tax Law,and briefly combs the relevant contents of controlled foreign company rules in China's Individual Income Tax Law.The second chapter discusses the problems existing in the rules of controlled foreign companies in China's tax laws.This chapter mainly analyzes the rules of controlled foreign companies in the individual tax laws and their collection and management,analyzes the problems existing in the rules from the following six aspects:tax payers,controlling entities,controlling contents,tax objects,exemption clauses and reasonable operation needs,and analyzes the problems existing in the collection and management of the rules from the tax collection and management level of personal income tax for foreign personnel and the voluntary disclosure system.The third chapter draws lessons from the rules of foreign controlled foreign companies.This paper mainly introduces the contents of the rules of controlled foreign companies in the third action of the United States,Britain,Japan and BEPS,providing reference ideas for improving the rules of controlled foreign companies in China'sIndividual Income Tax Law.The fourth chapter optimizes the path of controlled foreign companies in China's tax laws.The content of this chapter is mainly to put forward suggestions to solve the problems existing in the rules of controlled foreign companies in the second chapter of the tax law,including: by expanding the tax subject and control scope,clarifying the control connotation and adding control tests,clarifying the scope of "reasonable business needs" and the tax object,perfecting the income calculation method,perfecting the exemption clauses,consolidating the collection and management foundation and strengthening the risk management.