Research On Perfecting China’s CFC Tax System Under The Background Of BEPS

The Controlled Foreign Corporation(CFC)tax system is considered as a measure to prevent tax avoidance,or an extension of the resident’s tax base.The background of its emergence is the continuous development of multinational companies under globalization.Due to the different tax legislation status of various countries,it may lead to policy failure,profit transfer and long-term tax deferral.The CFC tax system is designed to prevent resident companies from retaining profits abroad by abusing tax havens,thereby delaying or even avoiding tax avoidance in their home countries.Currently,more and more countries in the world have implemented this measure.The outcome of the third action plan of Base Erosion and Profit Shifting(BEPS)-"Developing Effective Controlled Foreign Company Rules" is intended to provide countries with legislation and policy development on the management of controlled foreign companies.The recommendations recommend best practices for countries to develop controlled foreign company taxation systems.China introduced the CFC tax system in 2008.The State Administration of Taxation announced the Implementation Measures for Special Tax Adjustments(Draft for comments)in September 2015,introducing some of the best practice recommendations in the BEPS action plan,such as the concept of "attributable income",and clarifying its determination method.However,China’s CFC tax system still needs to be improved in many aspects,such as omission of tax payer identification and unclear control standards.With the rapid development of internationalization and modernization of taxation in the world today,China’s economy is also undergoing a transition to high-quality development.The "One Belt and One Road" development strategy has been gradually implemented.Under this background of the era of major changes,a more complete CFC suitable for China’s national conditions is established.The tax system meets the requirements for tax development,and is also conducive to the implementation of China’s "introduction" and "going out" strategy,and improve the international competitiveness of enterprises.This paper mainly uses literature reading,comparative analysis,case analysis and othermethods to make comparative study on CFC tax systems in various countries.Based on their advanced experience and combining with the actual situation of China’s tax collection and management,it puts forward suggestions on improving the CFC tax system in China,which has strong practical significance.This paper is structured into five chapters: the first chapter is an introduction;the second chapter mainly defines CFC-related concepts;the third chapter mainly describes the relevant regulations and existing problems of China’s CFC tax system;the fourth chapter mainly elaborates the CFC tax system of developed countries and its experience;the fifth chapter mainly combines the third action plan of BEPS to provide suggestions for optimizing China’s CFC tax system.