A Study Of Expatriation Tax

The expatriate tax is a product of economic globalization,the high nominal tax burden of wealthy people,and national fiscal pressure.Wealthy people generally apply higher marginal tax rates,which increases their incentives to avoid tax;economic globalization promotes the global flow of capital,technology,and labour,which creates conditions for wealthy people to manipulate tax residency to avoid tax;the taxpayer's change of tax residency and transfer of taxable assets will directly bring about changes in the size of the tax base and affect the state's fiscal revenue.Expatriate tax refers to a special tax treatment when a resident taxpayer manipulates his or her tax residency through expatriating to make his or her taxable income escape from national tax jurisdiction.When a taxpayer expatriates,the tax authorities will liquidate the income and property,and the income tax will be levied in advance on the capital gains that have been born but not yet realized.The expatriate tax has the following characteristics.The expatriate tax is a tax “levied on the rich”.The covered taxpayers usually only have a certain asset or total assets exceeding a certain scale.The tax basis is unrealized asset gains,which is mark-to-market based on deem sales.The tax rate applies the applicable income tax and property tax rules and tax incentives are diversified.The expatriate tax is a special tax treatment formulated by developed countries to combat tax avoidance and prevent asset flight.It is of great significance for safeguarding national tax sovereignty and promoting social equity.Recent years,the scale and growth rate of immigration and asset transfer of wealthy people in China have been surging,which is not conducive to the stable development of the economy and the realization of social equity.It also infringes upon the state's tax sovereignty and causes tax losses.The huge benefit released by China's economic development since the Reform and Opening-up will probably leave China with the immigration wave of wealthy people.How to delay or control the immigration wave of the wealthy people in China at this stage has become an urgent problem to be solved.The expatriate tax provides an effective response to China's wealthy people immigration and its derivative problems.At present,the domestic research on the expatriate tax is still in its infancy.When domestic scholars discuss the system,there are controversial conclusions about the name,nature,position,and taxation object of the expatriate tax.The domestic research mainly stays at the level of international experience summarization and policy exploration.The theoretical basis of the implementation of expatriate tax has not been analyzed from the perspective of domestic law.Is it necessary for China to formulate and implement the expatriate tax? How should the system be positioned and implemented.This paper introduces the expatriate tax system of the United States and the European Union,and provides experience for China to introduce the expatriate tax in the future,which has practical significance.From the perspective of tax sovereignty principle and tax fairness principle,it is of theoretical significance to analyze the theoretical basis of China's implementation of expatriate tax.Finally,the article puts forward the preliminary plan of introducing the expatriate tax system in China,and provides suggestions for China's legislation on the expatriate tax in the future.This paper adopts the literature research method,through the retrieval of the domestic literature and international literature of the expatriate tax,and exhausts the literature materials related to the topic,so as to fully understand the status quo of other scholars' research on the expatriate tax,so that this paper can move forward the research on this topic.At the same time,this paper classified the complicated expatriate tax systems in the world into four different type according to the happening time of tax liability and latent income.Each country's tax expatriate tax or a specific regulation for the taxpayer's departure will fall into four classifications.The classification research will make the results of this paper more effective,create academic background and context,and specify the research objects for this paper.This paper consists of four chapters.The first chapter aims to introduce the problem and delineate the research objects of this paper: analyzing the status quo and consequences of the current rich immigrants and asset transfer in China;clarifying the name and system position of the expatriate tax;classifying the expatriate tax into four types according to the tax liability occurrence time and latent income;specifying the research objects are the narrow expatriate tax and the trailing tax.The second chapter introduces the US and EU expatriate tax system,presents the status quo and characteristics of the expatriate tax of the United States and the EU,and analyzes the different legal reasons behind it.From the perspective of vertical time,this paper sorts out the development history of the US expatriate tax system.From the horizontal perspective,this paper analyzes the development status of the EU's expatriate tax under the guidance and influence of the European Commission and the European Court of Justice,and strives to provide experience in both horizontal and vertical dimensions to implement the expatriate tax in China in the future.The third chapter is the theoretical analysis.A country should have tax jurisdiction to wealth and its appreciation in the country,but without the aid of the tax deduction system,as long as the assets held by the resident taxpayer have unrealized gains,the change in the status of the resident taxpayer will result in the tax loss of the exiting country,resulting in unfair distribution of tax jurisdiction between the exiting country and the destination country.The expatriate tax system helps to promote the fair distribution of international tax jurisdiction between the exiting country and the destination country,and maintains the tax sovereignty of the exiting country.The expatriate tax complies with the requirements of the principle of tax fairness: on the one hand,it promotes horizontal equity and vertical fairness among taxpayers;on the other hand,under the specific expatriate tax rules,the income tax is levied on unrealized assets,which will not hurt the capital and inhibit the vitality of the market,and therefore meet the requirements of the state and the taxpayer's tax fairness.The fourth chapter puts forward the preliminary plan of introducing the expatriate tax in China.The expatriate tax is a supplement to personal income tax and is subordinated to personal income tax,which should not increase the tax burden.China should set up appropriate wealthy taxpayer test according to national conditions,and should adopt a narrow expatriate tax.Deferred tax rules and tax guarantees may apply in different situations according to different destination countries.