Theoretical Construction And Empirical Study Of General Anti-avoidance Rules

The general anti-avoidance rules are different from the specific anti-avoidance rules,and refer to the construction of tax avoidance behavior determination standards through abstract general terms.They do not target specific types of tax avoidance methods,but are generally applicable to all tax avoidance situations.It is often criticized for violating the certainty requirements of the law under the rule of law.But the certainty of law is intended to guarantee the guiding role of law.General anti-avoidance rules can meet the certainty requirements of the law by improving the rules themselves.From another perspective,the general anti-avoidance rule itself is a supplement to the loopholes in the tax law,and therefore meets the certainty requirements of the law.The legal basis of general anti-avoidance rules is the ability-to-pay-principle,which is derived from the principle of equality,and the principle of substantial taxation derived from it.Both the general anti-avoidance rules and the specific anti-avoidance rules are anti-avoidance rules.But They are different in terms of legislative ideas,applicable logic,applicable conditions,and degree of avoidance.Thus,they are actually two different types of rules.Therefore,the general anti-avoidance rule cannot be identified as the anti-avoidance principle based on the abstraction of terms.In terms of application,specific anti-avoidance rules shall prevail.The general anti-avoidance rules may be applied to re-characterize the facts of the transaction in which the case involves arrangements that fall into the scope of application of the special anti-avoidance rules but do not meet the applicable type conditions.Compared to the special anti-avoidance rules,the general anti-avoidance rules are in the “second place”in application,and they are used to supplement loopholes of law.As for the relationship between domestic general anti-avoidance rules and tax treaty,in terms of application,when there are not general anti-avoidance rules in the tax treaty,or the tax arrangement does not meet the applicable requirements of the anti-avoidance rules in the tax treaty,based on the agreement in the tax treaty,the interpretation of the agreement,and by reference to judicial practice,it was concluded that the tax treaty prohibits the application of domestic general anti-avoidance rules only if there is a conflict.The general anti-avoidance rules in the tax treaty shall apply when the arrangement in question is in compliance with their applicable conditions.In addition,in terms of the applicable range of the domestic general anti-avoidance rules and the general anti-avoidance rules in tax treaties,when the former is wider than the latter,the latter shall prevail,and when the former is narrower than the latter,the former shall prevail.The general anti-avoidance rules focus on the determination of the substance of the corresponding tax facts.It’s the task of other tax rules to determine how to levy tax and make credit based on this fact.Three core components,which are taxable arrangements,tax benefits and purposes,can be extracted from the provisions of the applicable conditions of general anti-avoidance rules in various jurisdictions.Through the study of the statutory provisions and judicial practices of various jurisdictions,it is concluded that the scope of tax arrangements should include a single step and a combination of several arrangements,and economic substance tests should be conducted;the scope of tax benefits should include underpayment,non-payment of tax,deferral of payment and the acquisition of tax credits,and should be tested for the degree of relevance to the arrangement;tax avoidance should be the main purpose or one of the main purposes,and the object and purpose of relevant tax provisions should not be a standard.There are several problems in Chinese current general anti-avoidance rules,such as low legislative levels and differences in the applicable standards.Based on the current status of the Chinese legislation,judicial practice and anti-tax avoidance needs,and learning form the construct and application experience of general anti-tax avoidance rules in other jurisdictions,it is recommended to uniformly stipulate Chinese general anti-tax avoidance rules in the law,include economic substance test into the application conditions,include tax deferrals and tax credits into the scope of tax benefits,and replace tests that do not have a reasonable business purpose with a main purpose test.