Research On International Tax Avoidance Based On Offshore Trust And Its Legal Regulation

Offshore trust,a new development of trust in the era of economic globalization,has become the main method of international tax avoidance for high net-worth people because it can maximize the nature of trust to evade financial supervision on the basis of friendly tax system of international tax havens.With the increase of high net-worth people in China,and the implementation of testamentary trust formulated by the Civil Code,the number of offshore trusts set up by high net-worth people in foreign jurisdiction will further increase,which will lead to use offshore trusts to evade tax quite frequently.In this context,this paper comprehensively uses the methods of comparative analysis,normative analysis and empirical analysis,analyzes the relevant theories of offshore trust about tax avoidance,generalizes and compares the measures of major countries and the international society to regulate offshore trust tax avoidance,and puts forward some suggestions on the improvement of China’s regulation of offshore trust tax avoidance,which is of great significance to improve anti-avoidance of the Individual Income Tax Law,strengthen the income tax administration of high net-worth people and safeguard China’s tax interests and tax fairness.This paper includes introduction and four chapters focusing on international tax avoidance by offshore trust and its legal regulation.The first chapter,as the theoretical basis of this paper,discusses the definition of offshore trust and its income tax system.Firstly,considering the uncertainty,this chapter compares some relative definition standards of offshore trust,and points out that the standard of the place of establishment should be adopted.Secondly,it analyzes the influence of the special legal structure of offshore trust on the income tax system of offshore trust,and concludes that countries and regions use the trust conduit theory or trust entity theory to qualify the tax status of offshore trust,and on this basis,determine the tax subject of offshore trust income.The second chapter analyzes the international tax avoidance by offshore trust from causes,methods and legal nature.Firstly,discussing the cause based on tax haven,trust structure and entitlement under tax treaties.Secondly,by empirical analysis for tax avoidance cases about offshore trust,summarizing typical international tax avoidance methods adopted by transnational taxpayers.Finally,by analyzing the legal nature of international tax avoidance from the perspective of jurisprudence,the opinion is concluded that international tax avoidance by offshore trust is legal in form,but illegal in essence.The third chapter discusses the foreign anti-tax avoidance practice about offshore trust.Through a comparative study of the domestic regulations,this chapter summarizes the differences and similarities between the common law system and the civil law system in regulating tax avoidance by offshore trust.In the aspect of international law regulation,this chapter introduces latest development about the exchange of tax information,analyzes the information exchange of financial account information for offshore trust under the CRS framework.The fourth chapter discusses the improvement in anti-tax avoidance system of offshore trust in China.Based on the limitation of tax regulation of offshore trust in China,as well as tax avoidance methods by offshore trust and the foreign practice of anti-tax avoidance,to improve the anti-tax avoidance system of offshore trust in China,on the one hand,it is necessary to amend the Individual Income Tax Law by formulating specific anti-tax avoidance rules of offshore trust and improving the general anti-avoidance rule;On the other hand,it is appropriate to broaden the disclosure channels of tax information of offshore trust by improving the registration system of offshore trust,introducing the voluntary disclosure project about foreign assets and actively participating in the international community to improve the CRS.