Tax Adjudication System And Tax Avoidance Behavior Of Multinational Corporations

With the deepening of economic openness,the global capital flow has accelerated.To expand capital accumulation,multinational corporations have resorted to complex tax avoidance behaviors,sometimes to the detriment of tax sovereign and source countries.Today,more and more multinational companies obtain huge tax benefits by signing tax rulings with tax authorities to shift profits from high-tax regions to low-tax regions.Therefore,anti-tax avoidance actions have become the main measures taken by countries.As one of the main organizations fighting against anti-tax avoidance,the European Commission has been conducting state aid investigations in recent years,mainly targeting tax rulings signed by member governments and multinational companies to investigate whether they comply with the Treaty on the Functioning of the European Union.In October 2015,after the European Commission conducted an EU state aid investigation into the tax ruling signed between Starbucks and the Dutch government,it determined that Starbucks obtained inappropriate tax benefits by entering into a tax ruling with the Dutch government,which constituted "illegal state aid".Therefore,Starbucks Group is required to pay 20-30 million euros in taxes.Later,Starbucks Group and the Dutch government appealed to the European Court of Justice.On September 24,2019,the European Court of Justice ruled that Starbucks won the case and did not need to pay huge taxes,which changed the result of the usual fines imposed by multinational companies.Similarly,in August 2016,Apple was constituted an "illegal country aid",and therefore asked Apple to pay 13 billion euros in back taxes.After that,Apple Group and the Irish government appealed to the Court of Justice of the European Union.On July 15,2020,the Court of Justice of the European Union ruled that Apple won the case and did not need to pay huge taxes,which changed the result that multinational companies were sentenced to fines.The article intends to study the tax adjudication system and the tax avoidance behavior of multinational corporations and the existing tax adjudication system in my country-advance pricing based on the double cases.The article is divided into six parts for analysis: The first part summarizes the innovation points of the paper by sorting out the relevant research status at home and abroad.The second part is the theoretical basis of the tax ruling system and the tax avoidance of multinational corporations.Firstly,the relevant concepts and signing procedures of the tax ruling system are introduced.Secondly,it introduces the relevant theories of "OECD Transfer Pricing Guidelines",and expounds the concept and application scope of the arm’s length principle.The third introduces the relevant concepts,review institutions and implementation procedures of the EU state aid system,and points out that the European Commission usually combat tax avoidance,maintain fair competition in the EU market.The third part is an analysis of the double cases of multinational companies Starbucks and Apple using tax rulings to avoid tax,starting from the appeal results of Starbucks Group and Apple Group’s successful tax avoidance.First,review the tax rulings signed by multinational companies Starbucks and Apple and the governments of member states,and describe the tax avoidance arrangements accused by the European Commission of "illegal state aid".Second,analyze the European Commission’s investigation logic from the perspective of the EU state aid investigation.Judgment logic,and finally compare the two successful cases of tax avoidance by multinational companies,and analyze the common points in the cases.The fourth section presents the reasons for the failure of the EU State Aid investigations to determine tax rulings.Firstly,it analyzes the substantive purpose of the EU state aid investigation carried out by the European Commission,and points out that it has the purpose of super-tax sovereignty.Secondly,it analyzes the EU state aid investigation procedure,and points out that the European Commission does not assume more burden of proof and adopts appropriate review methods when conducting the EU state aid investigation,and the basis used in the investigation also has some conflicts with the current international tax rules..The third analyzes the results of the EU state aid investigation on tax rulings,and points out that it should revoke the “illegal state aid”designation for Starbucks and Apple in accordance with the EU state aid system,and the governments of member states do not need to withdraw the aid that has been issued before.Fourth,it analyzes the future trends of EU state aid investigations against tax rulings in the context of BEPS.By listing tax rulings suspected of“illegal state aid” disputes in recent years and their final results,it points out that EU state aid investigations will be more frequent and in-depth in the future.Member State taxation,aiming to unify the tax sovereignty of the entire EU.The fifth part is the implementation of my country’s tax ruling system.Echoing the EU tax ruling system,my country’s existing tax ruling system is an advance pricing agreement system.At present,there are still problems such as the level of effectiveness of legal norms still to be improved,the method of dispute resolution is relatively simple,and the APA’s burden of proof is lacking.The successful tax avoidance cases of multinational enterprises provide relevant enlightenment for the improvement of my country’s tax ruling system.The sixth part is the policy suggestion for perfecting my country’s tax ruling system.The article draws on the lessons of Starbucks and Apple’s successful tax avoidance in the EU through tax rulings,summarizes the advantages and disadvantages of the European Commission’s investigation logic on tax rulings,and proposes the legislation,enforcement and coordination mechanisms of my country’s APA system.corresponding policy recommendations.