Anti-Tax Avoidance Exploration Of Offshore Family Trusts In China

At present,traditional industries are upgrading their quality and emerging industries are thriving;At the same time,private wealth continues to accumulate and high-net-worth groups continue to expand.In the more than two decades since the promulgation of the Trust Law of the People’s Republic of China(hereinafter referred to as the Trust Law),the trust industry has gradually developed and tended to improve.The trust was originally established to inherit family wealth,but the trust not only plays a role in inheriting family wealth,protecting property,equity concentration,etc.,the trust has been accompanied by the function of tax avoidance since its birth,and taxpayers in common law countries often use trusts to avoid inheritance tax and income tax.Since the landing of the first single family trust in China in 2013,there have been many cases of using offshore family trusts to avoid tax,and the choice of trust tax avoidance will inevitably affect the country’s tax revenue,resulting in disorder in the domestic tax order and turmoil in the trust market.Since the Trust Law,China has not continued to introduce new relevant legal systems,forming a complete set of trust tax system.Chinese trust tax law field,especially in the tax avoidance of trusts,lags a lot,and can not effectively prevent the use of trust tax avoidance,resulting in the outflow of domestic capital and the erosion of Chinese tax base.At the same time,offshore family trusts originate from common law countries,and offshore trusts are also property management systems developed by foreign enterprises for the legal and tax systems of their countries.In order to better manage the tax of offshore family trusts,the national level needs to formulate and improve relevant tax regulations,and the tax authorities must also introduce corresponding tax avoidance regulations to improve the control ability of offshore family trusts,so as to promote the healthy development of the trust industry.This paper uses the comparative analysis method of case studies to explore how domestic and foreign enterprises use offshore family trusts to achieve the goal of tax avoidance,and puts forward policy suggestions on anti-tax avoidance of trusts.This paper first defines the concept of offshore family trusts and supplements their offshore structures and forms of tax avoidance,and then explains the relevant theoretical points of the research topic.Secondly,after explaining the development history of foreign trust industry and the current development status of trust in China,by comparing the tax matters involved in foreign trusts with the tax-related elements involved in Chinese trust business from establishment to termination,the efforts made at home and abroad against tax avoidance are drawn.Thirdly,using the three cases of the Rockefeller VI family,the Hong Kong Pang Dingwen tax avoidance case and the Zhou Black Duck who used the listing to avoid tax,compare the structures in different times and contexts,identify how the three use offshore family trusts to indirectly avoid inheritance tax and income tax,and obtain relevant policy enlightenment for Chinese improvement of the trust tax system through comparative analysis.Finally,this paper summarizes the cases and the theories mentioned above,points out the shortcomings exposed by Chinese trust tax system behind the success of tax avoidance of various enterprise families and the dilemma of trust anti-tax avoidance at this stage,and puts forward countermeasures and suggestions from the aspects of legal regulations,tax collection and management,and tax-related information exchange,in order to improve the anti-tax avoidance system of offshore family trust business in China.