The Study Of One-person Company's Income Taxation In China

By the Company Law of the People's Republic of China, One-person Company is referred to One-person Limited Liability Company which is invested by a natural person or an artificial person. As our country's economy mature, the Organizational form of enterprises varied. With its unique investor and limited liability characteristics, One-person Limited Liability Company is a popular organizational form of enterprises among small and medium investors. In china, One-person Limited Liability Company is a newly emerged form of enterprises. Since the primary company law regulated that the Limited Liability Company should have two investors at least which had negative impact in stimulating investment, the new company law has reformed to recognize One-person Limited Liability Company's legal status. On October 27th 2005, the One-person Company officially gets its legality in mainland China.The taxation of One-person Limited Liability Company is a new topic in the research of tax system which causes many interests among tax scholars. Defer from the typical form of the Limited Liability Companies, the newly emerged One-person Company is quite a special form of company. One-person Limited Liability Company has only one investor; furthermore, the situation of shareholders' participation in management is much common in One-person Limited Liability Company which is similar with the individual enterprise of exclusive investment. However, One-person Limited Liability Company'dividend has economic double taxation problem. So, there are some issues to be discussed. Is it proper to levy corporation income tax on One-person Limited Liability Company? Is there a way to only levy individual income tax on One-person Limited Liability Company according to the taxation of individual enterprise of exclusive investment and partnership enterprises? How about the tax burden of One-person Limited Liability Company In comparison with the enterprises mentioned above? What's the main problem of One-person Limited Liability Company's income taxation? How to improve it? To solve these problems, I chose"The study of one-person Company's income taxation in China"as my title of dissertation for academic degree. The analysis in this paper is mainly divided into two sections: theory and practice.Through my study, the conclusion is in recent china, the adoption of only levy individual income tax on One-person Limited Liability Company is inadvisable which can be explained by legal theory, principle of taxation, tax burden investigation and so on. The more scientific and reasonable way is that One-person Limited Liability Company should pay corporation income tax and the investor should pay individual income tax according to the dividend he or she gets. To alleviate the problem of economic double taxation of One-person Company and facilitate a fair, public and equitable competition in various kinds of investors, I suggest the government adopt a"Partial-charge system"method toward the dividend of One-person Company.