Establishment Of Enterprise Income Tax Expenditure System

Tax expenditures is an emerging concept, since its introduction it has attracted increasing attention to academics. There is a great stride in theoretical research and practical application. Tax expenditures as a hidden indirect expenditure is part of a strong policy in the tax system, to achieve public policy goals also need a special tool for regulating economic activity. With the development in the tax-theory and practice, many countries in the world have established tax expenditures system which is used to manage the tax expenditures in a scientific, standardized way.China tax policy underwent through different period of reform.There are lots of achievement, but still some problems. Establishment of China tax expenditures system will be conducive to improving China's budget management system, improving financial transparency and greatly promoting the reform of the taxation system and the economic system, increasing our financial efficiency in the use of funds.This paper studies with the enterprise income tax expenditure, using the basic tenets of Western economics, institutional economics and the modem tax expenditures theory. Using comparative methods for the theoretical explanation of tax expenditure and empirical analysis, the paper try to give some support in the specific plan of establishing the enterprise income tax expenditure which adapt to China tax system and optimize fiscal expenditure management system, to provide reference on establishing the overall tax expenditures system in China. The research and innovative accomplishments are the following: (1) The timeliness of the study. The new enterprise income tax-law is drafted on two sessions in 2007 and submitted to the National People's Congress adopted on March 19. It provides a sound basis for making more certain the necessity and feasibility studies. (2) There is specific object and new adequacy content. The paper is based on previous research on how to establish China tax expenditures, exploring the establishment of the enterprise income tax system. Construction spending in the enterprise income tax system put forward some feasible countermeasures. (3)There is certain innovative idea in establishing a framework for the enterprise income tax system in China. According to the latest tax law and the introduction of the new enterprise income tax, the paper provides method on how to identify specific projects in our enterprise tax expenditure system, constructs China enterprise income tax expenditures report.This paper is divided into five parts: The first part is introduction, a brief description of the theoretical development of tax expenditures theory and the background and significance of the topic. The second part is enterprise income tax expenditure on the system's basic theory, including tax expenditures system content and the definition of enterprise income tax expenditure; Analysis of the economic impact of enterprise income tax expenditure, that is, resource allocation, compensation effect and stabilizer effect; Analysis of enterprise income tax expenditure system of positive and negative effects on the economy. The third part talks about the current stage of China enterprise income tax expenditure and the main problems in this area. Explore the issues from the enterprise income tax expenditure's effect in coordinating the development between different regions and attracting foreign direct investment. It also shows the necessity and feasibility of establishing a system of enterprise income tax expenditure. The fourth part is the experience in the developed countries, particularly the United States and Germany, sums up foreign tax expenditure management and the establishment of the system is worth learn from them. The fifth part provides specific ideas and method for the building of China's enterprise income tax expenditure system, clarify the item in enterprise income tax expenditure, cost estimation, design tax expenditure report and performance evaluation of the final system. Finally, give some related measures to protect the establishment of the enterprise income tax expenditure system.