China Securities Investment Fund Tax System

Fund has been developing in an unprecedented speed in recent years, all with the recovery and development of security market. The scale of fund has increased to 3000 billion RMB in the beginning of 2008 from 500 billion in 2005. The development of fund subjectively requires a suitable and effective taxation which could promote its healthy and fast development. However, current tax regulations, regarding fund mainly issued as supplementary circulars to income tax laws and turnover tax laws. These circulars are carried out as temporary and remedy measures in respect to problems emerged in market. Due the lack of systematism and standardization, current taxation of fund can hardly function very well. Especially, taxation regulations for QFII fund and QDII fund have been absent for a long time. Thus, it requires prompt action to design and establish a taxation of fund in practice.Fund is not only an important financial instrument, but also a crucial institute investor in security market. The function of fund covers all key sections of security market, and illustrates a feature of double investment, double distribution and multiple gains. Furthermore, fund taxation can reflect main features, problems and developing direction of the taxation of security market. Therefore, a deep and meaningful research of fund taxation could contribute to healthier and faster development of fund market as well as security market. Nevertheless, there are limited research fruit regarding fund taxation at the present. There are not sound works to systemize current tax regulations regarding fund, neither are effective suggestions for optimizing the fund taxation. Consequently, the research of fund taxation could demonstrate a theoretical significance.This paper analyses the existing tax system about the security business and securities investment fund, and discusses the related literature from the capacity as a subject of tax law for the securities investment fund, and the prevailing tax system and the current framework of securities investment funds, and the market regulation and control ability, analyses the securities investment fund tax policy orientation from current educational circles and business circles for various approaches, including the transformation of tax system model for the turnover tax system to the capital gains tax system, the realization of market regulation and control, and the stability of the securities investment funds tax system, Upon which this paper also analyses the current construction for securities investment fund tax system, including the policy suggestions on capital gains tax on the discussion and the stamp tax on securities transactions.Based on the analysis and comparison of the securities market and on existing tax system of securities investment funds and the related literatures, this paper views based on sconstructing the analysis of securities investment fund tax system of general framework. From the perspective of the tax system of securities investment fund operation plan, from the securities investment funds and pay tax on the main aspects of securities investment fund tax system is analyzed, and analyses the special funds for securities investment fund which QDII funds and QFII fund involves international tax problems.On the basis of the analysis framework, the paper systematically combed the current tax regulations concerning securities investment fund tax arrangements, tax structure, tax subject from aspects of the current fund, a preliminary analysis of the tax system, and from the systematic, standardization and forward-looking, control ability for the existing tax system of securities investment fund, the existing problems and further analyses the present tax system of securities investment funds and defects.Thereafter, this paper compares and analyses major securities market countries or regions of the securities investment fund tax system, and introduces these countries or regions with the securities investment trading and securities investment capital gains tax policy, and the relevant taxes for QFII fund system arrangement, discussed the country or region of securities investment related tax policy's experience of the development of the securities investment fund market.Finally, this paper analyses the reasonable and effective system of securities investment fund tax system features, including tax system framework, tax avoidance of double taxation, the policy of market regulation ability, and the operability for the tax.