The Legal System Of China's Tax Incentives

Since has established the reform and open up as basic national policy in 1970's, China have gradually enacted and implemented a series of tax preference legal system. This large-scale, all-directional tax preference legal system has played an important role in the implementation of reform and opening policy and the development of commodity economy and market economy. At the same time, we have to acknowledge that there are lots of flaws in our tax preferential legal system following the socialist market economy developing, the industrial structure perfecting and the world economical integration speeding up, especially after entering into WTO . The legal system which is characterized as "low-rated, wide-based, few preferring and strict regulating" get more and more attention in our world, china has already raised the curtain of the new round of revision of the tax preferential legal system.It is important for the further development of our economical structure to improve our tax preferential legal system. In the field of tax system, it is the requirement of market economy to implement the principles of legalization and neutralization of tax, which is usually violated in our tax preferential legal system. Therefore, we should pay more attention to these two aspects of tax legal system. After entering into WTO in December2001, our economy have gradually incorporated in the trend of economical globalization and free trade, which put forward some demands in the development of tax structure. It is necessary to implement reasonable and proper tax preferential system, but there is big gap between these provisions and the reality of China and the trend of the world. The research project we faced now is to analysis the tax legal system and to eliminate these flaws.This paper have made fully analysis of the reality, functions and flaws in our tax preferential legal system from theoretical, comparative and positive views. Beginning with the meaning of the tax preference, the paper put forward the question of the necessary of the tax preference. Second, the author has discussed the current tax preferential legal system both from positive and negative views, which focus on the international and regional tax preference. At last, the author has put forward suggestions based on the fundamental reality of China, drawing lessons from foreign tax preferential legal system by comparative analysis.