The Reform And Improvement Of China Life Insurance Tax System On The Basis Of Comparing US Life Insurance Tax System With Its Chinese Counterpart

The development of insurance is affected by many factors, such as social and economic environment, macroeconomic policy, social and cultural factors. World experience shows that insurance tax system has a significant influence on the development of insurance. From the company’s point of view, tax revenue will affect the accumulation of surplus, which will affect the solvency of insurance company. Furthermore, insurance companies will choose tax-avoiding organization modes and better sites, which will ultimately affect their competition ability. From point of view of individual, tax have power to affect customer behavior. for instance, people buy life insurance to avoid heritage and gift tax.With the considerable development of insurance industry and the realization of commitment to opening policy, especially the launching of tax merger reform in 2007 and the new enterprise accounting standard with its subsequent interpretation of life insurance tax policy, tax policy of insurance cannot keep the space with time. Meanwhile, there are some defects lurking in the instrument of Chinese insurance tax policy when compared with its international counterpart. These factors hider rather than promote the evolution of insurance industry. It is time that we need to change.In the first part, this paper mainly analyzes the influence that insurance and tax police lay on each other in the perspective of qualitative analysis and economic analysis, the purpose of which is to show that tax police have a negative influence on insuranceThe second part of this paper show the trace of Chinese insurance tax which is followed by current situation of insurance tax in perspective of individual income tax, business tax and enterprise income tax. At the end of this part, we explore the problems lying in Chinese life insurance tax systemIn the third part we mainly introduce the life insurance tax system in United States. Firstly; we introduce the tax police of American life insurance products in detail, such as tax rules about premium deduction, dividends, life insurance payment, etc. Secondly, we introduce enterprise income tax, premium tax and heritage and gift tax. Finally, we draw a conclusion from American life insurance tax systems that we could tax insurance products respectively according their features and government’s intensionIn the fourth part we firstly analysis the influence of new tax law and new accounting standards launched in recent years. Secondly, this paper shows some ideas to make existing system better. Finally, this paper gives space for heritage and gift taxThe main innovations of this paper:First, under the background of new income tax law and new accounting standards we put forward some relevant solutions, for example, life insurance tax policy may appropriate and converge with new accounting standards to define insurance clearly to avoid other financial tools are packaged as insurance contract. Meanwhile, authorities should release some related tax regulations to cope with the new tax problems. Second, this paper show insurance company what measure should be took under the expectation of heritage and gift tax which spur the need of insurance consideratelyDeficiency in this paper:first, the analyze method is limited, lacking data to support. Second, this paper doesn’t conclude all details of insurance tax system, such as minority tax items. Third, this paper is finished without challenges of insurance tax regulation.