Study On The Definition Of Cont Rolled Foreign Companies Of International Tax Avoidance

As economic globalization progresses, the economic comunication and cooperationbetween countries are more and more closer. In the process of economicglobalization,multinational corporations live in a very important position in the stateand the country’s economic exchanges are playing an increasingly important role, but atthe same time we can see that, along with the increasing complexity of multinationalcorporations, international tax issues increasingly highlighted. Multinational companiesto invest abroad, the level of tax burden as a very important consideration. In order toachieve the purpose of reducing the corporate tax burden, a number of companies delayor do not distribute profits to shareholders through the establishment of a controlledforeign company, so as to achieve tax avoidance in tax havens. In order to maintain theirtax interests, countries in the world have established a controlled foreign company tax,a tax on undistributed profits of controlled foreign companies controlled by theirresidents can be attributed to its residents.In the sixties of last century, the United States first to establish a controlled foreigncompany tax, since most of the world follow the example of the United States haveestablished their controlled foreign companies legislation in accordance with their actualsituation. In this system, the definition of controlled foreign corporation is thestarting point of this system. Therefore, the definition of controlled foreign corporationbecame the first issue to solve a problem. In Article45of the Enterprise Income Tax Law"in2007, China introduced the" controlled foreign company tax, and the controlled foreigncorporation is defined, which is a major step forward for China’s anti-avoidancelegislation. However, our practical operation of the anti-avoidance is not yet mature,and this led to the controlled foreign company legislation in China left many problemsto be solved. This article focuses on the definition of controlled foreign company andgive some suggestions to promote China’s controlled foreign company tax system.The article is divided into four chapters. The first chapter summarizes InternationalTax Avoidance，The second chapter describes the legal basis and economic foundation ofcontrolled foreign company. The third chapter comprehensively analysis the definition ofcontrolled foreign companies, including the elements of control, tax havens and so on.The third chapter describes the status and problems of China’s controlled foreign companieslegislation. Through the analysis of Enterprise Income Tax Law Enforcement Ordinance andthe State Administration of Taxation on Enterprise Income Tax Law ",""Special TaxAdjustments (for Trial Implementation)", pointing out the problems that exist in ourlegislation, and give some suggestions in order to improve China’s legislation.