Research On China’s Tax System Of Asset Securitization

Asset securitization is the structured process whereby interests in loans and other receivables are packed, underwritten, and sold in the form of "asset-backed" securities. It began with the structured financing of mortgage pools in the1970s in the USA and introduced widely into Asian countries. Asset securitization has offered many benefits to each of the major parties in the transaction. For originators, it can improve asset/liability and credit risk management. For investors, it offers a combination of attractive yields and a measure of flexibility. For borrowers, it helps borrowers benefit from the increasing availability of credit on terms that lenders may not have provided had they kept the loans on their balance sheets. Based on the benefits of asset securitization, China should seize the opportunity to make it stronger and bigger.This paper will study the tax system of asset securitization, which directly determines securitization’s financing costs and structure, to provide a good tax environment in China. This paper is divided into five chapters.Chapter1:the preamble of this paper. This section describes the background of asset securitization’s tax issues, theoretical research, article ideas, innovation and inadequacies. This chapter points out that the tax problem is the business aspect, which needs to properly handle in asset securitization.Chapter2:theoretical analysis on the tax system of asset securitization. This section gives a description of asset securitization, including the concept, the features, and value analysis and business process. This section lays the foundation for the research of tax system.Chapter3:international comparison about the tax system of asset securitization. This section separately introduced foreign countries’specific tax approach of major parties in securitization, including originators, investors and borrowers.Chapter4:the introduction of China’s asset securitization tax system. This section separately introduced China’s specific tax approach of major parties in securitization, including originators, investors and borrowers. It also gives a credit asset securitization case to illustrate the tax treatment of major parties.Chapter5:the evaluation of China’s asset securitization tax system and the corresponding advice. As discussed, this chapter points out the existing problems of China’s current securitization tax system and put forwards corresponding advice.