| Being a major source of public revenue, taxation has always been the attention of public interests. In China’s tax regime, Corporate Income Taxes, together with Value-Added Tax (VAT) and Consumption Tax are major tax sources that constantly ranked at the forefront; therefore it plays an important role in regulating financial income and adjusting income distribution. Large corporates are recognized as the focus of the tax department due to their contribution in and influence over the country’s economic situation and tax collection therefore the tax risks that associated with large corporations income tax have increasingly being the social focus and also key areas for tax department.Recently in the context of information technology, an increasing attention has been paid to risk management and tax compliance. This paper conducted the research based on a comprehensive literature on domestic tax risk management and the corporate income tax collection practices of City L. This paper took the public management perspective, advanced the empirical analysis according to risk management theory and public finance theory. Research method adopted in the study includes literature reviews, interviews and survey research. City L has initiated its experiment in risk monument for large companies since2010and has revealed that the risks primarily resulted from the difficulty in internal control of tax authority and from the unsound internal control mechanism of the companies. The study also highlighted the four types of conflict in the income tax management of large corporations in city L, namely the identification of large cooperates, weak management due to understaffed tax authorities, and the information asymmetry and underused between the company and the tax authorities and lastly the incompatible effectiveness of the administration of joint management. Furthermore, this paper proposed suggestions in four aspects:risk management-oriented and optimizing the allocation of human resources; a clear risk response-role responsibility system, improving the longitudinal adjustment of the internal functions of tax authorities; using information technology as the basis for tax management, enhancing the level of information risk management of large enterprises.This paper has adopted the empirical analysis approach and has taken the tax risk management model applied by tax authorities at City L. It looked into the current status of domestic tax source management, together with useful experience from developed countries and has then put the findings within the general principles of the tax administration reform. This is done by examining the cause of associated risks from both tax authorities and companies, investigating of solutions for better risk control with most economical resources and costs. Based on the findings in the case study of City L, the paper attempts to explore the future development of tax source management in relation to the risk faced by large corporations. The findings will identify some possible key solutions to prevention, analysis, and control of the management risks; in return, this will benefit future studies in strengthening the professional management of tax source, enhancing control and minimising the unfavorable effects that may have caused by the tax risks to the public finance and the society. |
