The Study On The Legal Problems Of Anti-tax Avoidance In Indirect Transfer Of Equity Of Non-resident Enterprises

What is a controversial and hot topic in the field of international taxation in recent years is that the issue of indirect transfer of equity of non-resident enterprise.With the increasing international investment,companies are constantly looking for the edge of the law.The origin of equity investment income is determined by the location of the invested enterprises,according to China's relevant laws and regulations.We can see that direct transfer of equity will pay corporate income tax.However,there is no need to pay taxes with no relevant legal regulation for indirect transfer of equity.Therefore,indirect transfer of equity be used with non-resident enterprise,and it has become an important way of get a return on investment for them.The tax authorities are also constantly exploring and has introduced a series of laws and regulations to regulate the behavior of paying taxes in order to safeguard the national tax sovereignty and protect levying successfully of the relevant taxes.No.698 was developed by the State Administration of Taxation to be the regulation of indirect transfer of equity of non-resident enterprise for the first time in 2009.The next few years,tax authorities in China introduce constantly relevant legal regulation by summing up the previous experience of combining with tax cases,because the drawbacks of the laws and regulations gradually appeared with the development of tax practice.It is not difficult to find that China lacks the tax laws and regulations that can be used for practical operation to determine reasonable commercial purpose.Whether it is enterprise income tax or general anti-avoidance clause,it does not provide the judgment standard of reasonable commercial purpose.Although there are still many problems of the development of No.7,2015,it is a symbol of a major forwarding step of the rule of indirect transfer of equity of non-resident enterprise.No.7 made a detailed standard of "reasonable business purpose of business " provides the "blacklist" and "safe haven" of "reasonable business purpose".No.7 strengthens cross-border supervision of tax sources of non-residents in the outside borders,and fights against cross-border tax avoidance,at the same time,it enhances the certainty and maneuverability of indirect transfer of equity of non-resident enterprise.However there are still some question of fragile legal basis and fuzzy standards of reasonable business purposes.No.7 is not suitable for the normative documents with shorter application time.Therefore,this paper will focus on the analysis and understanding of No.7 on the basis of practical cases,and analyze the taxability of transfer of indirect equity of nonresidents from the perspective of jurisprudence.At the same time,I will learn from foreign legislation and practical experience to improve the standard of the reasonable business purpose.Then I will have some anti-tax avoidance of useful inspiration,looking forward that it is helpful for the non-resident enterprise indirect transfer equity anti-avoidance working in the future.