A Study On Perfection Of Living Expense Deduction System In Individual Income Tax Of China

‘The Decision of the Central Committee of the Communist Party of China on Deepening the Reform of Several Major Issues',which was approved by the Third Plenary Session of the 18 th Central Committee of the Communist Party of China(CPC),took the "Perfection of Taxation System" as an important part of deepening fiscal and taxation reform,and put forward requirements on the establishment of a ‘Comprehensive and Classified Combination Individual Income Tax System'.How to meet the requirements of individual income tax reform,it requires that the existing living expense deduction of the individual income tax should be carefully studied and analyzed,to summarize up those existing problems and shortcomings of it,By combining with the advanced theories and successful experiences obtained in the living expense deduction systems of other countries,it puts forward a scheme which is suitable for future living expense deduction of individual income tax of China.To this end,this paper especially focuses on living expense deduction.On the basis of principles of tax equity and the rights to subsistence and development of the people,with using methods of literature research,comparative analysis and value analysis,and throughout the summary on the study results of Chinese and foreign scholars in the field of living expense deduction,the paper makes the analysis on living expense deduction of individual income tax of the main western countries,and puts forward a reasonable strategy with providing effective solutions for perfecting the living expense deduction system.In order to study the concerns mentioned above,this paper is to deploy the analysis on them from five aspects: The first part is an introduction,which mainly focus on the background of the living expense deduction of individual income tax.It mainly explains the background,significance and research methods of the paper's subject.It generally narrates the research analysis status quo from domestic and international sides on living expense deduction.This part will lay a foundation for carrying out next steps of the study.The second part outlines the basic items,connotation and function and theories basis of the living expenses deduction.The third part introduces the main problems existed in the living expense deduction.Based on the current situation of our country,it comprehensively analyzes the problems existed in China's living expense deduction system.The fourth part introduces the comparison research on foreign living expense reduction.Throughout a comprehensive analysis,it finds out those valuable clues which are beneficial for the perfection of China's living expense deduction system.The fifth part focuses on how to perfect our country's living expense deduction system.On the basis of the principles of ‘tax equity' and ‘ability to pay' etc.,it provides out the deduction principle,deduction items,deduction standard and deduction methods,to perfect the living expense deduction system of China.Finally,the conclusion part summarizes the whole thesis from different aspects,and proposes that the living expense deduction items should consist of basic living expense deduction,extra living expense deduction and special living expense deduction,which is established with China characteristics.In this way,it is to realize the targets of the reform for individual income tax system of China.