Research On Chinese Anti-avoidance Policies Of The Non-resident Enterprises Indirect Transferring Of Shares

Non-resident enterprises indirect transferring of shares,seemingly to be the normal offshore transactions,however sometimes can be used as the tax avoidance means for tax benefits by the multinational enterprises.According to the General anti-avoidance rules(GAARs),the key to distinguish the artificial tax avoidance transactions from the normal business activities is to determine whether the tax payer entered into this transaction for a reasonable business purpose.What is a reasonable business purpose,how to determine it,what forms GAARs,how the General anti-avoidance activities carry out and so on,are problems waiting to be answered immediately by taxation theories and practices.The principle of statutory taxation established by the 18 th plenary session,is the core principle judging the tax policies of the indirect transferring of shares in China.The formulation and applyment of these anti-avoidance policies in China must meet this principle.Therefore,from the perspective of anti-tax avoidance and standardized management,this paper summurizes the deficiencies of the related policies through analysing the case,provides a detailed analysis about the foreign cases and GAARs,and finally in consideration of China’s specific conditions,tries to propose some useful suggestions.Firstly,this paper introduces the basic taxation theories of the non-resident enterprises indirect transferring of shares,including the distribution of tax right,and the different meanings of the economic substance doctrine.Secondly,it analyses the Chinese related anti-avoidance policies,and points out the current problems in these policies through the case analysis,such as the defects among the policies and practices of the reasonable business purpose test,GAARs need to be improved ugently and the judicial restraints need to be strengthened.Thirdly,in the reference of other countries’ experiences,this paper points out the effects and relations of the subjective test and objective test in the reasonable business purpose test,summarizes the 14 countries and areas’ GAARs legislation frameworks,and also studys the judicatures of foreign countries.Last but not least,this paper proposes that the reasonable buseniss purpose test should force both on the subjective test and objective test,Chinese GAARs should to be perfected with the reference of abroad GAARs legislation frameworks,while the judicial department should establish the tax courts and tax judges to improve their anti-avoidance capabilities and judicial restraints.