The Anti-avoidance Research Of Non-resident Enterprises Indirect Equity Transfer

In recent years,many offshore companies have controlled Chinese companies through the establishment of subsidiaries in tax havens,and have achieved tax avoidance through the transfer of shares in overseas subsidiaries.This not only creates an unfair competitive environment,but also infringes on the tax benefits of residents.Infringement of tax sovereignty.This method of indirect transfer of equity tax avoidance is the focus of anti-tax avoidance by tax authorities in various countries.Since the implementation of the "Enterprise Income Tax Law",China's tax authorities have begun to pay attention to the non-resident enterprises' indirect transfer of equity arrangements.The general anti-tax avoidance clause has also become China's supreme legal basis for the exercise of tax jurisdiction over indirect equity transactions.When the issuance of the Document 698 of the State Administration of Taxation in December 2009 explicitly pointed out that the abuse of organizational forms by overseas investment enterprises indirectly transferred equity in China's resident enterprises and did not have reasonable commercial purposes,the tax bureau authority had the power to reclassify the transaction in accordance with the economic nature.The issuance of Circular No.698 is of great significance in combating tax avoidance by non-resident enterprises.However,there are still problems such as the wide application scope and unclear application standards.With the promulgation of Circular [2014] No.32 and [2015] No.7,the State Administration of Taxation combined with the applicable scope,judgment criteria,adjustment methods,working procedures,and dispute handling of tax anti-tax avoidance practices against general anti-avoidance measures.Further stipulations have been made that there are corresponding standards for the judgment of reasonable commercial purposes,making the general anti-tax avoidance clauses no longer remain merely a paper deterrent effect.This paper through the introduction of the concept and typical model of non-resident enterprises indirect transfer of stock rights,analyzes the issue of taxability and tax jurisdiction,and discusses the feasibility and necessity of paying tax on this transfer.According to the general anti-avoidance provisions and relevant provisions of Circular No.698 and No.7 in the anti-tax avoidance case in Guiyang,the analysis of the contradictions and problems between the tax and business sides concluded that the tax authorities exercised tax jurisdiction over the indirect transfer of equity transactions to non-resident companies encountered problems.Finally,according to the above problems and problems,suggestions or opinions were put forward from four aspects: perfecting the anti-avoidance legal system and raising the level of legislation,refining the criteria for judging reasonable commercial purposes,harmonizing the exercise of tax jurisdiction and tax planning rights,and strengthening international tax cooperation.This article analyzes the related concepts and typical models of non-resident enterprises' indirect transfer of stock rights,analyzes their taxability and tax jurisdiction issues,and discusses the feasibility and necessity of taxation of the transfer transaction;The current status of such transactions against tax avoidance was introduced,and the legal basis and practice of anti-tax avoidance by China's tax authorities were pointed out;according to the general anti-avoidance provisions and the relevant provisions of Circular No.698 and No.7,etc."X Group anti-avoidance tax case" analysis of the contradictions and problems between tax and business sides,summed up the problems encountered by tax authorities in the exercise of tax jurisdiction over this type of equity transactions;Finally,in accordance with the above issues and problems,improve the anti-tax avoidance legal system to improve The recommendations were made on several aspects including the legislative hierarchy,the elaboration of criteria for judicious rationalization of commercial purposes,the harmonization of tax jurisdiction and the exercise of tax planning rights,and the strengthening of international tax cooperation.