Research On Individual Income Tax System Of Gift Income

Gift is a typical transaction behavior in modern civil society.As with transactions such as buying and selling,gift is also a way of transferring ownership of the goods,and the biggest feature of gift is that they are gratuitous,that is,transactions without consideration.Gift has different effects in civil law and tax law.The effect of gift in civil law is the non-consideration transfer of ownership of goods.From the perspective of tax law,the income generated by a gift may lead to an obligation to pay taxes.The concept of "income" has undergone the development from the doctrine of source income,the doctrine of net assets increase to the doctrine of market income.According to the doctrine of net assets increase,assets obtained by gifting fall into the range of “income” in individual income tax law.Whether personal gift income is taxable can be analyzed from a variety of theories.According to the taxability theory,once the gift income meets the economic taxability and the legal taxability,it then owns the taxable profitability.According to the theory of constituent elements of taxation,as long as the gift income meets the requirements of taxation,the tax liability under the individual income tax law will arise.Therefore,it is valid to levy taxes on the individual’s gift income.Meanwhile,the taxation of personal gift income is indispensable.From the perspective of propriety,taxation of personal gift income is the substantial demand of the affordability principle,the fiscal revenue principle,and the anti-avoidance regulations.However,not all the gift income of an individual should be taxed.Based on the need for redistribution,gift income from entities of different identities and of different property attributes should be regulated accordingly.Thus,the gift income can be analyzed from the typing of the subject and the object of gifts so that different categories of gift income can be regulated accordingly.Here are the two biggest problems existing in China’s legislation with regard to gift income: First,the taxation system for individual gifts in China is extremely messy.There is no special tax item collection for personal gift income.Instead,individual cases are regulated through the method of "one case,one discussion",and there is no uniform logical application standard between the various situations.Second,there are doubts with regard to the rationality of the classification of gift income in some normative documents.For example,after the publication of Document [2019] No.74,the gift of personal housing is classified as "accidental income".The connotation of "accidental income" is an aleatory income.However,the gift of housing has no randomicity in it,so that it is inappropriate for gift of housing to be classified as "accidental income".Legal interpretation cannot exceed the semantical "fire-range",otherwise there will be a suspicion of analogical interpretation and transcendental interpretation,which does not meet the basic requirement of statutory taxation principle.There are two ways to construct the system of gift income in terms of rules: One is to add “gift income” to the individual income tax law,in a legislative way,to systematically regulate the personal gift income,while the disadvantage lies in the impact on the legal stability.The other is to treat the gift income in an interpretive way.To systematically classify the former scattered "one case,one discussion" method,so that the gift income can fall into the nine types of income.The attitude towards the above path is to take adding the category of "gift income" as the principle,systematically integrate the individual gift income,in order to exert the integrity of taxation and the value function of anti-avoidance.But at present,considering the legal stability and the cost of legislation,we should adopt a systematic "one case,one discussion" approach to the institutionalization of individual gift income.Integrate and classify the content scattered in various normative documents with logical standards,that is,the "two-tier" gift income attribution system.The individual gift income is firstly judged by the standard of subject,for example,gift received as an investor from the enterprise he/she invested in should be classified as operating income or dividend income.Secondly,the gift income should be judged according to the standard of conduct.A gift that has randomicity in it from a general subject should be taxed in accordance with accidental income,while gifts under general situation,including real property,movable property,and property rights,should be attributed to property transfer income.