Research On The Legal System Of The Final Settlement Of Individual Income Tax

The collection of individual income tax in China began in 1980,and classified income tax system was adopted.Limited to its collection mode,the individual income tax burden is unfair,which is not conducive to promoting the development of the individual income tax system and economic growth.In order to reduce the tax burden of taxpayers,implement the principle of taxation according to capacity,realize the collection of individual income tax according to people,time and place,and promote social equity.Since 2019,China has implemented a personal income tax system combining classification and comprehensive,which not only reduces the overall tax burden of personal income tax,but also increases the requirement for taxpayers to make annual final settlement.At the same time,the first individual income tax final settlement in 2020 also exposed many problems,such as insufficient support of declaration system,large difference between withholding and final settlement,conflict of interest between tax source and final settlement,imperfect tax refund mechanism,etc.,which need to be deeply discussed and analyzed,and solutions are given.This paper studies China’s personal income tax final settlement legal system from the following four parts:The first part,summary of the legal system of individual income tax settlement.The final settlement of individual income tax refers to the behavior that the taxpayer calculates the final amount of tax payable in the previous year on the basis of deducting the annual deduction items and withholding tax,reports to the tax authorities,and then makes the final tax refund settlement.The final settlement of individual income tax is different from the self declaration system,which is a "self taxation" system based on the relationship between tax and debt.Perfecting the final settlement system of individual income tax in China can effectively improve the ability of Tax Governance,promote the fairness of tax burden of different sources of income,and improve the taxpayer’s tax awareness.The second part,the foreign individual income tax final settlement legal system and evaluation.The United States,Britain,Germany,France and Japan have all established their own legal system of final settlement in the development of individual income tax,which has effectively improved the efficiency of final settlement and promoted the fairness of tax burden,which is worthy of our reference.The third part,the current situation and problems of the legal system of final settlement of individual income tax in China.Firstly,the declaration system of individual income tax final settlement is not enough;secondly,the difference between individual income tax withholding and final settlement is large;thirdly,there are conflicts of interest between regions;finally,the tax refund mechanism of individual income tax final settlement is not perfect.The fourth part,suggestions on perfecting the legal system of final settlement of individual income tax in China.Combined with China’s national conditions,this paper puts forward suggestions for reference to improve the legal system of final settlement of individual income tax.Firstly,we should strengthen the tax declaration service,simplify the tax declaration and other measures to improve the tax declaration system and enhance the taxpayer’s awareness of final settlement;secondly,we should improve the legal system of withholding and prepayment in terms of methods,deduction regulations,tax information and withholding agents to reduce the difference between withholding and final settlement;thirdly,we should restrict the right to change the location of final settlement and clarify the legal system Finally,the detailed tax refund regulations,multiple and timely tax refund mechanism and final settlement reward are taken as important measures to improve the tax refund legal system.