| As China’s economy grows explosively,it has become increasingly common for Chinese new rich to choose to secure the continuation of family wealth and to realize tax planning by setting up a cross-border trust.But,at the same time,cross-border trusts are also commonly used for tax avoidance.The reasons for that are quite complicated.Firstly,the arrangement of cross-border trust can be pretty flexible and the information relevant to a cross-border trust is usually opaque,so it is very difficult for taxation authorities to track down.Secondly,cross-border taxation rules are way too complicated.For instance,based upon the subjects to whom the trust income is attributed to,trust tax rules includes grantor attribution rules,trust attribution rules and beneficiary attribution rules.The application of these three parts of rules in various cross-border situations may give rise to a series of conflicts of taxation rights.In a sharp contrast to that,however,there are no special tax rules for trust in China,and there are no relevant provisions for cross-border trust tax.However,with the further development of cross-border trust industry,it may mean a huge loss of Chinese tax base.Therefore,this Paper is of the view that it is necessary for Chinese academy to dig into field of cross-border trust taxation,and to construct an anti-tax avoidance system for cross-border trust by borrowing from foreign experience.For this purpose,this Paper,based upon the study of the cross-border trust tax system of four typical Anglo-American law countries-the UK,the US,Australia and New Zealand,sorts out the tax principles that have been applied to cross-border trust income taxation in foreign countries,the ranks of priority in case of attribution conflicts,and puts forward some suggestions on anti-tax avoidance rules for cross-border trust income.This Paper is composed of four chapters:The first chapter analyzes the necessity of constructing the anti-tax avoidance system of cross-border trust income in China,and finds out that on the one hand,the scale of offshore trust set up by Chinese is quite magnificent,but,at the same time,the current tax rules in China is quite limited in application,and the newly introduced CRS and CFC rules are also inadequate to solve such problem.Therefore,it is necessary to build up a special anti-tax avoidance system for cross-border trust.The second chapter introduces the foreign trust income tax rules,including the general trust income tax rules of the UK,the US,Australia and New Zealand,the special rules applicable to cross-border situations,the trust residence rules and the unilateral overseas tax relief rules,and compares and analyzes the similarities and differences between the four different countries.Based on the second chapter,this chapter analyzes five common tax avoidance scenarios resulted from the loopholes in the tax system of cross-border trust: fiscally homeless trust,negative attribution conflict,double relief,distribution tax lacuna and treaty arbitrage,and explains the possible causes of these tax avoidance situations Through the analysis of the problems existing in foreign experience,similar problems can be effectively avoided when we learning from foreign experience.The fourth chapter is an analysis of the construction of China’s cross-border trust income anti-tax avoidance system.On the basis of the previous two chapters,a summary of the tax principles and tax priority in the West has been made,and some suggestions on anti-tax avoidance rules of cross-border trust has been put forward from the perspectives of grantor taxation,trust residence and distribution taxation. |
