Research On The Application Of The “Beneficial Ownership” Rule In China’s Anti-tax Avoidance

With the deepening of China’s reform and opening up and the continuous development of economic globalization,transnational trade and investment are increasing day by day,and international tax avoidance is becoming increasingly common.One important way of tax avoidance is the abuse of tax treaties,that is,third country residents use the "resident status" of the contracting country to obtain tax or treaty treatment that cannot be obtained by direct investment.In order to effectively carry out international anti tax avoidance,some countries have begun to apply the "beneficial owner" rule to restrict and test the "resident status" of non resident taxpayers who apply for tax treaty benefits,believing that it is only possible for taxpayers to enjoy tax treaty benefits when they are "beneficial owners" that meet certain requirements.Specifically,taxpayers must engage in substantive business activities and have ownership and control of the income or rights and property derived therefrom.China has been paying attention to the abuse and prevention of tax treaties since the early1990 s.In 2007,the main purpose test clause was added to the tax treaties to regulate the abuse of tax treaties.In domestic law,China has introduced general anti tax avoidance provisions into the "Enterprise Income Tax Law" and "Implementation Measures for Special Tax Adjustment",taking general anti tax avoidance as the entry point,and has successively issued normative documents to improve the certainty of the rules.However,most of the bilateral tax treaties signed in China have not yet included provisions to prevent the abuse of tax treaties,which cannot provide clear guidance for enterprises to avoid the abuse of tax treaties.The existing research only discusses the conceptual differences and case practices of "beneficial owner",but there is still a lack of research on the "beneficial owner" rule based on China’s tax policies and systems.This article attempts to study the application of the "beneficial owner" rule in China from the perspective of anti tax avoidance applications.First of all,starting from the theory of "beneficial owner" rule applied to anti-tax avoidance,this paper analyzes the emergence,development,understanding divergence,role and related principles of "beneficial owner".Secondly,this paper reviews the current situation of "beneficial owners",summarizes the differences of "beneficial owners" at home and abroad,and puts forward the problems of our rules.And the case analysis method is used to determine the identity of the "beneficial owner" of S company and B company,to analyze the disputes and difficulties of the tax authorities in the case judgment,from a practical perspective to provide reference for the paper to solve the problem of the existence of the rule identification standard is not clear.Furthermore,this paper analyzes the application of "beneficial owner" rule in foreign and domestic countries,and studies the application of relevant rules in the BEPS Action Plan issued by the two developed countries,the United States and the Netherlands,and the OECD.Finally,it puts forward some suggestions on improving the rules of "benefit owners" from domestic law and international cooperation.The study found that there are still some problems in domestic definition of "beneficial owner" contrary to international trend,lack of matching with the LOB and PPT rules of domestic tax law system,the legal level of normative documents is too low,the identification standard is fuzzy and the discretion of tax authorities is too large.Therefore,from a domestic perspective,our country should connect the concept of "beneficiary owner" with international trend,perfect supporting domestic tax law provisions and systems,enhance the legal level of normative documents,refine the identification standard of "beneficiary owner" and reasonably limit the discretion of tax authority,etc.From the perspective of international cooperation,our country should actively revise tax treaties with other countries,strengthen the exchange of international tax information,improve the level of tax enforcement teams,and actively participate in international rules and promote the development of multilateral conventions.