| At first,the exploration of anti-tax evasion in China began in 1986.Then the revision of the Individual Income Tax Law of the People’s Republic of China has issued in 2018,as the applicable anti-tax evasion rules have been added to this field.The individual income tax,as one of the main sources of fiscal revenue,plays an important role in the redistribution of social resources.The legislation on anti-tax avoidance of individual income tax in China remained gaps before,which led more and more high-net worth people to lightening their tax burden by adopting various tax avoidance means,aggravating the unfair income distribution of the society.In that case,the gap between the rich and the poor has been widened and the national tax benefit has been seriously damaged.Therefore,Article 8 of the Individual Income Tax Law introduces anti-tax avoidance rules in China,including the arm’s length principle,two special anti-tax avoidance rules for controlled foreign companies and general anti-tax avoidance rules as miscellaneous clauses,which makes the legislation of the Individual Income Tax Law more complete and has great significance for the construction of the whole anti-tax avoidance rule system.This paper discusses on the definition of relevant concepts of tax avoidance,a current situation about regulations of individual income tax avoidance and its application,the lack of application of anti-tax avoidance rules in the individual income tax law of China.First of all,the literature research on tax avoidance is sorted out at home and abroad.The concept of tax avoidance is summarized,the constituent elements and the legal basis of anti-tax avoidance are summed up,and the definition of tax avoidance in the legislation is analyzed domestic and overseas.The scholars elaborate three different perspectives on the legal nature of tax avoidance,combining the constituent elements from Criminal Law.In terms of object,objective elements,subject and subjective elements of a crime,the constitutive elements of tax avoidance with legal thinking will be put forward.In practice,the provided references for anti-tax avoidance of individual income tax can be identified.At the same time,the legal basis of anti-tax evasion of individual income tax is discussed from the principle of tax collection to the principle of tax function.Secondly,this paper discusses deeply the main ways and reasons of individual income tax avoidance in our country.Through the analysis of the main ways and reasons of individual income tax avoidance and the comparison with the current anti-tax avoidance rules of individual income tax in our country,and points out that the current rules for individual income tax evasion are still defective in China,such as being general,vague and unclear in their application.To be specified as follow.There is no clear guidance in the arm’s length principle as to what constitutes a reasonable choice of transfer pricing method for making a determination.What percentage of the shares of foreign companies is held by natural person shareholders to be considered as being controlled by a foreign company? How to determine if a taxpayer has engaged in economic activity with a improper purpose of exempting tax under the general rules of Anti-Avoidance?(Mainly reflected in that there is no clear guidance on how to reasonably select the transfer pricing method in the arm’s length principle,natural person shareholders can only be identified as the controlled foreign company if the proportion of shares held by the foreign company reaches such proportion,and in the general anti-tax avoidance rules,how to determine the unreasonable commercial purpose of the taxpayer to engage in economic activities for the purpose of reducing or exempting tax by improper means and what tax benefits should be identified as inappropriate tax benefits.)In addition,due to the lack of a sound system for a full inquiry of natural persons’ tax-related information,the tax bureau is unable to fully catch the tax-related information.Under this circumstance,natural person taxpayers are easy to avoid tax.Meanwhile,the inconsistency between Tax Collection Law,Enterprise Income Tax Law and Individual Income Tax Law affects its possibility to apply the individual anti-tax avoidance rules better.,At the same time,the anti-tax avoidance rules for individual income tax are unclear about the allocation of the burden of proof between tax authorities and taxpayers.Finally,some suggestions are put forward to improve the application of anti-tax avoidance rules for individual income tax.First,to improve the anti-tax avoidance rules itself.The special anti-tax avoidance rules are mainly to refine the transfer pricing method based on the arm’s length principle and the relevant identification boundaries for controlled foreign companies.The general anti-tax avoidance rules clarify the standards of definition on the reasonable commercial purposes and improper tax benefits.Second,it is to establish a disclosure system for natural person taxpayers.Third,to strengthen the connection and coordination among Tax Collection Law,Enterprise Income Tax Law and Individual Income Tax Law is important.Fourth,to determine the distribution on burden of proof between tax authorities and taxpayers is crucial.The anti-tax avoidance rules of individual income tax in China have made a leap forward from the beginning.Not only to constantly discover the problems,but also to perfect the applications in practice,the anti-tax avoidance rules will be in a great progress in the future.,Therefore,the research on anti-tax avoidance rules of individual income tax law is of great significance to the construction of our anti-tax avoidance legal system. |
