On The New Taxation Right System Under OECD

At present,the world economy is transforming from an entity to a digital economy,and the international tax field is undergoing major and profound changes.In order to coordinate the multilateral framework,adapt to the development of the digital economy,and maintain the stability of the international tax environment,the new tax right system came into being under the predicament that the current international tax system can no longer meet the needs of the current international tax environment.However,as the new tax right system is still in its infancy in theory and practice,there are many unresolved disputes,which lead to its scientific and effective being questioned.Taking into account the above facts,the article will focus on the disputes caused by the new tax right system and find its way to improve it.At the same time,China,as a large country with two-way capital input and output,needs to pay timely attention to the development of the new tax right system in Pillar I,promote the formation of an international consensus on the new tax right system,and use it to solve the tax problems faced by China in the digital economy.The article discusses the new tax right system in the perspective of OECD through five parts,as follows:The development of economic digitalization has brought difficulties in the application of traditional tax rights,the difficulty in dividing the resident country from the source country,the ambiguity in the recognition of cross-border transaction income,and the difficulty in determining the attributable profits of the source country.In this context,there is an urgent need for a set of multilateral tax provisions that can be agreed among countries,with a view to eliminating hidden dangers from the source.The new tax power system is to deal with such challenges by giving market countries the right to tax a certain proportion of the global surplus profits of super-large transnational groups.It integrates three proposals,namely "user participation","marketing intangible assets" and "significant economic presence",and finally decides to adopt a unified approach globally to redistribute part of the income of transnational corporations to the market countries,giving the market countries new tax rights.According to the principle of single entity,the new tax power sets the threshold of income and profit margin for transnational groups as a whole,excludes the extractive industry and the regulated financial service industry,and significantly limits the scope of application.This kind of restriction is too much.Although it can alleviate the challenges of the digital economy to a certain extent,excluding most of the digital enterprises is against tax fairness and will reduce the enthusiasm of developing countries for application.Therefore,the new tax right system should delete the quantitative test rules,set the threshold test of digital service business,and return to the original intention of adapting to the new digital tax environment.The new tax right system adopts the quantitative connection degree with special purpose,and applies the matching new rules of income source.However,the new connectivity rules ignore the key role of user participation in the value creation of the digital economy,and greatly increase the complexity and uncertainty of international tax rules in the post-BEPS era.Therefore,the new rules of taxation rights should take user participation as the connecting factor,and take user participation as the core to determine whether the market country is connected with multinational enterprises.When determining the degree of connection,comprehensive consideration should be given to both the existence of user and enterprise interaction behavior and the location of the user.The new tax right uses the overall tax base of multinational groups,hierarchical profit ownership,and focuses on protecting the interests of market countries.However,for developing countries,there are many practical obstacles to the new tax base determination rules.In addition,there are still difficulties and blind spots in the parallel application of the tax base determination rules of the traditional tax power system,which need to be adjusted and improved by OECD.Based on the consensus reached in the first pillar plan,it is necessary for China to carry out the reform of domestic tax system in advance to meet the new international tax environment before the further promotion of the two-pillar plan.However,China’s current income tax system conflicts with the new tax right and is difficult to adapt to the new tax environment.At present,it can be improved from the construction of new joint rules,the modification of income tax related provisions and the improvement of withholding tax.