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On main form of international tax avoidance and its prevention

Author: LiuYing From: www.yourpaper.net Posted: 2010-06-11 23:38:59 Read:
International tax avoidance is a multinational taxpayers to take advantage of the differences in national tax law loopholes, exceptions and defects, to take all legitimate means, cross-border tax territory to seek the maximum to reduce the total tax liability of its international behavior. With the rapid development of economic globalization, the international economic exchanges increasing the multinational taxpayer international tax avoidance has become one of the thorny issues faced by the national tax authorities, caused great concern and attention of Governments and relevant international economic organizations .
The causes of international tax avoidance and form
In respect of the the in terms of the the causes of of the international tax avoidance. On the one hand is of transnational the taxpayer due to the the interests of drivers, subjective on the want to take advantage of the the the a smaller risk of the method of the the this kind of the international tax avoidance the to achieve of profit maximization - get the truth. Then go; the other hand, from the Objectively speaking, difference of the tax system all countries for the international tax avoidance provides the conditions for. In In addition, the the government's tax revenue Collection and Management the level of, Company Law, the immigration law the, foreign exchange management Ordinance as well as the temper justice of the bank secrecy system degree of difference can also cause international tax avoidance.
Multinational taxpayers tax shelters in real economic life, strange, and continues to evolve, but summed up in nothing more than the following specific form.
Multinational taxpayers ownership change. In general, when taxpayers in high-tax countries found much lighter tax burden on low-tax country, will consider the residence to move to a low-tax country and become its residents to escape tax, international purely for tax avoidance transfer of residence of the phenomenon known as a tax exile.
2 Using the permanent establishment. The so-called permanent establishment is set up to determine the location of production and business establishments multinational taxpayers in a country. Many States provide that the operating profits of the permanent establishment shall be exempted from tax avoidance channel, which opened up to multinational taxpayers. Multinational taxpayers have conclusive evidence that the activities undertaken in the country of origin has nothing to do with the business profits of a permanent establishment, can be exempt from the taxes of the country of origin obtained. Cross-border taxpayers can be be to divert through a permanent establishment or the goods, property, and cost of, so as to achieve the the the purpose of the tax avoidance.
3. Select the the most favorable the form of of the Company. Multinational companies to achieve tax plan optimization, usually set up branch offices in the primary stage, when the operating activities to carry out a comprehensive and then set up a subsidiary. The benefits of the establishment of branch offices, headquarters and the branch is the same legal entity the, Branch income tax summary Corporation, which the head office branch losses against their taxable profits; Branch is not the country of the limit of the amount of foreign capital invested, created the procedure is relatively simple, certain financial information need not be published to the host country; branch may be exempt from the capital of the country of registration tax or stamp duty, and may be exempt withholding the income tax.
A domestic tax havens to establish a base. A so-called 'Al company is the refers to to multinational companies out of operating the purpose of with third countries, in the of a single base State in the the formation of of the the legal persons or other responsibility of the Co., Ltd. of. The base company has an independent tax status, most of located in the to to tax avoidance to Hong Kong or the tax avoidance State, its the primary economic interests are in the the outside the country of base, the main so that four specific the form of of the the Secretary for, the Controlling companies, investment companies.
Tax avoidance through transfer pricing. The so-called transfer pricing refers to the settlement price of the goods, services transactions between associated enterprises parties, also known as the transfer price. Involved in the field of international tax transfer price refers specifically to the association between enterprises, human determine the price at the time of the transaction. The basic characteristics of the performance of the companies belonging to high-tax country's income transfer to low-tax countries or tax havens deliberately raise or lower prices, so as to achieve the purpose to reduce the tax burden.
6 tax deferral of tax avoidance. Tax deferral is the national implementation of the jurisdiction of the residents bear the profits of foreign subsidiaries in the form of dividends remitted to their parent, the parent company is not taxed only when the subsidiary profits remitted to the parent company only requires parent tax liability. So the of tax avoidance in cross-border the in commonly used to the Extension of investors (Approach of tax payment).
Second, the prevention of international tax avoidance
Speed ??up the legislative building against international tax avoidance. In order to effectively control the international tax havens, countries should focus on establish and improve the terms of the tax regulations, pay attention to the exact use of text, trying to plug the loopholes. To develop specialized anti-avoidance provisions and provides for the taxation of cross-border tax reporting obligations to investigate the burden of proof. Furthermore, we need limit the a the residents of the the Financial sexual's emigrated of the activities. Formulation of all these terms are the tax authorities to prevent international tax avoidance and effective legal weapon. 2. To strengthen the the the restrictions of on the the a variety of of the pay taxes the main body of, and to prevent the use of the the international transfer of to carried out the international tax avoidance. Was on the one hand yes right to the a natural person does take advantage of the in the form of of the have emigrated abroad, reference is to be made to the person's circumvent the the restrictions of the tax burden. If the state regulations, must belong to the 'real "and" All "to relocate only be recognized only from their own tax levied for the relationship, while the" partial "and" false "moved to the non-recognition. On the other hand is the the restrictions of the on either the body take advantage of to change the the in the form of of the residents or citizens identity circumvent the the tax burden. such as the Netherlands Zeng to regulate, authorize when the occurrence of of the by its enterprises in the the the time of war or other similar disasters to migrate to the Netherlands Territory, without to do the tax avoidance processing, but
migration for other reasons, is generally believed that the tax avoidance purposes, but not recognized, still continuous obliged to pay tax.
Adhere to the "the independent competition" standard to prevent taxed the international transfer of international tax avoidance. The international transfer of taxed avoidance occurs mainly in the financial accounts of the activities of these enterprises, international between associated enterprises] forms of profit distribution reflects the interests of the Group "feature, so the given limits of this avoidance, the key is should adhere to the the standard of the "and compete independently", that is, in accordance with any party to of the a company there are a associated shared with unaffiliated third-party companies, their respective the the interests of the independent economic and in in order to with the and mutual competition the identity of appear, In the the the same or similar the case of, engaged in the the same or similar costs, expenses or profit activities should bear or vested to examine whether it is normal to measure a company's profits, whether the unreasonable arrangement between companies. Those who in line with the the standard of the "and compete independently", in the the time of taxed on the can to admit, Otherwise, the you want to carried out in accordance with the this standard adjust the, so that you can achieve the The purpose of the to prevent the tax avoidance.
4 Make sure the "fair price" to prevent transfer pricing. Key aspects of the sale of goods or property pricing between associated enterprises is to determine a "fair" price, as a measure of whether the taxpayer by way of transfer pricing, depression or raise prices to avoid taxes two such as the United States in its domestic income Code provisions, affiliated companies or companies are selling goods or property, the fair price of the financial regulations, cf each other unrelated parties, under the same circumstances, the price paid for the sale of similar goods or property. Transfer pricing adjustment methods comparable uncontrolled price method, the resale price method, the cost-plus method three
5. Strengthen the the the Inland Revenue management, and to carry out a wide range the the tax inspectors and their the tax audit. One is to strengthen the system of tax returns. Stringent requirements of timely, accurate and true to the national tax authorities to declare all of their operating income, profits, costs or expenses charged to taxpayers engaged in cross-border economic activity. Second is to strengthen the accounting and auditing system. The necessary audit, to strengthen the accounting process and results of the multinational taxpayers to check their business or accounts of all real and wrong, as well as multi-share cost and non-existent expenditure. At present, many countries generally require foreign companies, AG declared all kinds of statements always have to go through a Notary Public Accountants audit, or non-recognition. The third is to take the resulting approved system: many countries assumptions or estimates to determine the taxable income of the international tax satisfied. Taxation can be based on an assumption or estimate above, this is not tax desertion, but effective way to take in some exceptional circumstances. If the taxpayer can not provide accurate cost or expense vouchers, unable to correctly calculate taxable income, the tax authorities with reference to a certain standard, estimated or approved by a corresponding amount of income, and then to 20 The aim of the permit tax In order to avoid the use of inaccurate cost or expense and tax avoidance, but also can simplify collection procedures in multinational taxpayers.
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