Legal System on International Taxation,Outline,A Brief Introduction Income Taxes Bases of Income Taxation Income Double Taxation Tax Treaties Tax Incentives Tax Avoidance and Evasion,Reference,1. Ray August, International Business Law: Text, Cases, and Reading, 5th Edition 2. 劉劍文，國(guó)際稅法，北京大學(xué)出版社，第二版，2004年4月 3. 余勁松 吳志攀，國(guó)際經(jīng)濟(jì)法，北京大學(xué)出版社 高等教育出版社，第三版，2009年4月,A Brief Introduction to International Tax Law,1. Concept: International tax law is the body of law that deals with taxation relationships based on transactional incomes among states, states and tax-payers.國(guó)際稅法是調(diào)整國(guó)家間以及國(guó)家與納稅人之間的,以跨國(guó)所得為基礎(chǔ)形成的國(guó)際稅收關(guān)系的法律關(guān)系的總和。 2. Characteristics: (1) The Relationship it governs調(diào)整對(duì)象: the relationship occurred in tax levy 稅收征納關(guān)系 tax benefits allocation. 國(guó)家間稅收分配關(guān)系 (2) Subject matter客體: transnational income, property, etc.; 跨國(guó)所得以及各種流轉(zhuǎn)稅的征稅客體; international tax benefits 國(guó)家間進(jìn)行分配的國(guó)際稅收收入 (3) Subjects主體: the subjects of international tax levy, the subjects of international tax payment, the subjects of tax benefits allocation (4) Regulatory forms法律規(guī)范形式: a combination of public law & private law, international law & domestic law 3. Sources: (1) Taxation treaties (2) Taxation usages (3) Domestic Law (foreign-related tax law),INCOME TAXES,Most Widely Used Basic Tax Governments Use One of Two “Models” to Collect Income Taxes Schedular model分類所得稅制: Imposes taxes at flat rates on different sources of income.將納稅人的各項(xiàng)所得劃分為若干種類，按類別規(guī)定不同的適用稅率和不等的費(fèi)用扣除及優(yōu)惠辦法，分別計(jì)征所得稅 Global model綜合所得稅制: Imposes uniform rates on all sources of income.將納稅人的各項(xiàng)所得加總，再減去稅法允許扣除的有關(guān)費(fèi)用和減免項(xiàng)目之后，按統(tǒng)一的稅率計(jì)征所得稅 Progressive rates are commonly imposed. 累進(jìn)制 Defined: Rates that increase as income increases.,1. Nationality Principle: States tax their citizens or nationals on their worldwide income no matter where they may reside. 2. Residency Principle: States tax the worldwide income of persons legally residing within their territorial jurisdiction. Determining residence Natural persons determined by one of three tests: Objective test: The length of time a person resides within a states borders. Subjective test: The intent of the individual to make a place his or her permanent domicile or household. Declarative test: The individual meets the admission criteria for entering the country as a resident. Companies determined by two tests: Where the company was incorporated Where the company is managed and controlled,BASES OF INCOME TAXATION,Source Principle: States tax all income from sources within their territorial jurisdiction and generally exempt from taxation income accruing abroad. Income accrued or derived from local sources commonly includes: Income derived from property located within the country. Income derived from any trade or profession carried on through any agency or branch within the country. Income derived from local employment carried on within the country,4. Interrelationship of Taxation Treaties The three bases may be used in conjunction with each other. Priority Source principle is usually regarded as the normal or default rule.通常使用的或一般性標(biāo)準(zhǔn) Nationality and residency are usually treated as supplemental and subordinate rules.特別標(biāo)準(zhǔn)或補(bǔ)充性標(biāo)準(zhǔn),5. Persons Immune from Taxation The following persons are commonly immune from taxation: Foreign governments. Foreign diplomats. Embassy technical and support staff and consular officials are exempt only with respect to their employment in the embassy or consulate. International organizations and their personnel, depending on The instrument creating the organization Agreements between the organization and the particular state The applicability of multilateral tax conventions Local tax law The applicability of general principles of international private law,INCOME 所得,1. Income Categories 應(yīng)稅所得 a. personal or business income個(gè)人所得或企業(yè)所得: The earnings or profits made by individuals and businesses. b. capital gains資本收益: The increase in value of the underlying capital owned or invested in by individuals and businesses. 1) In most countries, all income derived from corporate assets is regarded as business income. Both capital gains and ordinary profits are treated as business income. 2) In some countries, capital gains are distinguished from personal or business income. Capital gains are taxed at a different rate. Or, tax-payers are given tax breaks稅收減免 on their capital gains, depending on how long the assets are held or to what purpose the proceeds收益 are put.,Computation of Income Income of employed persons: Salaries and wages. Income for self-employed persons and companies. Calculated by one of two methods Profit and loss statement method損益表法: Gross business income is offset by allowable losses and deductions. 總營(yíng)業(yè)收入減去成本和扣除項(xiàng)目 Balance sheet method平衡表法: Income is calculated as the difference between net worth at the beginning and the end of the accounting period. 財(cái)務(wù)年度期初和期末的凈值差額 Countries using either of the methods make various adjustments to reflect local definitions of income. These typically include personal exemptions, deductions for expenses, and credits for double taxation.,3. Integration of Company and Personal Income Taxes Problem: How to allocate (or integrate) the tax burden between companies and their dividend receiving shareholders. Approaches: Classical system: Impose a tax on company earnings and on company dividends when they are distributed. 以“法人實(shí)在說(shuō)”為基礎(chǔ)，認(rèn)為公司和股東是兩個(gè)不同的經(jīng)濟(jì)利益主體。從征稅對(duì)象看，公司的征稅對(duì)象是利潤(rùn)，股東的征稅對(duì)象是股息，因而無(wú)論是納稅主體還是納稅客體都不存在雙重征稅問(wèn)題。采用古典制的國(guó)家中，公司所得稅與個(gè)人所得稅并存，分別征收。公司利潤(rùn)在公司層次要交納公司所得稅，不管該利潤(rùn)是被保留還是被分配。如果其被作為股息分配，這些股息還要由個(gè)人股東交納個(gè)人所得稅，結(jié)果會(huì)引起對(duì)公司利潤(rùn)的經(jīng)濟(jì)性雙重征稅。,2) Shareholder imputation system: Impose a tax on company earnings and on company dividends when they are distributed. Give shareholders a credit for the taxes paid by the company on distributed dividends to offset their personal income tax obligation. 歸集制是將公司層次征收的公司稅全部或部分地歸集起來(lái)，減少股東個(gè)人就股息應(yīng)交納的所得稅。股東可用分得股息所交納的個(gè)人所得稅，全部或部分抵免其個(gè)人所得稅義務(wù)。 3) Company deduction system: Companies deduct distributed dividends as an operating expense before determining their company income. Shareholders pay ordinary income taxes on the dividends they receive. 在公司層次上，允許被分配的利潤(rùn)（股息），以經(jīng)營(yíng)性指出的名義從應(yīng)稅所得中扣除。股東在獲得股息時(shí)正常交納個(gè)人所得稅。,4) Company two-rate system applies two rates of company taxes: Higher rate for undistributed profits. Lower rate for distributed profits. Distributed profits are taxed at a lower rate to compensate for the personal tax to be paid by the shareholder (at the ordinary rate). 5) Shareholder two-rate system: Imposes a lower personal tax rate for income received as dividends. Companies are taxed at the ordinary company rate. 對(duì)股東取得的股息按較低的稅率征收個(gè)人所得稅。,6) Shareholder exempt system: No taxes are imposed on dividend income received by shareholders. Companies pay ordinary company rate. 將股息收入排除在個(gè)人的綜合收入之外，不征個(gè)人所得稅。這等于只征收了一道公司所得稅。在公司層次，對(duì)公司的全部利潤(rùn)，包括未分配利潤(rùn)和保留利潤(rùn)，都按法定稅率征收公司所得稅。 7) Full-integration system: No company taxes are collected. All company profits (whether they are distributed or not) are deemed to be distributed to shareholders. Shareholders pay personal income taxes accordingly.,DOUBLE TAXATION,Defined: Taxation of the same income in two countries Systems for Relief from Double Taxation 消除雙重征稅的制度 Exemption system:免稅法 Income is taxed in one state (commonly a host state). Income is exempt from tax in a second state (commonly the home state). 通常是由居住國(guó)政府對(duì)本國(guó)居民來(lái)源于境外的所得或財(cái)產(chǎn)免于征稅。實(shí)質(zhì)上是居住國(guó)政府對(duì)收入來(lái)源國(guó)政府行使地域稅收管轄權(quán)的那部分所得放棄行使居民稅收管轄權(quán)，承認(rèn)來(lái)源地稅收管轄權(quán)的獨(dú)占權(quán)，從而避免兩種稅收管轄權(quán)的重疊交叉，防止雙重征稅的發(fā)生。,Credit system: 抵免法 Tax paid in one state is used as a credit against a taxpayers liability in another state.居住國(guó)政府按本國(guó)居民納稅人在世界范圍內(nèi)的所得匯總計(jì)算其應(yīng)納稅額，但允許其將因境外所得已向來(lái)源地國(guó)繳納的稅款在本國(guó)稅法規(guī)定的限度內(nèi)從本國(guó)的應(yīng)納稅額中抵免。,The credit will be in the form of either a direct credit for an overseas branch or an indirect credit for a foreign subsidiary. Direct credit 直接抵免 直接抵免是適用于同一經(jīng)濟(jì)實(shí)體的跨國(guó)納稅人向來(lái)源地國(guó)已納所得稅稅款的抵免。即總公司所屬的居住國(guó)政府，允許該公司用其海外分支機(jī)構(gòu)已繳來(lái)源地國(guó)的稅款來(lái)沖抵總公司的應(yīng)納稅款。 State Beta (the state of residence), 50% income tax rate on the worldwide income of its residents companies 1,100,00050%=550,000 State Omega (the state where the branch locates), 30% income tax rate on foreign branch income 1,000,00030%=30,000 550,000- 30,000= 520,000 居住國(guó)應(yīng)征所得稅稅額=國(guó)內(nèi)外總所得居住國(guó)所得稅稅率-允許抵免的已繳來(lái)源地國(guó)所得稅稅款,Indirect credit 間接抵免 間接抵免是適用于跨國(guó)公司母公司與子公司之間的一種抵免方法。 母公司所屬的居住國(guó)政府，允許母公司從其子公司已繳來(lái)源地國(guó)的所得稅款中，用應(yīng)由母公司分得的股息承擔(dān)的那部分稅款，來(lái)沖抵母公司的應(yīng)納稅款。 間接抵免之所以稱為間接，是因?yàn)槟腹舅诘木幼?guó)政府允許母公司抵免的稅額，并不是由母公司直接向子公司所在國(guó)政府繳納的，而是通過(guò)子公司間接繳納的。 子公司在國(guó)外已納的所得稅稅款不能完全視為母公司的繳納，母公司的居住國(guó)只能就該公司所分擔(dān)的子公司的所得稅稅款給予稅收抵免。 間接抵免法計(jì)算原理與直接抵免法一致，其復(fù)雜性主要在于先應(yīng)從母公司收取的外國(guó)子公司支付的股息計(jì)算出這部分股息已承擔(dān)的外國(guó)所得稅稅額 母公司承擔(dān)的外國(guó)子公司所得稅稅額=外國(guó)子公司向所在國(guó)繳納的所得稅母公司分得的股息/外國(guó)子公司稅后利潤(rùn),Deduction system:扣除法 A taxpayer deducts the tax paid to one state from the profits liable to taxation in another state. 居住國(guó)政府對(duì)居民納稅人因國(guó)外所得而向來(lái)源地繳納的所得稅稅款，允許作為扣除項(xiàng)目從應(yīng)稅所得額中扣除，就其余額適用相應(yīng)稅率計(jì)算應(yīng)納稅額。 居住國(guó)應(yīng)征所得稅額=（居民的跨國(guó)總所得-國(guó)外已納所得稅額）適用稅率,Comparison of the Double Taxation Relief Systems From the perspective of the taxpayer, the tax relief system can be ranked as follows: exemption system-best, credit system-intermediate, deduction system-worst. The most advantageous system of double taxation is the exemption system. By being exempt from tax liabilities in one state, the taxpayer is subject to a lower overall tax bill. The least advantageous system is the deduction system. Because it only allows the tax paid in one state to be deducted from gross income in the other state, the overall tax bill tends to be higher. The principal adverse feature of the credit system is that the taxpayer ends up paying the higher rate of the two taxing countries.,TAX TREATIES,Purpose: To ameliorate the problem of double taxation and other matters, including tax incentives, tax avoidance, and tax evasion Model Treaties these are widely used Organization for Economic Cooperation and Development (OECD) Model Treaty. United Nations (UN) Model Treaty.,Coverage of Tax Treaties Taxes covered by most treaties: 1) Income taxes所得稅 2) Capital gains taxes資本所得稅 3) Taxes on net wealth凈財(cái)富稅 Persons covered by most treaties: Natural persons. Companies.,Basis for Taxation under the tax treaties 1) Both the OECD and the UN model tax treaties base taxation on the residency of persons within the contracting states. 2) Today, states do not insist upon taxing their nonresident citizens. The exception is the United States.,3) If individuals have dual residency, their tax status will then be determined by a series of tie-breaking rules set out in the treaty. The following are the rules from both the OECD and the UN model treaties: a permanent home available to him If an individual has a permanent home in both or neither of the countries, then his residence is in the country with which his personal and economic relations are closest. If a center of vital interest cannot be ascertained, residence is in the country of the individuals habitual abode. If an individual has a habitual abode in both or neither of the countries, then his residence is in the country of which he is a citizen or national. If all of the foregoing fail to determine residence, then “the competent authorities of the contracting states shall settle the question by mutual agreement.” for companies with dual residency, treaty residence is determined by the place of effective management of the company.,Double Taxation Provisions Significant factors: Residency, personality, and types of income. General rule: States may only tax residents.,Exceptions: 1) relate to the taxpayers Personality: Non-resident person providing independent or professional services may be taxed by a tax treaty state if the person maintains a fixed base within that state. However, only the income attributable to the fixed base may be taxed. 如果非居民跨國(guó)獨(dú)立勞務(wù)提供者在該稅收協(xié)定締約國(guó)有固定基地，該締約國(guó)可對(duì)該非居民跨國(guó)獨(dú)立勞務(wù)提供者征稅，但應(yīng)限于可歸屬于該固定基地的那部分勞務(wù)所得 (“固定基地原則”), Non-resident employee may be taxed in a tax treaty state to the extent of the earnings the employee receives in that state. 稅收協(xié)定締約國(guó)對(duì)非居民的受雇者以在該締約國(guó)取得的收入為限征稅 However, they are not to be taxed, if - they are present in that state for less than 183 days; - they are paid by a nonresident employer; - the nonresident employer does not have a fixed base or permanent establishment within that state., Non-resident companies may be taxed by a tax treaty state if they maintain a permanent establishment within that state.如果在非居民公司在一締約國(guó)有常設(shè)機(jī)構(gòu)，該稅收協(xié)定締約國(guó)對(duì)該公司可征稅，但應(yīng)限于可歸屬于該常設(shè)機(jī)構(gòu)的利潤(rùn)為限。 (“常設(shè)機(jī)構(gòu)原則”) The OECD and the UN model treaties use the term to refer to a fixed place of business at which a nonresident carries on any commercial activity, either wholly or partly. This includes, but is not limited to the following: - Branch offices, factories, and workshops; - Mines, oils and gas wells, quarries, and other places for extracting natural resources; - Building sites, construction projects, and assembly projects that last for more than 12 months,A permanent establishment, does not, however, include any of the following: - The use of facilities to store, display, or deliver goods - The maintenance of a stock of goods or merchandise for the purpose of storage, display, delivery, or processing by another - The maintenance of a facility for purchasing goods or merchandise, for scientific research, or for collecting or disseminating information - The maintenance of a facility for advertising, marketing, or any other activity of a preparatory or auxiliary nature - The maintenance of a building sites, construction projects, and assembly projects that last for 12 or fewer months - The carrying on of business through a broker, general commission agent, or any agent of independent status acting in the ordinary course of business,The UN model allows profits to be attributed from a wider range of sources than does the OECD model by following the force-of-attraction rule.引力原則This rule says that if a company in Country A has a permanent establishment in Country B, then Country B may tax not only the profits generated by the company through the permanent establishment but also any profits that come to the company from trade or business that is carried on in Country B independent of the permanent establishment., Certain special persons, such as the estates of deceased individuals and personal trusts, who are subject to taxation by a contracting state. Although these persons are juridical entities similar to companies, they are not business entities. Because they exist to manage the assets of an individual, the OECD and UN model treaties look to the residency of that individual in determining their residency.,2) relate to the types of Income: Immovable property is taxable only in the state where the property is situated. Dividends remitted by a subsidiary are subject to limited withholding taxes代扣所得稅by the host (or source) state. Under the OECD treaty, royalties are to be taxed only in the state where the recipient is a resident (i.e., the home state); Under the UN treaty, both the source state and the home state may tax royalties, but the contracting parties are to set a limit on the withholding rate that the source state may impose. Capital gains. - alienation of immovable propertysituated in the other contracting state may be taxed in that other state. - alienation of movable propertypertaining to a fixed base available to a resident of a contracting state in the other contracting statemay be taxed in that other state. - alienation of ships or aircraft operated in international traffic.shall be taxable only in the contracting state in which the place of effective management of the enterprise is situated. - other thanpara.1,2,3, shall be taxed only in the contracting state of which the alienator is a resident.,TAX INCENTIVES稅收優(yōu)惠,Purpose: A tax scheme used primarily by host states to encourage international trade Examples of Tax Incentives Income tax holidays for foreign investors.收入稅免征期 Capital allowances (e.g., accelerated depreciation). Carrying forward of allowances for income tax deductions. Waivers and deductions of import duties. Export subsidies. Deferment of corporation registration fees and duties. Tax exemptions for expatriate employees.,TAX AVOIDANCE AND EVASION,1. Tax Avoidance 避稅 a. Defined: Efforts by individuals and companies to Take advantage of loopholes in the tax laws, or Where some doubt exists as to the interpretation of a tax law, to benefit from that doubt. b. Common examples: Tax havens. Transfer pricing. Treaty shopping. Thin capitalization.,1) Tax havens利用避稅港 a) Defined: States that provide a refuge from taxes for i. Taxpayers themselves. ii. The taxpayers income. iii. The taxpayers capital and other assets. b) Methods for countering: i. Many states tax income earned in tax havens. ii. Some states try to structure their own tax laws to limit the usefulness of tax havens to local residents. iii. Other states impose special taxes on certain types of income and transactions that commonly involve the use of tax havens.,2) Transfer pricing轉(zhuǎn)移定價(jià) a) Defined: The practice of charging arbitrary prices for goods or services provided by one affiliate company to another affiliated company so as to lower the tax burden of the overall enterprise. Purpose: Allows small profits to be made on the books of affiliates in countries w