How to prevent international tax evasion and avoidance? (How to avoid tax internationally? )

In nature, tax evasion is a blatant illegal act; Formally speaking, tax evasion belongs to fraud, which is usually manifested in the taxpayer's evasion of tax obligation by means of concealment, false report, false report and omission after tax obligation occurs. The so-called tax avoidance generally refers to the behavior of taxpayers to reduce or evade their tax obligations by some form of non-illegal means by taking advantage of the defects in the tax law. Tax avoidance means that taxpayers evade their tax obligations by seemingly legal means before their tax obligations arise. Therefore, there is no obvious fraud in essence and no illegality in form, so it is difficult to be investigated for legal responsibility. The so-called international tax avoidance means that transnational taxpayers consciously take some measures that violate the tax law in order to reduce or evade their tax obligations on transnational income or transnational property value. The so-called international tax avoidance means that transnational taxpayers take advantage of the differences in tax laws of various countries or loopholes in international tax agreements to reduce or evade their tax obligations through some form of non-illegal means. It is difficult to distinguish international tax evasion and tax avoidance from domestic tax evasion and tax avoidance. Because there is only one standard to distinguish between tax evasion and tax avoidance in domestic tax law, the standards to distinguish between international tax evasion and tax avoidance vary greatly in different countries. Some behaviors may be considered as international tax evasion in one country, but they can only be considered as tax avoidance in another country. There is no uniform standard in this world. Second, the main ways of international tax evasion and international tax avoidance 1. The main ways of international tax avoidance are: ① not submitting tax information to tax authorities. This mainly refers to not submitting tax returns to the tax authorities, or concealing from the tax authorities the property they own abroad or the income from dividends, interests, salaries, etc. (2) False income. False income means that taxpayers falsely report one income as another for the purpose of tax evasion. For example, taxpayers falsely report interest income earned abroad as dividend income, or falsely report dividend income as interest income. (3) inflated costs (fictitious deduction). The inflated cost refers to the measures taken by taxpayers to increase costs and reduce tax payable, such as underreporting and overstatement, making things out of nothing, and listing expenses in disorder. The main ways of inflated cost are inflated commission, patent fee, communication fee and amortized depreciation fee. (4) forging account books and receipts and payments vouchers. This mainly means that taxpayers achieve the purpose of tax evasion by making false accounts. For example, set up two account books, one for the inspection by the tax authorities and the other to reflect the real business situation of the enterprise. 2. The main ways of international tax avoidance Generally speaking, there are three main ways of international tax avoidance for transnational taxpayers, namely, tax avoidance through the transnational flow of taxpayers; Tax avoidance through the transnational movement of tax objects; Abuse of tax treaties for international tax avoidance. (1) Tax avoidance through transnational movement of taxpayers and international tax avoidance through transnational movement of taxpayers are common tax avoidance methods for natural persons. Due to the different standards for determining residents' tax jurisdiction in different countries, taxpayers often avoid taxes by emigrating abroad or reducing their residence time in a certain country. For example, an American who has a residence in new york has lived and worked in China for a long time. In order to achieve the purpose of tax avoidance, he took the practice of returning to the United States for a holiday every 1 1 month in China. Because according to the laws of New York State, only those who have a residence in the state and have lived in the state for more than 6 months are considered as resident taxpayers in the sense of the state tax law; According to the laws of China, only foreigners who have lived in China for more than one year are regarded as resident taxpayers in the sense of China tax law. In this way, the American took advantage of the loopholes in the tax laws of the two countries, neither living in China for 12 months, nor living in new york for 6 months. Therefore, he has no obligation to pay taxes to residents of China and the United States. (2) International tax avoidance through the transnational movement of tax objects. There are two main ways to avoid tax through the transnational flow of tax objects: one is to avoid tax through transfer pricing; The second is to avoid taxes through tax havens. (1) international tax avoidance through Transfer pricing refers to the transfer of profits from one affiliated enterprise to another by artificially raising or lowering the transaction price between transnational affiliated enterprises, mainly between their parent companies and subsidiaries, rather than by independently competing market prices. The specific form of transfer pricing is that subsidiaries import raw materials or spare parts from affiliated enterprises at a price higher than the normal market, and then sell finished products to affiliated enterprises at a price far lower than the market, thus making subsidiaries lose money or have no profit on their books and leaving all their profits abroad. The main purpose of price transfer of multinational corporations is international tax avoidance. Because the profits of subsidiaries established in high-tax countries can be artificially transferred to low-tax countries through price transfer, thus reducing the tax burden of multinational companies as a whole. (2) Tax havens refer to countries and regions that do not levy income tax and property tax or levy taxes at extremely low tax rates. For example, the British Virgin Islands, Bahamas, Berezin, Niue and other regions only charge fixed fees to overseas companies and do not levy any other taxes, so they are completely tax-free countries. In Hong Kong, Singapore, Malta, Cyprus, Gibraltar and other places, residents or enterprises in their own countries or regions only collect income from their own countries or regions and do not tax overseas income, which means that overseas income is not taxed. At present, the tax authorities of many countries have included the above countries and regions in the list of tax havens. Multinational taxpayers evade international taxes mainly by setting up "base companies" in tax havens. They collect their income and property outside tax havens to their base companies in tax havens, so as to achieve the purpose of tax avoidance. The so-called base companies refer to those companies established in tax havens, but actually controlled by foreign shareholders. All or major business activities of such companies take place outside tax havens. There are three main ways for multinational taxpayers to avoid tax by using base companies: one is to use base companies to fictional transit sales business; One is to take the base company as the holding company and leave all the profits of subsidiaries in the base company in the form of dividends; One is to take the base company as the trust company and make the overseas property fictitious as the trust property of the base company, so as to collect all the proceeds into the account of the base company. (3) Weakening share investment for international tax avoidance (capital weakening) mainly means that transnational investors intentionally reduce the share investment ratio in foreign affiliated enterprises and increase the loan investment ratio, so as to achieve the purpose of tax avoidance. There are at least two differences in tax treatment between stock investment and loan investment: (1) In stock investment, the invested company must pay income tax in the source country first, and then distribute dividends to investors from after-tax profits, so dividends cannot be deducted from the taxable income of the company in advance; In loan investment, the interest paid to investors can be deducted from taxable income in advance as expenses; (2) In stock investment, investors may need to pay withholding income tax to the source country for dividends received from the source country; In loan investment, although investors may have to pay interest withholding tax, the interest withholding tax rate is generally lower than the dividend withholding tax rate. For example, suppose an American company and a China company set up an equity joint venture, in which the American side contributed 5 million yuan, accounting for 50% of the shares. The taxable income of the joint venture company in that year was 6,543,800,000 yuan, and the income tax was 654.38+000 * 33% = 330,000 yuan. China and the United States each pay 50%, that is, each pays1650,000 yuan income tax. In the end, China and the United States each received a dividend of 335,000 yuan from the after-tax profit of 670,000 yuan (yield 6.7%). However, if the US splits the investment of 5 million yuan, of which 2 million yuan is equity investment, accounting for 20% of the equity of the joint venture company, and the other 3 million yuan is loan investment, and the loan interest is agreed to be 300,000 yuan per year (interest 65,438+00%), then the income tax payable by the joint venture company in that year is (65,438+000-30) * 33% = After-tax profit is 470,000, and American dividend is 94,000. With the interest of 300,000 yuan, the United States received a dividend of 394,000 yuan from the joint venture company, and the Chinese side received a dividend of 376,000 yuan. China's income tax is only 230,000. American 50% tax 16.5, dividend 33.5 joint venture100 * 33% = 330,000, after-tax profit 670,000 tax 33 China 50% 16.5 33.5 American 20%+3 million loan, 30 (10 Total 30+9.4=39.4 Joint venture company (100-30)*33%=23, after tax 70-23=47, tax 23 80% China 18.4 37.637.6 ④ Multinational taxpayers abuse tax treaties to avoid taxes, so-called abuse tax treaties to avoid taxes internationally. The establishment of direct transmission company is as follows: there is a tax agreement between country A and country B, and there is a tax agreement between country B and country C, but there is no tax agreement between country A and country C. Company A has income from country C, but if it is directly transferred from country C to country A, it has to pay 67% double tax (33% in country A and 34% in country C). However, the company in country A has set up a subsidiary in country B, and the subsidiary receives income from country C. In this way, after paying 34% of the source tax to country C, the company in country A remits its profits to the subsidiary in country B, which is tax-free and then remitted back to country A from country B, which is also tax-free. The company in country A only pays 34% income tax in country C. The establishment of indirect pipeline company is as follows: country B has a preferential tax agreement with country C, but there is no agreement between country A and countries B and C. Company A in country A has income from country C, so it chooses to set up a holding company in country D (which may be a tax haven or sign a tax agreement with country B), and then the holding company in country D sets up a subsidiary in country B to collect income from country C. Third, domestic legal measures to control international tax evasion and tax avoidance From a practical point of view, at present, countries generally control international tax evasion and tax avoidance through domestic legislative measures. The measures taken by countries to control international tax evasion and tax avoidance can be divided into general domestic law measures and special domestic law measures. 1. General domestic law measures to control international tax evasion and avoidance. These measures mainly include: ① strengthening the international tax declaration system; ② Strengthening the tax review system; (3) Implement the income assessment system. 2. Special domestic law measures to control international tax evasion ① Measures to prevent multinational affiliated enterprises from using transfer pricing to avoid tax At present, countries generally adopt the "fair trade principle" to control the transfer pricing behavior of multinational corporations. The principle of fair trade is also called the principle of independent competition in China. Its theoretical basis is that the distortion of balance of payments distribution caused by price transfer will only occur between affiliated enterprises, but not between independent unrelated enterprises in the competitive market, because the transactions of unrelated enterprises are carried out under normal competitive conditions. According to this principle, commercial transactions between affiliated enterprises should be conducted at fair market prices. If the price is artificially raised or lowered, the tax authorities of the countries concerned may adjust the income and expenses of the affiliated enterprises according to the fair market price. The core of the principle of fair trade is to compare the internal transaction price between affiliated enterprises with the normal transaction price of independent enterprises. If there is a distorted price, the tax authorities can adjust the distorted internal price. However, there are three defects in the implementation of the independent transaction principle: (1) The internal transaction price between affiliated enterprises is not comparable to the normal price between independent enterprises. As more and more transnational transactions involve the use of intangible assets and the provision of special services, it is difficult for tax authorities in various countries to find comparable independent enterprise prices; (2) The review cost is too high. Because the normal transaction principle is mainly to compare the transaction prices between affiliated enterprises, the tax authorities must compare all transnational transactions of enterprises one by one during the review, which will consume considerable audit costs; (3) There may be new double taxation. Because transfer pricing often occurs between affiliated enterprises located in different countries, if a country's tax authorities increase the taxable income of an enterprise located in its own territory according to the normal transaction principle, then the country where the counterparty of the enterprise is located should correspondingly reduce the taxable income of the latter, otherwise it may cause new repeated taxation, which violates the principle of fair tax burden. In view of the defects of the arm's length principle, the United States and OECD countries have recently begun to reform their traditional transfer pricing tax systems, mainly in three aspects: (1) choosing profits as comparable objects. The traditional normal transaction principle is to compare the internal transaction price between affiliated enterprises and the normal transaction price between independent enterprises with the transaction price as the comparable object; The profit comparison method avoids the complexity of finding normal prices and comparing them one by one, but uses the method of comparing the profit levels of affiliated enterprises with similar independent enterprises to prove whether transfer pricing has been carried out between affiliated enterprises. The United States also put forward the "best method principle" in 1994, authorizing the tax authorities to decide whether to adopt the price comparison method or the profit comparison method. ⑵ Relax the comparability requirement in the normal transaction principle. The traditional normal transaction principle requires the internal transactions of affiliated enterprises to be completely consistent with the normal transactions in the market, while the loose normal transaction principle does not require strict comparability between them, as long as the differences are not great, they can usually be adopted. (3) Implement the advance pricing mechanism. Advance pricing mechanism refers to the advance pricing agreement reached between affiliated enterprises and tax authorities, which stipulates that enterprises must submit the pricing principles and calculation methods of internal transactions between themselves and overseas affiliated enterprises to the tax authorities for approval in advance. In the future, transactions between taxpayers and affiliated enterprises shall be conducted in accordance with the pricing method agreed in the advance pricing agreement. The advance pricing mechanism has two advantages: first, it reduces the management cost of both parties; The second is to improve the predictability of enterprise transaction costs. Because enterprises can make accurate judgments on their own tax costs before each transaction. The advance pricing mechanism has been implemented in Shenzhen and other cities for several years, and the effect is good. The detailed rules for the implementation of the new tax collection and management law stipulate in principle the advance pricing. (2) Measures to prevent the use of tax havens for tax avoidance. The legal control measures for such tax avoidance in various countries can be mainly divided into three categories: (1) preventing taxpayers from setting up base companies in tax havens; For example, the income tax and company law of the United Kingdom stipulate that any company resident in the United Kingdom shall not move out of the United Kingdom without the approval of the British Treasury. If a company moves to a tax haven for the purpose of tax evasion, it will not only pay taxes to the British government, but also be subject to criminal punishment. (2) Stop the establishment of the base company by prohibiting abnormal profit transmission. For example, Belgian law stipulates that payments made by Belgian resident companies to affiliated enterprises in tax havens and countries with low tax rates will not be deducted when calculating taxable income if they belong to abnormal profit transfer. ⑶ Cancel the deferred tax treatment of undistributed dividends obtained by domestic shareholders in the base company. The tax laws of many countries stipulate that if a company does not distribute profits to shareholders in the form of dividends, these undistributed profits should not be included when calculating the taxable income of shareholders. However, the American tax law stipulates that if American shareholders have a base company (controlled foreign company) located in a tax haven, even if the profits of the company are not distributed to shareholders in the form of dividends, shareholders must include them as distributed dividends in their taxable income, pay income tax and cannot enjoy deferred income tax treatment. (3) Measures to prevent capital weakening and tax evasion In view of the weakening of equity by multinational investors, countries generally adopt two methods to control it: first, restrict shareholders from providing excessive loans to companies; The other is to regard the interest paid by the company to shareholders as dividends, stipulating that the company shall not deduct interest expenses from taxable income. For example, the United States federal tax law stipulates that the legal ratio of corporate debt to its net assets is 65,438+0.5: 65,438+0. If the company's total debt exceeds this ratio, it will be regarded as an act of weakening capital, and the interest paid in excess cannot be deducted from the taxable income, but this part of interest should be regarded as dividends and should be subject to dividend withholding tax. ④ Measures to prevent transnational taxpayers from abusing tax treaties to avoid tax. At present, most countries take measures to set up special clauses in anti-abuse tax agreements when signing tax agreements, so as to prevent third-country residents from enjoying tax preferences through pipeline companies. A few countries, such as Switzerland and the United States, have also formulated anti-abuse tax treaty measures in their domestic tax laws. Four. Carry out international cooperation to prevent international tax evasion and tax avoidance With the increasingly serious phenomenon of international tax evasion and tax avoidance, governments all over the world have realized that it will be difficult to effectively control international tax evasion and tax avoidance only by unilateral domestic law measures. Therefore, countries generally take the form of bilateral and multilateral cooperation to prevent international tax evasion and avoidance by signing tax agreements. These international cooperation mainly includes three aspects: 1. Establish an international tax information exchange system. Using the international tax information exchange system, tax authorities of various countries can know the income and property value of transnational taxpayers in the other country, which is conducive to cracking down on international tax evasion. At present, many countries have stipulated the system of providing information to each other in bilateral tax treaties according to the principles stipulated by OECD and the United Nations Model Convention. This system mainly includes three aspects: ① the object of information exchange. According to the OECD Model Convention, the object of exchange is the information necessary for the implementation of tax treaties and the domestic tax information of each contracting state. The United Nations Model Convention adds that the exchange objectives should also include information on preventing international tax evasion. ② The scope of information exchange. Countries generally have restrictions on the scope of information exchange in tax treaties. For example, it is stipulated that the information exchanged is limited to information that can be obtained through legal and normal administrative channels; States parties have no obligation to provide each other with confidential information of enterprises or individuals; There is no obligation to provide information that violates the national public policy. ③ the way of information exchange. There are generally five ways to exchange information between States parties: routine exchange; Exchange according to special requirements; One party offered; The tax authorities of both parties shall conduct tax inspection on taxpayers at the same time; One party allows the tax personnel of the other party to enter the country for tax inspection. 2. Add anti-abuse clauses to the double taxation agreement. Since most abuses of tax treaties take the form of establishing pipeline companies, countries have taken measures to combat the abuse of tax treaties, and the most important thing is to prevent third-country residents from using pipeline companies to enjoy tax concessions. At present, the methods adopted in practice in various countries are: ① perspective method. According to the perspective method, whether the residents of the contracting state can enjoy the preferential treatment of the agreement depends on whether the shareholders who control or own the company are also residents of the contracting state. If the shareholders who control or own the company are residents of a third country, the company shall not enjoy the relevant tax reduction or exemption benefits stipulated in the agreement. (2) Exclusion method. Exclusion law refers to the preferential treatment stipulated in bilateral tax agreements, which is not applicable to some companies in a contracting state that enjoy low tax treatment. Because third-country residents often especially favor these low-tax companies when setting up conduit companies. ③ Channels. Channel method is an effective way to deal with stepping stone catheter company. It stipulates that dividends, interest and royalties paid by a resident company of a Contracting State to residents of a third country shall not exceed a certain proportion of its total income. Resident companies exceeding a limited proportion shall not enjoy the preferential treatment stipulated in the agreement. This has restricted catheter companies from transferring a large amount of their income to a third country. (4) subject to tax law. This means that taxpayers can enjoy preferential treatment of tax reduction and exemption for certain types of income in the agreement, and it must be based on the premise that such income is taxed in the taxpayer's country of residence. For example, the tax treaty between Austria and Britain stipulates that if Austrian companies have dividend income from Britain, the preferential withholding tax rate levied by Britain as the source country is 5%. However, the prerequisite for the UK to grant preferential tax rate to this company is that Austria must also be the country of residence of this company and tax it, otherwise the UK will impose a standard withholding tax of 15% on this company. The purpose of passing the tax law is to deal with typical pipeline companies, such as base companies located in tax havens and pipeline companies established in a contracting state that enjoy tax exemption or low tax treatment. 3. Mutual assistance in tax collection and management This includes that the tax authorities of one country accept the entrustment of the tax authorities of another country to carry out certain tax collection and management activities on their behalf, such as serving tax payment notices, implementing tax preservation measures, and recovering taxes on their behalf. Because transnational taxpayers often evade their tax obligations by transferring their income and property abroad, or accumulating them in tax havens without remitting them back to China, or even emigrating abroad, in this case, the relevant countries can effectively stop this kind of international tax evasion and avoidance by providing tax administrative assistance in this regard.