Audit of Anti -avoidance of challenges and difficu

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Audit of Anti-avoidance of Problems and Solutions

【Key words anti-avoidance paper audit dilemma strategy

【Abstract】 This article is based on enterprises, especially foreign-funded enterprises in China in recent years, the prevalence of realistic avoidance, the first analysis of China anti-avoidance into the predicament of the audit, and then proposed the establishment of a high-quality anti-avoidance audit team, audit surveys to establish an anti-avoidance mechanism for cross-border cooperation, the establishment of tax information database to enhance the anti-avoidance capability, reasonable anti-avoidance powers set to increase the punishment for tax avoidance efforts to increase the cost of corporate tax avoidance strategies such as anti-avoidance audit.

With the November 28, 2007 the first adjustment of the causes of anti-avoidance cases of administrative litigation arising Yunyan District in Guiyang City, who Civil Hospitals open trial, the anti-China tax audit entered a new phase. It can be predicted quite a long time in the future, anti-avoidance economic audit of the audit will be a very important field and hard work.

First, the plight of China's anti-tax audit

According to statistics, foreign companies established in China's loss in the period 1988-1993 35% -40% in 1994 -1995 years to 50% -60% in the period 1996-2000 an average of 60% -65%; After this, foreign loss stabilized at about 50%, self-reported total loss of 1 200 billion each year - 1 500 billion. Another relevant data indicate that the current enterprise income tax over the world's 159 countries and regions the average tax rate is 28.6%, China 18 countries and regions around the average tax rate was 26.7%. China's implementation of corporate income tax rate of 25% are moderate or lower levels, conducive to enhancing enterprise competitiveness and attract foreign investment. But in China there is a lower tax rate under the conditions of such a large scale tax avoidance, thought-provoking. This also shows that China must establish an efficient, comprehensive audit of the new anti-avoidance system.
and developed hundreds of years of history compared to the anti-tax audits, tax audits in China to carry out anti-very late. Shenzhen Pilot 1988, 1991, the national implementation of legislation to the present, only 20 years time. In today's increasingly complex anti-avoidance tax avoidance and confrontation, our anti-avoidance audit work is still in its infancy, tangible results. Audit inquiry into the plight of China's anti-tax avoidance reasons, mainly the following aspects:
(a) the lack of anti-avoidance
audit professionals in the increasingly great open market economy, often involving not only the domestic corporate tax tax laws and tax rates, but also to the country (territory) the tax laws and tax rates. This requires tax auditors around the world who know the tax system and tax agreements, but also to master and use of e-commerce environment, the economic transactions of multinational corporations operating conditions and laws. But up to now training in this area lags far behind the development of the situation.
(b) anti-avoidance auditors collaborate with other departments is not enough to evade taxes
companies often involve cross-regional, cross-range prices and market information, which requires the anti-avoidance auditors and the Ministry of Commerce, Customs, Business Administration statistics and and other closely related departments to strengthen the liaison of information between various departments and communication, audit department alone,
(c) The local government will not strongly anti-avoidance
appears in some local governments, investment is more important than loss of tax revenue, attracting more performance the greater the anti-avoidance tax department will destroy the soft investment environment. So anti-avoidance improper interference of local officials to become a common phenomenon in the audit, which greatly reduces the efficiency of anti-avoidance audit institutions. Local tax authorities on tax collection and management tools exist, backward technology, Cha Du lax and so on.

(d) there are loopholes in tax laws of China and various types of arbitrary large
now bonded zones and high-tech enterprises involved in various all sorts of tax incentives, which provides a tax avoidance as legitimate a lot of room. In the specific policies, just the formal implementation of the new enterprise income tax law, although restrictions were metastatic pricing behavior provides for the principle, but have not yet reached the degree of direct action.
(e) difficulty in the implementation of tax administration
from the implementation of tax administration point of view, due to the imperfect tax law, there is a variable definition such as the continuity of taxpayers, tax rates on the adjustable nature of the object and the tax rate differential on the other defects, the taxpayer can take advantage of tax laws led to the inadequacy of tax avoidance, which increased the difficulty of the implementation of anti-avoidance audit. For example, in practice, often with the anti-avoidance tax avoidance is not entangled in disputes with the current law is difficult to accurately define.
(f) the new tax anti-avoidance provisions of the relevant laws need to support
For example, in the corporate income tax on the current common practice is the burden of proof from taxpayers to increase administrative efficiency, that is, if the tax authorities have ruled that transfer pricing tax avoidance the taxpayer,[link widoczny dla zalogowanych], the taxpayer can not provide proof to the contrary with the fact that, according the implementation of the tax authority's decision. However, the Administrative Procedure Law of China adopted the system of proof that the defendant, that the burden of proof by the executive branch. Clearly, the anti-avoidance rules of evidence and the taxpayers in administrative proceedings conflicting rules of evidence.

Second, our audit of the way anti-avoidance

(a) the establishment of a high-quality anti-avoidance audit team, the cooperation of relevant departments to strengthen the current tax
people, especially large multinational companies, which are mostly knowledge-intensive and capital-intensive enterprises, their mode of operation, management, and the final product and so on into the advanced technology and modern management concepts, many multinational companies is itself a product of high technology. In addition, the audit of anti-avoidance is the main rival foreign companies spend lots of money to hire professional Accounting , lawyers, these people versed in national laws and access to information, has a wealth of tax experience. To implement effective management of such a taxpayer, you must have a high theoretical knowledge and practical skills. To safeguard national sovereignty, protect the national interest, tax, audit institutions must have a large number of highly qualified personnel. Therefore, it is necessary to set up full-time anti-avoidance audit institutions to improve the collection and management personnel, especially anti-avoidance auditors professional and ethical standards and business skills so that they are familiar with tax laws, proficient in foreign languages, knowledge of financial accounting, international trade International financial , knowledge of international taxation to raise the level of tax audits, tax cope with the implementation of the international community caused friction and the ability of the tax dispute.
In addition, because anti-avoidance related to social and economic life in all sectors, rely on tax audit institutions to strengthen the anti-tax avoidance is not enough work to be with the customs, trade, finance, Insurance , commodity inspection, industrial and commercial, foreign exchange and other professional sectors and a variety of accounting, auditing, tax offices work together. Especially in light of international trade disputes and the emergence of some new events, to strengthen anti-dumping investigations, such as dumping and the links between departments and information sharing, transfer pricing anti-avoidance of work to do, all aspects of plug tax loopholes, tax laws to maintain the dignity of protect national interests from losses.
(b) the establishment of anti-avoidance cross-border cooperation mechanisms audit investigation, detailed rules
economic globalization and the rise of the information economy, production and distribution methods to make some major changes. Only by a country's tax audit department of some business activities across multiple countries, large multinational companies are often powerless to carry out tax audit investigation, the result is that tax avoidance can not solve the increasingly serious problem. Current cross-border cooperation in the anti-avoidance, a pressing task is to exchange intelligence. China has tax treaties with relevant countries also have information exchange provisions. May 2005, the tax authorities of the two countries signed in Beijing, China's first bilateral advance pricing arrangement (referred to BAPA), the two sides first began anti-avoidance cooperation. The framework of the BAPA, the two sides from other countries can share the goods and services price information; its main function is anti-avoidance, followed by the avoidance of double taxation. Given the international situation, the future tax collection should be strengthened cross-border collaboration, and increase international cooperation in anti-avoidance efforts audit investigation.