国际税收

Chapter 1Backgrounds
I Introduction
II Why taxation
III Optimal taxation
IV Goals of international tax rules
V Current taxation system of China: an overview ［=§ 6I］
Chapter 2Tax treaties and model tax conventions
I Important role of international tax treaties
II Treaty as main source of international laws
III Legal nature and general effect of tax treaties
IV Objectives of tax treaties
V Model tax conventions
VI Interpretation of tax treaties
VII Multilateral conventions or provisions involving tax matters
VIII Multilateral forums and coordinators on tax matters
Chapter 3Jurisdiction to tax
I Introduction
II Categories of ‘jurisdiction to tax’
III General income tax liabilities under Chinese domestic laws［=§ 6II］
IV Residence rules: defining ‘resident’
V Resident in Chinese tax laws ［=§ 6III］
VI Source rules: determination of ‘source jurisdiction’ and source taxation
VII Source taxation in Chinese laws ［=§ 6IV］
VIII Tax jurisdictions: conclusion
IX Bilateral modes helpful to resolve conflicts of jurisdictions
Chapter 4Double taxation and its relief
IInternational double taxation defined
IICauses of IDT
IIIGeneral approach to relieve double taxation
IVRelief mechanism (1): deduction method
VRelief mechanism (2): exemption method
VIRelief mechanism (3): credit method
VIITax sparing
VIIIRelief of double taxation under Chinese laws ［=§ 6V］
国际税收
Contents
Chapter 5Tax avoidance and antiavoidance rules
IImportant terms
IICauses of international tax avoidance
IIIBalance of tax avoidance and countermeasures: ethics of tax
avoidance, and justification of antiavoidance measures
IVBasic elements and ways of tax avoidance
VOverview of antiavoidance methods
VIThin capitalisation and thin capitalisation rules
VIIUse of tax deferral and CFC rules
VIIITransfer pricing and its prevention
IXTreaty shopping and antishopping clauses
XHybrid mismatch and antihybrid rules
XI(International) tax planning and international coordination
XIISpecial tax adjustments under Chinese laws: antiavoidance rules on enterprise income tax ［=§ 6VI］
XIIIConclusion: international tax law framework
Chapter 6Chinas international taxation administration
ICurrent taxation system of China: an overview ［=§ 1V］
IIGeneral income tax liabilities under Chinese domestic laws［=§ 3III］
IIIResident in Chinese tax laws ［=§ 3V］
IVSource taxation in Chinese laws ［=§ 3VII］
VRelief of double taxation under Chinese laws ［=§ 4VIII］
VISpecial tax adjustments under Chinese laws: antiavoidance rules on enterprise income tax ［=§ 5XII］
Illustrations & Cases
Illustrations
IL1: Some important principles in the field of international taxation2
IL2: Sale of a selfbuilt house (determining the amount of gross income)9
IL3: Payment to a contractor who built a house for the owner (determining the amount of gross income)10
IL4: Roxanne supporting a child living abroad (a simple example of
‘international tax law’)13
IL5: Roxanne receiving interest paid by a foreign bank
(tax liability under treaty and domestic law)15
IL6: The expenditure on environmental protection facility reducing
the effective tax rate17
IL7: The meaning and use of quick deduction (progressive rates)18
IL8: Reeve being paid $20′000 this year (various tax rate structures)19
IL9: James and Angela spending on purchases (‘regressive’ excise tax)20
IL10: Consulting service at the end of a year (cash method for revenue)22
IL11: Temporary employment at the end of a year (cash method for expenses) 22
IL12: Threeyear loan at compound interest rate of 10% (‘nett income under cash method’ and ‘cash flow’)22
IL13: Consulting service at the end of a year (accrual method for revenue)23
IL14: Temporary employment at the end of a year (accrual method for expenses)23
IL15: Chin being paid ￥162′000 this year as her salary (a simple example of individual income tax computation)24
IL16: Both Reeve and Nancy earning $100′000 (transnational interindividual equity)38
IL17: Reeve earning income from three foreign countries (tax jurisdiction)39
IL18: A German company with a branch in Tunisia (capital import and export neutrality)41
IL19: Taxation on ‘royalties’ (treaty interpretation)49
IL20: ‘Guaranteed’ low rate on royalties under a tax treaty (certainty through tax treaty)55
IL21: ‘Substance over form’ doctrine (treaty interpretation)64
IL22: What is ‘liable to tax’ (tax treaty interpretation)64
IL23: Mr Walter performing abroad (residence and source jurisdiction)79
IL24: Dividends paid to resident or nonresident? (tax jurisdictions)85
IL25: Placeofmanagement shifted to law tax country and receiving royalties there (a way to escape high taxes)93
IL26: Income of a law firm who providing transnational services (difficult to define ‘source’)98
IL27: Painter painting in a large office building (coherent commercial activity) (location test for PE)103
IL28: Salesman regularly visiting customers office (‘disposal’ test for PE)106
IL29: Employee using subsidiarys office to ensure the performance of previous contracts (‘disposal’ test for PE)106
IL30: Prebuilding road and postbuilding restoring (starting time of a PE)107
IL31: Praxis selling wooden chairs abroad through PE (PEs income taxable?)111
IL32: Praxis selling wooden chairs abroad through PE at $90 (‘separate entity approach’ to determine PEs income)112
IL33: Praxis selling wooden chairs abroad through PE at $90 (‘separate entity approach’ to determine PEs income)112
IL34: Apportionment of income from sales in two states (3factor formula method)114
IL35: Praxis selling wooden chairs abroad through PE (income attributable to PE under ‘2factor apportionment method’)115
IL36: Sale of manufactured widgets through a PE (different assumptions under arms length method)116
IL37: Interest received by banks branch as PE and the possible double taxation (the effect of PE rule)118
IL38: Chin being paid ￥162′000 for her services (source taxation on personal services income)118
IL39: Painter painting in clients office for two years (PE or fixed base?)120
IL40: Working for 170 days and staying another 3 weeks on vocation (source taxation on an foreign employee: presence)122
IL41: Hiring welders through a foreign person (international hiring out of labour)124
IL42: Danish company and workers building house in Germany (source taxation rules)126
IL43: Resale of branded shirts (not paying for the application of a trade mark) (meaning of ‘royalties’)131
IL44: Payment for the ‘development’ of a plan (service payment or royalties?)131
IL45: Accountancy firm buying list of tax decisions (payment for services) (meaning of royalties)133
IL46: Payment for a machinery together with technical documents and attached software (meaning of royalties)133
IL47: Payment for a new manufacture process (meaning of royalties)134
IL48: Payment for a franchise agreement of hotel managing (meaning of royalties)134
IL49: Payment for various things abroad (information/knowhow and services) (meaning of royalties)135
IL50: Interest paid to a resident Bank chargeable to a PE (interest in connection with PE) (triangular case)140
IL51: Rent from Paraguay paid to a Mexican resident who keeping a house in Denmark (income from third states) (21 OECDMTC)145
IL52: Dividends between contracting states redistributed through an ‘intermediate’ thirdstate corporation (21 OECDMTC)145
IL53: Consulting firms combined tax rate (double taxation)163
IL54: Resident individual working abroad 4 months (residencesource double taxation)164
IL55: Dividends paid to foreign shareholders (residencesource double taxation)165
IL56: Foreign tax credit not available under different consolidation rules (double taxation)165
IL57: Furnishing of services for a project (service PE under 5.3(b)UNMTC) (bilateral arrangement to relieve double taxation)172
IL58: Consulting firms domestic tax under deduction method (double taxation relief)174
IL59: Deduction of tax for foreign dividend (double taxation relief)175
IL60: Consulting firms domestic tax under full exemption method (double taxation relief)176
IL61: Tax shifting under exemption system (weakness of exemption method) (double taxation relief)177
IL62: Consulting firms domestic tax under exemption with progression (double taxation relief)179
IL63: Unilateral and bilateral exemption (double taxation relief)180
IL64: General meaning of credit method (double taxation relief)181
IL65: Credit in case of higher foreign tax rate (credit method)183
IL66: Thirdcountry interest income of a bank and its branch (ordinary credit)183
IL67: Excess credit (the noncreditable part of foreign income taxes) (ordinary credit)187
IL68: Excess credit carried forward (ordinary credit)188
IL69: ‘Item’ of income (itembyitem limit)189
IL70: Consulting firms domestic tax under ordinary credit191
IL71: Overall, percountry, & itembyitem limitation (credit method)192
IL72: Dividends from whollyowned subsidiary (indirect credit)196
IL73: Shifting of the benefit of a tax incentive to residence country in case of no tax sparing199
IL74: Tax planning without tax sparing under overall limitation on the foreign tax credit (‘mixer company’ to use the low tax)201
IL75: Triple nontaxation on transfer of patent (international tax avoidance)217
IL76: Tax avoidance under ‘permanent establishment rule’218
IL77: Tax advantage of debt financing over equity (thin capitalisation) (tax avoidance)237
IL78: Backtoback loan under thin capitalisation rule (tax incidence under thin capitalisation rule)239
IL79: Transferring interest to a foreign entity in tax haven (tax deferral) (tax avoidance)241
IL80: Double taxation resulting from parallel CFC rules (tax avoidance)252
IL81: Transfer price between affiliates (tax avoidance)253
IL82: Sale of goods through transfer price to avoid taxes (tax avoidance)254
IL83: Double taxation under transfer price adjustment (tax avoidance)255
IL84: The determination of the tested party with different functions (arms length approach) (transfer pricing)259
IL85: Comparable uncontrolled price method used in the sale of wooden chairs (arms length approach) (transfer pricing)261
IL86: Resale price method used in the sale of wooden chairs (arms length approach) (transfer pricing)262
IL87: Cost plus method used in the sale of wooden chairs (arms length approach) (transfer pricing)262
IL88: Comparison of traditional methods used in sale of wooden chairs (arms length approach) (transfer pricing)265
IL89: ProfitSplit Method used in the sale of patented pharmaceuticals repackaged (arms length approach) (transfer pricing)266
IL90: Combination of profit split and traditional methods in the sale of patented pharmaceuticals (residual profit split method) (transfer pricing)267
IL91: Determination of the comparable margins under transactional nett margin method (arms length approach) (transfer pricing)270
IL92: The profitability of a taxpayer selling top quality audio players (transactional net margin method) (arms length approach)271
IL93: Determination of the range of the comparable margins (arms length approach) (transfer pricing)271
IL94: Goods resold by foreign subsidiary after affixing trade name (determination of the tested party under TNMM)272
IL95: Comparability adjustment based on location savings (transfer pricing adjustment)273
IL96: Commensuratewithincome standard used in the transfer of patents of plastic contact lens (arms length approach)276
IL97: Cost contribution arrangements (CCA) to develop small electrical appliance (transfer pricing)277
IL98: Constructive Cost Contribution Arrangements in joint development of intangible property rights (transfer pricing)278
IL99: Correlative adjustment applied to goods sold to foreign affiliate (transfer pricing)279
IL100: A tax loss after transfer pricing methodology fixed under contemporaneous documentation rule (transfer pricing)283
IL101: Taxpayer in a tax haven purchasing bond through independent intermediary for treaty shopping (‘backtoback loan’) (conduit)285
IL102: Taxpayer in a tax haven purchasing stocks through subsidiary for treaty shopping (controlled affiliate as conduit)286
IL103: Canadian taxpayer receiving dividends through EU holding company (controlled affiliate as conduit)287
IL104: Royalties received by a hybrid entity under an OECD style treaty (double nontaxation) (tax avoidance)293
IL105: Double depreciation deduction for purchase through a loan under a ‘doubledip purchase’ (hybrid entity) (tax avoidance)294
IL106: Financial arrangement through a hybrid entity (double deduction) (tax avoidance)294
IL107: Depreciation deduction doubled under a ‘doubledip lease’ (crossborder tax arbitrage transaction) (tax avoidance)295
IL108: Financial arrangement through a hybrid entity (deduction / noinclusion) (tax avoidance)295
IL109: Financial arrangement through a hybrid instrument under an OECD style treaty (deduction / noinclusion) (tax avoidance)296
IL110: Carrying on business through a hybrid entity and other operating companies (deduction / noinclusion) (tax avoidance)297
IL111: Transfer of operations together with supporting intangibles under a costcontribution arrangement (international tax planning)299
IL112: Leveraged acquisition with debtpush down and use of intermediate holding companies (international tax planning)301
IL113: Chin being paid ￥162′000 this year as her salary (Chinese individual income tax)322
IL114: Mr Du being paid in both China and Vietnam (residents Chinese IIT calculated separately on foreign and domestic income)355
IL115: What is huji for? (hukou in Chinas daily life)357
IL116: Chinese IIT of shorttermresident employee temporally worked abroad (nondomiciled resident)358
IL117: Representative offices taxable income based on ‘expenditureplus method’ (PEs income)372
IL118: Marketing agricultural machinery in Kuwait for a Chinese company (source taxation without PE in China?)374
IL119: Kuwaiti company marketing drilling rig in China through a Chinese company (source taxation with PE?)374
IL120: Chinese IIT of temporary nonresident employee (nonresident individual staying in China not over 90 days)384
IL121: Chinese IIT of nonresident employee staying in China more than 90 days (source taxation)386
IL122: Praxis derives income from Toland and Piland (foreign tax credit against Chinese EIT)392
IL123: Threetier indirect credit allowable (foreign tax credit against Chinese EIT)396
IL124: Miss Tian derives income from US, Thailand, UK and North Korea (foreign tax credit against Chinese IIT)399