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On the legal consequences of international tax competition

【Title】 on the legal consequences of international tax competition, the English title】【 On Legal Consequences of International Tax Competition SHI Hui (Ningbo University, Ningbo 315211, China) 【OF 】 Shi Hui Shi Hui of Informal (1977 -), LL.M., Ningbo University School of Law Teachers. Ningbo University School of Law, Ningbo, Zhejiang 315211 【Abstract】 With the economic globalization, and international tax competition in an increasingly intensified. It is the governments to provide public goods to maximize the revenue-maximizing behavior caused by the subject with national tax This determines the dual nature of its subject and content of the mixed. Article that is the basis of these characteristics, from international and domestic law were discussed in two levels of the legal consequences of international tax competition, that should not be overlooked that it has become a legal issue. Theory of Abstract title 】【English Abstract With the process of economic globalization, international taxcompetition has been initiated and increasingly developed.It 'sresulted from the conflict between government actions that aimat gaining the most revenue by providing the most public services, and individual taxpayer's actions of international tax competition whichcan no more be ignored as a legal matter. Key words international tax competition / Features / legal consequences international tax competition / characteristic / legal consequences body】【 [in CLC] D996.3 [Document code] A [Article ID] 1009-4504 (2002) 03-0055-04 open world economic development, economic globalization has become an irreversible trend It broke the economic barriers between countries. new research topic. An international tax competition and the legal consequences of the so-called international tax competition have , refers to the international community level, the district government or other jurisdictions through tax expenditures absorb the inflow of resources to expand the tax base and thus increase government revenue, or through the output tax as much as possible to get income from the practice of other jurisdictions. Simply put, international tax competition is to the international mobility of capital or operating activities to attract into the country, all countries or activities on the implementation of this capital tax cuts, thus triggering the tax competition. International tax competition is the national government to provide public goods to maximize the income resulting from maximizing behavior and the subject of national tax [2] which determine that it has the following salient features. First, the subject of duality. In theory, the subject of international tax competition is limited to countries because of tax jurisdiction is an important part of national sovereignty, enjoy complete autonomy by the state taxing powers, such as the development of tax laws, policies, the establishment of the tax system, of course, including the provision of preferential tax relief measures. But in practice, the state tax behavior is always done by acting on the taxpayers and the state of the main actions directly affect their economic behavior, so that they choose profits and move, has become one positive subject. Therefore, the performance of international tax competition, for two main levels: the macro level of countries - including the home country, host third countries; micro subject - including personal and corporate cross-border investment. Second, the contents mixed. Dual nature of the subject, the subject behavior will directly affect the macro-micro-economic behavior of the main body, the performance of the taxpayers is one of the competition between tax cuts, but also the main micro and macro tax competition between the main body. Third, the relationship between multilateralism. Involved in international tax competition relations are many and complex, performance: between the host and home country tax on the distribution of international tax relations, international investment law's bilateral investment relations; host and home country and the taxpayers were between tax levied on the domestic tax law relationship and the other arising out of investments between domestic law; transnational economic relations between some of the taxpayers. We can compare, see the legal consequences of international tax competition is how to produce. Figure A: No cases of international tax competition photos Figure A shows that in the absence of international tax competition, the taxpayer's investment in the host country, according to the normal tax rate from the source to be levied , home country taxation under the normal tax rate from the membership to be levied, according to home country laws to implement the elimination of double taxation (such as credit method) credits, which on the one hand to ensure that the taxpayers of both countries, the taxpayer bears the normal On the other hand to ensure that both the exercise of state power to tax and the rational allocation of tax benefits. Figure B: international tax competition under the dotted line photos Figure B but have not satisfied some of the performance or less tax payable by taxpayers. As the international tax competition in the high tax rate for taxpayers in the country to avoid tax liability should open the door, so they greatly encourage tax avoidance, so that on the one hand, destroyed the home country (host country) between the original and the taxpayer legal relations (mainly the relationship between domestic law) of the balance; the other hand, destroyed the home country and host country, the balance of the legal relationship between the original (mainly for the relationship between international law.) Giving rise to legal consequences. Paper from domestic law and international law aspects of international tax competition were investigated levels of legal consequences. The legal consequences of the Second international law (a) the challenges of international tax law international tax law is a new branch of international economic law, broadly speaking, it refers to the adjustment of national with international organizations, legal persons and natural persons Based on the fact that among the foreign-related taxation of legal relations arising from the domestic and international tax norms combined. 1, and international tax law contrary to the legislative purpose of the overall goal of international tax law, is the need for international economic exchanges (that is, economic globalization), obtained for the formation of transnational economic relations, to provide public tax way. To achieve this purpose, on the one hand depends on the impartiality of the provisions of international treaties, it also depends on national laws of each other. And international tax competition is taken to refer to a unilateral tax reduction or exemption of the tax system to adjust, otherwise known as non-cooperative international tax coordination. [3] In this case, the state too much attention to their tax base and tax revenues of the local interests, while ignoring the international environment as a whole. 2, and the theory of international tax law contrary to the principles of tax jurisdiction tax jurisdiction in international tax law issues, established a However, in the context of international tax competition, the host country to attract foreign investment, is likely to give up (eg, tax-free) or limit (eg, deferred taxes) that principle. Country of residence principle, also known as the taxpayer's income is derived from domestic or foreign. However, in the home countries of international tax competition may encourage the export of capital, it will automatically give up or limit the principle. Even like in strict accordance with this principle, in practice, will also be obstacles to investment in the country (or uncooperative), making the exercise of power is limited. 3, and runs counter to the trend of international tax law economic globalization is an irreversible trend in today's world, the emergence and development of international tax law is moving along from time to time. Based on 90 from the 20th century the field of international tax law since achieved some initial results of the investigation, we can see that the development trend of international tax law presents the following basic features: First, the adjustment of the legal norms of international tax relations enrich and improve, and in the international tax agreements concluded between countries in both the breadth and depth of the development of foreign countries are also improving tax laws. Second turn of the century the world of tax reform, the countries are re-examine their advantages and disadvantages of the existing tax system, efforts to explore economic development needs to follow the market, and co-ordination with the world pattern. Third, the rapid development of integrated regional taxes, promote international coordination of tax and international tax law convergence is expanding. And international tax competition, fundamentally speaking, is no international tax cooperation and coordination trends. (B) the challenges of international investment law international investment law is to adjust the relationship between international private direct investment in the sum of legal norms, international economic law is an important branch. 1, the global investment environment, investment environment, deterioration of international investment law is a basic category, is able to effectively influence the operation and efficiency of international capital in all external conditions and factors. It includes the Therefore, in the case of international tax competition, countries strongly optimize their investment in small environment, because of the lack of coordination, or even malicious competition, thereby greatly deteriorating international investment environment. Such as the American economist Hans-Werner Sinn evaluation of the implementation of the United States since the early 80's one-way tax measures, said: After the worst economic recession, developing countries also suffered one after another debt crisis. If not get some hard efforts, the world banking system almost collapsed. The United States alone seems to benefit: Because the country opened up the majority of the consumer base and investment base. international investment, international investment guidance and management. Indeed, international tax competition could lead to international investment, but because of its fundamentally out of the market mechanism, from the international level, and long-term development, the final will mislead the international investment flows. In addition, international tax competition as one-sided pursuit of investment capital, the introduction of the host country, and even the management is easy as bait, will perform on the one hand, lazy strictly within the management of foreign investment, other investment in the home country prevent the legal management of their own capital . 3, on the trend of international investment standards for the treatment of international investment away from new order along with the further development of the struggle, the international investment law issues in establishing standards for the treatment of foreign capital, the increasingly positive national treatment standard, it is an equal standards of treatment, both against the discrimination against foreigners, but also against the privileged status of foreigners in the host country, in full compliance with principles of international law and economic globalization based on market requirements. In pursuit of the international tax competition to maximize the introduction of foreign investment, make way for their countries at the economic interests of investors and operators, investors, foreign immigration to give special concessions, such as exemption from withholding tax, deferred tax, lower tax rates, which in fact discriminatory treatment is a standard, is a denial of national treatment standards. , Of course, in addition to international tax law, the impact of international investment law, international tax competition will lead to other areas of the challenges of international economic law, such as . Three domestic law on the legal consequences arising from international tax competition on the domestic law of legal consequences, the main international tax avoidance the taxpayer caused to the host or home country against the domestic tax laws. To realize this, we must reflect on the current international tax avoidance of academic definition. (A) of the current academic point of view of international tax avoidance (Internationd Tax Avoidance) the concept of domestic scholars all have our say, opinions vary. Some said: said: the flow of non-current and other methods to seek to minimize or avoid the behavior of the tax burden. legal means, although the drilling of the legal loopholes, but after all, not breaking the law, will not lead to legal liability. [8] or that sex is a medium of international tax avoidance is a legitimate way of using international tax avoidance, the taxpayer's conduct was not fraudulent, so it is an act not against the law; but because of international tax avoidance and to the relevant state revenue and the principle of tax fairness do harm, it is an illegal act, in short, this law is not explicitly prohibited, there is no support or protection of the act,[link widoczny dla zalogowanych], is a legitimate neither illegal nor in sex. [9] (b) of the author's point of view I suggested that avoidance behavior by cf law, one can clearly understand the nature of international tax avoidance. Legal evasion (evasion of law), also known as the unauthorized theft law (fraude a la loi), or the establishment of links to points of fraud (fraudulent creation of points of contact), it refers to civil law relations involving foreign parties for the use of a conflict norms, deliberately creating a link points to avoid the law should apply, so the law to their advantage to applicable law or stripping an escape behavior. [10] Because the law applicable to foreign civil cases, there is a link depends on various objective points, and some connecting point is the ability to change with the meaning of the parties, such as nationality, residence, domicile and so on. Essential Elements evasion of law are: 1, from the actors point of view, the behavior is caused by the parties themselves. 2, from a subjective perspective, the parties have purposes, conscious cause, that is, the parties have to avoid a legal subjective motives. 3, from the object to avoid speaking, is to avoid the law must be in accordance with the conflict rules should apply to the mandatory or prohibitory laws, including the law of the land and (or) foreign law. 4, from the behavior point of view, the parties are artificially created or altered by one or more links point to achieve the purpose of circumvent the law, such as changing the nationality, domicile and behavior, the matter of location and so on. This behavior, although the fact is illegal, but the surface appears to be legitimate. 5, the results from an objective point of view, the parties to avoid actions have been completed, according to the wishes of the parties to act, we must apply the law of the parties benefit. [11] on international tax avoidance is concerned, the actors, it is the result of acts of transnational taxpayers own; in the subjective, the purpose of transnational taxpayers, caused by a conscious, that is not conducive to him to avoid a the motive of tax law; to avoid the object, is the tax law should apply. We know that tax law is the scope of the law are mandatory, according to the bourgeoisie by the traditional method of law, it is public law, taxation is a sovereign right to conduct part of the act, not private behavior, the field of tax law not applicable principle In behavior, is the international face of the taxpayers with legal or legitimate means, by artificially create or change one or more link sites, such as the transfer of property - including the company's stock and bond transfers, country of residence to become a non-resident companies multinational companies, the country of residence all or part of the company to transfer its business to non-resident country trade company, country of residence to allow the control of the company's non-resident multinational companies issuing stocks and bonds; who transfer - including the establishment of a also known as the The objective result, the taxpayer has the purpose of cross-avoidance behavior has been completed, so as to achieve the anticipated effect of reducing their tax liability. Therefore, by comparing the analysis, we can see that international tax avoidance is a legal act of circumvention. Under the existing academic and practical effect of the law to avoid identification, agreed that legal sanctions against the country. Thus, it is a produce legal consequences. Through the above analysis, one can clearly recognize that international tax competition, the level of international law and domestic law level, have had serious legal consequences, has become the legal issues should not be overlooked. [Received Date] 2002-03-22 【Reference】 [1] Taniguchi and prosperity. International tax competition and the implementation of OECD measures [J]. Tax Renditions, 1999, (1). [2] Tan Tudor ancestors. On Tax Competition [J]. Taxation and Economy, 2000, (2). [3] Zhu Qing. On the international tax competition [J]. Tax Research , 1996, (4). [4] Reuven s.Avi-Yonah.Globalization, Tax Competition, and the Fiscal Crisis of the Welfare State [J]. Rarvard Law Review, vol.113. 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