When the Belt and Road Initiative Meets BEPS: Reforming China's Foreign Tax Credit Rules in the New Era |
| |
| Authors: | ZHENG Yi |
| |
| Affiliation: | Associate Researcher, School of Law, Sun Yat-sen University, Guangzhou 510275, China. |
| |
| Abstract: | Today, international taxation is at an inflection point. The implementation of action plan on base erosion and profit shifting (BEPS) and enforcement of the Belt and Road Initiative are reshaping taxation rules and principles. As a crucial aspect of outbound taxation, foreign tax credit is expected to embrace the normative objectives of the new era, which emphasize the importance of subjecting all trans-border business activities to equitable, efficient, and coordinated taxation. Currently, China’s foreign tax credit prescribes in an incompatible pattern; it lacks clear legislative intent, despite marking specific rules with archaic unilateral characters. To reform this regime, legislative principle should reflect the latest consensus on the economic activities’ nexus and ensure that the income derived from trans-border transactions falls under a minimum tax. Regarding specific rules, it is strongly suggested that active and passive incomes be distinguished and the equity holding threshold of obtaining indirect credit be lowered. China’s foreign tax credit reform should take an inclusive perspective, actively participating in the cooperation between countries. |
| |
| Keywords: | foreign tax credit base erosion and profit shifting (BEPS) Belt and Road Initiative (BRI) coordinated tax |
|
| 点击此处可从《Frontiers of Law in China》浏览原始摘要信息 |
|
点击此处可从《Frontiers of Law in China》下载全文 |
|
