Subject Orientation and Scope Definition of Tax Advance Ruling: Based on the Functional Perspective of Tax Certainty and Promotion Strategy of Belt and Road Initiative

Wang Bo

doi:doi:10.16538/j.cnki.jsufe.2018.06.009

Summary

The tax advance ruling system is one of the most important systems conducive to the construction of a harmonious relationship between tax collection and payment. The main reason why China’s tax advance ruling system has not been put into law is that the research results on the subject and scope of the system are extremely insufficient, and people from all walks of life have not reached a consensus on the subject and scope. Previous studies, mainly based on comparative methods on the introduction of various system elements of the tax advance ruling, not only neglect the study from the perspective of social and economic functions of the system, but also ignoring the special research of the subject and scope. The article holds that the tax advance ruling system is a double-edged sword. Although it helps to realize the certainty of taxation, if it is unreasonable, it may damage the tax base. It also has the derivative function of promoting the Belt and Road initiative. When setting the ruling subject, it should consider the realization of the Belt and Road Initiative. Therefore, based on the perspective of social and economic functions, functional analysis method should be used to study the subject and scope of the tax advance ruling system. From a theoretical perspective, it will provide a theoretical basis for the introduction of the tax advance ruling system, expand and deepen the theoretical breadth and depth of the tax advance ruling; its practical value lies in providing system supply for the pilot of the tax advance ruling, promotes its final entry into law and gives play to the certainty of taxation and promotes the achievement of the Belt and Road Initiative. It can raise the level of tax enterprise cooperation and tax administration, and ultimately serve China’s economic and social development. Based on the above research purposes and functional analysis methods, this article follows the thinking logic that the function of tax advance ruling not only determines the position of the subject, but also determines the ruling scope. Firstly, it is the key issue whether the system can be incorporated into the law to clarify the subject position and scope of the tax advance ruling, which should be studied from the perspective of economic and social functions. Secondly, the main function of tax advance ruling system is to realize the certainty of taxation law, which has three orientations beneficial to enterprises, society and tax authorities, and has been proved by the practice in China and abroad. The cross border trade and investment barrier in Belt and Road caused by the difference of tax rules can be broken through the certainty of the tax advance ruling, which derives the function of promoting the Belt and Road Initiative. Thirdly, based on the dual function, it is feasible and of legal basis to select the state administration of taxation as the main ruling subject, but the functional departments should be positioned as the Comprehensive Service Department of Tax Advance Ruling formed and upgraded by the policy and regulation departments of the state administration of taxation. Then, in view of the two normative modes of determining the scope of tax advance ruling, China should adopt the mode of combining the abstract positive regulation with the generalization plus enumeration negative regulation. The ruling subject can deny the application based on saving tax administrative costs, surpassing authority, avoiding conflicts with tax administration and court decisions, and maintaining public welfare and so on. Finally, it is advisable to make the abstract and positive provisions on the regulation of tax advance ruling in the tax collection and administration law, and then to make clear by the subordinate law the subject status and functions and powers of the Comprehensive Service Department of Tax Ruling, including the power of refusal through the general negative provisions and various types of applications that can be rejected by listed negative provisions.