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TAX LEGISLATION: LEGAL STANDARDS, TRENDS, CHALLENGES

International Taxation Conference

The Centre of Tax Documentation and Studies of
The University of Lodz

October 10-12, 2013

 
     
 

 

2013年10月10日-12日在波蘭Lodz大學法學院舉辦了“稅收立法-立法標準、動向與挑戰”國際學術會議,來自OECD、IBFD(荷蘭國際財政文獻局)、IFA(國際財政學會)、ICC(國際商會)等歐洲著名財稅研究機構,以及來自歐盟各主要成員國、美國、俄羅斯、中國的各高校、歐洲著名律師事務所的36位學者和專家參加了本次國際學術研討會。

本次國際會議主要圍繞“稅收立法的標準、立法動向、現存立法技術問題、未來所面臨的挑戰”這一主題進行了廣泛的探討,並針對四個分組議題-“稅法結構”、“立法標準”、“稅法品質評估”、“國內稅法與國際稅法的關係”,由來自各國的學者分別介紹了本國的稅收立法現狀與問題,並分別闡述了各自的見解。

我院楊廣平副教授應Lodz大學校長、Lodz大學法律行政學院“稅收文獻研究中心”主任Nykiel教授的邀請參加了本次國際學術會議,並作為分組會議的國別報告人(National Reporter),對中國的稅法體系、稅收立法權的分配、地方稅法體系的構建、中國稅收立法品質評估現狀、國際稅收協定對國內稅法的影響與適用國際稅收協定中出現的問題等進行了分析和評論,並向議會主辦方提交了4萬字英文會議論文。

波蘭Lodz大學法律行政學院“稅收文獻研究中心”是歐洲比較有影響的稅法研究中心之一,有10多位從事稅法和財政法教學研究的專任教授,該中心圖書館收集的稅法學專著豐富,財稅法方面的雜誌齊全,覆蓋整個歐洲和北美,並與歐盟及北美的稅法研究機構有著密切的合作和交流。本次會議結束後,楊廣平副教授就南開大學法學院“東北亞財稅法研究中心”與Lodz大學法律行政學院“稅收文獻研究中心”今後如何建立合作交流關係,與該中心主任-Lodz大學校長Wlodzimie rz Nykiel教授和中心副主任Ziemowit Kukulski進行了深入探討,並確定在今年內簽訂合作協定。


 
Lodz大學法律行政學院
The School of Law and Minisitration of Lodz University


 

税法文獻研究中心
(The Centre of Tax Documentation and Studies)


 
國際會議廳
 
 
 
INVITATION LETTER


Conference Report

Review on Tax Legislation Issues of China – Focus on the Problem of Authorized Legislation(EN)

 
The Summary of the conference speech

About structure of national legislation

First of all, please allow me to present a brief introduction about the fundamental state of tax legislation in China. According to statistics of legislative bodies of China, there are total of 4th of the tax laws enacted by the central legislatures (the Congress and the Standing Committee), there are 56 of tax administrative regulations which have been enacted by central government (The State Council), and 50th of tax administrative rules enacted by the ministries and commissions of central government (The State Administration of Taxation or Ministry of Finance of China etc.). On the other hand, there are almost 2318 of non-legislative tax regulatory documents which have been formulated by Central and local administration of taxation.

We could see from these legislative statistics that one outstanding feature in current tax system of China is so called “administrativization of legislative power” on tax matters. That means, in most cases, the Congress transferred their legislative power to administrative organs by way of so called “authorized legislation”. But because the authorized scope of legislative power is not clear and overbroad, this had made the administrative organs in fact become the subject of tax legislation. As a result, in tax law system of China, more than 80% of tax institutional norms were issued by the State Council in the form of regulations or interim regulations. It caused some problems in the interpretation and application of tax law. For example, the tax system is becoming more complicated, and it also easily caused the conflict between laws and regulations.

So I think the key point concerning to the trend of tax legislation in China is to strengthen the congress’ legislative power on tax matters, that means all kinds of tax should be enacted by law, and enacting The Basic Law of Tax in order to coordinate the relationship between the Constitution and the various tax laws.

The next, I would like to report the second issue that is concerned with the local tax legislative power. We could understand from the view of constitutionalism, China is a centralized country, so it's very hard to expect that the local self-government system will be provided in current Constitution and the high autonomous powers will be conferred by Constitution. Although local Congress have power to formulate local regulation in accordance with Constitution, but in fact, the legislative power concerning tax matters has been highly centralized in central legislative organs and Central government, local legislative organs do not have a real sense of independent tax legislative power in China. For this reason, local governments only have administration authority of tax collection and management.

But I think that with China's economic development, local governments will accomplish more and more affairs, and their financial burden is to be heavy increasingly, so the local government should be given a certain degree of autonomy, and it should be confirmed in the Constitution.

The third part is about issue of legislative evaluation on tax law. Since 2005, central and local legislative organs and governments have conducted several times of evaluation of legislative quality against their respectively promulgated laws, administrative regulations and local regulations. In addition, about 65 of laws and regulations have been enacted on the base of the practice on the evaluation of legislative quality.

The current legislative evaluation system of China can be summarized three characteristics: First, the type of legislative evaluation in China is basically the ex-post legislative evaluation, namely, the evaluation object are laws, administrative regulations and rules which were implemented for 3-5 years after promulgation; Second, the legal relationship of law or regulation which was chosen to evaluate is relatively simple; Third, evaluation subject mainly use qualitative analysis method, and rarely using quantitative analysis methods, therefor, there are many of subjective evaluation which were written in the evaluation report instead of objective quantitative indicators.

So I think It is necessary to set up a special evaluation system on tax matters, not limited to ex-post evaluation, but also should pay attention to prior evaluation which include the proceeding of discussions and hearings, interest and cost analysis etc. and also to legislation process which include drafting the tax bill, analysis of legitimacy, rationality, maneuverability and adaptability etc., from this way, it should establish a systematic evaluation system in whole process of tax legislation. In addition, it should set up a negotiation mechanism to fully promote the open consultation between legislators and relevant interest subject, making the legislative proceeding more openly and clearly.

About Quality of national tax legislation

I will introduce you some issues concerning with quality of national tax legislation. The issue of evaluation of tax legislation is a new topic in China, and I could not find some relevant materials that talking about evaluation of tax legislation.

In fact, In China's current tax law system, there are no tax legislative evaluation systems issued both at the central level or local level, meanwhile, tax laws and regulations which have been promulgated and implemented have not been evaluated by legislators and governments in the past few years.

Since it is lack of tax legislative evaluation, it often caused some problems in the process of implementation of tax systems. For example, the provision of higher-level law is oversimplified, and lower-level law (especially the Government department rules and non-legislative rules) is too bloated. But, in accordance with relevant judicial interpretation, it provided that “the judgment only cites relevant laws and legal interpretations, administrative regulations, local regulations and judicial interpretations as a ruling basis”. That means, some administrative tax rules and non-legislative tax rules is just treated as reference in judicial practice in fact, and not as compulsory norm in the application of law. So that it caused the lack of stability when apply to tax law. Other problems are also prominent, such as, (1) there is a conflict between tax laws and regulations. (2) The expression in tax legal norms is not consistent with other department law. (3) The current tax system is lack of legislative predictability, unable response to the change of social economic. For example, the criterion of pre-tax deduction of wages and salaries has been adjusted legislatively for three times in five years.

But on the other hand, there are some general legislative evaluation rules which was enacted by Local legislators and local government, for example, Local congress of GuangZhou province enacted “the Ex-post Evaluation of Rules”, some standards were provided in this rules, such as “Evaluation Subject, Qualification of authorized evaluation, the way of public participation, Evaluation Object, Evaluation matters and criterion, Evaluation method, evaluation report and efficacy”. But these local regulations did not apply to tax evaluation, because that the local government has no tax legislative power.

With my opinion, I think in order to solute the above mentioned problems on tax legislation, It is necessary to set up a special evaluation system on tax matters, not limited to ex-post evaluation, but also should pay attention to the proceeding of drafting and deliberation of the tax bill.

About National tax legislation and international, EU and non-tax legislation

I will introduce you some issues concerning with the relationship between domestic tax law and tax treaty and agreement. By the end of January, 2013, China’s government has signed an international tax agreement with a total of 99 countries. In each international tax treaty, it has included almost the main taxes in the domestic tax system, so that the status of international tax treaty is playing an important role in tax law system.

Since joining the WTO in 2001, China has adjusted some domestic tax rules in accordance with the relevant rules of WTO. However, there is no special provision on how to deal with the relationship between domestic law and international agreement in Constitution. In practice of tax legislation, for example, “The Law of China Concerning the Administration of Tax Collection” has provided that “if the provisions of the relevant tax treaties or agreements concluded between China and foreign countries are in conflict with the provisions of this Law, the relevant matters shall be handled in accordance with the treaties or agreements”. Similar provision can also be found in the “Enterprise income tax law”. So we can see from these provisions that the provisions of international tax treaty or agreement shall apply directly in China, and is superior to the domestic tax law.

However, the existing problem shows that the tax treaty and tax agreement has been signed with foreign country without legislative approval procedures. In fact, it just becomes an administrative agreement in form. In accordance with “Law of China on the Procedure of the Conclusion of Treaties”, the State Council shall conclude treaties and agreements with foreign states, and the Standing Committee shall decide on the ratification and abrogation of treaties and important agreements that concluded with foreign states. In most case in China, a number of international tax treaties and agreements have been signed with foreign states by director of the Ministry of Finance, or of the State Administration of Taxation, and just be reported to the State Council for filing, not be required to submit it to the Standing Committee for examination and decision. So, from this point of view, it can be thought that the legal effect of international tax treaty only stay in the aspect of administrative agreement, and could not take effect to be superior to domestic tax law.

In addition, as the Chinese social economy grows and changes, domestic tax law is also constantly revised and improved. In this implementation process, revised domestic tax law will conflict with international tax treaties and agreements which were signed previously. However, the problem is that it is the lack of a conflict resolution mechanism to coordinate such confliction between new revised domestic tax law and tax treaty which has been signed previously.

Other issues relating to tax legislation

I will introduce you two important issues that we are very concerned about in China, the first one is about the “Principle of tax legalism”. In the current Constitution of China, there is only one provision related to tax matters, provided that “it is the duty of citizens of China to pay taxes in accordance with the law”. But as I know in other counties, for example in Japan and South Korea, it is also provided that “the matters concerned with the creating new tax or modifying the existing tax should be followed by law”, this is the principle that we called the “Principle of tax legalism”.

But this important principle was not provided in Chinese Constitution, in accordance with “The law of Legislation”, it is provided that “basic economic system and basic systems of finance, taxation, customs, banking and foreign trade” shall only be governed by law. Meanwhile, it also provide that “if laws have not been enacted on the tax affairs in time, the Congress or its Standing Committee has the power to make a decision to authorize the State Council, according to actual needs, to formulate administrative regulations first on part of those tax affairs. But the purpose and scope of the authorization shall be clearly defined, and the authorization organ shall exercise the power strictly in compliance with the authorized purpose and scope, it may not impart the authorized power to any other organs”. But in the existing laws,it did not make it clearly on the scope of authorized legislation, and it was often transferred their authorized legislation power from Centre government to the State Administration of Taxation, and to local government. Here, I really want to know if there is a good experience to solve this problem in European countries.

The second issue is concerning with the interpretation of tax laws. According to the Constitution, the power of legal interpretation belongs to Congress. But in fact, the State Council, Ministry of Finance, State Administration of Taxation has also the power of interpretation. The power of administrative interpretation is too large, as a result, discretion in administration is too large, this may cause the implementation of tax law depend on administrative power too much.

 
 
Oct 13,2013
 
 
 
 
 
 
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