¹ú¼ÊË°ÊÕ

Chapter 1Backgrounds
Iª± Introduction
IIª± Why taxation
IIIª± Optimal taxation
IVª± Goals of international tax rules
Vª± Current taxation system of China: an overview £Û=§ 6ª±I£Ý
Chapter 2Tax treaties and model tax conventions
Iª± Important role of international tax treaties
IIª± Treaty as main source of international laws
IIIª± Legal nature and general effect of tax treaties
IVª± Objectives of tax treaties
Vª± Model tax conventions
VIª± Interpretation of tax treaties
VIIª± Multilateral conventions or provisions involving tax mattersChapter 1Backgrounds Iª± Introduction IIª± Why taxation IIIª± Optimal taxation IVª± Goals of international tax rules Vª± Current taxation system of China: an overview £Û=§ 6ª±I£Ý Chapter 2Tax treaties and model tax conventions Iª± Important role of international tax treaties IIª± Treaty as main source of international laws IIIª± Legal nature and general effect of tax treaties IVª± Objectives of tax treaties Vª± Model tax conventions VIª± Interpretation of tax treaties VIIª± Multilateral conventions or provisions involving tax matters VIIIª± Multilateral forums and coordinators on tax matters Chapter 3Jurisdiction to tax Iª± Introduction IIª± Categories of ‘jurisdiction to tax’ IIIª± General income tax liabilities under Chinese domestic laws£Û=§ 6ª±II£Ý IVª± Residence rules: defining ‘resident’ Vª± Resident in Chinese tax laws £Û=§ 6ª±III£Ý VIª± Source rules: determination of ‘source jurisdiction’ and source taxation VIIª± Source taxation in Chinese laws £Û=§ 6ª±IV£Ý VIIIª± Tax jurisdictions: conclusion IXª± Bilateral modes helpful to resolve conflicts of jurisdictions Chapter 4Double taxation and its relief Iª±International double taxation defined IIª±Causes of IDT IIIª±General approach to relieve double taxation IVª±Relief mechanism (1): deduction method Vª±Relief mechanism (2): exemption method VIª±Relief mechanism (3): credit method VIIª±Tax sparing VIIIª±Relief of double taxation under Chinese laws £Û=§ 6ª±V£Ý ¹ú¼ÊË°ÊÕ Contents Chapter 5Tax avoidance and antiª²avoidance rules Iª±Important terms IIª±Causes of international tax avoidance IIIª±Balance of tax avoidance and countermeasures: ethics of tax avoidance, and justification of antiª²avoidance measures IVª±Basic elements and ways of tax avoidance Vª±Overview of antiª²avoidance methods VIª±Thin capitalisation and thin capitalisation rules VIIª±Use of tax deferral and CFC rules VIIIª±Transfer pricing and its prevention IXª±Treaty shopping and antiª²shopping clauses Xª±Hybrid mismatch and antiª²hybrid rules XIª±(International) tax planning and international coordination XIIª±Special tax adjustments under Chinese laws: antiª²avoidance rules on enterprise income tax £Û=§ 6ª±VI£Ý XIIIª±Conclusion: international tax law framework Chapter 6China¬ðs international taxation administration Iª±Current taxation system of China: an overview £Û=§ 1ª±V£Ý IIª±General income tax liabilities under Chinese domestic laws£Û=§ 3ª±III£Ý IIIª±Resident in Chinese tax laws £Û=§ 3ª±V£Ý IVª±Source taxation in Chinese laws £Û=§ 3ª±VII£Ý Vª±Relief of double taxation under Chinese laws £Û=§ 4ª±VIII£Ý VIª±Special tax adjustments under Chinese laws: antiª²avoidance rules on enterprise income tax £Û=§ 5ª±XII£Ý Illustrations & Cases Illustrations ILª²1: Some important principles in the field of international taxation2 ILª²2: Sale of a selfª²built house (determining the amount of gross income)9 ILª²3: Payment to a contractor who built a house for the owner (determining the amount of gross income)10 ILª²4: Roxanne supporting a child living abroad (a simple example of ‘international tax law’)13 ILª²5: Roxanne receiving interest paid by a foreign bank (tax liability under treaty and domestic law)15 ILª²6: The expenditure on environmental protection facility reducing the effective tax rate17 ILª²7: The meaning and use of quick deduction (progressive rates)18 ILª²8: Reeve being paid $20′000 this year (various tax rate structures)19 ILª²9: James and Angela spending on purchases (‘regressive’ excise tax)20 ILª²10: Consulting service at the end of a year (cash method for revenue)22 ILª²11: Temporary employment at the end of a year (cash method for expenses) 22 ILª²12: Threeª²year loan at compound interest rate of 10% (‘nett income under cash method’ and ‘cash flow’)22 ILª²13: Consulting service at the end of a year (accrual method for revenue)23 ILª²14: Temporary employment at the end of a year (accrual method for expenses)23 ILª²15: Chin being paid £¤162′000 this year as her salary (a simple example of individual income tax computation)24 ILª²16: Both Reeve and Nancy earning $100′000 (transnational interª²individual equity)38 ILª²17: Reeve earning income from three foreign countries (tax jurisdiction)39 ILª²18: A German company with a branch in Tunisia (capital import and export neutrality)41 ILª²19: Taxation on ‘royalties’ (treaty interpretation)49 ILª²20: ‘Guaranteed’ low rate on royalties under a tax treaty (certainty through tax treaty)55 ILª²21: ‘Substance over form’ doctrine (treaty interpretation)64 ILª²22: What is ‘liable to tax’ (tax treaty interpretation)64 ILª²23: Mr Walter performing abroad (residence and source jurisdiction)79 ILª²24: Dividends paid to resident or nonª²resident? (tax jurisdictions)85 ILª²25: Placeª²ofª²management shifted to law tax country and receiving royalties there (a way to escape high taxes)93 ILª²26: Income of a law firm who providing transnational services (difficult to define ‘source’)98 ILª²27: Painter painting in a large office building (coherent commercial activity) (location test for PE)103 ILª²28: Salesman regularly visiting customer¬ðs office (‘disposal’ test for PE)106 ILª²29: Employee using subsidiary¬ðs office to ensure the performance of previous contracts (‘disposal’ test for PE)106 ILª²30: Preª²building road and postª²building restoring (starting time of a PE)107 ILª²31: Praxis selling wooden chairs abroad through PE (PE¬ðs income taxable?)111 ILª²32: Praxis selling wooden chairs abroad through PE at $90 (‘separate entity approach’ to determine PE¬ðs income)112 ILª²33: Praxis selling wooden chairs abroad through PE at $90 (‘separate entity approach’ to determine PE¬ðs income)112 ILª²34: Apportionment of income from sales in two states (3ª²factor formula method)114 ILª²35: Praxis selling wooden chairs abroad through PE (income attributable to PE under ‘2ª²factor apportionment method’)115 ILª²36: Sale of manufactured widgets through a PE (different assumptions under arm¬ðs length method)116 ILª²37: Interest received by bank¬ðs branch as PE and the possible double taxation (the effect of PE rule)118 ILª²38: Chin being paid £¤162′000 for her services (source taxation on personal services income)118 ILª²39: Painter painting in client¬ðs office for two years (PE or fixed base?)120 ILª²40: Working for 170 days and staying another 3 weeks on vocation (source taxation on an foreign employee: presence)122 ILª²41: Hiring welders through a foreign person (international hiring out of labour)124 ILª²42: Danish company and workers building house in Germany (source taxation rules)126 ILª²43: Resale of branded shirts (not paying for the application of a trade mark) (meaning of ‘royalties’)131 ILª²44: Payment for the ‘development’ of a plan (service payment or royalties?)131 ILª²45: Accountancy firm buying list of tax decisions (payment for services) (meaning of royalties)133 ILª²46: Payment for a machinery together with technical documents and attached software (meaning of royalties)133 ILª²47: Payment for a new manufacture process (meaning of royalties)134 ILª²48: Payment for a franchise agreement of hotel managing (meaning of royalties)134 ILª²49: Payment for various things abroad (information/knowª²how and services) (meaning of royalties)135 ILª²50: Interest paid to a resident Bank chargeable to a PE (interest in connection with PE) (triangular case)140 ILª²51: Rent from Paraguay paid to a Mexican resident who keeping a house in Denmark (income from third states) (21 OECDMTC)145 ILª²52: Dividends between contracting states reª²distributed through an ‘intermediate’ thirdª²state corporation (21 OECDMTC)145 ILª²53: Consulting firm¬ðs combined tax rate (double taxation)163 ILª²54: Resident individual working abroad 4 months (residenceª²source double taxation)164 ILª²55: Dividends paid to foreign shareholders (residenceª²source double taxation)165 ILª²56: Foreign tax credit not available under different consolidation rules (double taxation)165 ILª²57: Furnishing of services for a project (service PE under 5.3(b)UNMTC) (bilateral arrangement to relieve double taxation)172 ILª²58: Consulting firm¬ðs domestic tax under deduction method (double taxation relief)174 ILª²59: Deduction of tax for foreign dividend (double taxation relief)175 ILª²60: Consulting firm¬ðs domestic tax under full exemption method (double taxation relief)176 ILª²61: Tax shifting under exemption system (weakness of exemption method) (double taxation relief)177 ILª²62: Consulting firm¬ðs domestic tax under exemption with progression (double taxation relief)179 ILª²63: Unilateral and bilateral exemption (double taxation relief)180 ILª²64: General meaning of credit method (double taxation relief)181 ILª²65: Credit in case of higher foreign tax rate (credit method)183 ILª²66: Thirdª²country interest income of a bank and its branch (ordinary credit)183 ILª²67: Excess credit (the nonª²creditable part of foreign income taxes) (ordinary credit)187 ILª²68: Excess credit carried forward (ordinary credit)188 ILª²69: ‘Item’ of income (itemª²byª²item limit)189 ILª²70: Consulting firm¬ðs domestic tax under ordinary credit191 ILª²71: Overall, perª²country, & itemª²byª²item limitation (credit method)192 ILª²72: Dividends from whollyª²owned subsidiary (indirect credit)196 ILª²73: Shifting of the benefit of a tax incentive to residence country in case of no tax sparing199 ILª²74: Tax planning without tax sparing under overall limitation on the foreign tax credit (‘mixer company’ to use the low tax)201 ILª²75: Triple nonª²taxation on transfer of patent (international tax avoidance)217 ILª²76: Tax avoidance under ‘permanent establishment rule’218 ILª²77: Tax advantage of debt financing over equity (thin capitalisation) (tax avoidance)237 ILª²78: Backª²toª²back loan under thin capitalisation rule (tax incidence under thin capitalisation rule)239 ILª²79: Transferring interest to a foreign entity in tax haven (tax deferral) (tax avoidance)241 ILª²80: Double taxation resulting from parallel CFC rules (tax avoidance)252 ILª²81: Transfer price between affiliates (tax avoidance)253 ILª²82: Sale of goods through transfer price to avoid taxes (tax avoidance)254 ILª²83: Double taxation under transfer price adjustment (tax avoidance)255 ILª²84: The determination of the tested party with different functions (arm¬ðs length approach) (transfer pricing)259 ILª²85: Comparable uncontrolled price method used in the sale of wooden chairs (arm¬ðs length approach) (transfer pricing)261 ILª²86: Resale price method used in the sale of wooden chairs (arm¬ðs length approach) (transfer pricing)262 ILª²87: Cost plus method used in the sale of wooden chairs (arm¬ðs length approach) (transfer pricing)262 ILª²88: Comparison of traditional methods used in sale of wooden chairs (arm¬ðs length approach) (transfer pricing)265 ILª²89: Profitª²Split Method used in the sale of patented pharmaceuticals repackaged (arm¬ðs length approach) (transfer pricing)266 ILª²90: Combination of profit split and traditional methods in the sale of patented pharmaceuticals (residual profit split method) (transfer pricing)267 ILª²91: Determination of the comparable margins under transactional nett margin method (arm¬ðs length approach) (transfer pricing)270 ILª²92: The profitability of a taxpayer selling top quality audio players (transactional net margin method) (arm¬ðs length approach)271 ILª²93: Determination of the range of the comparable margins (arm¬ðs length approach) (transfer pricing)271 ILª²94: Goods resold by foreign subsidiary after affixing trade name (determination of the tested party under TNMM)272 ILª²95: Comparability adjustment based on location savings (transfer pricing adjustment)273 ILª²96: Commensurateª²withª²income standard used in the transfer of patents of plastic contact lens (arm¬ðs length approach)276 ILª²97: Cost contribution arrangements (CCA) to develop small electrical appliance (transfer pricing)277 ILª²98: Constructive Cost Contribution Arrangements in joint development of intangible property rights (transfer pricing)278 ILª²99: Correlative adjustment applied to goods sold to foreign affiliate (transfer pricing)279 ILª²100: A tax loss after transfer pricing methodology fixed under contemporaneous documentation rule (transfer pricing)283 ILª²101: Taxpayer in a tax haven purchasing bond through independent intermediary for treaty shopping (‘backª²toª²back loan’) (conduit)285 ILª²102: Taxpayer in a tax haven purchasing stocks through subsidiary for treaty shopping (controlled affiliate as conduit)286 ILª²103: Canadian taxpayer receiving dividends through EU holding company (controlled affiliate as conduit)287 ILª²104: Royalties received by a hybrid entity under an OECD style treaty (double nonª²taxation) (tax avoidance)293 ILª²105: Double depreciation deduction for purchase through a loan under a ‘doubleª²dip purchase’ (hybrid entity) (tax avoidance)294 ILª²106: Financial arrangement through a hybrid entity (double deduction) (tax avoidance)294 ILª²107: Depreciation deduction doubled under a ‘doubleª²dip lease’ (crossª²border tax arbitrage transaction) (tax avoidance)295 ILª²108: Financial arrangement through a hybrid entity (deduction / noª²inclusion) (tax avoidance)295 ILª²109: Financial arrangement through a hybrid instrument under an OECD style treaty (deduction / noª²inclusion) (tax avoidance)296 ILª²110: Carrying on business through a hybrid entity and other operating companies (deduction / noª²inclusion) (tax avoidance)297 ILª²111: Transfer of operations together with supporting intangibles under a costª²contribution arrangement (international tax planning)299 ILª²112: Leveraged acquisition with debtª²push down and use of intermediate holding companies (international tax planning)301 ILª²113: Chin being paid £¤162′000 this year as her salary (Chinese individual income tax)322 ILª²114: Mr Du being paid in both China and Vietnam (resident¬ðs Chinese IIT calculated separately on foreign and domestic income)355 ILª²115: What is huji for? (hukou in China¬ðs daily life)357 ILª²116: Chinese IIT of shortª²termª²resident employee temporally worked abroad (nonª²domiciled resident)358 ILª²117: Representative office¬ðs taxable income based on ‘expenditureª²plus method’ (PE¬ðs income)372 ILª²118: Marketing agricultural machinery in Kuwait for a Chinese company (source taxation without PE in China?)374 ILª²119: Kuwaiti company marketing drilling rig in China through a Chinese company (source taxation with PE?)374 ILª²120: Chinese IIT of temporary nonª²resident employee (nonª²resident individual staying in China not over 90 days)384 ILª²121: Chinese IIT of nonª²resident employee staying in China more than 90 days (source taxation)386 ILª²122: Praxis derives income from Toland and Piland (foreign tax credit against Chinese EIT)392 ILª²123: Threeª²tier indirect credit allowable (foreign tax credit against Chinese EIT)396 ILª²124: Miss Tian derives income from US, Thailand, UK and North Korea (foreign tax credit against Chinese IIT)399ÐÅÏ¢