Chapter1
1.what is International TaxWhat does it mainly address(探讨)
International Tax is a science focusing on a serious tax issues resulting from different and conflicting tax rules made by particular countries ,jurisdictions and resolutions(决议).
International tax in a board sence covers not only income but also turnover taxes,etc. 2.Talk about differences between China and USA on taxation system
1)The USA is a country with income taxes as a major tax while in China we have turn over taxes as our important taxes.
2)The federal government,state government and local government of the USA have pretty rights to collect taxes,while the rights to collect taxes are mostly controlled in central government.
3)The USA use comprehensive income tax system and deduct fees refers to different situation.China use itemized income tax system.
4)In the respect of estate tax, real estate tax is the mainly object to be taxed .
3.On differences among Macau,China Continent and HongKong for the purpose of tax features according to table 1
1)The corporate income tax rates in China Continent is the highest in these three ,to 25%. The tax base of China Continent Is worldwide while the others are territorial.
2)In China Continent we have taxes for interest,royalties,technical fees,management fees (all of them are 10% for non-resident,20%for resident ),while the others don’t have them.
3)China Continent have value-added tax ,while the others don’t have them.
4.On differences among UK,China Continent and Spain for the purpose of Corporate income tax according to table 2
1)Spain has the highest corporate tax rate to 32.5%.
2)UK doesn’t tax for many income which China Continent or Spain will tax such as Capital gains ,branch profits,dividends, technical fees and management fees.
5.On differences among China Continent and foreign jurisdictions for the purpose of withholding taxes according to table 3
1)For branch profits, interest ,technical fees and management fees most jurisdictions don’t collect tax except Ireland(collect for interest) and China Continent.
2)Except Switzerland federal tax rates of dividends and interest are 35% and higher than China Continent ,other jurisdictions’ withholding tax rates are mostly lower or equal to China Continent. Chapter2
International Income Taxation
1.How does a country generally design its income taxation system (book page50)
1)territorial(领土模式）： 2)Residency(属人模式）:
tax on the worldwide income of residents, and impose tax on the income of nonresidents from certain sources within the country. eg.the USA. 3)Exclusion(例外）:
specific inclusion or exclusion of certain amounts,classes,or items of income in/from the base of taxation. 4)Hybrid(混合模式):
some governments have chosen for all or only certain classes of taxpayers, to adopt systems that are a combination of territorial, residency, or exclusionary.
2.Why is it important to make clear source of income
To make clear source of income is important because it decidides that whether a individual or corporation should pay tax in a country and what credits can it enjoy.
3.Term explanation:Thin Capitalization;Foreign tax Credit;Withholding tax; International tax treaty; Deferral system; International transfer pricing Thin Capitalization:
Thin capitalization is a method that taxpayers borrow too much money from oversea related party and pay much interest, so that they can enjoy much deduction before tax.By this way,they transfer profits from high tax burden countries to low tax burden countries or jurisdictions. Foreign tax Credit（外国税收抵免）：
If you paid or accrued foreign taxes to a foreign country on foreign source income and are subject to resident country tax on the same income, you may be able to take a credit for those taxes. Taken as a credit, foreign income taxes reduce your own country tax liability. Withholding tax:
Withholding tax is tax withheld by the country when a corporation making a payment to its resident country , in which the full amount owed to that corporation is reduced by the tax withheld. International tax treaty:
International tax treaty is a treaty a country (or jurisdiction) signed with other countries (or jurisdiction) for affairs about taxation. Deferral system：
Deferral system is a tax incentive (激励措施)to encourage domestic tax residence to make investment broad. But it may cause international tax avoidance.(缺点：可能造成国际避税) International transfer pricing:
International transfer pricing is a very important way for multinational company to avoid international tax. Transfer pricing refers to a kind of non-market pricing action taken by related corporations to shift profits form high tax rate countries or jurisdictions to low tax rete regions. Chapter3 Tax Residence
1.What is the main difference between a tax resident and a non-tax resident for tax liability purpose In general, a tax resident bears infinite tax liability ,should pay tax for all of its income.
A non-tax resident bears limited tax liability, should pay tax for income sourced from the country. 2.Can you name some tests in determining whether a person is a resident for corporation:
place-of-incorporation test,place-of-management test,residence of the shareholders test for individiual:
a fact-and-circumstances test ;abode test; number of day test(in China:1~5year – temporary resident,>5year - long-term resident)
3.Take an example to prove how different countries apply differing tests to judge a person's residence For example ,
China for individual:domicile test,number of days(a full year);
for corporation:place-of-incorporation test or place-of-management test ireland for individual:number of days test(183 days),domicile test for corporation:place-of-incorporation test or place-of-management test 4.Term explanation:Tax residence;dual resident;domicile test; Tax residence:
If an individual or a corporation is a tax residence ,it bears infinite tax liabilitis to its own country.Domicile is, in common law jurisdictions. dual resident:
dual resident means an individual or a corporation is resident taxpayer in two countries at the same time.It often occurs when two use different standard for tax residence. domicile test:
If an individual or a corporation has its domicile in a country ,it is the country's tax residence.It is a common tax jurisdiciton.