Tax law

Author: Xu Mengzhou
Publisher:
Publishing Date: 2004-07-01
Features:
Editor's Note: Tax law is one of the main courses in law and economic law majors in higher education institutions, as well as an important course for economics and management majors. To meet the needs of tax law teaching, we have compiled this textbook, Tax Law. From the drafting of the outline to the writing of each chapter, it is guided by Marxism, Mao Zedong Thought, and Deng Xiaoping Theory, based on the reform of China's tax system and the actual practice of tax administration according to law, reflecting the achievements of recent tax legislation and tax law research, and strives to accurately explain the basic principles and systems of tax law, while making innovations in the theory and structural system of tax law, achieving an organic unity of scientificity, systematicity, and practicality. The book consists of five parts and sixteen chapters: Part I covers the basic principles of tax law; Part II covers the basic systems of tax law; Part III covers the systems of turnover tax law; Part IV covers the systems of income tax law; and Part V covers the systems of property, resource, and behavior tax law. Part I and Part II are the general principles of tax law, while Part III, Part IV, and Part V are the specific principles of tax law. Tax Law is one of the 21st Century Law Series textbooks published by China Renmin University of Political Science and Law, intended for undergraduate students but can also serve as a major reference for postgraduate students in economic law. The book is edited by Professor Xu Mengzhou, with the chapters contributed by: Xu Mengzhou: , II, III, IV, XIV, XV, and XVI; Zhu Daqi: VI, VII, VIII, and IX; Yin Shaoping: X, XI, XII, and XIII; Wang Lijie: V. In addition, comrades such as Deng Zhiyi, Liang Fei, Duan Xiaoxi, Peng Xinlin, Song Yan, Fan Hongjuan, and Li Wenhua participated in the collation or translation of the book's materials. In the process of compiling this book, the authors have done their best, but due to the limitations of their knowledge and the short time for writing, if there are any inappropriate or incorrect places, we sincerely ask the readers to point them out for revision in the second edition. Editors, September 1999
Excerpt:
The tax system includes tax authorities and taxpayers. The subject of taxation is authorized by the state, generally the financial authorities, tax authorities, and customs. This indicates that taxation is a unique exclusive right of the state, which can only be exercised by authorized specialized agencies. The subject of taxation includes residents and non-residents. The concept of a "resident" is a specialized term in tax law, and each country's laws have clear definitions of residents. A "resident," from a tax perspective, refers to a person who, in a country exercising resident taxation jurisdiction, is subject to unlimited tax obligations according to the provisions of that country's tax law, due to factors such as place of residence, habitual residence, period of residence, location of administrative organs or main offices, or other similar standards. This includes both natural persons and legal persons. Those who do not meet the criteria for a resident under a country's laws are non-residents. Non-residents, as limited taxpayers, are taxed only on their income.① Using the term "resident" in tax law is more scientific than using terms like "people," "citizens," or "nationals," because foreigners or stateless persons may also be subject to tax obligations. Fourth, it includes the formal characteristics of taxation, which are reflected in the "three attributes" of taxation. "Based on legal provisions" implies the characteristics of compulsion and fixedness (normativity), while "not directly repayable" or "" indicates that taxation is an unconditional transfer of wealth from individual taxpayers to the state. Fifth, to exclude fines, penalties, and other confiscatory actions from the definition of taxation, the term "non-punitive" is used to summarize this meaning. Sixth, the phrase "based on political power and legal provisions" in the definition not only reflects the formal characteristics of taxation but also encompasses its social attributes. We believe that summarizing taxation as a levying act—a compulsory economic act—is more scientific. Because taxation is neither a simple material or wealth nor an abstract distribution relationship, but rather a vivid and specific act that conforms to normative standards, driven by state coercion, i.e., a levying act. This levying act is manifested as a compulsory economic act.
II. Classification of Taxes
The classification of taxes refers to the categorization of various taxes in the tax system according to certain standards. The purpose of classifying taxes is to study and compare the characteristics and advantages of different tax types, in order to find an optimized tax system suitable for China's conditions. Based on different criteria, taxes can be divided into various categories:
1. According to the nature and characteristics of the tax base, taxes can be divided into five major categories: turnover taxes, income taxes, property taxes, behavior taxes, and resource taxes. Turnover taxes are taxes based on the premise of commodity exchange and the provision of services, with commodity turnover and non-commodity turnover as the tax base. Income taxes are taxes based on the income or profit of taxpayers as the tax base. Property taxes are taxes based on the quantity or value of certain specific properties of taxpayers as prescribed by the state. Behavior taxes are taxes that impose a tax on the occurrence of certain specific behaviors, targeting the behavior itself. Resource taxes are taxes based on the income derived from the occupation and development of state-owned natural resources as the tax base.
2. According to the final destination of the tax burden, taxes can be divided into direct taxes and indirect taxes. Direct taxes are taxes where the tax burden is borne by the taxpayer themselves. Indirect taxes are taxes where the taxpayer can transfer the tax burden to others, who then bear it.
3. According to the difference in tax management authority and tax revenue disposal rights, taxes can be divided into central taxes, local taxes, and shared taxes between the central and local governments. This classification is determined by the fiscal management system of the division of tax systems. Central taxes are taxes managed and controlled by the central government. Local taxes are taxes managed and controlled by local governments. Shared taxes between the central and local governments are taxes jointly managed and controlled by both.
4. According to the basis of calculation, taxes can be divided into ad valorem taxes and specific taxes. Ad valorem taxes are taxes calculated based on the price of the tax base. Specific taxes are taxes calculated based on a specific unit of measurement of the tax base. All current turnover taxes in China are ad valorem taxes, but beer, yellow wine, gasoline, and diesel in the consumption tax are specific taxes. Resource taxes, land use tax, land occupation tax, vehicle and vessel tax, and slaughter tax are specific taxes.
5. According to whether taxes have a specific purpose, taxes can be divided into general taxes and purpose taxes. General taxes are used for the regular expenses of the state treasury. Purpose taxes are taxes designated for specific purposes, such as social security taxes. In the current tax system of China, only urban maintenance and construction tax and land occupation tax are purpose taxes.
6. According to whether the tax rate includes the tax amount, ad valorem taxes can be divided into intra-price taxes and extra-price taxes. China's customs duties and value-added tax do not include the tax amount in the calculation price, making them extra-price taxes. Other ad valorem taxes are intra-price taxes.
In addition, there are other methods of classifying taxes, such as progressive taxes and regressive taxes; proportional taxes and fixed taxes; monetary taxes and taxes, etc. However, from the perspective of tax theory and tax practices in countries around the world, classifying taxes based on the nature of the tax base is the most widely adopted method in the world and is also the most basic and important way of tax classification. China also primarily adopts this method.
III. The Basis of Taxes
What is the basis of taxes? In other words, what is the objective foundation for the emergence, existence, and development of taxes? "This is a fundamental issue in the entire national tax theory and socialist tax theory. Only with a clear understanding of this and confirming that socialist taxes are bound to exist can we then discuss other theoretical and policy, institutional issues of taxes."① We believe that the existence of the state and the independent property of residents are the basis of taxes.