Five years after the global financial crisis, many countries are still trying to reduce their budget deficits. The governments of these countries have turned to the tax authorities for help. At the same time, in order to attract and encourage investment, these governments provide various financial incentives to maintain competitiveness. Reducing the income tax rate has become a global trend, but it runs counter to the goal of balancing the budget. Therefore, tax authorities all over the world are actively protecting their tax revenue, monitoring radical tax planning more closely, and improving the punishment for tax offenders. In 20 13, the Organization for Economic Cooperation and Development (OECD) issued the report "Tax Base Erosion and Profit Transfer (BEPS)" and related "Action Plan" to deal with the radical tax planning problem. The above changes have become a turning point in the history of international taxation, and international tax compliance management will face more difficulties than before.

Over the years, multinational companies have often set up complex overseas holding structures and cross-border related transactions to reduce overseas taxes, thus achieving the purpose of tax saving. However, in the current international tax environment, tax authorities all over the world are concerned about the holding enterprise structure and cross-border inter-company arrangements, but there is not enough business and operational essence. Therefore, enterprises that use pipelines in the holding structure may be more strictly supervised and questioned by the tax authorities, and the expected tax benefits may not be approved. Therefore, when designing the holding structure of overseas investment, China enterprises should not only consider the potential tax benefits, but also consider whether the commercial entities established in overseas holding enterprises are economically feasible, so as to realize the expected tax benefits and meet the requirements of local tax authorities. In addition, when conducting cross-border related transactions, related taxes should not be artificially separated from their activities.

* * * China enterprises have the same problem.

Although the overseas investment transactions of Chinese enterprises are huge, many enterprises have not specially hired experienced international tax personnel to participate in overseas investment projects. Overseas investment teams are responsible for cross-border tax planning of overseas investment projects, and overseas financial teams (sometimes business teams) appointed by the head office are responsible for post-transaction tax integration and continuous tax compliance. However, this arrangement may lead to unexpected negative tax results. For example, the settlement period of many overseas investment projects is quite long, which can reach 18 to 24 months or even longer. In view of the rapid changes in the global tax environment, the tax planning at the time of acquisition in two years may no longer be applicable; Even if it is applicable, it needs different degrees of adjustment. In addition, many other factors need to be considered in the integration of the merged company, such as refinancing plan, disposal of idle assets or adjustment of transfer pricing policy, so that the new company can be integrated into the whole group, which are all related to taxation. Enterprises should consider the influence of these factors on tax revenue, formulate the most efficient and effective tax strategy, and make it match with the business strategy of enterprises. However, overseas financial teams (not involved in tax planning) do not have enough overseas tax knowledge to correctly implement the preset tax structure. It is even more difficult to ask them to complete the continuous tax compliance work according to the ever-changing tax laws. Therefore, many China enterprises face many risks when investing overseas.

How do multinational enterprises adapt to the ever-changing tax environment?

Over the years, in order to achieve global business expansion, multinational companies have strategically deployed their business teams and tax teams. Tax executives are usually regarded as just below the CFO and CEO, and they will provide more efficient and effective tax processes where appropriate, which will be integrated into the business of enterprises. The headquarters and regional branches of multinational corporations have tax teams to establish a clear global tax framework, reflect the Group's tax policies and support global tax governance and risk management. In today's severe tax environment, tax executives are no longer only concerned about transactions, but are always ready to work with management and business leaders as front-line personnel in tax work to provide support for maintaining the company's tax status in various stakeholders and tax groups. Multinational enterprises expect their tax directors to improve, rather than damage, the company's reputation at home and abroad when managing corporate taxes and meeting the requirements of higher transparency.

How should China enterprises respond?

At the same time of accelerating globalization, China enterprises should allocate more resources in their headquarters to deal with the tax problems of overseas investment. The tax function is at the turn of the century, and the board of directors should pay more attention to it, because tax will affect the audit, financial forecast, overall strategy and risk management of overseas investment projects. In view of the traditional local taxation function, China enterprises should actively seek external tax sources with international vision and various global business experiences. Taxes were not built in a day. At present, the tax law is changing with each passing day, and tax matters are no longer a problem of a single country, but need to understand tax agreements more comprehensively and establish a solid relationship with local tax authorities. Enterprises are committed to increasing tax certainty, reducing compliance costs and reducing disputes with tax authorities. This is the necessity of tax risk management. Tax consultants should actively participate in the tax risk management of enterprises to minimize unexpected losses. In view of the fact that most enterprises in China are not engaged in short-term business, continuous tax risk management is the top priority.

The current business tax environment is changing rapidly, so it is difficult for enterprises to know the latest situation. In addition to global compliance and consulting, enterprises should also strengthen management in many aspects, and their business decisions should be coordinated with tax decisions. Enterprises should pay attention to the rationality of tax data and transactions. Enterprises can ensure that reasonable taxes are paid at the locations of the parent company and overseas subsidiaries through tax consultants. Therefore, tax functions (internal and external) should play an important role when enterprises enter new markets, and help enterprises achieve the best tax effectiveness and compliance from the perspective of China's taxation and market. This is an appropriate and effective way for China to deal with the tax issue in the process of entering the global market.