With the acceleration of global economic integration, the interdependence among countries' economies is deepening. It is increasingly difficult for governments of various countries and regions to implement some valuable policies on economic activities, because such activities are often transnational and are not controlled by a certain government. International tax competition is one of the typical manifestations of this activity. China has joined the WTO. According to the provisions of GATS and other agreements, the capital market will be gradually opened, and the dependence of China's tax system on foreign countries will be deepened. Therefore, it is a rational choice for China to face international tax competition and international tax cooperation with a positive attitude. Since proper tax competition plays a positive role in economic development and is attractive to international hot money, China, which insists on opening to the outside world, should also participate in proper tax competition, but this tax competition is a competition in cooperation, that is, competition under the premise of respecting international practices. International tax coordination and cooperation is an inevitable and reasonable trend in the development of international tax field. Coordination and cooperation is also a process in which sovereignty and interests must make concessions. Therefore, China should seek active participation and voice in cooperation, protect China's legitimate interests to the maximum extent, and strive for the benefits of economic globalization for our use.

(A) China's preferential tax policies

Since the reform and opening up, China has implemented a series of preferential tax policies to attract foreign investment and introduce advanced technology, which has promoted the rapid development of China's economy. Implementing preferential tax policies is the scope of a country's tax sovereignty, but with the acceleration of the process of joining the world economic integration, it is undoubtedly necessary to re-examine China's preferential tax system from this standpoint.

According to the standards of harmful tax competition determined by OECD report, it is considered that some foreign-related preferential tax policies in China are suspected of harmful tax competition. Mainly manifested in: first, foreign-funded enterprises have enjoyed super-national treatment for a long time, forming a "circular fence" to some extent. In terms of income tax, although the statutory tax rate of domestic and foreign-funded enterprises is 33% (of which the local income tax of foreign-funded enterprises is 3%, which is ineffective because most provinces and cities implement tax relief policies), the actual income tax burden rate of foreign-funded enterprises is much lower than that of domestic-funded enterprises due to the gap in preferential policies such as tax base calculation, asset disposal and reinvestment tax rebate. In terms of turnover tax, domestic-funded enterprises have to pay import duties, value-added tax and consumption tax when importing equipment, and foreign-funded enterprises can reduce or exempt imports. These preferential tax policies separate foreign-funded enterprises from domestic-funded enterprises to a certain extent, forming a "circular fence". Some preferential policies for border trade and investment in Hong Kong, Macao and Taiwan, as well as multi-level regional tax preferential policies designed around special economic zones, coastal open cities, coastal open economic zones and economic and technological development zones, can also be considered as a kind of "enclosure", but the former benefits a certain range of taxpayers and the latter benefits a certain range of regions. Second, tax incentives are multi-level and complex, and the tax system lacks transparency. Authorized legislation is widely used in China's current tax law, and most tax laws and regulations are expressed by administrative organs in the form of regulations, provisional regulations, implementation rules, decisions, notices, supplementary provisions and so on. Other governments are not easy to know. Many preferential tax policies only stipulate some basic principles, lack corresponding implementation rules, are flexible and difficult to operate, and even have different interpretations and implementation methods in different regions. What's more, in order to expand the strength and scale of attracting foreign businessmen in the region, some local governments are scrambling to reduce their rights or tax exemptions and expand the scope of preferential treatment, and regard tax incentives as an important means to attract foreign investment and enhance the competitiveness of enterprises in the region.

At the same time, it should be noted that the OECD's standards and containment measures for vicious tax competition are mainly formulated from the standpoint of developed countries. Therefore, we must also analyze China's preferential tax policies from the perspective of developing countries and China's specific national conditions. China has a vast territory, so it can make use of different comparative advantages to attract foreign investment. In addition, China is a country with huge market potential, which in itself has a great temptation to international capital. As long as it is well guided, international capital will have the power to flow in. Moreover, China's labor and land resources are relatively cheap and its political environment is relatively stable, which are powerful factors to promote international capital inflows, indicating that there is no need for vicious tax competition in China. At present, China is still a developing country and needs the support of other countries on some issues. If China's preferential tax policies are not matched with those of developed countries, it is obviously difficult to work. If China is recognized as a country engaged in vicious tax competition by other countries, it may be retaliated by these countries, which will make it difficult to implement China's normal preferential tax policies, and the loss will outweigh the gain. Therefore, China's foreign-related tax preferential policies should be based on full consideration of the interests of the other country, and relevant tax preferential agreements should be signed with it to give appropriate preferential treatment to foreign investment. China's preferential tax policies must also meet the requirements of transparency and actively promote the reform of the preferential tax system.

(ii) International tax forums

As mentioned above, the vicious international tax forum established by the OECD report is a substantial attempt by the OECD to curb vicious international tax competition. At the same time, we note that in 2002, the World Bank, the International Monetary Fund and the OECD jointly initiated the establishment of an international tax dialogue. The international community has moved from theoretical discussion to practical efforts to establish a consultation and dialogue mechanism that can reflect the voices of all parties and coordinate the conflicts of interests between developing and developed countries. However, today's world is full of contradictions, and the huge interest difference between North and South makes it very long and difficult to establish an effective international tax coordination mechanism.

Under realistic conditions, there is no power beyond the national sovereignty of various countries, which can directly make the tax systems of various countries converge. To coordinate the tax jurisdiction of various countries and avoid vicious tax competition, we must rely on the international coordination of tax authorities of various countries based on the principle of equality and mutual benefit. For example, Les Mussen proposed that international tax cooperation should be an all-round cooperation between the two countries' tax systems, including the exchange of tax information, the choice of tax jurisdiction and tax rate, and whether to impose restrictions on capital flows. The premise of international tax cooperation is that every country participating in international tax cooperation must be superior to equilibrium output in cooperation in equilibrium output. How to grasp the balance between safeguarding national tax sovereignty and the concessions that must be made to participate in international tax coordination needs to be explored by all countries in practice.

The International Tax Dialogue Forum provides us with a good place for cooperation, exchange and coordination. The establishment of the dialogue mechanism means that the international tax competition has been upgraded from a unilateral low-level "preferential war" to a high-level multilateral confrontation to formulate "rules of the game". In this confrontation and cooperation, China should actively participate in the multilateral dialogue of international tax coordination and strengthen international tax cooperation with other countries. China should adhere to the principle of equal consultation and benefit sharing, reflect the wishes of developing countries in the discussion of various fiscal and taxation policies, and actively promote the formation of tax policy norms beneficial to developing countries. At the same time, China should also promote the transparency reform of China's tax law and actively cooperate with international tax information exchange. In order to get its due position in the tax dialogue forum.

To sum up, China, as a developing country, should base itself on China's national conditions, rationally construct a new preferential tax system to avoid vicious tax competition, actively participate in international tax cooperation, express the reasonable positions and demands of developing countries, strengthen China's tax coordination ability from both inside and outside, enhance China's international economic competitiveness, and seek faster development in the process of economic integration.

brief Introduction of the content

This book is the final result of the National Social Science Fund Project (03BJY095) "Research on Asymmetric International Tax Competition —— Also on the Adjustment of China's Tax Policy", and it is also the sequel to "Research on International Tax Competition" published by the author (co-author) in 2004, and is dedicated to readers here. Generally speaking, based on the author's original analysis of international tax competition, this book further deepens the research on the basic theory and practice of international tax competition, puts forward a more comprehensive and systematic theoretical analysis framework, further analyzes international tax competition on the basis of combining theory with practice, and puts forward some views on China's tax reform and tax policy application under the new historical conditions of international tax competition. I hope to further enrich the research on international tax competition together with my colleagues in the domestic fiscal and taxation theory, continue to accelerate the tax reform in China and improve the application of tax policies under the new historical conditions.

Part of this book is enriched and perfected on the basis of some international tax competition papers published in recent years. These papers include: properly handling trade frictions and the application of fiscal and tax policies (Deng Liping, 2006a); Asymmetry of international tax competition and its policy impact (Deng Liping, 2006b); Research on international tax relations under the new concept of harmonious world (Deng Liping, 2006c); Tax Competition and Coordination in China-ASEAN Trade Liberalization (Deng Liping, 2007a); Dealing with trade frictions with prudent fiscal policies (Deng Liping, 2007b); Effectively participate in international tax competition and promote the development of open economy (Deng Liping, 2007c); Three Views on Building Socialism with Chinese characteristics's Tax System (Deng Liping, 2008); Analysis on the Model Construction of International Tax Competition (Zheng Li Equality, 2008); Thoughts on Tax Development under the New Situation of Open Economy (Deng Liping, 2009).

Brief introduction of the author

Deng Liping, male, vice chairman of Fujian Provincial Political Consultative Conference, deputy to the 9th, 10th and 11th National People's Congress, president of Xiamen National Accounting Institute, professor of economics at Wang Yanan of Xiamen University, distinguished professor, Minjiang scholar, doctoral supervisor, winner of special allowance from the State Council. He obtained a bachelor's degree and a master's degree in economics from Xiamen University, studied in Canada from 65438 to 0986, obtained a doctorate in economics from the Department of Economics of Dalhousie University, and taught in many universities in Canada. 65438-0996 Before returning to China, he was a professor (tenured faculty) in the Department of Economics at Ellison University in Mount Canada. After returning to China, he served as the director of the International Trade Department of Xiamen University, the vice president of the School of Economics, the dean of the online education college, the assistant to the principal and the vice president. Long-term commitment to the teaching and research of international finance and taxation and international economy and trade. After returning to China, he has published more than 200 papers and 20 monographs in academic journals at home and abroad, and his research achievements have won many awards for outstanding scientific research achievements from the Ministry of Education, the Ministry of Finance, State Taxation Administration of The People's Republic of China and Fujian Province. He presided over more than 20 provincial and ministerial scientific research funds and horizontal funds, including the National Social Science Fund, the National Natural Science Fund, the Ministry of Education, the Ministry of Finance, the Ministry of Commerce, the Ministry of Justice, State Taxation Administration of The People's Republic of China and Fujian. At the same time, he served as vice president of China Taxation Society, executive director of China Assets Appraisal Association, executive director of China International Trade Society, director of China Finance Society, director of china international taxation research institute, academic member, and economic adviser of Fujian Provincial People's Government. At present, he is an influential middle-aged fiscal and taxation scholar in China. Xiamen National Accounting Institute is the academic leader of finance and taxation teaching and research, one of the academic leaders of Xiamen University's finance discipline (national key discipline), and the academic leader of Xiamen University's international economy and trade discipline.

Library catalogue

The first chapter is the analysis of international tax competition.

Chapter 1: Research on international tax competition: basic analysis framework.

Section 1 International tax competition is a kind of "competition" behavior

Section 2 International tax competition is an act of "government competition"

The third part: international tax competition is "the competitive behavior of government using tax"

Section IV: International tax competition is "the international competition for the government to use tax".

Section 5 International tax relations and international tax competition under international economic relations

Chapter II International Tax Competition: Based on the analysis of the development of tax relations.

Section 1 From domestic tax competition to international tax competition

Section 2 International Tax Relations and International Tax Competition

Chapter III International Tax Competition: An Analysis Based on the Development of Economic Relations

Section 1 International Tax Competition under the Development of International Economic Relations

Section 2 International Tax Competition under the New International Economic and Trade System

Chapter IV Tax Preferences and International Tax Competition

Section 1 Tax Preferences and Tax Incentive Policies: Theoretical Analysis

Section II Tax Preferences and Tax Incentive Policies: Empirical Analysis

Section III Tax Preferences and Tax Incentive Policies: Effect Analysis

Section IV Tax Preferences and Tax Incentive Policies: Benefit Evaluation

Chapter V Sovereign Countries and International Tax Competition: Further Analysis

Section 1 Tax Incentive Policy and Transitional Capital Flight

Section 2 Identification of Harmful Tax Competition: Restrictions on Sovereign Countries' Participation in Competition

The third part analyzes the role of tax havens in international tax competition.

Asymmetry of international tax competition

Chapter VI Research on Asymmetric International Tax Competition

The first part of the question.

Section 2 Research on Narrow Asymmetric International Tax Competition

Section III Research on Welfare Effect under Asymmetric International Tax Competition

Section IV International Tax Coordination under Asymmetric Conditions

Section V Asymmetric International Tax Competition and Coordination: A Case Study of China-ASEAN

Chapter VII Research on International Tax Competition under Asymmetric Information

Section 1 Information Asymmetry and Taxation: A New Perspective of Studying International Tax Competition

Section II Overview of the Relationship between Information Asymmetry and Modern Taxation

Section III International Tax Competition under Asymmetric Information Conditions