| Summary: | 碩士 === 國立中興大學 === 法律學系碩士班 === 107 === With the booming development of international trade , enterprises mostly adopt the mode of the multinational operations through the cross-border operations, foreign direct investment or indirect investment in ways to reduce the risks and uncertainties in domestic business based on the global layout. The most common pattern of tax avoidance would be setting up subsidiaries in tax haven and shifting the income to low-tax regions in order to reduce the group’s tax burden and maximize overall profits; Or use a tax haven to set up a paper company to convert the occupant’s identity and avoid the tax burden of the home country.
In response to the trend of enacting general anti-avoidance rules in other countries, policy makers in Taiwan amended the Article 43-3 (Controlled Foreign Corporation Rule) and Article 43-4 (Places of Effective Management Rule) of Income Tax Act on July 12, 2016. In coordinate with the OECD “Common Reporting and Due Diligence Standard”, the Ministry of Finance issued the “Common Reporting and Due Diligence Standard” on November 16, 2017. Taiwanese companies used OBU accounts for earnings allocation and concealed assets. After the overseas funds are exposed, the Taxation authority can conduct the check of the Controlled Foreign Corporation Rule and the Places of Effective Management Rule, which will help to restore the loss of tax base.
In this study, specifically analyzes the Controlled Foreign Corporation Rule and the Places of Effective Management Rule, and proposes relevant recommendations for future adoption. In the case of Taiwanese companies setting up paper companies in tax havens, the impact of the new law on the Places of Effective Management Rule of Article 43-4 of the Income Tax Act will be discussed.
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