Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation

Jiangyu Huang; Qiuyan Xie; Jing Li

doi:doi:10.11648/j.ajtab.20200604.18

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Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation

Jiangyu Huang, Qiuyan Xie, Jing Li

Published in American Journal of Theoretical and Applied Business (Volume 6, Issue 4)

Received: 18 December 2020 Accepted: 28 December 2020 Published: 31 December 2020

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Abstract

Family trust is an important innovation in the development of financial technology and digital economy. As an innovative method for family business wealth preservation, appreciation and inheritance, family trusts play an important role in financial markets and social safety nets. The healthy operation of family trusts is inseparable from a good tax collection and management system. This study is based on case analysis and international comparative law, combined with the particularity of family trusts, and analyzes the risks that may be faced in its income tax enforcement. The research found that the insufficient regulations of family trust policies make tax collection and administration face the risks of double taxation, tax loss, and high tax administration cost. Based on the substantive tax principles and the perspective of the sustainable development of family trusts, the research puts forward suggestions on the improvement of income tax collection and management in Chinese family trusts: The design of family trusts and taxation systems should insist on substantive taxation; combine the theory of trust conduit with the theory of trust entities; clarify the time, scope, beneficiary, and choice of accounting standards for family trust collection. In the era of digital economy, governments, enterprises, and educational institutions have formed partnerships to strengthen the education of family trust investors on financial, taxation, and digital economy requirements. Taking the sustainable development of family trusts as the starting point, build a new momentum and social safety net for China's economic and social development.

Published in	American Journal of Theoretical and Applied Business (Volume 6, Issue 4)
DOI	10.11648/j.ajtab.20200604.18
Page(s)	106-111
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Family Trust, Income Tax, Principle of Substantial Taxation, Digital Economy

References

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[2]	Agranov M, Palfrey T R (2020). The effects of income mobility and tax persistence on income redistribution and inequality [J]. European Economic Review, 123.
[3]	Huang, J. Y. (2016). Research on the Tax Collection and Management of Chinese Family Trust. Journal of Mianyang Teachers' College, 2016, 35 (01):30-34.
[4]	Shi, X. P, Zhao, J (2019). The Difficulties and Countermeasures of Taxation of Family Trust Income. Taxation Research, 2019 (11):119-123.
[5]	Jiang, W. J. (2018). The construction of China’s trust tax system: Based on the current tax system and international reference. China Management Informationization, (21):125-128.
[6]	Qu, L. L (2018). Redefinition of overseas family trusts: under the new tax law. Modern Commercial Banking, (22):81-83.
[7]	Charlet. D, Lecha, V. P. (2005). Voice Biometrics Within the Family: Trust, Privacy and Personalisation. International Conference on E-Business and Telecommunication Networks. Springer, Berlin, Heidelberg.
[8]	Hauswald, H. (2013). Antecedents and outcomes of stakeholder trust in family businesses-An application of the integrative model of organizational trust. In: Stakeholder Trust in Family Businesses. Familienunternehmen und KMU. Springer Gabler, Wiesbaden.
[9]	Goodwin, I. (2013). How the Rich Stay Rich: Using a Family Trust Company to Secure a Family Fortune, College of Law Faculty Scholarship.
[10]	Chamu, Sundaramurthy (2008). Sustaining Trust Within Family Businesses. Family Business Review, 21 (1):89-102.
[11]	Hadjielias, E, Poutziouris, P. (2015). On the conditions for the cooperative relations between family businesses: the role of trust. International Journal of Entrepreneurial Behaviour & Research, 21(6):867-897.
[12]	Bawa, S. G, Vu, N. T. (2020). International effects of corporate tax cuts on income distribution. Review of International Economics, (2).
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[14]	Mirrlees J A (1971). The Theory of Optimal Income Taxation. Review of Economic Studies, 38 (114): 175-208.
[15]	Bornman M, Wassermann M (2020). Tax knowledge for the digital economy. Journal of Economic and Financial Sciences, 13(1).
[16]	Tsindeliani I, Kot S, Vasilyeva E , et al (2019). Tax System of the Russian Federation: Current State and Steps towards Financial Sustainability. Sustainability, 11.

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APA Style

Jiangyu Huang, Qiuyan Xie, Jing Li. (2020). Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation. American Journal of Theoretical and Applied Business, 6(4), 106-111. https://doi.org/10.11648/j.ajtab.20200604.18

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ACS Style

Jiangyu Huang; Qiuyan Xie; Jing Li. Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation. Am. J. Theor. Appl. Bus. 2020, 6(4), 106-111. doi: 10.11648/j.ajtab.20200604.18

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AMA Style

Jiangyu Huang, Qiuyan Xie, Jing Li. Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation. Am J Theor Appl Bus. 2020;6(4):106-111. doi: 10.11648/j.ajtab.20200604.18

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@article{10.11648/j.ajtab.20200604.18,
  author = {Jiangyu Huang and Qiuyan Xie and Jing Li},
  title = {Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation},
  journal = {American Journal of Theoretical and Applied Business},
  volume = {6},
  number = {4},
  pages = {106-111},
  doi = {10.11648/j.ajtab.20200604.18},
  url = {https://doi.org/10.11648/j.ajtab.20200604.18},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtab.20200604.18},
  abstract = {Family trust is an important innovation in the development of financial technology and digital economy. As an innovative method for family business wealth preservation, appreciation and inheritance, family trusts play an important role in financial markets and social safety nets. The healthy operation of family trusts is inseparable from a good tax collection and management system. This study is based on case analysis and international comparative law, combined with the particularity of family trusts, and analyzes the risks that may be faced in its income tax enforcement. The research found that the insufficient regulations of family trust policies make tax collection and administration face the risks of double taxation, tax loss, and high tax administration cost. Based on the substantive tax principles and the perspective of the sustainable development of family trusts, the research puts forward suggestions on the improvement of income tax collection and management in Chinese family trusts: The design of family trusts and taxation systems should insist on substantive taxation; combine the theory of trust conduit with the theory of trust entities; clarify the time, scope, beneficiary, and choice of accounting standards for family trust collection. In the era of digital economy, governments, enterprises, and educational institutions have formed partnerships to strengthen the education of family trust investors on financial, taxation, and digital economy requirements. Taking the sustainable development of family trusts as the starting point, build a new momentum and social safety net for China's economic and social development.},
 year = {2020}
}

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TY  - JOUR
T1  - Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation
AU  - Jiangyu Huang
AU  - Qiuyan Xie
AU  - Jing Li
Y1  - 2020/12/31
PY  - 2020
N1  - https://doi.org/10.11648/j.ajtab.20200604.18
DO  - 10.11648/j.ajtab.20200604.18
T2  - American Journal of Theoretical and Applied Business
JF  - American Journal of Theoretical and Applied Business
JO  - American Journal of Theoretical and Applied Business
SP  - 106
EP  - 111
PB  - Science Publishing Group
SN  - 2469-7842
UR  - https://doi.org/10.11648/j.ajtab.20200604.18
AB  - Family trust is an important innovation in the development of financial technology and digital economy. As an innovative method for family business wealth preservation, appreciation and inheritance, family trusts play an important role in financial markets and social safety nets. The healthy operation of family trusts is inseparable from a good tax collection and management system. This study is based on case analysis and international comparative law, combined with the particularity of family trusts, and analyzes the risks that may be faced in its income tax enforcement. The research found that the insufficient regulations of family trust policies make tax collection and administration face the risks of double taxation, tax loss, and high tax administration cost. Based on the substantive tax principles and the perspective of the sustainable development of family trusts, the research puts forward suggestions on the improvement of income tax collection and management in Chinese family trusts: The design of family trusts and taxation systems should insist on substantive taxation; combine the theory of trust conduit with the theory of trust entities; clarify the time, scope, beneficiary, and choice of accounting standards for family trust collection. In the era of digital economy, governments, enterprises, and educational institutions have formed partnerships to strengthen the education of family trust investors on financial, taxation, and digital economy requirements. Taking the sustainable development of family trusts as the starting point, build a new momentum and social safety net for China's economic and social development.
VL  - 6
IS  - 4
ER  -

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Author Information

Jiangyu Huang

College of Big Data Application and Economics, Guizhou University of Finance and Economics, Guiyang, China
Qiuyan Xie

College of Big Data Application and Economics, Guizhou University of Finance and Economics, Guiyang, China
Jing Li

Faculty of Management and Economics, Kunming University of Science and Technology, Kunming, China

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APA Style

Jiangyu Huang, Qiuyan Xie, Jing Li. (2020). Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation. American Journal of Theoretical and Applied Business, 6(4), 106-111. https://doi.org/10.11648/j.ajtab.20200604.18

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ACS Style

Jiangyu Huang; Qiuyan Xie; Jing Li. Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation. Am. J. Theor. Appl. Bus. 2020, 6(4), 106-111. doi: 10.11648/j.ajtab.20200604.18

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AMA Style

Jiangyu Huang, Qiuyan Xie, Jing Li. Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation. Am J Theor Appl Bus. 2020;6(4):106-111. doi: 10.11648/j.ajtab.20200604.18

Copy | Download

@article{10.11648/j.ajtab.20200604.18,
  author = {Jiangyu Huang and Qiuyan Xie and Jing Li},
  title = {Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation},
  journal = {American Journal of Theoretical and Applied Business},
  volume = {6},
  number = {4},
  pages = {106-111},
  doi = {10.11648/j.ajtab.20200604.18},
  url = {https://doi.org/10.11648/j.ajtab.20200604.18},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajtab.20200604.18},
  abstract = {Family trust is an important innovation in the development of financial technology and digital economy. As an innovative method for family business wealth preservation, appreciation and inheritance, family trusts play an important role in financial markets and social safety nets. The healthy operation of family trusts is inseparable from a good tax collection and management system. This study is based on case analysis and international comparative law, combined with the particularity of family trusts, and analyzes the risks that may be faced in its income tax enforcement. The research found that the insufficient regulations of family trust policies make tax collection and administration face the risks of double taxation, tax loss, and high tax administration cost. Based on the substantive tax principles and the perspective of the sustainable development of family trusts, the research puts forward suggestions on the improvement of income tax collection and management in Chinese family trusts: The design of family trusts and taxation systems should insist on substantive taxation; combine the theory of trust conduit with the theory of trust entities; clarify the time, scope, beneficiary, and choice of accounting standards for family trust collection. In the era of digital economy, governments, enterprises, and educational institutions have formed partnerships to strengthen the education of family trust investors on financial, taxation, and digital economy requirements. Taking the sustainable development of family trusts as the starting point, build a new momentum and social safety net for China's economic and social development.},
 year = {2020}
}

Copy | Download

TY  - JOUR
T1  - Study on Income Tax Enforcement of Family Trusts: Based on the Principle of Substantial Taxation
AU  - Jiangyu Huang
AU  - Qiuyan Xie
AU  - Jing Li
Y1  - 2020/12/31
PY  - 2020
N1  - https://doi.org/10.11648/j.ajtab.20200604.18
DO  - 10.11648/j.ajtab.20200604.18
T2  - American Journal of Theoretical and Applied Business
JF  - American Journal of Theoretical and Applied Business
JO  - American Journal of Theoretical and Applied Business
SP  - 106
EP  - 111
PB  - Science Publishing Group
SN  - 2469-7842
UR  - https://doi.org/10.11648/j.ajtab.20200604.18
AB  - Family trust is an important innovation in the development of financial technology and digital economy. As an innovative method for family business wealth preservation, appreciation and inheritance, family trusts play an important role in financial markets and social safety nets. The healthy operation of family trusts is inseparable from a good tax collection and management system. This study is based on case analysis and international comparative law, combined with the particularity of family trusts, and analyzes the risks that may be faced in its income tax enforcement. The research found that the insufficient regulations of family trust policies make tax collection and administration face the risks of double taxation, tax loss, and high tax administration cost. Based on the substantive tax principles and the perspective of the sustainable development of family trusts, the research puts forward suggestions on the improvement of income tax collection and management in Chinese family trusts: The design of family trusts and taxation systems should insist on substantive taxation; combine the theory of trust conduit with the theory of trust entities; clarify the time, scope, beneficiary, and choice of accounting standards for family trust collection. In the era of digital economy, governments, enterprises, and educational institutions have formed partnerships to strengthen the education of family trust investors on financial, taxation, and digital economy requirements. Taking the sustainable development of family trusts as the starting point, build a new momentum and social safety net for China's economic and social development.
VL  - 6
IS  - 4
ER  -

Copy | Download