Tax Harmonization of Treaty Benefits for Teachers and Researchers in China
Słowa kluczowe:
teachers, provision, double tax treaty, tax harmonizationAbstrakt
As of September 2024, China had signed more than 100 double tax treaties with countries and regions all over the world. This paper focuses on the tax exemption provision for teachers and researchers contained in dozens of double tax treaties signed by China as well as on the Chinese domestic legislation that serves to interpret the tax exemption provision for teachers and researchers. The tax exemption provision for teachers and researchers enhances market competitiveness of treaty partners’ teachers and researchers on the Chinese higher as well as non-higher education markets. On the other hand, the treaty partners who do not include the tax exemption provision for teachers and researchers in their double tax treaties with China suffer from weakened market competitiveness on the Chinese higher and non-higher education markets. These circumstances give rise to a very interesting phenomenon: mutual rationality in concluding a double tax treaty might cause an irrational outcome in the context of a country’s treaty network consisting of more than one hundred treaties. This lesson implies that mutual negotiation of a double tax treaty might no longer be the best choice for striving towards cross-border tax harmonization. In the context of globalization, it might be more prudent for a country to negotiate a tax treaty by taking into account the convergence of stances adopted by the majority of other treaty partners of this country. Otherwise, this country might lose its competitiveness on the market of its treaty party, compared with most of this party’s other treaty partners that have adopted a different tax stance in their treaties. This paper also discusses the importance of enhancing tax harmonization by both contracting states in terms of their domestic detailed rules formulated to implement the teacher’s provision contained in their double tax treaty, since the disparities in the strictness and complexity of implementing the teacher’s provision and ratifying tax exemption will impair the reciprocity rule of the tax treaty.
Bibliografia
Announcement of the State Administration of Taxation on Further Improvement in Implementation of the Provisions on Teachers and Researchers in Tax Treaties (Announcement of the State Administration of Taxation No. 91 of 2016).
Announcement of the State Administration of Taxation on Implementation of the Provisions on Teachers and Researchers Contained in Tax Treaties (Announcement of the State Administration of Taxation No. 42 of 2011).
Announcement of the State Administration of Taxation on Promulgating the Administrative Measures for Non-Resident Taxpayers to Claim Tax Treaty Benefits (Announcement of the State Administration of Taxation No. 60, 2015).
Announcement of the State Administration of Taxation on Promulgating the Administrative Measures for Non-Resident Taxpayers to Enjoy Treaty Benefits (Announcement of the State Administration of Taxation No. 35 of 2019).
Article 20 (regarding teachers and researchers) of the Agreement between the Government of the People’s Republic of China and the Government of the Polish People’s Republic for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income. The treaty was signed on 7 June 1988 and has been effective from 7 January 1989 and applicable since 1 January 1990.
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Ostrovsky, I. (2019). Tax Treaties and Special Considerations for Unemployment Income. The Contemporary Tax Journal [CTJ],8(1), Art. 6, pp. 35–37. Sęk, M. (2023). The Remuneration of Teachers and Researchers under Art. 21 of the Brazil-Poland Double Taxation Convention of 2022 in the light of the Polish Treaty Practice. Kwartalnik Prawa Podatkowego [Tax Law Quarterly]. 4. State Administration of the PRC. All the double tax treaties signed by China with its treaty partners, https://www.chinatax.gov.cn/chinatax/n810341/n810770/common_list_ssty.html (assessed: 5.12.2024).
ZHU Xiaodan, PEI Zhaobin (2015). The Argument on the Applicability of the Teacher and Researcher Provision in Double Tax Treaties. [The title of the paper in Chinese: 论中国税收协定教师和研究人员条款的适用]. International Taxation in China, [the name of the journal in Chinese: 国际税收], 9.
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