In relation to laws involving taxation, such laws should be construed in accordance with the principle of taxation by law and the respective purposes of the relevant laws, balancing therewith the economic purposes and the principle of equality in substantive taxation.
The tax collection authority acknowledges that the constituent elements and facts of the tax assessment shall be based on the existence of actual economic relationships and their related interests.
A taxpayer, based on gaining tax benefits, abuses legal forms to aovid the constituent elements of taxation and attain the economic benefits equivalent to normal transactions, such actions shall be termed tax avoidance.
The tax collection authority shall bear the burden of proof in ascertaining the tax avoidance in the preceding paragraph and the constituent elements and facts of the tax assessment in the second paragraph.
The obligation of taxpayers to assist the reporting of the required information according to this Act and any relevant tax acts is not exempted from the provision in the preceding paragraph.
The tax collection authority,in identifying the obligations of taxpayers in transactions with related parties,as in the case prescribed in the second or third paragraph,and in determining the correct calculation of the tax payable by the taxpayers may, in accordance with the tax laws, make adjustment of the calculation based on normal transactions or the obtained information.
The taxpayers may,before engaging in specific transaction, provide relevant documents to the tax collection authority for consultation；the tax collection authority shall reply within six months.