Tax Law

I. Concept and Characteristics of Taxation
(I) Concept of taxation
Taxation is a special distribution means by which a state obtains financial revenue for free by virtue of its political power and according to the standards stipulated by law in order to exercise its functions. Taxation reflects a specific income distribution relationship between the state, as a party, and social groups and members of society, as the other party. The role of taxation is mainly reflected in the following aspects: Firstly, taxation is the main form and tool of a sate for organizing its fiscal revenue; The state may regulate social production, exchange, distribution, and consumption through the establishment of tax types and regulations on tax types, tax rates, and other aspects, to promote the healthy development of the social economy; Thirdly, taxation is an important means of supervising and managing the economic conditions; and Fourthly, taxation plays a role in maintaining state power.
(II) Characteristics of taxation
Taxation has the following three characteristics: compulsory, gratuitous, and fixed.
(1) Compulsory. Taxation is compulsory collection of taxes by the state, as a social administrator, through the issuance of laws and government orders and relying on political power. Social groups and members with tax obligations must comply with compulsory tax rules and pay taxes in accordance with the law, otherwise they will be subject to legal sanctions.
(2) Gratuitous. Taxation is nationalization of a portion of the income of social groups and members by the state relying on political power.
(3) Fixed. Taxation is a continuous source of fixed income levied according to the standards defined by national laws and regulations with relatively stable applicable periods.