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Chapter 2 Tax System

An overview of tax systems helps tax officials understand the fundamentals of various
categories of taxes and jurisdiction-specific practices, as well as learn knowledge and
the latest developments in international taxation. In this context, the introduction of
tax systems and the current international tax rules are included in this theme to
improve capacity in tax legislation and enforcement.

2.1 Introduction of Tax Systems

Four types of taxes are introduced in this section: Goods and Services Taxes, Income
Taxes, Property and Behavior Taxes, and Other Taxes. To broaden participants’
understanding of various taxes, the following are introduced: basic concepts and
rationales of those taxes; major elements of the tax system such as taxpayers, objects
of taxation, tax base, tax rates, tax payable, tax incentives, administration methods,
time of payment, filing of taxes and fees; distribution of tax power in respect of tax
legislation, enforcement, administration and inspection; major tax reforms and best
practices, as well as trends and topical issues regarding tax systems.

2.1.1 Goods and Services Taxes

Represented by Value Added Tax (hereinafter referred to as “VAT”), goods and
services taxes serve as an important way for jurisdictions to raise fiscal revenue in the
modern tax system, featuring broad tax base and ease of collection. According to
statistics from the OECD, nearly 170 jurisdictions around the world have introduced
VAT as of 2021. The subtopic of goods and services taxes builds on basic theories and
principles of goods and services taxes, focuses on the trending issues of VAT, and
highlights the core characteristics of VAT, such as the neutrality principle and the
destination principle, as well as the specific practices of VAT system design, VAT
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