| dc.description.abstract | In order to take advantage of cheap labor and inexpensive land in mainland China for production and export business, China introduced foreign-funded enterprises in the early of this century. However, with the purchase power of the Chinese domestic market rising, foreign producers gradually began to attach importance to domestic market. That made full-export type producers pay more attention to the domestic market and become hybrid type. However, both types are restricted by customs bonded, foreign exchange verification business and export tax rebate business. Among these, customs bonded is the most complex and widely used, requiring significant business involvement. Large numbers of Taiwan-funded enterprises have not been really aware of such tax risks and their root causes. Due to this reason, enterprises lack daily operation and management processes to identify, assess, and control the processing trade tax risks. Even though some enterprises are conscious about the risks, they just rely on simple analysis, rather than developing a systematic program of prevention and control of processing trade tax operating risks. Therefore, China Customs’ processing trade policy and regulations derived from processing trade tax risk deserves more our concerns and attentions.
This paper considers the COSO risk model which includes various stages of the plant status, management and operation, and management of the environment to calculate the size and level of the processing trade tax operating risks at the various stages. In addition, this study concludes with the mistakes that the Taiwan-funded enterprises often made in processing and trading, which lead to high tax-involved risks, in the aspects of operating mentality, practice and purpose. Then, this study explores and discusses the feasibility the methods for Taiwan-funded enterprises to reduce Customs’ processing trade tax risks in China. | en_US |