This paper discusses the jurisprudential basis and institutional limits of China’s anti-avoidance regime by analyzing the Guangzhou Defa case and the Tianchang Tianqin cases. It argues that anti-avoidance works on “limited transcendence” of tax legality through substantive taxation. This power, while necessary for the protection of the tax base, must be limited by procedural regularity, constituent elements, and the principle of proportionality. The Defa case supports veil piercing, whereas the Tianqin case stresses statutory limits. The paper argues for a balanced model of governance which balances effective enforcement with protection of taxpayer rights. It suggests specific pathways for codifying general anti-avoidance rules (GAAR) by drawing on comparative insights from the Organization for Economic Co-operation and Development (OECD) base erosion and profit shifting (BEPS) framework and domestic judicial trends. It also puts forward measures to establish a pre-ruling system to enhance legal certainty.
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Share and Cite
Wang, S. (2025) The Jurisprudential Logic and Institutional Improvement of Anti-avoidance Rules: A Localized Interpretation Based on the Principle of Substantive Taxation. Journal of Social Development and History, 1(4), 93-98. https://doi.org/10.71052/jsdh/HKNA9624