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Tax Transplant; Tax Law; Chinese Tax Transplants


This paper seeks to explore the above question by drawing insights from existing literature. The existing body of literature is rich in documenting the phenomenon of legal transplants, theorising why legal transplants take place and presenting the debate on the relevance of local culture to the adaptation of the transplants. In terms of tax transplants, there is an emerging strand of literature that examines the unique characteristics of tax transplants, the common core of tax law, and the global tax convergence. However, there is a lack of analysis focusing on the critical role of processes in legal and tax transplants. Through a case study of the Chinese tax transplants, this paper seeks to test the theories of legal transplants and to demonstrate the importance of process in successful transplants. It examines two types of processes: tax processes and transplantation processes. Tax processes include the political process, administrative and compliance process, and dispute resolution process. Tax transplantation processes include the process of selection, translation, adoption and adaptation. The central claim of this paper is that processes matter in tax transplants. Taxation science is capable of being borrowed and duplicated. Tax processes in a country are defined by its general political, legal and institutional culture, and thus vary from country to country. Many tax rules or principles are the outcomes of tax processes in the country of origin and their implementation depends on a certain set of administrative processes. The transplantation of a tax rule or principle is likely to fail if it is done without the necessary processes, or at least, without a full appreciation and accommodation of the differences in processes.