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administration must undergo a special procedure, and hence it is not used very often 101 .
French courts have always recognized the authority of the tax administration to submit
evidence about the real nature of the transaction, so that it should be requalified for tax
purposes.
5.1.4 China
China is also a civil law system country. Under art. 67 of the Constitution of the People's
Republic of China, the Standing Committee of the National People's Congress have the
power to interpret the constitution and other national statutes. This means that authoritative
interpretation of tax laws is in the first place the work of the legislator. However, the
Chinese tax legislator has not made frequent use of this power. Article 89(18) of the
constitution allows a delegation of this power to lower agencies. In this way, the
constitutional provision is used to grant regulatory power to the Ministry of Finance and to
the State Administration of Taxation to issue interpretive regulations of the tax laws. The
legislature may achieve a similar effect by amending an existing law, with or without
retroactive effect. Such action by the legislature is common when the legislature wants to
reverse the effect of the interpretation of a statute by a court. 102
Most of tax cases in China are an administrative case. In contrast to a judicial case, where
the court makes a pronouncement on the dispute between the authorities and the taxpayer,
the decision of tax officials in a tax administrative case authoritatively disposes of
substantive issues without court involvement. Although it is generally known that
administrative officials play a pivotal role in law making and interpretation in China, little
attention has been devoted to how law has actually been used in an administrative case. 103
5.2 Designing rule for New Zealand
In the 2004 Budget, the United Kingdom introduced a new obligation on promoters and
users of certain tax schemes to disclose them to the UK Inland Revenue 104 . This is the
101
International Monetary Fund, Tax Law Design and Drafting, volume 1, 1996.
102
Ibid.
103
Jiang,Z.D, The Administrative Use of Law in China: The Baori Gold Club Tax Case, The Columbia
Journal of Asian Law, 1999.
104
The 2004 UK Budget and the Chancellor's Speech are available at,
.
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