Abstract It has been four whole years ever since Legislative Yuan passed the taxation of trusts for the third time on May 29, 2001. Last year (2004) the real estate investment trust (referred to as ¡§REIT,¡¨ hereinafter) business handled by trust dealers was extremely prosperous, forming a major trend in the market. Trusts have a lot of functions, such as security of assets, appreciation of assets, engagement in public charity, serving as conduit, etc. But the most important merit of trusts is the function of tax saving, which caused a high popularity of REIT last year. However, the taxation problems of trusts are too controversial. Apart from their being regulated by laws, there is still much room for evasion of tax payment. Due to the diversity of the behaviors of trusts, the government still could not find out a perfect taxation method. Based on the fairness and justice of taxation, conduit theories of trust, judgment of tax income for the treasury, neutral principles of taxation and the executive principles according to law, it is easy to attend to several things only but lose sight of some others as there are too many things to be paid attention to. Even up to May 31, 2005, taxpayers still did not know how to declare the synthetic tax for the fiscal year of 2004 over the trusts with unspecified, non-existed beneficiary, or specified beneficiary but the authorizer preserves the right of changing the beneficiary. As affected, it is still uncertain of the taxation rules for the REIT contracts amounting to tens of billions of NT dollars signed last year. The taxation techniques are seriously lagged behind the economic behaviors. In view of this, the study still refers to the books of trusts written by local authors, and takes the taxation of trusts, including income tax, legacy tax, land appreciation tax, land value tax, contract tax, house tax, business tax, etc. and the related in interpretations as the research areas, and then judges the situation with the references of the related articles in newspaper, magazines and journals, attempting to find out the best way of taxation of trusts. Under the objective, legal, rational, concrete and workable principles, some significant conclusions are made. It is hoped that among the varied arguments, the research results of this paper could get co-understanding from most of the people, become referential to the taxation policies of the government, make concrete contributions to the practical implementation, and make the future trust business achieve prosperous development.

Indirect taxes are value added tax, excise and customs. Taxation on these taxes is different than on the other taxes, because indirect taxes are paid by the person who pays the cost of the good or service, but collected form the real taxpayers – natural and legal persons, which are determined in the legal acts. The taxation of natural and legal persons begins from the principles of taxation, which are the basis of taxation. The principles of taxation are distributed into two groups: theoretical and determined in the legal acts, because of the collision of theory and legal acts. The indirect taxes – value added tax, excise and customs – are described through the principles of taxation. Also these taxes are analysed by their taxpayers – natural and legal persons, the procedure of taxation, the influence of the indirect taxes to the national budget and the main tendencies of all indirect taxes in Lithuania.