Abstract: With the pace of the Reform and Opening-up, China′s tax legal system for the foreign has undergone four different stages along. In the past 40 years, its actual pattern with tax incentives as the core has been weakened due to weakening effect. The basic trend of the future tax legal system for the foreign is to achieve the transformation of the institutional innovation. This paper attempts to further clarify the relationship between tax incentives and institutional innovation from the theory and practice, and proposes the way of transforming China′s tax legal system for the foreign: under the premise of promoting the rule of law on tax incentives for the foreign, we will start from two levels of international and domestic tax legal systems to innovate China′s tax legal system for the foreign.

Key words: The Past 40 Years of Reform and Opening-up, tax legal system for the foreign, tax incentives, institutional innovation, transformation