In the modern market economy, with a large number of new businesses every day registration produces the same time, there are a large number of enterprises closed down for various reasons, are forced off. Enterprises in the production and management process in the ability to obtain success, except with the enterprises to enter the industry, market outlook, policy guidance, staff quality, Guan Li level, a relationship management Li Nian Deng, the extent and business planning for the founding of Ge Zhong , whereas the tax planning is planning one of the most important of which, because of different organizational forms of enterprises in the tax have different characteristics, investors have the choice of enterprises of different organizational forms, its investment income will also produce differences, thereby affecting the business overall revenue and profitability. Therefore, when setting up in business, it is necessary to choose the organization to conduct some form of positive planning.
In general, the form of business organization is divided into three categories, namely, corporations, partnerships and sole proprietorships. From a legal perspective, companies are legal entities, who in proportion to the amount invested limited liability. In addition, also available from other angles, for example, can be divided into domestic and foreign firms; foreign companies in joint ventures and Sino-foreign cooperative enterprises and other.
Organizational form of the second level classification is carried out in the company's enterprise division. The level of relations between two of the company, subsidiaries and parent companies of the total. Different organizational forms have different levels of taxation, therefore, investors must take into account in the establishment of enterprises of different organizational forms for business impact.
1, Ltd. and comparison of selected partnerships
My company and partnership to implement the provisions of various tax. The state company's operating profits in the corporate sector on corporate tax levied on profit after tax as a dividend distribution to investors, individual investors need to pay a personal income tax. The partnership is not, operating profits do not pay corporate tax, imposed only a partner's personal income tax share of income.
Example 1: person A runs a company, the annual profit of 200,000 yuan, will the manner in which companies can set up the largest tax benefits?
Option 1: set up a limited liability company
Corporate Income Tax = 20 × 33% = 6.6 (million)
Personal income tax = (20-6.6) × 20% = 2.68 (million)
After-tax income = 20-6.6-2.68 = 10.72 (million)
Scenario 2: the establishment of individual enterprise
Personal income tax = 20 × 35% -0.675 = 6.325 (million)
After-tax income = 20-6.325 = 13.675 (million)
Should choose Option 2, the taxpayers of this move is a permitted by law, the tax planning before the act, and to achieve a certain tax saving effect.
In addition, every coin has two sides, the choice of its positive aspects, but also should consider the negative side, can not be generalized. For example, in not considering the case of the main factors, alone and the case of a limited partnership, partnership better than Co., Ltd., a partnership only once as personal income tax, and Co. still have to sign a corporate income tax; if taken into account corporate tax base, tax rates, incentives and other factors exist, Inc. also has the positive side, because the state's tax incentives are generally only applicable Inc., for example, State Administration of Taxation (1997) No. 198 which provides for joint-stock companies, shareholders, individual shareholders received capital reserve into income that do not levy personal income tax, this partnership that will not be able to enjoy; Secondly, the nature of business in two after-tax measure general interest, can not just nominal tax rate, but also the overall tax rate, as Corporation's "holistic" measures generally better than the partnership business, "holistic" means the elimination of overlapping levied, taxes will remove part; Third, both among its own residents as partners, but also foreign residents, the emergence of the transnational partnership tax phenomenon, due to the different nationality, tax differences will appear. In general, large-scale enterprises should choose Inc., small business, more appropriate use of partnerships. Because of the larger companies need more capital, financing is difficult to manage more complex, such as the use of forms of partnership operation more difficult.
Second, comparison of subsidiaries and branch selection
The so-called subsidiary is effectively controlled by a parent or subsidiary of the parent company directly or indirectly controlled by a series of companies in a company; so-called branch is a branch of that organization as the company exists in the national tax revenue, it often synonymous with the permanent establishment.
When a company to conduct cross-regional operation, the common practice is to set up subsidiaries in other regions, that is set up subsidiaries or branches, from a legal perspective, subsidiaries are independent legal entities, and branches are not independent legal entities, they difference is between: first, to establish procedures for different independent accounting unit established in the field, go through many procedures, set up complicated procedures, start-up costs are large, and relatively simple procedure to set up branch, less expenses; 2 are different forms of accounting and tax, accounting and independent subsidiary is an independent report and pay tax, local tax authorities prefer to, but not a separate legal subsidiary, carried out by the head office and uniform tax accounting profit or loss, if profit and loss, branch and head office can offset each other after the income tax. Third, different tax incentives, undertake a comprehensive tax liability subsidiaries, branches bear only limited tax liability. Subsidiary is an independent legal person can enjoy the tax exemption period, preferential policies, etc., various preferential policies; the branch as a non-independent legal entity, you can not enjoy the preferential policies. If foreign investment enterprises in China's "two-three half-free", "tax preferential rates" and other preferential policies, they can only apply to independent enterprise.
Example Two: Blue Sky is a company with A, B two branches of the Group, the company headquarters in 2002 profit 30 million yuan, the profit of 5 million yuan branch A, branch B loss of 3 million yuan, the corporate income tax 33%, then the group in 2002 tax payable = (3000 +500-300) × 33% = 1056 (million) if the A, B replaced by subsidiary companies, a change in the overall tax on . Suppose A, B two subsidiaries income tax rate of 33%. Company Headquarters Company income tax = 3000 × 33% = 990 (million), A Company Company income tax = 500 × 33% = 165 (million), B Company has incurred losses since 2002, that year should not pay corporate income tax.
Well, blue sky company income tax payable for the year 2002: 990 +165-1155 (million), higher than the overall total branch revenue :1155-1056 = 99 (million). If the head office and subsidiaries of different tax rates apply, then the situation would change.
Example 3: Nanjing Tian Shun Corporation, Zhuhai, Hainan and each have a branch, of which Nanjing corporate income tax rate was 33%, Zhuhai, Hainan and are 15%. 2002 profit of 20 million yuan the company headquarters; Hainan, Zhuhai, two subsidiaries were 2 million yuan and profit of 3 million yuan. Corporation provides after-tax profits of subsidiaries to repatriate 60% of head office, 40% of its retained, then in 2002:
Company Headquarters Company income tax = 2000 × 33% = 660 (million)
Hainan subsidiary of Company income tax = 200 × 15% = 30 (million)
Zhuhai subsidiary of Company income tax = 300 × 15 = 45 (million)
Corporation subsidiary to repatriate profits = (200-30) × 60% + (300-45) × 60% = 255 (million)
Repatriation of profits should be subject to income tax = 255 × (33% -15%) = 45.9 (million)
Blue Sky company's overall revenue = 660 +30 +45 +45.9 = 780.9 (million)
If we change the two subsidiary branches, the sky's overall tax = (2000 +200 +300) × 33% = 825 (million)
This set up a branch than a subsidiary to reduce investor tax 825-780.9 = 44.1 (million). Visible, set up subsidiaries and branches have advantages and disadvantages. As the legal parent of that subsidiary, and not of the same legal entity, and therefore can not be incorporated into the Corporation, a subsidiary of the loss on account; the branch and head office is the same legal entity, its place in the operations and head loss can be offset . Therefore, when enterprises to expand production and management needs to establish branches abroad or overseas, you can enter the ground in the early stages unfamiliar to local conditions, production and management at the initial stage, the possibility of large losses occurring situation, consider setting up a branch so that the loss occurred outside recorded as a reduction in head office to reduce the burden on head office. When the production and management to track product sales picked up, can be profitable, should consider setting up a branch, you can enjoy a profit guarantee of local tax preferential policies.
Third, private enterprises and individual businesses the choice of
Under the current tax law, private enterprises in China for "The People's Republic of China Enterprise Income Tax Law", which is applicable to individual businesses, "The People's Republic of China Individual Income Tax Law," Judging from the rate of tax the private sector should be 3 million or less, the rate 18% of their taxable income in the 30,000 to 100,000 yuan, the rate of 27%, the annual taxable income of 10 million yuan, the rate was 33%; individual businesses should be at 3 million and tax applicable marginal rate of 20%, direct look seems higher than the private sector, but individual businesses into the tax rate applicable tax rate for the total effective tax rate of only 15.8%, lower than the private sector 18%; individual business taxable amount 100,000 yuan, the applicable marginal tax rate of 35%, 33% higher than private rates, but only 28.25% effective tax rate, we can see that, at the same level of profitability, the individual business for more than the private benefits However, individual businesses have many shortcomings, such as small size, difficult to extend and so on. The private sector is relatively highly-organized, able to expand operations, reduce costs, increase profits, etc., so investors have the choice of organizational form of the former should be taken into account many factors, making the choice to their advantage.
IV, the choice of the so-called foreign-funded enterprises refer to: the state-owned assets, the collective assets, personal assets of domestic enterprises founded. Including state-owned enterprises, collective enterprises, private enterprises, joint ventures and joint-stock enterprises. The so-called foreign-funded enterprises is approved by the Chinese government set up in China with foreign capital participation in the economic entity. Including: joint ventures, Sino-foreign cooperative enterprises and wholly foreign-owned enterprises.
Within the tax on foreign-funded enterprises there is a big difference: preferential tax rate within the range of small enterprises, 18% and 27% in two grades; face a significant reduction in foreign concessions, were 15% and 24% in two steps. Preferential policies to enterprises within the narrow scope of application, mainly the tertiary industry, using the "three wastes" business, labor service enterprises, run factories, welfare enterprises, foreign-funded enterprises range is wider, including: production enterprises, advanced technology companies, export companies, as well as in energy, transportation, port construction enterprises, domestic enterprises preferential reduction short time, usually 1-3 years, while foreign-funded enterprises breaks a longer time, usually 5 years or 5 years. In addition, within the foreign taxes applicable to the number of subjects are different, domestic enterprises for more than 10, foreign taxes applicable to 6. Shows that foreign-funded enterprises enjoy more preferential policies, tax differences are large, the same in other conditions, enterprises should choose joint ventures.