As we all know, the cost of tax expenditures is an important part of business. China's accession to WTO, as the increase of foreign economic and trade activities, enterprises should try to find lower cost methods of international trade, international trade and thus to reduce the tax payment has become an important research topic. As with the standardization of the international market economy, rule of law features, our enterprises should protect their overall, long-term interests, abandon the tax avoidance, tax evasion and other short-term behavior, a shift to science and international tax planning, namely the use of international tax rules, by their own financing, investment and operation and other production operations in advance Shidang the arrangements and logistics, so that enterprises should pay taxes according to law, but also fully provided for an international Shui Fa Quan Li and preferential policies to maximize the tax interests of the enterprise Jiazhi maximized.
First, the objective foundation of international tax planning
Enterprises to international tax planning, we must first have better understanding on the national tax system. Because the objective of international tax planning is based on differences in international taxation, that all countries because of different political systems, economic development is uneven, the tax system exists between the big difference. This difference in tax planning for multinational taxpayers to provide the space and opportunity possible.
Different countries different tax jurisdiction by tax revenue, tax rates, tax object, tax base, tax incentives and other aspects of composition:
1, the difference between tax jurisdictions
Tax on the tax jurisdiction of the States there are three types: resident jurisdiction, civil jurisdiction and the jurisdiction of income sources. Each country or region is generally based on their political, economic Qingkuang and legal traditions, choices and exercise tax jurisdiction, Qizhongduoshu country is exercised simultaneously Jumin jurisdiction and the jurisdiction of the proceeds Laiyuan. As a result of the exercise of sovereign countries with different tax jurisdiction, thereby creating opportunities for international tax planning.
2, the rate differences
Rate difference is the different countries, for the same amount of taxable income or taxable amount of class to a different tax rate. Enterprises can choose to countries with lower tax rates to an integrated investment, tax rates can also be the sector of countries with high profits from low tax countries.
3, taxable and tax base differences
Taxes in different countries may be different tax objects, objects of different countries for each tax under the scope and content may be different, so their tax bases will be different. Enterprises can use different tax treatment for tax planning.
4, the difference between tax incentives
Many countries in order to attract foreign investment, the tax on foreign investors to implement different kinds of benefits. Such as tax relief, various tax deductions. Preferential tax policies of a country is the multinational taxpayers an important element of tax planning.
Can be seen from the above analysis, international tax planning is the basis of differences in national tax system. Business only in the complete control of the state's tax laws and their specific tax system, based on and consider some other objective factors, be possible to work out the right tax planning program.
Second, the specific method of international tax planning
Based on the basis of international tax planning and other relevant factors, can be roughly summed up specific ways of international tax planning are as follows:
1, to avoid tax jurisdiction
As discussed above, companies can take measures to avoid the jurisdiction of the same resident or citizen to exercise the jurisdiction of the country has personal legal relations, or to avoid exercising the same jurisdiction over the place from the source contact. This is to avoid the so-called tax jurisdiction.
Foreign investment enterprises can avoid becoming a permanent national body to reduce taxes. Enterprises in many countries, "permanent establishment" in the profit is taxable, so in the short-term cross-border business activities, so as not to become the host of "permanent establishment", you can avoid the tax to the host country. This can be controlled to avoid short-term management of the time or by changing the nature of the host institution to achieve.
2, the use tax rate differences
Since the tax rates prescribed in different countries there are differences, making international tax planning, the firm can choose to countries with lower tax rates to an integrated investment, tax rates can also be the sector of countries with high profits from low tax countries. According to statistics, the total assets held by U.S. multinational companies located in those parts of 25% corporate income tax rate of less than 20% of the country or region, in these countries generally higher return on assets.
Transfer of taxable income is usually in practice a number of ways:
(1) companies can use transfer of trust property. Once the trust relationship established clients to entrust their property trust management, trust property, the legal ownership of the client relationship between the cut off. Generally entrusted to the trustees of the property owner is no longer the property of income tax. And in a discretionary trust, the trust's beneficiaries do not enjoy the trust property ownership, so long as the beneficiaries do not receive a distribution from the trust benefits, the beneficiaries do not have to pay any tax on trust property. Tax planning can be used in such provisions to tax avoidance, if the higher a country's income tax rate, the country can be a discretionary trust company means to entrust their assets in tax havens outside the trust on behalf of management, through creation of such a foreign trust, the property owner and the beneficiary can be completely out of the proceeds on to the property tax obligation to the national government. Also, because the trust property is entrusted the management of tax havens Trust, the trust property, the local government levy or collection of income are generally not very little income tax.
(2) Enterprise can also be associated to the low-tax country means of transferring profits using transfer pricing internal transfers at the company's profits, the profits of the company group as many affiliates in low tax countries to achieve. The practice of transnational corporations in tax planning in this way the most common.
(3) through the formation of internal insurance company to transfer profits. The so-called internal insurance company refers to a group of companies or associations engaged in the same business investment company established specifically for its parent or sister companies to provide insurance services as an alternative to an insurance company outside the insurance market. Multinational insurance companies can use internal tax planning. In practice, in a no-tax or low tax countries within the insurance companies, then the parent company and subsidiaries to pay large premiums way to transfer profits out of the country of residence, part of a group profit of the company being kept in the internal tax havens insurance company on account. No amount within the insurance company profits in the local tax, but this is not to repatriate profits because the parent company's country of residence is not their duty.
There are other methods of transfer of taxable income, in practice these methods are effective in the international tax planning.
3, the tax paid attention to tax planning and tax base, the difference between objects
In tax planning, we must take into consideration the chosen location for investment tax mainly income tax, the investment in inventory valuation and cost accounting, fixed assets depreciation, extraction of various types of reserve fund requirements of different areas to carry out tax planning.
In international tax planning, we should pay attention to the analysis of the import duty. Import duties usually attached to the product prices, lower export tax or import duty-free prices will benefit, and the high import duties will lead to increased investment costs. However, if foreign investors will be a country exports to direct investment, high import taxes in the country, high rates of its competitors will be able to prevent the export of investment location. Therefore, when making tax planning, direct investment and exports for the strategy adopted should be different.
4, planning to consider tax incentives
Use of tax incentives is an important element of tax planning. For example: international taxation between countries signed agreements to other countries usually have another income residents in particular, preferential income tax withholding provisions. However, this agreement should not have signed the agreement in the country other than the non-resident companies to benefit, but companies can set up in one compact domestic subsidiaries, and make it a local resident company, the subsidiary exclusively by residents of third countries control. In this way, international tax agreements can enjoy the preferential treatment of the subsidiary. Then the subsidiary and then pass through affiliated to the parent company to benefit.
In international tax planning, and taking tax breaks, we should pay attention to tax incentives are often in the economic underdevelopment, low quality labor force in areas of greater intensity. So not only consider tax breaks, ignore the backward region's infrastructure system burden and high cost caused by the political and operational risks.
Third, our corporate international tax planning measures
(A) status of our corporate international tax planning
Tax planning in China is not a new concept, but tax planning in the implementation of China's enterprises is not satisfactory.
First of all, our most enterprises lack awareness of tax planning. Because the leadership of China's enterprises lack the financial, tax knowledge, so when it comes to reducing tax costs, are often used with tax evasion, tax officials favoritism and other methods to find, and not through its own legitimate tax planning and reasonable tax savings. The company's financial personnel and can not use the level of tax and accounting knowledge to do business tax planning.
For many enterprises in China, tax planning lack a good foundation. From our part of the current situation of financial management, there are serious irregularities phenomenon: for example financial management activities do not work in strict accordance with procedures, without adequate feasibility study, without the necessary financial budget on the subjective decision by the corporate leadership, which a situation not to mention this was a tax planning.
Meanwhile, the tax planning of the main enterprises in China, still unclear. Accountants only concern accounting, financial statements, do not care about tax revenue and related cost comparison decision-making; and management believes that the financial sector, tax planning functions. This form of tax planning case no one is responsible.
There is a considerable portion of China's poor management and poor corporate system. The low quality of corporate accounting staff, accounting systems, and accounting records are inaccurate, inconsistent with the accounts do not comply with accounting procedures is serious, which makes tax planning no way. Therefore, financial management is not complete, so the effectiveness of tax planning is not always ideal. This enterprise, the more impossible to be familiar with international tax and financial knowledge to understand the country's tax system, it is difficult to complete the work of international tax planning.
On the other hand, we want to see our business for the urgent need for international tax planning. The end of 2001, China has approved a foreign investment enterprise 3091, total investment of 4.333 billion U.S. dollars, all over the world, more than 150 countries and regions. With China's accession to WTO, Chinese enterprises to enter international trade will be a new phase, not only is the bloom and export business, international business and will also get a more impressive career development. Therefore Chinese enterprises must improve the level of international tax planning, to meet their development needs.
(B) s Business Tax Planning Strategies
Chinese enterprises improve the level of international tax planning, you can start from the following aspects:
1, to study international tax factor as an important basis for tax planning
As previously discussed, the international tax planning is based on the difference between the international tax system, so to enhance our company's international tax planning level, it should strengthen the system of international taxation.
Enterprises should study the country's tax laws and tax policy, according to different national tax systems and policies, select a favorable place for investment. This requires companies to do understand the differences in national tax system, and focus on the dynamic national tax policy and development. In the choice of investment or in the market, from the country's tax structure, on favorable terms and other aspects to fully understand and consider. China already has some enterprises to choose based on tax planning practice examples of foreign investment locations such as China CITIC, Shougang Group, China Travel and other bases in Hong Kong foreign investment company or holding company.
2, appropriate arrangements and capital structure of organizational form
In tax planning, the need to consider organizational form factor. Organizational forms of enterprises are mainly owned enterprises, partnerships and limited liability for the three organizational forms of tax law are very different. Therefore, if a foreign investment enterprise established, we must choose a specific form of organization in order to reduce taxes. Co., Ltd. as the United States tax law can apply to meet specific conditions in accordance with the partnership form of computing income tax. If the business establishment, pay attention to this small, Inc. to meet the conditions, you can pay income tax by a partnership to save a lot of taxes.
Meanwhile, the company's capital structure, tax planning should also pay attention to the content. As the level of their own development in China is not high, the capital structure prone to irrational behavior. Such as corporate debt capital and the ratio between equity capital can be adjusted to increase corporate value, but when there is personal income tax, the tax shield effect of this will be cut personal income tax. Therefore, the arrangement of enterprise capital structure to find the optimal debt ratio business point. Multinational enterprises operating in China, we should pay attention to the first well-known business and planning objectives related to national tax laws and regulations, pay close attention to the contents of laws and regulations and changes. Choose the appropriate balance in different proportions, in line with net profit after tax and the principle of maximizing corporate value, considering enterprise risk, tax risk and political risk, and ultimately selected the feasibility of the program.
3, select the line with the international tax environment and operations of the accounting methods
Method of accounting will affect taxable income. The establishment of foreign investment to alleviate the tax burden of companies, enterprises should pay attention to the host country tax accounting research, choose the appropriate accounting methods.
For example, for inventory valuation method, you can plan from the following perspective: When the price situation in different attention to the case of possible different inventory valuation methods; when the inventory cost and market prices deviate from history, many countries allow companies to Select the lower of cost method.
Again, for fixed assets depreciation method of planning, we should note that in the initial period of fixed assets, accelerated depreciation method can be used more than the straight-line depreciation, but later if the company profits every year, the accelerated depreciation tax benefits with the delay . Meanwhile, the accelerated depreciation method is not always good for business. Only in the enterprise lost money or not does not tend to enjoy the corporate income tax reduction in the period, is the most favorable choice
In addition, the extraction of the Fund, the use of accounts and accounting policies are tax planning content.