When it comes to signing contracts, I think most people are familiar with them, but if you want to ask you which businesses and what companies are suitable for signing? What businesses and companies are not suitable to sign? You don't necessarily know.
Let me tell you about it.
Background of the case
Zhang San is going to make an equity investment in China Tax Youcai Group, so is Zhang San investing in his personal name? Or is it invested in the name of the company?
Tax control analysis
1.If the shareholders of CT Youcai Group are corporate shareholders, the dividends obtained by the corporate shareholders from the invested enterprises are exempt from enterprise income tax.
2.If the shareholders of CT Youcai Group are natural person shareholders, the dividends obtained by the natural person shareholders from the invested enterprises are subject to 20% individual income tax.
3.If the shareholders of CT Youcai Group belong to a sole proprietorship, the dividends obtained by the shareholders of the sole proprietorship from the invested enterprise are subject to 20% individual income tax calculated according to the "income from interest, dividends and bonuses".
4.If the shareholders of CTY Group belong to a partnership, the dividends obtained by the natural person partners of the partnership from the invested enterprise are subject to 20% individual income tax calculated according to the "income from interest, dividends and bonuses".
5.If the shareholders of CT Youcai Group are corporate partners, the dividends obtained by the corporate partners from the invested enterprises are not direct investments, and they are not between resident enterprises, so the dividends obtained by the corporate partners from the partnership do not belong to the dividends and bonus income between resident enterprises, and cannot be exempted from enterprise income tax.
Policy basis
1.According to Article 26 of the Enterprise Income Tax Law of the People's Republic of China, the following income of an enterprise is tax-exempt income: (2) Equity investment income such as dividends and bonuses between eligible resident enterprises.
2.According to Article 83 of the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China, the term "dividends, bonuses and other equity investment income between qualified resident enterprises" as mentioned in Article 26 (2) of the Enterprise Income Tax Law refers to the investment income obtained by resident enterprises from direct investment in other resident enterprises. The term "dividends, bonuses and other equity investment income" mentioned in Items (2) and (3) of Article 26 of the Enterprise Income Tax Law does not include the investment income obtained from the public offering and listing of resident enterprises for less than 12 months.
3.According to Article 2 of the Notice of the State Administration of Taxation on the Implementation of the Provisions on the Collection of Individual Income Tax by Investors of Sole Proprietorship Enterprises and Partnership Enterprises (Guo Shui Han 2001 No. 84), the taxation of interest, dividends and bonuses on the foreign investment of sole proprietorship enterprises and partnership enterprises shall not be incorporated into the income of the enterprise, but shall be separately regarded as the interest, dividend and bonus income obtained by the individual investor. Dividends and bonus income" taxable items are calculated and paid for individual income tax. In the case of repatriation of interest, dividends and bonuses for foreign investment in the name of a partnership enterprise, the interest, dividends and bonus income of each investor shall be determined in accordance with the spirit of Article 5 of the provisions attached to the Circular, and the individual income tax shall be calculated and paid according to the taxable items of "interest, dividends and bonus income".
4.According to Article 1 of the Notice on Issues Concerning the Levy of Individual Income Tax on Income from the Transfer of Restricted Shares of Listed Companies by Individuals (Cai Shui [2009] No. 167), from January 1, 2010, the income obtained from the transfer of restricted shares by individuals shall be subject to individual income tax at a proportional rate of 20% according to the "income from property transfer".
Summary of tax control
Through the analysis of the above policies, if China Tax Youcai Group is likely to be listed in the future, then it is more advantageous for Zhang San to invest in the name of a natural person, because after listing, the income obtained by the individual from the transfer of restricted shares will be subject to individual income tax at a proportional rate of 20% according to the "income from property transfer". Compared with investment in the name of a sole proprietorship or partnership, the income tax burden on the transfer of property obtained is the lowest;
If China Tax Youcai Group does not plan to go public in the future, then it is most beneficial for Zhang San to invest in the name of ***.
Background of the case
If a door and window production enterprise and a construction and installation company bid for the door and window installation project to the real estate company at the same time (the installation project is contracted labor and materials), will there be a difference in the tax rate applicable to the VAT invoice obtained by the real estate company and different enterprises when signing the contract?
Tax control analysis
Door and window production enterprises are the main business of door and window production, door and window installation as an auxiliary business, the sale of doors and windows including installation, if the contract is not signed in the installation part of the separate expenditure, the door and window production enterprises should be sold according to the goods, applicable to the 13% VAT rate, if the contract is signed in the installation part of the separate expenditure and accounting in the financial accounting, then the door and window production enterprises should be respectively according to the goods sales and installation services, respectively, applicable to different tax rates or levy rates, doors and windows applicable to the 13% VAT rate, 3% VAT rate applies to installation;
Construction and installation enterprises are mainly engaged in construction services, and the construction and installation projects contracted by them are subject to a 9% VAT rate due to the contractor and materials;
In addition, there is a similar business that sells sand, soil, and stone for construction and the production of building materials.
General taxpayers can choose to calculate and pay VAT at the rate of 3% according to the simplified method for the sale of sand, soil and stone used in the sale of self-produced construction materials and the production of building materials.
General taxpayers shall pay VAT at 13% for the sale of purchased sand and gravel. That is to say, if the subject of the sale is of a commercial nature, it is not allowed to choose simple tax calculation.
That is to say, if the subject of the sale is of a production nature, it can choose simple tax calculation. Self-produced goods refer to the goods purchased by the production enterprise from raw and auxiliary materials, processed and produced by the enterprise or commissioned by the enterprise. General taxpayers purchase stones, and the sand and gravel processed and produced by the enterprise belong to the goods produced by the enterprise, and the sales of such goods can choose to calculate and pay VAT according to the simple method according to the 3% levy rate. If a general taxpayer purchases sand and gravel materials and directly resells them to customers without processing, the above policy should not be applied, that is, they cannot choose to calculate and pay VAT at the rate of 3% according to the simplified method, but should calculate and pay VAT at the rate of 13% according to the general tax calculation method.
Policy basis
1.According to Article 1 of the Announcement of the State Administration of Taxation on Further Clarifying the Issues Concerning the Collection and Administration of the VAT Reform (Announcement No. 11 of 2017 of the State Administration of Taxation), the provision of construction and installation services while taxpayers selling self-produced goods such as prefabricated houses, machinery and equipment, and steel structural parts does not belong to the mixed sales stipulated in Article 40 of the Implementation Measures for the Pilot Project of Replacing Business Tax with Value-Added Tax (Cai Shui 2016 Document No. 36), and the sales of goods and construction services shall be accounted for separately. Different tax rates or levy rates apply.
2.According to Article 40 of the Implementation Measures for the Pilot Project of Replacing Business Tax with Value-Added Tax (Cai Shui 2016 No. 36), if a sale involves both services and goods, it is a mixed sale. Units engaged in the production, wholesale or retail of goods and individual industrial and commercial households shall pay VAT according to the sales of goods; The mixed sales of other units and individual industrial and commercial households shall be subject to VAT according to the sales services.
3.According to Article 2 (3) of the Notice of the Ministry of Finance and the State Administration of Taxation on the Application of Low VAT Rates and Simplified Methods for Levying VAT on Certain Goods (CS 2009 No. 9), general taxpayers can choose to calculate and pay VAT at the rate of 6% in accordance with the simplified method for the sale of the following self-produced goods:
2) Sand, soil and stone used in construction and production of building materials.
4.According to Article 2 of the Notice of the Ministry of Finance and the State Administration of Taxation on Simplifying the VAT Collection Rate Policy (Cai Shui [2014] No. 57), Article 2 (3) and Article 3 of Cai Shui 2009 Document No. 9 "according to the 6% levy rate" were adjusted to "according to the 3% levy rate".
Summary of tax control
Through the above cases combined with policy analysis, it is not difficult to find that when signing a contract with a foreign party, the VAT rate applicable to the same business and different nature of the contract subject in the process of performing the contract is very different. Therefore, it is also very important to choose the right subject of the contract when signing the contract.