10 Methods Of Tax Planning For Sole Proprietorship And Partnership

In recent years, due to the less registered capital of individual proprietorship enterprises and partnership enterprises, the application is relatively easy, and it has become a common form of investment and entrepreneurship for the majority of aspiring entrepreneurs.

According to the tax law, from January 1, 2000 onwards, individual proprietorship enterprises and partnership enterprises will pay personal income tax on the basis of five progressive tax rates according to individual industrial and commercial households, and no longer pay enterprise income tax.

According to the characteristics of individual proprietorship enterprises and partnership enterprises, the following planning methods are introduced.

Investors can rely on their own production and operation in the research institutions to enjoy certain tax-free preferences.

Of course, this planning method needs certain premises, that is, the unit or enterprise has the title of high and new technology enterprise, gets the approval and approval from the tax authorities and customs, and has the preferential policies of the state.

Investors can also make necessary tax planning through affiliation with civil welfare enterprises or other enterprises that can enjoy preferential tax treatment.

In order to support civil welfare enterprises and enable more disabled people to live on their own, the state has introduced tax concessions for civil welfare enterprises.

Investors can also plan jointly by means of joint planning, that is, to divide the operation items into two or more than two institutions, to take charge of one of them, and to dump the ownership or management rights of other institutions as others, usually to their relatives or close friends, and to provide favorable conditions for each other to achieve the purpose of lightening the tax burden through the joint operation of these organizations.

The financial system of our country stipulates that the expenses incurred by investors from the date of applying for a business license to the date of production and operation shall be established as a start-up fee in addition to the expenses for obtaining fixed assets, intangible assets, foreign exchange gains and losses, and interest expenses that should be included in the value of assets, and shall be deducted from the installments in a period not less than five years starting from the date of commencement of production and operation.

The interest expenses related to the acquisition of fixed assets and intangible assets shall be included in the value of the assets acquired and not deducted as expenses.

As we all know, the value of establishment expenses and fixed assets and intangible assets must be amortized in stages, and can not be deducted as financial expenses, so that profits can not be reduced in the current period, so as to achieve the purpose of saving taxes. However, financial expenses can be directly offset to the profits and losses of the current period.

Therefore, investors should, as far as possible, include the financing interest expenses incurred in start-up costs, purchase and construction of fixed assets and intangible assets into financial expenses.

Financing is the precondition for any economic entity to undertake a series of business activities.

Without funds, any economic activities and business projects that can be benefited can not be carried out, so that profits and taxes related to the operation can not be mentioned.

In general, the tax burden on loans to financial institutions is less than the tax burden accumulated by self financing funds. The tax burden of mutual borrowing between wholly foreign-owned enterprises, partnerships or other economic organizations is less than the tax burden on loans to financial institutions.

That is, after the lender has returned interest, the profits have been reduced, especially the pre tax repayment policy, whose essence is to repay the loan with financial money, so the actual tax burden has been greatly reduced.

Therefore, using loans to engage in production and business activities is a good way for individual proprietorship enterprises and partnership enterprises to lighten their tax burden and avoid some taxes reasonably.

The investment in fixed assets is not enough to offset the profit of the fixed assets, but it can only extract the depreciation on time.

In this way, investors should not only invest a large amount of capital in the early stage, but also deduct them according to the regulations in production.

From the point of view of tax planning, if the equipment is rented, the lessee can reduce the operating profit and reduce the tax base in the business activities, thereby reducing the amount of tax payable, and laying the foundation for its continued operation in other kinds of business activities. The trust planning investor can also plan through the trust, and turn his assets or profits to another economic entity, so that the trustee will become the owner of the property and be responsible for the management and use of the property in accordance with the client's request, so as to facilitate the client's behavior. The beneficiary can be the third party designated by the client himself or the client.

The trust planning method is to make use of a special tax preference area to establish a trust institution in the area or to reach an agreement with a trust institution, so that the property that is not in the preferential area will be hung in the name of the preferential District trust institution, and a tax planning method can be used to save tax revenue.

The pfer pricing is also a matter for investors to pay attention to in production and operation.

Transfer pricing, also called reciprocal pricing, pfer pricing and allocation pricing, refers to the pfer of products or non products in the process of product exchange or trading, not in accordance with market rules and market prices, in the process of product exchange or trading, in the process of product exchange or paction, in the process of economic activities.

In such a pfer, the pfer price of the product can be lower or higher than the price determined by the supply and demand in the market according to the wishes of both parties, so as to achieve the purpose of paying less taxes or even paying taxes.

The key point of tax planning for donation tax is how to maximize the donation cost, and at the same time, try to make the tax payable within the scope of acceptance. That is, how to avoid exceeding the limit in case of the tax law, how to remedy the case in excess of the limit and how to avoid the object donated by the non tax law so as not to be eliminated by the tax inspection authority.

According to the provisions of the relevant tax law, investors can deduct the proceeds from the social organizations and state organs in China to the educational and other public welfare undertakings and donations from areas with serious natural disasters and poverty-stricken areas, which donate no more than 30% of their taxable income.

Taxpayers directly donate to the beneficiary shall not be deducted.

The tax planning for donation expenditure should start from the following aspects: (1) identify the donor.

(2) raise the limit of the limit.

(3) obtain legal credentials.

(4) pre adjusting the excess amount.

In addition, the taxpayers can also plan their income by postpone income.

The general economic main body hopes to get profits as early as possible. However, for individual proprietorship enterprises or partnership enterprises that pay personal income tax according to the progressive tax rate of five levels, on some occasions, they hope to postpone their income, so as to alleviate the current income and make their business income lower tax rates, so as to achieve the purpose of paying less taxes.

Generally, there are several ways to postpone getting income: (1) an agreement is reached with the customer to allow the customer to suspend payment of payment for goods or services.

(1) change the lump sum payment into installments.

(3) by pferring pricing, some related customers' earnings can be pferred to the associated customers through pfer pricing when their business is gloomy.

Under the progressive tax system, the decentralized planning method is very important, because in this case, the income tax payment increases with the concentration of income, and the grade climbing phenomenon will increase the tax burden sharply.

Therefore, for investors, the dispersion of their income has a strong practical significance.

Generally speaking, income dispersion mainly has the following types: first, pay wages to employees.

Due to personal income and wages, personal income tax is also required. Therefore, the tax planning needs careful planning to disperse the income as much as possible without paying personal income tax.

The two is to pfer pricing through its separate agencies, and pfer the proceeds to low tax places to lighten the tax burden.

The three is to distribute the concentrated income to the name of the trust company through the trust method.

Four, through joint ventures, tax exempt enterprises or tax reduction enterprises should be used as joint partners to diversify their income.

In accordance with the relevant provisions of the state tax law and financial accounting, investors can choose a series of internal accounting methods that are beneficial to their own interests in accordance with the relevant provisions of the state tax law and financial accounting, so that the cost, cost and profit can reach the best value, so as to achieve the purpose of paying less taxes or even paying taxes.