Tax Planning For Separation Of Enterprises

Ltd. is a pharmaceutical company.

The annual income tax of the company is 110 thousand yuan (33%) in 1997.

The amount of tax payable is: 11, 33% = 3.63 (10000 yuan), and in early 1998, the board of directors of the company believes that the sales scale of the company will not increase significantly this year.

There are two departments in the company, one is the production of raw materials department for the company, the 1997 is the taxable income of 90 thousand yuan, the other is the pharmaceutical finished product department, and the taxable income in 1997 is 20 thousand yuan.

Since raw material production costs and drug prices will not change significantly in 1998, the board decided that the pre paid corporate income tax in 1997 would still be the tax payable in 1997.

In order to pay the tax payable to the tax department in advance, the financial manager of this company disagrees. He thinks there is a better way to reduce the tax payable and reduce the tax burden.

The board of directors listened to his advice and took the advice.

Moreover, in subsequent tax inspection, tax officials did not find any evasion of the tax burden.

Analysis: it is a small scale enterprise, but there are two interrelated departments inside it.

For the raw material sector, it has a forward linkage effect, that is, its finished products are used as inputs to the pharmaceutical sector.

According to this phenomenon, the financial manager of the company is set up as a group, which is divided into A and B two independent accounting enterprises.

A is a raw material production enterprise, B is a pharmaceutical finished product enterprise.

Two the exchange of products between enterprises is done according to the normal price of the market, thus avoiding the suspicion of using related enterprises to pfer pricing.

The pfer pricing of affiliated enterprises refers to the pricing method of two enterprises with a certain degree of correlation in each other's pactions, respectively, in favor of their own tax burden, which is different from the normal price of the market.

For this behavior, tax officials will adjust their tax burden after they are discovered.

In this case, the two companies under the Thai energy group exchange their products at normal market prices, so their behavior is not a pfer pricing behavior.

In order to take care of a large number of small enterprises in China, if they pay taxes at 33%, the tax burden is heavier.

The enterprise income tax law stipulates that enterprises with a taxable income of less than 100 thousand yuan shall be collected at a more preferential tax rate according to the size of the taxable income, that is, the annual taxable income shall be collected at the rate of 30 thousand to 100 thousand yuan (including 100 thousand yuan) at the 27% tax rate, and the annual taxable amount shall be levied at 30 thousand of the tax rate (18% yuan).

According to this regulation, the company's financial manager has proposed the establishment of two factories to circumvent part of the tax burden reasonably.

After the separation, the sum of annual taxable income of A and B two enterprises is still 110 thousand yuan.

Among them, the A enterprise is 90 thousand yuan, the applicable tax rate is 27%, the income tax amount should be 9 x 27% = 24 thousand and 300 yuan, the B enterprise application rate is 18%, the income tax shall be 2 x 18% = 3 thousand and 600 yuan, A and B two corporate tax burden will be 27 thousand and 900 yuan, compared with the former tax saving two yuan.

Commented: the separation of enterprises is a legal act that divides an enterprise into two or more than two new enterprises according to the law.

The separation of enterprises is not the complete disappearance of the original enterprises. It may appear in the form of the dissolution of the enterprises to form new enterprises, or the separation of the original enterprises, the establishment of new enterprises in part, and the existence of the original enterprises.

In this case, the Thai Energy Limited company adopts second methods to separate part of the establishment of new enterprises.

In short, enterprises have not disappeared in essence, but have changed with the original ones.

It is precisely this kind of existence of enterprises that provides possibility for tax planning.

The idea of tax planning in the separation of enterprises is mainly reflected in the following aspects: in the case of progressive tax rate of enterprise income tax, the enterprises that originally used high tax rates can be divided into two or more than two enterprises with low tax rates, so that the overall tax burden can be reduced.