Questions And Answers About Foreign Invested Enterprises (4)

(1) according to the price of the same or similar business activities between independent enterprises; (2) according to the profit level that the price of the third party that is re sold to the irrelevant contact should be; and (3) according to the cost plus reasonable cost and profit; and (4) according to other reasonable methods.

How can we determine the tax year for foreign invested enterprises and foreign enterprises?

Answer: the tax law stipulates that the tax year for foreign invested enterprises and foreign enterprises is from January 1st to December 31st of the annual Gregorian calendar.

If a foreign enterprise or a foreign-funded enterprise is indeed difficult to pay taxes due to the characteristics of the industry and other taxes in accordance with the provisions of the tax law, it may file an application after reporting to the local tax authorities for approval, and the tax year shall be the fiscal year of 12 months.

When a business is opened in the middle of a tax year, or due to reasons such as merger and closure, the actual operation period of the tax year is less than 12 months, the actual operating period shall be a tax year.

When a company is liquidating, it should use the liquidation period as a tax year.

How can we deal with losses incurred by foreign invested enterprises and foreign enterprises?

Answer: the annual losses incurred by foreign invested enterprises and foreign enterprises can be made up by the income of the next tax year. The income from the next tax year can not be remedied, but it can be made up every year, but the longest can not exceed 5 years.

How do we calculate the intangible assets of foreign invested enterprises and foreign enterprises?

Answer: the valuation of intangible assets such as patent right, proprietary technology, trademark right, copyright and site use right shall be based on the original price.

The intangible assets of the pferee are the original price at the reasonable price.

The intangible assets developed by the company are the original cost in the course of development.

As an intangible asset of investment, it is the original price based on the reasonable price stipulated in the agreement and contract.

How do we calculate the inventory of foreign invested enterprises and foreign enterprises?

Answer: the tax law stipulates that the valuation of goods, finished products, products, semi-finished products, raw materials and materials should be based on the cost price.

The method of calculating the actual cost price of the stock issued or received can be selected by the enterprises in the FIFO, the moving average method, the weighted average method and the last in first out method.

Once the valuation method is adopted, it is not allowed to change at will; if it is necessary to change the valuation method, it should be reported to the local tax authorities before the next tax year.

What are the income tax preferences of foreign investment and "two type" enterprises?

Answer: a product export enterprise may, after the expiration of the enterprise income tax exemption in accordance with the tax law, reduce the enterprise income tax by half if the output value of the enterprise's export product reaches 70% of the output value of the enterprise.

Among them, the enterprise income tax that has been paid at 15% tax rate can be reduced by 10% tax rate.

If the advanced technology enterprises of advanced technology enterprises are still advanced technology enterprises after the expiry of the enterprise income tax law stipulated in the tax law, they can be extended for 3 years, and the enterprise income tax shall be reduced by half. The tax rate after half reduction is less than 10%, and the enterprise income tax shall be levied at 10% tax rate.

Question: how do foreign invested enterprises and foreign enterprises levy tax on equity income?

Answer: the pfer of foreign enterprises is not the proceeds from the B shares and overseas shares issued by enterprises and institutions in China.

The pfer rights and interests of foreign enterprises and foreign individuals who pfer shares from foreign invested enterprises in China to some part of their investment amount should be paid at the rate of 20% or the personal income tax.