Hengda Shares "Fake Foreign Capital" Violating "Two Exemption, Three Reduction"

August 17th, main business

According to the relevant data of Hengda stock pre disclosure material, during the reporting period of 2008~2010, Hengda leather industry was suspected of evasion of tax of 26 million 313 thousand and 800 yuan.

However, as a IPO enterprise, the sponsor's Western securities and lawyers have not regulated the tax irregularities.

Hengda shares did not hint at the risk of "tax return" in a risk warning.

Hengda shares pre disclosure material also openly acknowledged that the so-called

Take your own money and turn Hongkong into a joint venture.

Hengda leather industry was registered in March 8, 2005. Hengda shares directly held 70% shares, and one of the actual controllers of Hengda shares invested 30% shares.

In September 26th of that year, 30% of the shares held by Shan Cun Li were pferred to the brand group at the price of US $380 thousand.

After approval by the local government, in February 17, 2006, Hengda leather industry was pformed into a foreign-invested enterprise.

Let's look at the brand group.

In August 6, 2003, the brand group was established in Hongkong, Dan Yuping holds 70% shares, and Zhu Nianzhi holds 30% shares.

Dan Yuping is one of the main members of the single family of the actual controller of Hengda stock company, and Zhu Nianzhi is Dan Yuping's brother-in-law.

In August 26, 2005, Dan Yuping pferred 70% of the shares to Zhu Nianzhi.

This time point is worth pondering. The pfer time just happened before the brand group was pfered to Hengda leather stock.

As a major member of the family, Dan Yuping left the roster of shareholders of the brand group.

Although Zhu Nianzhi was a member of Hengda stock company, he served as the head of the Guangzhou company. He was not familiar with the officials of the Qingdao local economic and Trade Commission and the trade and Industry Bureau, and became the sole shareholder of the brand group.

In December 10, 2007, Zhu Nianzhi further pferred the brand group shares to Pan Yuye.

Pan Yuye is also an employee of Hengda stock.

Hengda shares every possible means to set up a brand group in Hongkong and pform it into a foreign invested enterprise. What is the significance? That is, the foreign-invested enterprises can enjoy the "two exemption, three reduction and half" corporate income tax preference.

That is to say, Hengda leather industry did not pay corporate income tax in 2007~2008, and 2009~2011 income tax was levied at 12.5% tax rate in half.

The seventy-fourth page of Hengda share pre disclosure information publicly acknowledged: "according to the confirmation letter issued by Dan Yuping, Zhu Nianzhi and Pan Yuye, Dan Yuping, Zhu Nianzhi and Pan Yuye are all employees of the company. The establishment of the brand group and the pfer of the brand group's shares are carried out according to the requirements of Hengda Limited (upper market main body)."

By Hengda shares, the brand group and its own jointly hold the shares of Hengda leather industry. Its essence is that Hengda shares 100% holding Hengda leather industry, but enjoys preferential tax incentives for foreign invested enterprises.

"This is a typical" fake foreign capital "business in Guangdong.

Such enterprises generally have the problem of illegal entry and exit of funds and violate the relevant provisions of domestic foreign exchange management.

According to the legislative intent of the Sino foreign joint venture law, we hope to introduce overseas funds to develop the domestic economy. Only those enterprises that accord with this intention can enjoy tax preferences.

This situation of Hon Da leather industry is obviously against the legislative intent and should not enjoy tax preferences. "

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Why does "fake foreign capital" not pay taxes?

"Fake foreign capital" is a popular saying. The industry also calls it "return investment", specifically referring to the pfer of currency capital or equity held by an investor in an economy to overseas, and then the direct investment into the economy.

"Fake foreign capital" usually shows that there are often irregular behaviors in capital outflow links, or failing to fulfill overseas investment management procedures according to regulations, or failing to disclose return investment matters in the process of audit.

The return investment will lead to "domestic capital changing into foreign capital", but the main business will not change at the same time when the nature of the enterprise changes.

This happens just to hang Da leather industry.

Lawyer Zhou and lawyer Jin Yuan of Guangdong law firm believe that the source of foreign capital should be paid attention to.

How did the original registered capital of the brand group exit? The domestic enterprises and residents in Hongkong need to be approved by the foreign exchange management department and whether their procedures are standardized. In addition, where does the brand group purchase the $380 thousand of the money from the Hengda leather industry?

As for compliance with the relevant provisions of the foreign exchange management department, Hengda shares did not respond to the slightest response.

Since Hengda leather belongs to the actual 100% holding company of Hengda stock company, the tax preference enjoyed by the former should be voluntarily made up for tax payment.

Under the preferential policy of "two exemption and three reduction", according to the 2008 ~2010 net profit data provided by Hengda share pre disclosure materials, the amount of preferential tax enjoyed by Hengda leather industry is 13 million 565 thousand and 900 yuan in 2008, 6 million 257 thousand and 300 yuan in 2009, and 6 million 490 thousand and 600 yuan in 2010.

In the latest three years, the total income tax concessions of Hengda leather industry amounted to 26 million 313 thousand and 800 yuan without calculating the data in 2007.

If we consider the preferential tax exemption in 2007, the tax preference granted by Hon Da leather industry as a "fake foreign capital" is likely to exceed 30 million yuan.

However, Hengda shares are not prepared for pre disclosure materials.

Even in risk hints, tax recovery risks are not involved.