Two Sources Of Tax Safety: Boss Decision And Contract Signing

Enterprise tax safety is the core competitiveness index of an enterprise. It is a kind of state that enterprises pay taxes according to the tax law policy. Besides paying more taxes or tax evasion, the risk of tax inspection is caused by the tax authorities.

The author believes that to enhance tax safety, enterprises must start from two sources: one is to start with the decision-making process of the boss; the two is to start with the contract signing process.

Nobel prize winner professor Robert Simon said: "management is decision-making."

Napoleon said: "the ability to make decisions is the most difficult to obtain and therefore the most valuable."

Herbert Simon, the representative figure of Western School of decision theory, holds that management is decision-making and decision-making is the core of management.

Implementation is undoubtedly important, but decision making is more important.

Without proper decision, there will be no excellent execution.

The level of decision making has a great impact on the success or failure of enterprises. According to the US Rand Co estimates, 85% of the big bankrupt enterprises in the world are caused by leaders' decision-making mistakes.

Tax management runs through the process of enterprise decision making, and business owners or decision makers are involved in tax matters when making decisions on major matters of the company.

If decisions are made, no consideration is given to them.

Safety problems will cause enterprises to bear unnecessary tax burden.

Because decision making mistakes are the biggest waste of enterprises, making mistakes in decision-making is fiercer than tigers. As long as the previous decisions are wrong, the relevant tax costs have become a fact.

As Song Hongxiang said, "taxes are generated by business processes and are paid by the financial department.

But tax is mainly determined by the boss's decision.

How to develop a company and how to do business depends on the boss's decision. A mistake in making decisions will bring huge tax risks to the company.

To enhance tax safety, enterprises must start with the decision of the boss and strengthen the tax management and risk control of business decisions.

Therefore, the tax safety of enterprises depends to a certain extent on the decisions of the boss and decision makers. If the tax safety problem is ignored in the decision-making process, it is likely to cause the enterprises to bear unnecessary heavy tax burden.

[case analysis: a company owner's decision making mistake leads to 25 million tax loss].

(1) introduction of the case:

A SASAC of a certain province has reformed a state-owned enterprise. In order to solve the problem of resettlement of enterprises, the local SASAC has reached two agreements with the enterprise: first, the government allocated a land with fair value of 100 million yuan to the pformed enterprises without compensation, and the reformed enterprises are responsible for handling the formalities of laid-off workers of the state-owned enterprises and undertaking the old-age insurance and medical insurance that the laid-off workers should continue to pay in the future.

Two, the government sold the land sold on a fair value of 100 million yuan to the reformed enterprises, and clearly stipulated in the agreement that the reformed enterprises should be used to settle the expenses of resettlement of the laid off workers in the state-owned enterprises to compensate for the 100 million yuan of land sold by the government to the enterprises after restructuring.

The SASAC allows the boss of the state-owned enterprise to make decisions and choose one of the two options. As a result, the state-owned enterprise chooses the first option (assuming that the cost of deed tax is not considered in the pfer of land).

(2) tax related analysis

Cost related analysis of the first scheme:

Since the government allocated the land with a fair value of 100 million yuan to the restructured enterprises without compensation, the accounting treatment of the enterprises after restructuring is: intangible assets land, loan: capital surplus / extra business income.

After the restructuring, the enterprise pays the insurance accounts for laid-off workers. The accounting treatment is borrowing management expenses, paying off workers' laid-off insurance costs, and making loans: bank deposits.

According to the provisions of article sixth (eight) of the enterprise income tax law of the People's Republic of China (No. sixty-third of the president of the People's Republic of China), "enterprises receive donations as the total amount of income."

Based on this regulation, the assets allocated by the government to the enterprise without compensation should be treated as donation. That is to say, the enterprise accepts the government's land donation without compensation and pays the enterprise income tax according to law.

That is to say, enterprises with restructuring will have to pay 100 million yuan 25%=2500 yuan for enterprise income tax.

The second option.

Analysis:

The government sold the land of a market with a fair value of 100 million yuan on credit sale to the reformed enterprise, and the accounting treatment of the enterprises after the reform was borrowed: intangible assets - land, loan: other payments.

The reformed enterprises are used to settle the cost of resettlement of the laid-off workers of the state-owned enterprises, and compensate for the 100 million yuan of land sold by the government to the enterprises after restructuring.

After restructuring, the accounting treatment of enterprises is borrowed: other payables - resettlement expenses and loans: bank deposits.

In accordance with the second option, we do not have to pay 25 million yuan of corporate income tax.

(3) tax related analysis conclusion

Through the above tax analysis, we can find that if the boss of the state-owned enterprise chooses second schemes, it will save enterprises 25 million yuan.

Therefore, the boss decision also needs to strengthen the awareness of tax risk, not only to pay attention to the business process, but also to pay attention to tax issues.

Taxation mainly depends on the decision of the boss. When making decisions, we must consider the issue of tax cost. This case is a lesson from corporate decision making which ignores the heavy tax burden caused by tax administration.

Two, enhance the second source of corporate tax safety: contract signing process

Because tax revenue runs through the entire business process, business is done according to the contract and is protected by law.

Contracts determine business processes, and business processes generate taxes.

However, none of the company's contracts was signed by the finance department, which was signed by the company's business department.

For example, the purchasing department signs the purchase contract, the sales department signs the sales contract, and so on.

Therefore, the company's business departments generate tax when doing business contracts.

The tax revenue of enterprises should be divided into three major links: first, the generation of tax; two, the accounting link of taxation; and three, the payment of taxation.

In these three tax links, only the business process of an enterprise will generate taxes, especially turnover taxes. As long as business flows, there will be a turnover tax.

Therefore, in order to control and reduce tax costs, we must control, reduce and standardize business processes.

The following two conclusions can be drawn:

First, the tax revenue of enterprises is not made by the Ministry of finance, but when the business departments do business.

Two, the relationship between contracts, business processes and taxes is: contracts determine business processes, business processes determine taxes, and contracts play a key and fundamental role in reducing tax costs.

Therefore, the contract determines the business process, and the business process generates taxes. The tax control of enterprises must start from the signing stage of the contract.

That is to say, the tax link of business lies in the business process, and the business process is often determined by the signing of economic contracts.

Only by strengthening the tax management of business processes can we really avoid tax risks.

That is to say, the control and reduction of enterprise tax costs should start with the signing of economic contracts, and the signing of economic contracts is the source of corporate control and reduction of tax costs.

Based on the above analysis, enterprises should pay attention to the signing and examination of daily tax related paction contracts, so that enterprises can really save taxes.

When carrying out production and operation, enterprises will sign various contracts with external or internal legal subjects.

A contract involves not only legal issues but also fiscal and taxation issues.

No matter what kind of economic contract, the terms of the contract will involve the tax liability of one or both sides of the contract. Slightly different, the difference between fiscal and tax results may be large, and the legal risks will be different.

As the price clause is an important clause in the economic contract, the price clause signed in the contract is an important basis for the tax cost. When the price of the economic contract is signed, it decides the tax burden such as value-added tax, business tax, consumption tax, enterprise income tax and personal income tax.

To reduce the above tax burden, we must negotiate the paction price accurately before the signing of the economic contract, that is, lowering the contract price to really reduce the tax burden.

At the same time, modifying some of the terms of the contract may save the company a lot of taxes, and there is no risk at all.

[case analysis: Lanzhou real estate enterprise investment construction project outside the the Yellow River bridge for low price to get auction land contract tax saving signing skills]

(1) introduction of the case

Gansu Jia Real Estate Company and Lanzhou municipal government made a piece of land through the auction process. The market price is 200 million yuan. The Lanzhou municipal government has added a condition to the real estate enterprise that auctions the land. The price of the land is 40 million yuan, or 160 million yuan, which will be auctioned to a real estate enterprise by the state-owned land. A real estate enterprise must invest in the construction of a the Yellow River bridge in the Yellow River, Lanzhou.

A real estate enterprise and the Lanzhou municipal government signed a land pfer contract of 160 million yuan. A Real Estate Company paid 160 million yuan for the Lanzhou land reserve center, and the land reserve center issued 160 million yuan administrative receipt to Lanzhou real estate enterprise.

In addition, a real estate enterprise invested 40 million yuan, in accordance with the wishes of the Lanzhou municipal government, in the distance from the land 2000 meters (outside the red line), built a the Yellow River bridge.

Please analyze the tax risk of land leasing contract signed by a real estate enterprise and the Lanzhou municipal government and how to sign the contract, so that the real estate enterprise's tax will be the lowest.

(2) tax risk analysis

The real estate business in this case has the following tax risks: the land price of the land pfer contract signed with the land department of the Lanzhou municipal government is only 160 million yuan, and the investment of 40 million yuan is the construction of the the Yellow River bridge, which belongs to the public infrastructure project outside the auction land. It is also known as the construction project outside the red line. The investment cost of 40 million yuan can not be regarded as the development cost in the future development cost of a Real Estate Company.

Therefore, the construction investment of 40 million yuan can not be deducted from the land value added tax and the enterprise income tax on the land development project at the auction.

(3) contract signing skills for tax saving

In order to save the tax burden, a real estate enterprise must consult with the Lanzhou municipal government on the auction of the land, and get the land according to the market auction price of 20 million yuan, and ask the Lanzhou municipal government to return 40 million yuan to the real estate enterprise. The specific contract signing skills are as follows:

First, a real estate enterprise and Lanzhou land department signed 200 million yuan of land pfer contract, the contract specifically agreed that the Lanzhou municipal government to the real estate enterprise land refunds 40 million yuan, and the land refunds special funds for the construction of the Yellow River bridge.

Second, it requires the Lanzhou municipal government or the Lanzhou land department to issue a land refund account specially for the construction of a the Yellow River bridge document or notice outside the project.

(4) tax saving after contract signing

According to the above contract signing skills, the land department of Lanzhou has issued 200 million yuan administrative receipt to a real estate enterprise. The land cost of a Real Estate Company is 200 million yuan, and the land cost can be increased by 40 million yuan, which can make a real estate enterprise pay less land value added tax and enterprise land tax.

In finance, when 40 million yuan of land is refunded, it is borrowed: bank deposit, loan: special payment. When the construction enterprise is commissioned to build the the Yellow River bridge, the cost will be directly reduced.

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