There Are Different Ways To Acquire Assets And Different Ways Of Tax Treatment.

The Ministry of Finance and the State Administration of taxation have continuously issued a series of tax policies on asset pfer, and have unified and standardized the tax treatment of related matters on the issue of assets taxable enterprise income tax payable by taxpayers and grass-roots tax authorities, and made specific provisions for some situations.

This indicates that the tax treatment of assets pfer behavior in the actual operation of enterprises is gradually improving and standardizing.

The notice on certain issues concerning the taxable income of enterprise income tax (No. twenty-ninth of the State Administration of Taxation announcement 2014) stipulates that the people's governments at or above the county level (including the relevant government departments, the same below) shall explicitly state assets in the form of equity investment into enterprises, and the enterprises shall be treated as state capital (including capital reserves).

If an asset is a non monetary asset, it shall determine the basis of Taxation on the basis of the value of the government's acceptance, and calculate the total income of the current period to calculate the enterprise income tax.

If the government fails to determine the value of the receipt, the taxable income shall be determined according to the fair value of the assets.

In recent years, the restructuring and restructuring of state-owned enterprises has been increasing.

In the process of asset restructuring and restructuring of state-owned enterprises, people's governments at all levels often allocate the operating assets owned or controlled by them to state-owned enterprises.

The situation.

The people's governments at or above the county level and their relevant departments have incorporated state-owned assets as equity investments into enterprises. They belong to policy pfer (investment). According to the current enterprise income tax regulations, they are not part of the income category. Therefore, enterprises should treat them as state capital (capital reserves) for enterprise income tax treatment.

In addition, because the asset value is usually directly determined by the government when it is pferred, the tax base of the asset can be determined according to its actual reception value.

When an enterprise receives the government's gratuitous assets, the assets designated for specific purposes and regulated according to regulations can be used as non taxable income.

The announcement of the State Administration of Taxation on 2014 No. twenty-ninth made it clear that the people's government at or above the county level has allocated state assets to enterprises without compensation. Any special purpose is designated and managed according to the provisions of the Ministry of Finance and the State Administration of Taxation on the handling of enterprise income tax on special purpose financial funds (fiscal 70 [2011]). Enterprises can be treated as non taxable income for enterprise income tax.

Where the assets belong to non monetary assets, the non taxable income shall be calculated according to the value of the government's receipts, and the enterprise income tax shall be calculated in the total income of the current period.

If the government fails to determine the value of the receipt, the taxable income shall be determined according to the fair value of the assets.

The people's government at or above the county level and the relevant departments have allocated state assets to enterprises without compensation, and designated units or business supervisory departments have designated special purposes, and enterprises have been managed according to the provisions of fiscal 2011 [70].

Therefore, according to the seventh provision of the enterprise income tax law, it can be treated as a tax free revenue.

Where the assets are non monetary assets without compensation, the non taxable income shall be determined according to the actual value of the assets received.

The enterprise shall incorporate the actual receivable value of the assets determined by the government into the taxable income of the current period and calculate and pay the enterprise income tax.

If the government fails to determine the value of the receipts, taxable income should be determined according to the fair value of the assets.

The policy basis of the above treatment is that the current enterprise income tax law divides the total income of the enterprise into three categories: tax-free income, non taxable income and taxable income.

Obviously, if the income does not belong to tax-free or non taxable income, it should be taxable income.

According to the Announcement No. twenty-ninth of 2014 of the State Administration of Taxation, enterprises receive shareholders to include assets, including shareholders' assets, and listed companies receive non tradable shares and new non tradable shares in the process of split share structure reform.

The assets donated and the shareholders abandon the equity of the enterprise, and if the contract and agreement have been treated as capital (including capital surplus) and have been actually processed in accounting, the total income of the enterprise shall not be counted. The enterprise shall determine the tax base of the asset at fair value.

Therefore, the acceptance of shareholders' assets into the company, which is treated as capital (including capital accumulation), indicates that the matter belongs to the normal acceptance of shareholders' equity investment behavior of the enterprise, and can not be treated as income tax.

At the same time, the enterprise accepts shareholders to pay the enterprise income tax on the basis of fair value.

The State Administration of Taxation Notice No. twenty-ninth of 2014 stipulates that if an enterprise receives shareholders' assets, it shall be counted as fair value and total income, and the enterprise income tax shall be calculated and paid at the same time, and the tax base of the asset shall be determined according to the fair value.

It can be seen that when an enterprise receives shareholders' assets, it is stated that the matter is not a normal acceptance of shareholders' equity investment behavior, but rather a donation. It should be included in the total income to calculate the enterprise income tax.

Investment in non monetary assets shall be limited to the establishment of new resident enterprises by non monetary assets, or the injection of non monetary assets into the existing resident enterprises.

The notice on the issue of enterprise income tax policy on non monetary assets investment (fiscal 2014 [116]) clarifies the enterprise income tax policy related to non monetary assets investment.

The income derived from the pfer of non monetary assets recognized by foreign enterprises (hereinafter referred to as "enterprises") based on foreign investment of non monetary assets can be uniformly divided into taxable income in the corresponding year within a period not exceeding 5 years, and the enterprise income tax shall be calculated according to the provisions.

The enterprise shall evaluate the non monetary assets and evaluate the pfer of non monetary assets in accordance with the balance of the fair value after deducting the tax base after the valuation of the non monetary assets.

When investing in non monetary assets, an enterprise shall confirm the realization of the proceeds from the pfer of non monetary assets when the investment agreement comes into force and the registration procedures for stock rights are taken.

If an enterprise obtains the shares of the invested enterprise by investing in foreign assets with non monetary assets, it should take the original tax cost of the non monetary assets as the tax basis, plus the annual recognition of the proceeds from the pfer of non monetary assets, and make adjustments every year.

The tax base for an investment enterprise to acquire non monetary assets should be determined according to the fair value of non monetary assets.

For non monetary assets investment between affiliated enterprises, the realization of pfer income is confirmed when the investment agreement comes into effect.

The notice on the collection and management of enterprise income tax on non monetary assets investment (Bulletin No. thirty-third of the State Administration of Taxation on 2015) clearly stated that the pfer of income from non monetary assets recognized by non monetary assets in foreign investment by a resident enterprise carrying out audit accounts may be uniformly counted into the corresponding year's taxable income during the period from the year of the pfer of non monetary assets to the 5 consecutive tax year, and the enterprise income tax shall be calculated according to the provisions.

During the 12 months after the entry into force of the investment agreement, the registration of non monetary assets has not yet been completed. When the investment agreement comes into effect, the realization of the proceeds from the pfer of non monetary assets shall be confirmed.

In line with the provisions of the fiscal 2014 [116] document, the investment behavior of the enterprise's non monetary assets is also in line with the special tax treatment conditions specified in the Circular of the Ministry of finance, the State Administration of Taxation on the handling of certain issues concerning the enterprise income tax reinsurance business (fiscal 59 [2009]) and the Circular of the Ministry of Finance on the promotion of enterprise income tax reorganisation (fiscal 109 [2014] 109).

The notice on the Levy of assets (equity) pfer enterprise income tax (State Administration of Taxation Announcement No. fortieth 2015) provides that the 100% directly controlled residents and between the 100% directly controlled residents of the same or the same number of resident enterprises shall be pressed according to the provisions of Article 1.

The pfer of equity or assets is limited to the following 4 situations:

1.100% between the parent and subsidiary companies directly controlled, the parent company pfers the shares or assets held by the parent company to the subsidiary company at the book value, and the parent company receives the 100% equity interest of the subsidiary company.

The parent company deals with the increase of long-term equity investment, and the subsidiary company receives the investment (including capital surplus).

The tax base for the parent company to acquire the equity of a subsidiary is determined by the original tax base of the pfer of equity or assets - that is, the parent company's capital contribution to the wholly owned subsidiary.

2.100% between the parent and subsidiary companies directly controlled, the parent company pfers the shares or assets held by the parent company to the subsidiary company's book value, and the parent company does not receive any equity or non equity payment.

The parent company deals with the reduction of the paid down capital (including capital surplus), and the subsidiary pfers assets according to the investment received - that is, the parent company pfers the assets to the wholly owned subsidiary.

3.100% between the parent subsidiary company directly controlled by the parent company and the subsidiary company, the parent company pfers its equity or assets to the parent company's book value, and the subsidiary does not receive any equity or non equity payment.

The parent company is processed according to the recovered investment, or processed according to the accepted investment, and the subsidiary company is dealt with by reducing the paid down capital.

The parent company shall, according to the original tax base of the Transferred Equity or assets, reduce the tax base for holding the shares of the subsidiary company, that is, a wholly owned subsidiary is free of charge to the parent company.

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4. under the direct control of a subsidiary company of the same or identical parent company, a parent company pfers the equity or assets held by its subsidiary to the net book value of the subsidiary company under the control of the parent company, and the party has not obtained any equity or non equity payment in the net book value of the subsidiary company. 100%

The drawing party shall deal with the owner's equity minus the owner's equity and pfer the assets according to the accepted investment processing, i.e. the pfer of assets between the wholly owned subsidiary.

In the 5. types of behavior, the pfer of shares or assets according to the net book value of a group of resident enterprises does not confirm the proceeds from the pfer of shares or assets, enjoy the policy of deferred tax preference, simplify the collection and management process at the same time, and greatly reduce the tax cost of internal pactions of group enterprises.

In addition, the income from donations should be determined according to the fair value of the assets, the taxable income should be determined, and the special appropriations of the government's finance and other departments should be obtained. If the conditions are satisfied, it is recognized as non taxable income, and the financial subsidy to obtain the nature of taxable income should be included in the total income of that year.

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