Nominal cash pool, also known as virtual cash pool, as the name implies, is that the funds within the group enterprises are only virtually gathered together without substantial transfer. In the nominal cash pool, the bank offsets the loan balance in each sub-account, calculates the total interest according to the net position of the account structure, and accordingly, the bank pays deposit interest or collects overdraft interest to the group. Nominal cash pool does not involve the transfer of funds between different entities, which simplifies the operating procedures of banks and enterprises to a certain extent, saves a lot of financial costs and further improves the efficiency of enterprise fund management. Therefore, the nominal cash pool is a widely used cash pool model in foreign advanced financial markets.
In China, the nominal cash pool is not feasible in principle. If the nominal cash pool is implemented, there will be many policy problems. In China, due to the strict interest rate control and the existence of deposit and loan spreads, enterprises will offset deposits and overdrafts, which will inevitably violate the relevant provisions of the state.
One of the biggest challenges is the strict domestic interest rate control system. Due to the implementation of interest rate supervision in China, the deposit and loan interest rates of banks are set by the central bank, and the difference between loan interest rates and deposit interest rates is at a high level in the international market. If the nominal cash pool is used, the deposits and overdrafts of the group enterprises cancel each other out, and no loan interest is charged for overdrafts, which is likely to violate the domestic interest rate policy.
Secondly, the nominal cash pool will also involve tax issues. Since each entrusted loan in the fund pool is subject to stamp duty, the use of nominal fund pool will not involve the actual operation of fund transfer, so enterprises do not have to pay stamp duty. In addition, under the general cash pool model, the interest income of the sub-account that issued the entrusted loan and the interest expense of the sub-account that obtained the entrusted loan are taxed one by one, and the group enterprise can calculate and pay the business tax and enterprise income tax on this basis. However, the nominal cash pool obviously offsets the deposit interest and loan interest, reducing the overall tax burden. Such behavior is easily questioned by the tax authorities.
In addition, Article 61 of the "General Rules for Loans" of the People's Bank of China clearly stipulates that enterprises shall not handle lending or disguised lending financing business in violation of state regulations. This kind of net settlement of deposits and overdrafts under the nominal cash pool leads to the transfer of funds between legal entities within the group without transaction, which violates the relevant provisions of the General Rules for Loans.
Therefore, under the control of the current legal framework and interest rate tax system, there is great resistance to launching the nominal cash pool in the domestic market. However, it is worth noting that nominal cash pool and net settlement, as advanced and efficient fund management tools, have been widely used internationally. At present, major domestic banks are also eager to follow the advanced experience of foreign countries and launch nominal cash pool products. Although domestic policies are not conducive to the promotion of nominal cash pools, and there are still some gray areas when banks develop such products, we can see that China's domestic financial control is constantly changing, the financial market is gradually relaxing, and the corresponding domestic laws and regulations are constantly improving. It is believed that the development of localized cash management products with China characteristics will surely become the development trend of enterprise fund management in the future.
Can stamp duty be collected together?
According to the provisions of China's tax law and the Provisional Regulations on Stamp Duty in People's Republic of China (PRC), in the loan contract, the loan contract (excluding interbank lending) signed by banks and other financial institutions with the borrower shall be sealed by 0.5% of the loan amount, the taxpayer shall be the contractor, and the documents used as the contract shall be sealed by the contract.
Therefore, according to the regulations, entrusted loans must pay stamp duty at 0.5 ‰ of each loan amount, and each transaction must be paid once. Cash pool is based on the transfer of funds within the enterprise under the entrusted loan model. Among them, the stamp duty payable for entrusted loans can be paid by the group enterprise and its member enterprises, generally by the lender and withheld by the bank.
In most cases, stamp duty is paid at the time of each transaction or contract signing. But cash pool is a special entrusted loan model. It takes the bank as the intermediary and adopts the way of many-to-many entrusted loans. In the fund pool, all sub-accounts may be providers or demanders of entrusted loans. In the cash pool structure, sub-account funds can be transferred to the balance several times a day according to the actual needs of enterprises or by setting a quota. When the sub-account balance exceeds the target balance, the excess will be deposited in the parent account or the entrusted loan with the earliest repayment time. If the balance of the subsidiary's external payment account is insufficient during the day, the bank can provide overdraft payment limited to the fund position of the parent company's account. At the end of the day, the mother account will return the entrusted loan to the subsidiary, and the banking system will automatically transfer the funds from the mother account to the sub-account to make up the overdraft amount.
It can be seen that under the cash pool model, enterprises will generate a large number of frequent fund transfers and allocations every day. Especially for those large enterprise groups, there are many sub-accounts, and the amount of entrusted loans based on cash pools is considerable every day. If stamp duty is paid one by one according to the entrusted loans mentioned above, it will inevitably consume a lot of manpower and material resources, which runs counter to the concept of promoting efficient fund management in the fund pool.
In fact, as early as Article 5 of the Provisional Regulations on Stamp Duty in People's Republic of China (PRC), it was stipulated that taxpayers should calculate the tax payable in accordance with the regulations, and purchase and affix stamps at one time (hereinafter referred to as decals). In order to simplify the decal procedures, if the tax payable is large or the number of decals is large, the taxpayer may apply to the tax authorities and take the payment book instead of decals or remit it on schedule. According to what we have learned, many enterprises are also aware of the complexity of frequent tax payment. In order to avoid the accounting stamp duty of each entrusted loan, it is common for enterprises to agree with the bank in advance on the total amount of entrusted loans, and then apply to the local tax authorities for filing. After the approval of the tax authorities, the stamp duty payable is calculated according to this total amount.
However, the provision of calculating stamp duty according to the total amount is not reflected in the tax law. How do enterprises and banks determine this total amount? There are no related terms to refer to. Then it is difficult to avoid the uncertainty of the total amount by calculating the stamp duty with the total amount, which may lead to the occurrence of enterprises paying less or more stamp duty. Similarly, the stamp duty payable according to the total amount is not conducive to the supervision of the relevant tax authorities.
How to set the interest rate standard of cash pool
Under the framework of cash pool, when the sub-account obtains the entrusted loan from the parent account, it will pay interest; On the contrary, the sub-account issues entrusted loans to the parent account and collects interest. At the same time, the interest income of entrusted loans must also pay business tax at 5% of the income, which will be withheld and remitted by the bank. At the end of the year, interest income is included in taxable income to calculate enterprise income tax.
It can be seen that the interest income and interest expense of the cash pool are important basis for calculating business tax and income tax. So what interest rate is used to calculate interest income and interest expenses?
At present, there is an unwritten rule that when enterprises borrow money from each other, they should refer to the lending rate agreed at the commercial loan interest rate level in the financial market, and they should not be abnormally high or low. But what kind of floating range is the so-called abnormal height or abnormal low here? At present, there is no specific express provision in China.
At present, only the following documents can be consulted on how to determine the interest rate of entrusted loans:
According to the Notice of the Central Bank on Adjusting the Interest Rate of Bank Deposits and Loans (Yinfa [1989] No.40), the entrusted loan interest rate shall be determined by the entrusting party, but the maximum shall not exceed the loan interest rate and floating range for the same period stipulated by the People's Bank of China.
According to the Notice on Issues Related to Expanding the Floating Range of Loan Interest Rate of Financial Institutions (Yinfa [2003] No.250), since 2004, the floating range of loan interest rate of commercial banks and urban credit cooperatives has been expanded to [0.9, 1.7], that is, the lower limit of loan interest rate of commercial banks and urban credit cooperatives to customers is the benchmark interest rate multiplied by the lower limit coefficient of 0.9. The upper limit is the benchmark interest rate multiplied by the upper limit coefficient 6550, and the floating range of the loan interest rate of rural credit cooperatives is extended to [0.9,2], that is, the lower limit of the loan interest rate of rural credit cooperatives is the benchmark interest rate multiplied by the lower limit coefficient 0.9, and the upper limit is the benchmark interest rate multiplied by the upper limit coefficient 2.
In June 5438 +2004 10, when the People's Bank of China raised the floating interest rate of deposits and loans, it was clearly pointed out that the loan interest rate of financial institutions (excluding urban and rural credit cooperatives) would not be capped in principle.
In that case, there is basically no upper or lower limit for setting the entrusted loan interest rate. In the cash pool, the interest rate actually adopted by enterprises is the interest rate agreed by the group enterprises themselves, and banks generally do not intervene in this process. But this does not mean that enterprises can set the interest rate of internal fund transfer at will. As far as we know, some enterprises have adopted such a practice: if the lending enterprise has no financial liabilities, it does not stipulate the lower limit of its lending, but it must not be lower than the deposit interest rate for the same period. In order to avoid the suspicion of paying less business tax, if the lending enterprise has financial liabilities, it must not be lower than its borrowing cost, otherwise it is suspected of transferring prices. Once the interest rate pricing within an enterprise is suspected of transfer pricing and capital weakening, it will be questioned by the relevant tax authorities and audit departments.
In the cash pool, group enterprises can transfer interest income by setting different loan interest rates with the help of mutual entrustment loans.
Sub-accounts in low-tax regions. Similarly, by setting a higher loan interest rate, interest expenses will occur in sub-accounts in areas with high tax rates, so it is easy to manipulate the tax burden level within the whole group. In the enterprise income tax law, a special chapter on "special tax adjustment" is set up to deal with anti-tax avoidance measures such as related party taxation, which further improves and strengthens the provisions on tax management between enterprises and related parties and prevents related companies from using related party transactions to realize profit transfer.
However, there are still some imperfections in a series of anti-tax avoidance measures. Article 46 of the new tax law stipulates that "the interest expenses arising from the standard ratio of debt investment and equity investment obtained by enterprises from related parties shall not be deducted when calculating taxable income." However, what is the proportion of this standard? For those enterprise groups that have already used cash pools, once this standard is formulated, it will have a great impact on their future business operations.
At present, in the domestic market, corporate cash pool products have begun to start slowly. With the strengthening of the trend of fund intensive management in group enterprises, I believe this product will have a good development prospect. However, due to the strict financial control adopted by China's financial market, this internationally advanced and mature banking product cannot play a real role in China. In addition, the current legal provisions failed to keep pace with the development of cash pool products. How to carry out further regulatory reform, relax corresponding policy restrictions and standardize the operation of the cash pool market are all issues worthy of attention. It is believed that the application of corporate cash pool products in China market can be better and more compliant only on the basis of learning from foreign advanced cash management experience and combining with domestic laws and regulations.
Cash pool is a new generation of cash management tool newly developed by China Merchants Bank to meet the requirements of optimal allocation of funds and operational appreciation in daily cash management of enterprises. The introduction of intelligent cash pool is the integration of intelligent fund planning management tools and open financial management tools of China Merchants Bank. Functionalized cash pool will help enterprises rebuild their capital and account management structure, and make security, profitability and liquidity get rid of zero-sum management games.
Project background
2065438+01May, China Merchants Bank began to promote a brand-new cash management and capital appreciation business-"smart cash pool", which brought brand-new ideas and solutions to enterprises. According to the cash manager of China Merchants Bank, this product intelligently invests or redeems the short-term operating capital surplus of the enterprise through the intelligent analysis of the changes in the funds in the enterprise account, which meets the dual needs of the enterprise for liquidity and profitability while ensuring the safety of the funds, and provides enterprises with automatic, highly applicable and customizable intelligent cash management services.
Basic process:
Concrete realization
China Merchants Bank has screened financial institutions with stable operation and good reputation in the market for the smart fund pool, focusing on the financial products they provide that are famous for their safety. On the other hand, the intelligent fund pool relies on the online banking U-BANK system that has been running safely for 15 years, and adopts various scientific and technological means to ensure security and provide system and data support for internal control of enterprises.
Intelligent cash pool supports a variety of financial products with different liquidity in the market, among which monetary fund can realize T+ 1 at the earliest. The intelligent cash pool provides intelligent tools to automatically judge the purchase or redemption amount according to the account balance. When the liquidity is sufficient, the system will automatically invest idle funds in finance; When the liquidity is insufficient, the system will automatically redeem the products it holds.
Effective fund management can reduce the cost of capital use in enterprises. Facing the flexible use of cash pool, it can directly create considerable capital gains for enterprises. Take the cash appreciation fund of China Merchants, which is only supported by the cash pool, as an example. The annualized rate of return of the fund is 1, 1.83%, far exceeding the liquidity. The one-day call deposit rate, which is both T+ 1, has more than doubled.
Under the financial crisis in 2008, the securities bubble made enterprise fund management and investors re-recognize the importance of the trinity of safety, liquidity and profitability in fund operation and management. The intelligent cash pool should be able to intelligently invest or redeem the short-term operating capital surplus of enterprises through intelligent analysis of the changes in enterprise account funds, meet the dual needs of enterprises for liquidity and profitability while ensuring the safety of funds, and provide enterprises with automatic, highly applicable and customizable intelligent cash management services.
Example of cash pool management
The establishment of cash pool has been widely used at home and abroad. The most famous company in the world is GE's "cash pool", and the more successful companies in China are PetroChina and Guangdong Communications Group. Take GE's "cash pool" in China as an example, and describe the best practices of cash pool in detail.
In August, 2005, the State Administration of Foreign Exchange approved General Electric (ge) to determine that China Merchants Bank would implement the US dollar cash pool business in China through bidding. GE has 82 cash pools around the world. This tender is the first time that GE has used a cash pool to manage US dollar funds in Chinese mainland. GE's investment in China began at 1979, and so far more than 40 business entities have been established, with the investment scale exceeding1500 million USD. The investment business includes more than ten industries or departments such as high-tech materials, consumer and industrial products, equipment services, commercial financing, insurance, energy, infrastructure, transportation, medical care and consumer finance. GE's sales in China increased from 20065430. With the expansion of business, due to cross-regional and cross-industry reasons, the problem of centralized cash management of member companies also appears. Before GE's cash pool was put into use, 40 subsidiaries of GE fought their own battles on the use of foreign exchange funds. Some companies deposit in banks, while others borrow from banks, which affects the efficiency of the use of funds. Only in 2002 did its RMB business realize centralized management and control, and the centralized management of RMB was also implemented by CCB through cash pool business.
Most of GE's sales revenue in China is USD assets. Before 2004, China's foreign exchange fund management stipulated that no matter whether there was equity relationship between two enterprises, they could not transfer funds in foreign currency. This actually means that for multinational companies in China, even if the subsidiaries have money in their accounts, the parent company cannot use it. As a result, GE's USD business in China cannot be managed centrally. Until June 5438+ 10, 2004, the State Administration of Foreign Exchange issued the Notice on the Internal Operation and Management of Foreign Exchange Funds of Multinational Corporations, pointing out that "the foreign exchange funds between members of multinational corporations can be borrowed through entrusted loans". In this case, GE cooperated with China Merchants Bank to avoid policy barriers and realize the capital control of subsidiaries by the headquarters of multinational companies. In addition, in the past, the international business of 40 subsidiaries of General Electric negotiated with banks respectively. Once the foreign exchange funds are taken away by ge headquarters, the international business of each subsidiary will be unified to China Merchants Bank.
GE Company has set up a parent company account in China. At 4 o'clock every afternoon, the banking system automatically scans the detailed accounts, clears them, and operates in strict accordance with the cash pool. For example, Company A enjoys an overdraft limit of $6,543,800,000 in the bank. At 4 o'clock in the afternoon, the system computer began to scan automatically and found that the account was overdrawn by 800,000 US dollars, so it withdrew 800,000 US dollars from the cash pool of the group company and emptied the account. If Company A did not deposit in the cash pool of the group company before, it was recorded as borrowing 800,000 dollars from the group company, while if there was a surplus of 6,543.8+0,000 dollars in the account of Company B, it was transferred to the cash pool and recorded as borrowing from the group company. After all the funds are concentrated in the group company, the total amount shown is $200,000.
This way, member enterprises in the group can enjoy the capital resources: the funds of member enterprises in the group can be concentrated in a "cash pool", and at the same time, member enterprises can use the funds in the pool conditionally according to the requirements of financial management in the group. Headquarters cash pool accounts collect the actual balance of bank accounts of member companies. When the bank account of a member company receives funds, the funds will be automatically collected into the cash pool account of the headquarters. The actual funds in the bank account of each member company are zero, and the total amount of funds paid by each member company does not exceed the "overdraft limit" specified by the group; When a member company has funds to pay, the bank account of the member company will be linked with the account of the headquarters fund pool to record the information of fund changes in real time; The implementation of the "cash pool" management of group funds has revitalized the deposited funds and improved the utilization rate of funds. By controlling the available amount in the management process, the risk of capital risk is successfully reduced.
Essentially, China Merchants Bank's GE dollar cash pool project is a flexible use of entrusted loans. In the cooperation between the two parties, the bank is the lender, the group company and its subsidiaries are the entrusted borrowers and borrowers, and then a package of entrusted loan agreements are realized through e-banking, which makes the businesses that need to be handled one by one become intensive businesses and processes, thus realizing the unified operation and centralized management of the foreign exchange funds of the whole group.