The invested enterprise shall, within 5 working days after the conclusion of the board of directors or shareholders' meeting, submit to the competent tax authorities the resolutions of the board of directors or shareholders' meeting, meeting minutes and other materials related to equity changes. If the invested enterprise experiences changes in individual shareholders or changes in the equity held by individual shareholders, it shall submit to the competent tax authorities within the 15th of the following month a "Personal Income Tax Basic Information Form (Form A)" containing information on shareholder changes and an explanation of the shareholder changes.

The competent tax authorities shall promptly verify the changes in equity interests of the invested enterprises, confirm the relevant transfer income, and promptly urge withholding agents and taxpayers to perform their legal obligations. If the transferred equity is settled in a currency other than RMB, the taxable income will be calculated in RMB based on the central parity rate of the RMB exchange rate on the day of settlement.

Tax avoidance methods

The tax avoidance behavior of foreign-invested enterprises in my country mainly manifests itself in tax avoidance through transfer pricing. Transfer pricing means that multinational companies artificially increase or overwhelm transaction prices, and transfer profits from high-tax areas to low-tax areas or tax avoidance areas through the affiliated enterprises in which they participate, so as to achieve the purpose of not paying taxes or paying less tax.

For the regulation of tax avoidance, my country’s tax law stipulates that business transactions between foreign-invested enterprises or institutions and sites established by foreign enterprises in China to engage in production and operation and their affiliated enterprises shall be in accordance with the rules of independent enterprises. The amount of taxable income is reduced by collecting or delivering prices and fees from business transactions between entities.

Extended information

The local tax authority where the invested enterprise is located shall be the competent tax authority for personal income tax on income from personal equity transfer. In the event of any of the following circumstances, the withholding agent or taxpayer shall declare tax to the competent tax authority within the 15th of the following month in accordance with the law:

The transferee has paid or partially paid the equity transfer price; the equity transfer The agreement has been signed and has taken effect; the transferee has actually performed the shareholder duties or enjoyed the rights and interests of shareholders; the judgment, registration or announcement of the relevant state departments has taken effect; the acts in items 4 to 7 of Article 3 of these Measures have been completed; the tax authorities have determined There is other evidence showing that the equity has been transferred.

When taxpayers and withholding agents apply for equity transfer tax (withholding) declarations to the competent tax authorities, they should also submit the following materials: equity transfer contract (agreement); identity certificates of both parties to the equity transfer; If it is stipulated that asset evaluation is required, a net asset or asset value evaluation report such as land and real estate issued by an intermediary agency with legal qualifications must be provided; supporting materials proving that the tax calculation basis is obviously low but with legitimate reasons; other information required by the competent tax authorities. Material.

Baidu Encyclopedia-Administrative Measures for Personal Income Tax on Income from Equity Transfer

Baidu Encyclopedia-Tax Avoidance