Transfer pricing

Use the differences in tax rates in different places of registration (not necessarily different countries, but also tax preferential zones) to transfer the profits of high-tax tax entities to low-tax tax entities through transactions taxpayer. Since transfer pricing is a common planning method, the tax bureau requires enterprises of a certain size to provide transfer pricing documents for filing at the same time.

Thin capitalization

Change equity income into debt income, increase pre-tax deductions by increasing borrowings (debt financing) and reducing the proportion of share capital (equity financing), to reduce corporate tax burdens.

Tax incentives

By changing the corporate form, such as splitting the R&D department into an R&D subsidiary (in order to meet the high-tech declaration conditions, part of the production and R&D functions are separated from the group company, If you establish a separate subsidiary), you can enjoy the preferential income tax rate for high-tech enterprises and legally take advantage of the preferential tax policies provided by the state.

A tax treaty

refers to a written agreement concluded through negotiation between two or more sovereign countries in order to coordinate their tax jurisdiction and deal with relevant tax issues. Countries that sign tax treaties with each other usually include sections such as double taxation avoidance and tax sparing. Compared with countries that have not signed tax treaties, signing tax treaties can effectively reduce double taxation and reduce corporate tax burdens.

Hybrid mismatch

For hybrid financial instruments, the most common situation is that they are treated as debt in one country and as equity in another country. This qualitative difference often results in payments under the financial instrument being treated as interest deductible in the country of the payer, but treated as dividends and receiving tax-free treatment in the country of the recipient. This is generally reflected in the mismatch result of the same expense being deducted multiple times (double deduction), or the same payment being deducted as an expense in one country (region) but not included in income in another country (region) (deducted by one party and not included in income by the other). . Non-resident Tax Management Office, International Taxation Department, State Administration of Taxation: Eliminating the impact of hybrid mismatch arrangements.

Controlled foreign companies

Establish controlled foreign companies in low-tax countries or tax havens, and through various commercial arrangements, retain the profits in the foreign company without distribution or distribute a small amount, evading Domestic tax liability.

Royalty fees

Refer to any payment made by people for the use of rights or intangible property such as information or services. For example: Income obtained by individuals from providing the right to use patent rights, trademark rights, copyrights, non-patented technologies and other franchises. Difficulties in pricing royalties provide room for companies to shift profits.