I. Legal provisions on capital reduction and change registration
For capital reduction, it is generally understood that its essence is that some or all shareholders reduce the registered (paid-in) capital of the invested enterprise according to law. In the current company law, there are not many clear provisions, the most important of which are as follows:
Article 177 When a company needs to reduce its registered capital, it must prepare a balance sheet and a list of assets.
The company shall notify the creditors within ten days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper within thirty days. Creditors have the right to require the company to pay off debts or provide corresponding guarantees within 30 days from the date of receiving the notice, or within 45 days from the date of announcement if they have not received the notice.
Article 178 Where a company increases or decreases its registered capital, it shall register the change with the company registration authority according to law. ?
With regard to the requirements for change of registration, reference should be made to Article 31 of the Regulations on the Administration of Company Registration: If a company reduces its registered capital, it shall apply for change of registration 45 days after the date of announcement, and shall submit the relevant certificates of the company's announcement of the company's reduction of registered capital in newspapers and the explanation of the company's debt settlement or debt guarantee.
Generally speaking, the process of capital reduction is as follows:
1. The company held a shareholders' meeting and made a resolution on capital reduction;
2. Prepare balance sheet and property list;
3. Notify the creditors within 10 days from the date when the shareholders' meeting decides to reduce the capital, and make an announcement in the newspaper within 30 days (preferably at the same time);
4. Creditors may, within 30 days from the date of receiving the notice, or within 45 days from the date of announcement if they have not received the notice, require the company to pay off debts or provide corresponding guarantees;
5. Find an accounting firm to issue a capital verification report on the registered capital of the company after capital reduction;
6. Collect the relevant certificates of the company's announcement on reducing the registered capital in the newspaper, and draft the description of the company's debt settlement or debt guarantee.
7. According to the relevant regulations, if the reduction of registered capital involves amending the articles of association, the revised articles of association shall be prepared;
8. If the company applies for change registration and reduction of registered capital after 45 days from the date of announcement, it shall also apply for change registration of reduction of paid-in capital.
Second, the accounting treatment of capital reduction
1, general accounting treatment
(1) The accounting treatment of the invested enterprise is as follows:
Borrow: paid-in capital
Loan: bank deposit (or other asset account)
If it involves fixed assets, it should pass, right Fixed assets cleaning? Should accounting be used as VAT deduction in sales? Taxes payable-VAT payable? Theme.
(2) For shareholders, the accounting treatment is as follows:
Debit: bank deposit (or other assets and taxes payable-VAT payable-input tax)
Loan: long-term equity investment (or financial assets)
2, accounting treatment of special circumstances
In practice, there is a special behavior of reducing capital, that is, reducing registered capital to make up for the past losses of enterprises. In this case, the invested enterprise actually fails to pay the shareholders' monetary funds or other assets, which is regarded as the reduced registered capital donated by the shareholders to the invested enterprise and included in the current profits and losses of the enterprise, so as to make up for the losses. In this case,
(1) The accounting treatment of the invested enterprise is as follows:
Borrow: paid-in capital
Loan: non-operating income
(2) For shareholders, the accounting treatment is as follows:
Borrow: non-operating expenses
Loan: long-term equity investment (or financial assets)
Third, the treatment of the enterprise's capital reduction income
1, used for invested enterprises.
If the invested enterprise takes its own non-monetary assets as the consideration for the reduction of shareholders' capital, according to Article 2 of the Notice of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on the Handling of Income Tax on Assets Disposed by Enterprises (Guo [2008] No.828), if the enterprise transfers its assets to others, it shall be recognized as sales income according to the regulations. At the same time, according to Article 2 of Announcement of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China on Relevant Issues of Enterprise Income Tax (People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.2016 No.80), the sales income shall be determined according to the fair value of the transferred assets.
2. For the company corporate shareholders
Article 5 of the Announcement of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China on Several Issues Concerning Enterprise Income Tax (State Taxation Administration of The People's Republic of China Announcement No.34, 20 1 1) stipulates that if an investment enterprise withdraws or reduces its investment from the invested enterprise, the part of its assets equivalent to the initial investment shall be recognized as investment recovery; The part equivalent to the accumulated undistributed profits and accumulated surplus reserves of the invested enterprise, which reduces the proportion of paid-in capital, is recognized as dividend income; The rest is recognized as investment asset transfer income.
Therefore, for shareholders, the income from the transfer of investment assets during capital reduction shall be calculated according to the above provisions, with reference to the following:
Income from transfer of investment assets = amount of assets obtained by capital reduction? Initial investment cost? Ratio of capital reduction? (Accumulated undistributed profit of invested enterprise+accumulated surplus reserve of invested enterprise)? Capital reduction ratio
Four, personal income tax treatment of capital reduction
1, "Announcement of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on the Collection of Individual Income Tax from Termination of Investment and Recovery of Funds" (State Taxation Administration of The People's Republic of China Announcement No.201No.41) stipulates that individuals terminate their investment, joint venture and business cooperation for various reasons and obtain equity transfer income, liquidated damages, compensation and other benefits from the invested enterprise. Income from property transfer? Personal income tax is calculated and paid according to the applicable provisions of the project. ? The calculation formula of taxable income is as follows:
Taxable income = the total amount of equity transfer income, liquidated damages, compensation and money recovered in other names obtained by individuals-the original actual investment amount (investment amount) and related taxes and fees.
2. Article 3 of People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.67 (20 14) "Administrative Measures for Individual Income Tax on Equity Transfer (Trial)" stipulates that the term "equity transfer" as mentioned in these Measures refers to the transfer of equity by individuals to other individuals or legal persons, including the following situations:
(a) sale of equity;
(2) The company repurchases shares;
(3) When the issuer issues new shares to the public for the first time, the shareholders of the invested enterprise will sell their shares to investors by way of public offering;
(4) The equity is forcibly transferred by judicial or administrative organs;
(5) Foreign investment or other non-monetary equity transactions;
(6) Paying off debts with equity;
(seven) other acts of equity transfer.
Article 4 stipulates that when an individual transfers equity, the taxable income shall be the balance of the equity transfer income after deducting the original value and reasonable expenses of the equity. Income from property transfer? Pay personal income tax.
According to the above provisions, the assets obtained by individual shareholders from the reduction of capital of the invested enterprise shall be regarded as the income from the equity transfer of the invested enterprise. Income from property transfer? Personal income tax is calculated and paid at the tax rate of 20%.
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