Tax problems of wholly-owned subsidiaries paying debts on behalf of their parent companies with assets

Transfer of liabilities from parent company to wholly-owned subsidiary = transfer of assets from wholly-owned subsidiary to parent company. According to relevant public information, the transfer of liabilities from a parent company to a wholly-owned subsidiary is essentially equivalent to the transfer of assets from a subsidiary company to the parent company, which is an act of capital reduction. On the one hand, the parent company reduces its liabilities (reducing liabilities is equivalent to increasing assets), and at the same time, according to the amount of debt reduction, it reduces its long-term equity investment in its wholly-owned subsidiary tax basis. On the one hand, a wholly-owned subsidiary increases its liabilities, while at the same time reducing its capital reserve-capital premium (or paid-in capital and equity).