Branches can't have independent legal person status, but they can conduct independent financial accounting, keep separate accounts for all income and expenses, make separate local tax returns, and the head office will summarize the branch statements at the end of the period.
The management fees charged by the head office to the branches shall be determined by the board meeting or the articles of association of the company. Whether the head office collects management fees is only the calculation method of profit distribution within your company, because the income tax should be calculated in summary and will not affect the income tax of the whole company.
Specific items: it depends on the specific business. It is suggested that the management fee charged by the Head Office be written off internally or linked to other current accounts such as accounts receivable and accounts payable. It is better for the head office not to determine the income, otherwise it will pay turnover tax again.
Does the branch need to refund the income tax when it cancels the income tax?
Accounting treatment methods of branch companies:
1. Branch does not have independent legal personality, and its external creditor's rights and debts are all borne by the head office. However, in general, the branch company conducts business independently, and the head office should liquidate its assets, creditor's rights and outstanding debts when canceling. After the liquidation, a liquidation statement shall be made to confirm the profit and loss, which shall be submitted to the local competent tax authorities for approval, and the head office shall make corresponding accounting treatment accordingly.
2. The Head Office shall, in the form of consolidated statements, offset its net assets (losses) with the allocation on the books of the Head Office, and confirm the losses. At the same time, the creditor's rights and debts should be merged into the account of the head office.
3. When confirming the loss, the income tax involving the head office and branches shall be contacted with the tax authorities (especially the head office).
4. Finally cancel the business license/tax registration certificate/organization code certificate of the branch.
Note: 1. Information required for cancellation of tax registration: original and photocopy of tax registration certificate, invoice and invoice purchase book, and fill in the cancellation application form. Cancel the national tax first, and then cancel the local tax.
2. To cancel the business license, first make an announcement, bring the original and duplicate of the business license, the tax cancellation certificate, and fill out the cancellation application form.
3. Finally, the cancellation of the organization code certificate shall be handled with the business license, tax registration and bank account cancellation certificate.
Does the branch have to pay tax when it cancels undistributed profits?
If there is a surplus, when this part of the after-tax profit of the enterprise needs to be distributed, individual income tax shall be paid according to the income, and the tax rate is 20%.
1. When the company cancels, if the undistributed profits are retained, because the undistributed profits belong to the after-tax profits of the enterprise, not personal income, there should still be dividend income and personal income tax should be paid when it must be redistributed to shareholders. Tax treatment of enterprise cancellation:
1, enterprise income tax payable at liquidation = liquidation income * enterprise income tax rate.
Liquidation income = assets-liabilities-owners' equity-liquidation expenses
2. Individual income tax payable by natural person shareholders = net profit shared by natural person shareholders *20%.
Net profit shared by shareholders = liquidation net profit * share offering ratio.
Liquidation net profit = liquidation income-liquidation enterprise income tax
All personal income taxes payable are as follows:
Personal income tax payable by natural person shareholders = net profit shared by natural person shareholders *20%.
Undistributed profit = net profit after liquidation+undistributed profit before liquidation
Net profit shared by natural person shareholders = undistributed profit * share sale ratio.
When liquidating undistributed profits, they shall be distributed in the following order:
1, to make up for the losses of previous years; There is no need to make special accounting entries to make up for losses with profits;
2. Withdraw the statutory surplus reserve fund; (Surplus reserve is used to cover losses or increase capital; The public welfare fund can only be used for the collective welfare of employees);
3. Withdraw any surplus reserve;
4. Distribute dividends of preferred shares;
5. Distribute common stock dividends.
6. Finally, the undistributed profit at the end of the year.
Undistributed profit is the undistributed profit of an enterprise. Distribution can be continued in future years, and it belongs to the owner's equity before distribution. In terms of quantity, undistributed profit is the balance of undistributed profit at the beginning of the period plus net profit realized in the current period, minus various surplus reserves and distributed profits.
Accounting treatment methods of branch companies:
1. Branch does not have independent legal personality, and its external creditor's rights and debts are all borne by the head office. However, in general, the branch company conducts business independently, and the head office should liquidate its assets, creditor's rights and outstanding debts when canceling. After the liquidation, a liquidation statement shall be made to confirm the profit and loss, which shall be submitted to the local competent tax authorities for approval, and the head office shall make corresponding accounting treatment accordingly.
2. The Head Office shall, in the form of consolidated statements, offset its net assets (losses) with the allocation on the books of the Head Office, and confirm the losses. At the same time, the creditor's rights and debts should be merged into the account of the head office.
3. When confirming the loss, the income tax involving the head office and branches shall be contacted with the tax authorities (especially the head office).
4. Finally cancel the business license/tax registration certificate/organization code certificate of the branch.
note:
1. Information required for cancellation of tax registration: original and photocopy of tax registration certificate, invoice and invoice purchase book, and fill in the cancellation application form. Cancel the national tax first, and then cancel the local tax.
2. To cancel the business license, first make an announcement, bring the original and duplicate of the business license, the tax cancellation certificate, and fill out the cancellation application form.
3. Finally, the cancellation of the organization code certificate shall be handled with the business license, tax registration and bank account cancellation certificate.