You were originally exported to America. Suppose the cost of the goods is 800 thousand, and the gross profit is 200 thousand if it is sold to American buyers. In China, the gross profit of 200,000 yuan is subject to 25% corporate income tax, which is 50,000 yuan.
Now you can use your registered offshore company to do entrepot trade, legally avoid taxes and increase profits through profit transfer.
Your cargo cost is still 800 thousand. You can sell it to your own Hong Kong company at a price of 850,000 yuan, and the Hong Kong company will sell it to the United States at a price of 6,543,800 yuan. Logistics transportation remains unchanged, and it is transported from China to the United States without going through Hongkong. The return route of capital flow has changed. The United States paid 6.5438+0 million to Hong Kong companies, and Hong Kong companies paid 850,000 to Chinese mainland.
Offshore income, in the above case, refers to the payment made by the United States to Hong Kong companies, because the above-mentioned whole trade process does not use Hong Kong resources. According to the provisions of the Anglo-American legal system, as long as the enterprise does not conduct business in the place of registration and does not use any resources in the place of registration, the enterprise earns profits outside the place of registration, which belongs to the offshore income of overseas profits and does not need to be taxed.
The above-mentioned offshore business legally avoided trade tax and increased profits:
On the book of China Company, the cost is 800,000 yuan, the sales income is 850,000 yuan, the gross profit is 50,000 yuan, and the corporate income tax rate is 25%, so the tax is 1.25 million yuan.
On the books of Hong Kong companies, the cost is 850,000 yuan, the sales income (offshore income) 1 10,000 yuan, and the gross profit10.5 million yuan, without using any resources in Hong Kong, and the tax amount is 0.
Understand? That's what I do. I am engaged in company registration in Hong Kong and other common law countries, promoting the services of Hong Kong accountants and Hong Kong lawyers, and providing related consulting services. If you have any questions, please ask them again.