If the company increases its assets or transfers its equity, it needs to pay personal income tax and company business tax. According to the Provisions of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Several Issues Concerning the Collection of Individual Income Tax and the Notice on the Exemption of Individual Income Tax for Shareholding Enterprises to Share Capital and Distribute Bonus Shares, it is considered that undistributed profits and any registered capital transferred from provident fund belong to dividends and dividend distribution.
The amount of transferred capital obtained by natural person shareholders is taxed as personal income (corporate shareholders does not need to pay tax). The undistributed profits used for transfer shall be deducted from the tax payable from the time of reprinting. Because the company may not pay taxes on time, or the date of payment is later than the date of transfer, the corresponding taxes shall be deducted first when increasing capital and shares.