Are there any special reorganization conditions for the merger involving the parent company?

An enterprise shall deal with its assets and equity step by step within 12 months before and after the reorganization, and the above transaction shall be regarded as a reorganization transaction according to the principle that substance is more important than form. Therefore, it is a special reorganization for the parent company to absorb and merge its wholly-owned subsidiaries.

legal ground

Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Several Issues Concerning the Treatment of Enterprise Income Tax in Enterprise Reorganization The term "enterprise reorganization" as mentioned in this notice refers to the transactions in which the legal structure or economic structure of an enterprise has undergone major changes outside its daily business activities, including changes in the legal form of the enterprise, debt restructuring, equity acquisition, asset acquisition, merger and division, etc. (5) Merger means that one or more enterprises (hereinafter referred to as the merged enterprise) transfer all their assets and liabilities to another existing or newly established enterprise (hereinafter referred to as the merged enterprise), and the shareholders of the merged enterprise exchange equity or non-equity payment for the merged enterprise to realize the legal merger of two or more enterprises.