What tax should I pay for this free transfer of assets in the tax law? The new accounting standards do not identify the business nature and financial confirmation of free transfer. In practice, free transfer is often understood as increasing or decreasing investment. In order to facilitate operation, investment takes precedence over the increase or decrease of capital reserve, so there is no need for industrial and commercial changes. That is, for the transferee, increase the assets and capital reserve at the same time; For the transferor, both assets and capital reserve will be reduced.
Free transfer of assets usually involves the handling of enterprise income tax, business tax, land value-added tax, deed tax, value-added tax and stamp duty.
Enterprise income tax must be paid.
Free transfer is subject to enterprise income tax in tax law. Article 6 of the Enterprise Income Tax Law stipulates: "The income obtained by an enterprise from various sources in monetary and non-monetary forms is the total income, including the income received from donations." Article 21 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates: "The income from accepting donations mentioned in Item (8) of Article 6 of the Enterprise Income Tax Law refers to the monetary assets and non-monetary assets that the enterprise accepts from other enterprises, organizations or individuals free of charge."
The Notice of State Taxation Administration of The People's Republic of China on the Income Tax Treatment of Enterprises' Disposal of Assets (Guo [2008] No.828) stipulates that under the following circumstances, if an enterprise transfers assets to others, because the ownership of assets changes, it does not belong to internal disposal of assets, and the income should be determined as sales according to the following six situations: marketing or sales; Used for socializing; Used for employee rewards or benefits; Used for dividend distribution; For foreign donations; Change the ownership of assets for other purposes.
Based on the above provisions, the transfer of assets without compensation should be regarded as a donation because it involves the transfer of ownership of assets, and the transferee of assets should determine the taxable income according to the fair value of the assets accepted and calculate and pay the enterprise income tax; The transferor of assets shall regard it as sales, determine the taxable income according to the difference between the fair value and book value of the transferred assets, and calculate and pay enterprise income tax.
Documents involving the transfer of property rights are subject to stamp duty.
According to the Interim Measures for the Administration of Free Transfer of State-owned Property Rights of Enterprises (Guo Zi Fa [2005] No.239), both parties shall sign a free transfer agreement. Free transfer of assets between enterprises, involving property rights transfer registration, according to the provisions of the "Provisional Regulations on Stamp Duty", the certificate of property rights transfer should be stamped according to the amount contained. Including property ownership and copyright, trademark exclusive right, patent right, proprietary technology use right and other transfer documents, should pay stamp duty according to regulations.
In addition, regarding the issue of free transfer of stamp duty on shares of listed companies through the stock exchange, according to the Notice of State Taxation Administration of The People's Republic of China on Handling Relevant Examination and Approval Matters of Free Transfer of State-owned Shares of Listed Companies (Guo Shui Han [2004] No.941), stamp duty will not be levied temporarily on the free transfer of state-owned shares of listed companies decided or approved by the State Council and provincial people's governments.
No deed tax
Free transfer without deed tax has a clear policy basis. According to the Notice of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China of the Ministry of Finance on the Deed Tax Policy for the Restructuring and Reorganization of Enterprises and Institutions (Cai Shui [2012] No.4), the units that implement administrative adjustment and transfer the ownership of state-owned land and houses to the people's governments at or above the county level or the state-owned assets management departments shall be exempted from deed tax. The transfer of land and housing ownership between enterprises belonging to the same investor, including the transfer of land and housing ownership between the parent company and its wholly-owned subsidiaries, the transfer of land and housing ownership between the wholly-owned subsidiaries of the same company, and the transfer of land and housing ownership between the same natural person and its wholly-owned enterprises and one-person limited liability companies, shall be exempted from deed tax.
Article 5 of the Detailed Rules for the Implementation of the Provisional Regulations on Business Tax stipulates that units and individuals give away real estate or land use rights to other units and individuals free of charge, which is regarded as taxable behavior.
Therefore, if the free transfer between companies involves real estate assets such as factories and houses, it should pay 5% business tax according to the same sales, and pay urban construction tax and education surcharge according to the prescribed proportion.
Land value-added tax and payable value-added tax
Article 2 of the Detailed Rules for the Implementation of the Provisional Regulations on Land Value-added Tax stipulates that the transfer of state-owned land use rights, above-ground buildings and their attachments and income refers to the paid transfer of real estate by sale or other means, excluding the free transfer of real estate by inheritance or gift.
The Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance of People's Republic of China (PRC) on Some Specific Issues Concerning Land Value-added Tax (Cai Shui [1995] No.48) points out that the "gift" as mentioned in the detailed rules refers to the following two situations. First, the owner of the real estate or the owner of the land use right will give the house property right and the land use right to the immediate family members or the person who bears the direct support obligation. Second, property owners and land users donate property rights and land use rights to social welfare and public welfare undertakings such as education and civil affairs through non-profit social organizations and state organs in China. Therefore, the free transfer of assets between companies does not belong to the above two situations, and land value-added tax should be paid.
The transfer of fixed assets, inventory and equipment is regarded as sales, and VAT should be paid. Item (8) of Article 4 of the Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Value-added Tax (Order No.50 of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC), Ministry of Finance of People's Republic of China (PRC)) stipulates that units or individual industrial and commercial households give goods produced, processed or purchased to other units or individuals free of charge, which is regarded as selling goods and paying value-added tax.
If asset transfer is regarded as asset reorganization, according to the Announcement of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on Taxpayer's Asset Reorganization Related to Value-added Tax (People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.201KLOC-0/3), in the process of asset reorganization, taxpayers transfer all or part of the physical assets and their related creditor's rights, liabilities and labor force to other units and individuals by means of merger, division, sale and replacement.