How to pay taxes on equity transfer of foreign-funded companies?

1. How to pay taxes on equity transfer of foreign-funded companies? Equity transfer is a common way for shareholders to exercise their equity. China's Company Law stipulates that shareholders have the right to transfer all or part of their capital contribution in a legal way. The system of free transfer of shares is one of the most successful manifestations of modern company system. With the establishment of China's market economy system, the reform of state-owned enterprises and the implementation of the Company Law, equity transfer has become an important form for enterprises to raise capital, reorganize property rights and optimize resource allocation. The disputes caused by this are the most common in company litigation, and the effectiveness of the equity transfer contract is the difficulty in the trial of such cases. Two. Taxes applicable to equity transfer of foreign-funded companies 1. The income tax shareholders (investors) of foreign-invested enterprises can be foreign enterprises, foreign individuals, foreign-invested enterprises and domestic-funded enterprises, and they can also be natural persons in China after the implementation of the Interim Provisions on Merger and Acquisition of Domestic Enterprises by Foreign Investors (hereinafter referred to as the Provisions on Merger and Acquisition by Foreign Investors) in April 2003 12. When they transfer the equity or shares of foreign-invested enterprises, the enterprise income tax under China tax system is different inside and outside. Foreign enterprises, foreign-invested enterprises and domestic-funded enterprises apply different income tax rates, different tax methods and different collection methods, while foreign individuals and natural persons in China apply individual income tax and apply the same tax rate and collection method. 2. Stamp duty is mainly levied on documents such as contracts, and the tax rate is 0.5 ‰, and the tax basis is the actual value of equity transfer price or equity. In practice, foreign investors of foreign-invested enterprises transfer their capital contribution to the transferee free of charge, the main purpose of which is to circumvent the provisions of China tax law. As the investor contributes capital in cash, in the case of free transfer, neither transferee needs to pay any tax to the China tax authorities on the transfer. 3. Business Tax Investors who invest in shares with intangible assets, including trademarks, patents, know-how, copyrights, trademarks and other intangible assets, or invest in shares with land use rights, shall pay a business tax of 5% of the transfer price when transferring their shares. If the transfer price is obviously low without justifiable reasons, China tax authorities have the right to verify the transfer price as the tax basis for business tax. Through the above answers, I believe everyone has an answer to the question of how to pay taxes on the equity transfer of foreign-funded companies. There are three types of taxes applicable to equity transfer of foreign-funded enterprises, namely income tax, stamp duty and business tax. The tax rate of stamp duty is fixed at five ten thousandths, and the tax rate of income tax and business tax depends on the specific situation.