Joining the WTO provides a broad international platform for Chinese enterprises to conduct transnational operations, but at the same time these enterprises will also face more intense international competition.
After entering the international market, how to gain a foothold in the fiercely competitive international market and gain global competitive advantages is a top priority for multinational companies.
It is our country to actively learn from the business methods of Western multinational companies, combine it with the actual situation of our country's enterprises, and make full use of the tax policies of various countries and the differences in tax systems to carry out international tax planning in order to achieve the purpose of maximizing profits. One of the important business strategies for enterprises to improve their international competitiveness.
String 8 1. International tax planning String 3 International tax planning refers to the behavior of multinational taxpayers using legal methods to reduce or eliminate tax burdens within the scope permitted by tax laws.
International tax planning is the extension and development of domestic tax planning on an international scale. Its activities not only cross tax boundaries, but also involve the tax policies of more than two countries. Therefore, international tax planning is more important than domestic tax planning. Planning is more complicated.
String 2 has a broad and narrow understanding of international tax planning.
A broad understanding is that international tax planning includes both international tax saving planning and international tax avoidance planning.
International tax-saving planning is not only legal, but the implementation of the taxpayer's planning behavior is in line with the legislative intent of the host country; international tax avoidance is also legal on the surface, but taxpayers achieve tax reductions by exploiting loopholes in tax laws. For tax purposes, it goes against the legislative intent of the host country.
In a narrow sense, international tax planning only refers to international tax-saving planning.
From a practical point of view, many foreign multinational companies engage in tax avoidance behavior to varying degrees in their operations, and implement international tax planning strategies in a broad sense.
Since my country’s multinational enterprises entered the international market late, are small in scale, and have weak competitiveness, in order to maximize profits and improve their international competitiveness as soon as possible, in their external operations, in addition to carrying out international taxation in a narrow sense In addition to planning, certain international tax avoidance practices should also be used appropriately.
String 1 "International tax planning" is still a new concept in our country, but internationally it has already become an important activity in corporate investment, financial management and business activities.
Countries (or regions) around the world have vastly different tax types, tax rates, preferential tax policies, etc., providing a broad space for multinational enterprises to carry out international tax planning.
Economic globalization, trade liberalization, financial market liberalization and the development of e-commerce all provide the possibility for international tax planning.
Under the conditions of scientific and technological progress, developed communications, and convenient transportation, the flow of production materials such as funds, technology, talents, and information of multinational enterprises has become more convenient, which provides conditions for international tax planning.
Large multinational companies often hire tax experts to conduct tax planning for the company.
For example, Unilever, which is famous for producing daily necessities, has subsidiaries all over the world.
Faced with the complex tax systems of various countries, the parent company hired 45 senior tax experts for tax planning.
The "tax savings" alone add millions of dollars to the company a year.
String 7 It should be pointed out here that the concept of tax planning is quite flexible and it is a relative concept.
Since the legal standards of various countries are different and the differences are large, and the laws of various countries are constantly being improved, therefore, some reasonable tax planning behavior carried out by a certain multinational taxpayer to reduce the tax burden will not In another country, or in the same country at a different time, it is sometimes considered tax avoidance or even tax evasion that should be prohibited.
At present, all countries in the world regard anti-tax avoidance as a focus of their national tax work, and have intensified anti-tax avoidance efforts. Many countries have formulated special anti-tax avoidance regulations, which undoubtedly brings great challenges to our country's multinational enterprises. International tax planning brings great difficulties.
Therefore, my country's multinational operating enterprises should carefully study, carefully analyze and pay attention to the tax regulations of the host country at any time, find shortcomings, seek planning space, and avoid possible penalties.
Word 5 2. The main methods of international tax planning Word 8 (1) Make use of reasonable selection of investment locations for international tax planning Word 41. Make full use of the tax preferential policies of various countries and choose the level of tax burden investment in countries and regions with low
String 5 In cross-border operations, in addition to conventional factors such as infrastructure, raw material supply, financial environment, technology and labor supply, investors must consider the differences in tax systems in different regions.
Different countries and regions have very different tax burden levels, and each country has also stipulated various preferential tax policies, such as accelerated depreciation, tax credits, differential tax rates, loss carryforwards, etc.
If our country's multinational investment enterprises can choose countries and regions with more tax incentives to invest, they will surely benefit in the long term and obtain a higher return on investment, thus improving their competitiveness in the international market. .
Usually, these enterprises can calculate and compare the tax burden rates of different countries or regions, and then choose countries or regions with low tax burden rates and better comprehensive investment environments to invest.
At present, there are nearly a thousand economic zones in the world with various preferential tax policies. The overall tax burden, especially the income tax burden, in these areas is relatively low, making them an investment paradise for multinational investors.
String 6 At the same time, you should also consider whether the investment location has any restrictions on the remittance of corporate profits.
This is because some developing countries, on the one hand, use low income taxes or even tax exemptions to attract foreign investment, and at the same time impose restrictions on the remittance of profits by foreign-funded enterprises, hoping to encourage foreign businessmen to reinvest.
In addition, in cross-border investment, investors will also encounter the problem of international double taxation. Avoiding international double taxation is also a factor that Chinese multinational investors must consider when choosing investment locations.
In order to avoid international double taxation, countries now generally have signed bilateral comprehensive tax agreements. According to the agreement, residents and non-residents of both contracting countries can enjoy many benefits regarding overseas tax payment. tax incentives such as tax deductions or credits.
Therefore, cross-border investments should try to choose countries and regions that have signed international tax treaties with the home country (the country where the parent company is located) to avoid international double taxation.
At present, our country has signed double taxation avoidance agreements with 63 countries, and there are more than 1,000 bilateral comprehensive tax treaties signed between countries in the world.
String 42. Try to choose international tax havens for investment. Currently, there are three main tax systems in countries around the world, namely, the tax system with direct tax as the main body, the tax system with indirect tax as the main body, and the low tax system.
Countries and regions that implement a low-tax system are generally called "tax havens". There are three main types: (1) Pure international tax havens, that is, there is no personal income tax, corporate income tax, net wealth tax, or inheritance tax and gift tax, such as Bermuda, The Bahamas, etc.; (2) Countries and regions that only exercise territorial jurisdiction, completely give up resident jurisdiction, and are tax-free on income or general property from abroad, such as Switzerland and Hong Kong , Panama, etc.
(3) Countries and regions that implement normal taxation but have special preferential policies to facilitate foreign investors in their tax system, such as Canada, the Netherlands, etc.
Obviously, if investors can choose to invest in these tax havens, they will undoubtedly benefit from tax exemptions or low taxes.
Usually, multinational taxpayers can achieve the purpose of international tax planning by establishing base companies in tax havens.
A more typical one is to establish a headquarters company in a tax haven as a transit sales agency between the parent company and its subsidiaries or subsidiaries.
Through the transfer of headquarters companies located in tax havens, the entire company will reflect its profits in tax-free or low-tax tax havens, thereby achieving the purpose of reducing the overall tax burden.
String 7 The establishment of international holding companies, international trust companies, international finance companies, controlled insurance companies, international investment companies, etc. is also one of the important ways for multinational companies to conduct tax planning today.
Multinational companies often gain the benefit of paying less withholding tax by setting up such companies in contracting countries, low-tax countries or tax havens, or can more easily transfer profits to tax-free or low-tax places. .
At the same time, because the after-tax income of the subsidiary is not repatriated, the parent company can obtain the benefit of deferred taxation. In addition, it can also easily raise capital and adjust the financial status of the subsidiary. For example, using a subsidiary in a country The profits of the subsidiary in another country are offset against the losses of the subsidiary in another country.
my country's Shougang Group has exerted its outstanding financing function by establishing a holding subsidiary in Hong Kong, and at the same time achieved the purpose of reducing its tax burden.
String 9 (2) Choosing a favorable corporate organization method for international tax planning String 4 When multinational investors set up a new enterprise abroad, expand investment to form a subsidiary or establish a branch, the organizational method of the enterprise will be involved. As a matter of choice, different business organization methods have very different tax treatment.
(1) As far as branches and subsidiaries are concerned, since the subsidiary appears as an independent legal person abroad, it can enjoy preferential tax treatment including tax holidays provided by the country where it is located. Since the company is sent abroad as an integral part of the enterprise, it cannot enjoy tax benefits.
In addition, the losses of subsidiaries cannot be remitted to the domestic head office. Since the branch and the head office are the same legal person, the losses incurred during the operation can be remitted to the head office's account, reducing the company's liability. Amount of income.
Therefore, when operating cross-border businesses, different organizational forms can be adopted according to the conditions of the host country’s enterprises to reduce tax burdens.
For example, in the initial stage of an overseas company, due to the greater possibility of losses, the organizational form of a branch can be adopted.
When an overseas company becomes profitable, if it can be converted into a subsidiary in a timely manner, it can obtain many tax benefits that a branch cannot obtain.
(2) As far as the choice of joint stock company and partnership is concerned, many countries implement different tax policies for companies and partnerships.
Therefore, my country’s overseas investment enterprises should choose a comprehensive tax burden based on the analysis and comparison of various factors such as the tax base, tax rate structure, tax preferential policies and specific tax policies of the investment location of the two organizational methods. Lower organizational form to form your own overseas enterprise.
String 6 (3) Using transfer pricing in related enterprise transactions for international tax planning String 5 Transfer pricing refers to the artificial determination in transactions between related parties in international tax affairs Prices are determined by independent parties on arm's length basis in a fair market.
The transfer pricing process is a very confidential and complex task.
The specific methods of transfer pricing strategies of multinational enterprises generally include the following: (1) Affect the costs of subsidiaries by controlling the transaction prices of intermediate products such as parts and semi-finished products.
(2) Influence the costs and expenses of subsidiaries by controlling the sales price or use period of fixed assets of overseas subsidiaries.
(3) Affect the costs and expenses of subsidiaries by providing loans and interest rates.
(4) The costs and profits of subsidiaries will be affected by the level of royalties charged for the transfer of intangible assets such as patents, proprietary technologies, trademarks, and manufacturer names.
(5) Affect the costs and profits of overseas companies through technology, management, advertising, consulting and other labor costs.
(6) Offer higher or lower commissions and rebates to overseas companies through product sales, or use the transportation system and insurance system controlled by the parent company to charge higher or lower fees to subsidiaries. Low transportation, handling, and insurance costs will affect the costs and profits of overseas companies.
String 5 In modern international trade, internal transactions of multinational companies account for a large proportion. Therefore, profits can be transferred through transfer prices by taking advantage of their high and low tax differences around the world to alleviate the problem. The overall tax burden of the company, thereby ensuring that the entire company obtains maximum profits.
Currently, all countries regard transfer pricing for tax avoidance purposes as the primary goal of anti-tax avoidance and formulate transfer pricing tax systems, which makes it difficult for multinational operating enterprises to use transfer pricing for international tax planning.
However, in order to attract foreign investment, increase employment, and develop their own economies, various countries often have different regulations and specific implementation of transfer pricing tax systems, which creates greater difficulties for multinational enterprises to use transfer pricing for tax planning. of flexible space.
String 3 (4) International tax planning by avoiding the formation of a permanent establishment String 2 A permanent establishment refers to a fixed place where an enterprise conducts all or part of its business, including management sites, branches, offices, Factories, workplaces, etc.
At present, it has become the standard for determining whether to tax non-resident business profits in many contracting countries.
For cross-border operations, avoiding a permanent establishment means it is possible to avoid limited tax liability in the non-resident country, especially when the tax rate in the non-residential country is higher than the tax rate in the country of residence. One thing seems more important.
Thus, multinational enterprises can achieve exemption from tax in non-residential countries through goods warehousing, inventory management, goods purchase, advertising, information provision or other auxiliary business activities instead of establishing a permanent establishment. discount.
For example, many Korean overseas construction companies contract projects in the Middle East and Latin American countries. These countries stipulate that the income earned by non-resident companies within six months is tax-free. Therefore, these Korean companies often try to complete their projects within half a year. Contracting projects to avoid paying income tax.
As another example, Japan built many offshore mobile factory workshops as early as the early 1980s. These factory workshops are all set up on ships and can be operated mobilely.
These mobile factories have been carried out mobile operations in Asia, Africa, South America and other places.
In 1981, a Japanese company came to my country to purchase peanuts. The company sent one of its offshore workshops to stay at our port for 27 days to process the purchased peanuts into peanut pulp, crush the peanut skins and make peanut paste. The finished boards are then sold to my country.
As a result, 64% of my country’s revenue from the sale of peanuts from Japan was returned to Japan, and Japanese companies did not pay any tax on the revenue from peanut skin boards.
The reason for this phenomenon is that our country and most other countries have regulations on the existence time of non-resident companies. Japanese companies use this regulation to legally avoid taxes.
String 9 With the development of science and technology, e-commerce has increasingly become an important method of international trade.
Many features of e-commerce provide convenience for international tax planning.
my country's multinational enterprises should also make full use of the characteristics of e-commerce to legally avoid taxes.
String 5 (5) International tax planning by choosing favorable accounting treatment methods. String 6 The diversity of accounting methods provides guarantee for tax planning.
Accounting regulations such as accounting standards and accounting systems, on the one hand, play a role in regulating the accounting behavior of enterprises. On the other hand, they also provide enterprises with different accounting methods to choose from, and help enterprises in these frameworks. and “free movement” within the rules creates opportunities.
my country's multinational enterprises should be familiar with the various accounting systems of the host country and skillfully use various accounting treatment methods to reduce tax burdens or delay tax payments.
For example, by appropriately delaying or advancing the settlement date of income and expenses by a few days, the purpose of tax deferral can be achieved; in countries where capital gains are exempted or levied at a lower income tax rate, overseas enterprises Financial decisions and accounting policies should be adjusted in a timely manner and efforts should be made to convert liquidity gains into capital gains, which will achieve considerable results.
Average expense apportionment is the best way to offset profits to the maximum extent and reduce tax payments. Enterprises can allocate various expenses incurred in long-term operating activities as evenly as possible in each period to make their profits even. , the phenomenon of excessive taxation at a certain stage will not occur; in the case of rising prices, the last-in-first-out method can effectively reduce the tax burden; when depreciating fixed assets, the accelerated depreciation method can be used to achieve The purpose is to recover fixed asset investment as soon as possible, reduce profits in the same period, and postpone the payment of income tax.
String 3 3. Points to note when conducting international tax planning String 5 Multinational taxpayers face the changing world economic climate and the complex international tax environment when formulating international tax plans. The fundamental purpose is to seek global benefits. Minimize tax burden on scale.
Therefore, my country's multinational operating enterprises must arrange business activities, plan taxation, and conduct global tax planning from a global perspective.
String 11. Have an in-depth understanding of the tax systems and related information of various countries.
Currently, the tax systems in various countries around the world vary widely, with various tax types, tax rates, and tax calculation methods, and the taxation relationship is quite complex.
In addition, the business form, types of income, business content, tax locations, politics, military, science and technology, culture, folk customs, etc. in various countries all affect the business activities of the company, and in turn affect the company's finance and taxation. arrange.
String 62. Have multiple alternatives.
Multinational operating enterprises should comprehensively analyze the situation, assess the situation, design as many alternative plans as possible from all angles, and choose the most advantageous plan.
String 43. Have a global perspective.
Multinational enterprises should look at issues from a global macro perspective.
The pursuit of minimizing each tax burden does not mean that the overall tax burden is minimized, and the pursuit of minimizing the tax burden does not mean that the income must be maximized.
For example, in order to reduce the withholding tax burden, you rigidly affiliate to a certain country and try to take advantage of the tax treaty between that country and other countries. Unexpectedly, that country has a heavy income tax.
Another example is that the tax situation of a certain country is already favorable, but the economic and geographical environment of the country are very bad, and taking advantage of it will result in a small loss and so on.
String 24. Have a long-term perspective.
Tax planning should be forward-looking and should not kill the goose to retrieve the eggs and ignore long-term benefits in pursuit of immediate benefits.
my country's multinational operating enterprises should have longer-term overall tax plans and business plans.