I. Asset purchase tax and equity purchase tax
(1) Definition of transaction type
Because different transaction methods apply different tax policies, we must first distinguish the types of restructuring transactions. According to the Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China, on Several Issues Concerning the Handling of Enterprise Income Tax in Enterprise Reorganization (Caishui [2009] No.59, hereinafter referred to as "Document No.59"), enterprise reorganization refers to the transactions with significant changes in the legal structure or economic structure outside the daily business activities, including changes in the legal form of enterprises, debt restructuring, equity acquisition, etc.
Equity purchase refers to an enterprise buying the equity of another enterprise to control the transaction of the acquired enterprise. The form of consideration paid by the acquisition enterprise includes equity payment, non-equity payment or a combination of the two.
Asset acquisition refers to the transaction in which an enterprise purchases the substantial operating assets of another enterprise. The forms of consideration paid by the transferee include equity payment and non-equity payment (II) Main taxes and fees.
Narui, the acquirer of equity acquisition, is the transferor and transferee of equity: the transferor of equity must pay income tax and stamp duty; The transferee of equity is required to pay stamp duty (transfer of equity of unlisted company).
The taxpayers of asset acquisition are the transferor and the transferee: the transferor is required to pay income tax, business tax, land value-added tax, stamp duty and value-added tax; The transferee of assets shall pay deed tax and stamp duty.
Let's introduce taxes by category:
1, income tax-enterprise income tax, personal income tax
(1) enterprise income tax
Enterprise income tax refers to an income tax levied by enterprises (including resident enterprises and non-resident enterprises) and other organizations with income in China on their production and operation income.
The theoretical core of China's enterprise restructuring income tax system lies in the economic essence theory of enterprise restructuring, which is supported by three rules: the continuity rule of shareholders' rights and interests, the continuity rule of operation and the reasonable business purpose rule. According to these three rules, the tax law gives enterprises different tax treatments, namely, general tax treatment (taxable reorganization treatment) and special tax treatment (tax exemption/deferred tax treatment) as stipulated in No.59 document.
Circular No.59, Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance of People's Republic of China (PRC) on Promoting Enterprise Income Tax Treatment (Cai Shui [20 14] 109) and Measures for the Administration of Enterprise Income Tax for Enterprise Reorganization (People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.4, 20 10) all provide detailed provisions on general tax treatment and special tax treatment.
In general tax treatment, the transferor shall confirm the gains or losses from the transfer of equity and assets. The tax basis of the equity or assets purchased by the purchaser shall be determined on the basis of fair value. In practice, most of them are based on the evaluation results made by evaluation agencies.
Where the enterprise reorganization meets the following conditions, special tax treatment provisions shall apply:
1 has a reasonable commercial purpose, and its main purpose is not to reduce, exempt or delay the payment of taxes;
2. The proportion of equity purchased by the acquiring enterprise/assets acquired by the transferee enterprise shall not be less than 50% of all equity/assets of the acquired/transferred enterprise;
3. The original substantive business activities of the restructured assets will not be changed within 65,438+02 months after the reorganization of the enterprise;
4. The amount of equity payment at the time of acquisition shall not be less than 85% of the total transaction payment;
5. The original major shareholder who has obtained equity payment at the time of enterprise reorganization shall not transfer the acquired equity within 12 months after reorganization.
(2) Personal income tax
If the transferor of equity is a natural person, individual income tax shall be paid. According to the Individual Income Tax Law (20 1 1 Amendment), income from property transfer, including interest, dividends, bonus income, income from property lease, income from property transfer, accidental income and other income, shall be subject to individual income tax; A proportional tax rate of 20% applies. The balance of equity transfer income after deducting the original value of equity and reasonable expenses is taxable income.
2. Turnover tax-VAT and business tax
When purchasing shares and assets, the assets of the transferor shall be merged into the transferee. In practice, many enterprises are prone to tax risks such as overpaying and underpaying value-added tax and business tax.
(1) VAT
For the transferor, Article 1 of the Provisional Regulations on Value-added Tax (revised by 20 16) stipulates that units and individuals that sell goods or provide processing, repair and repair services and import goods in China are taxpayers of value-added tax. According to the Detailed Rules for the Implementation of the Provisional Regulations on Value-added Tax (revised 20 1 1), the goods mentioned in Article 1 of the Provisional Regulations on Value-added Tax (revised 20 16) refer to tangible assets.
Therefore, the equity transfer in equity acquisition does not belong to the scope of value-added tax collection. In asset acquisition, the transferor transfers substantial business assets such as commodities and fixed assets to the transferee, and whether the transferee pays the consideration in the form of monetary assets or non-monetary assets, it is an act of selling commodities, and the transferor shall pay value-added tax.
It should be noted that in asset acquisition, if the transferee pays the consideration in the form of non-monetary assets, the transferee should also take the inventory and fixed assets involved in the non-monetary assets as the act of selling goods and calculate and pay the value-added tax.
However, there are also special problems in the handling of value-added tax. According to the Announcement of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on Taxpayer's Assets Reorganization Related to Value-added Tax (People's Republic of China (PRC) State Taxation Administration of The People's Republic of China AnnouncementNo. 1 13), taxpayers transfer all or part of physical assets and their related claims, liabilities and services to other units and individuals through merger, division, sale and replacement. According to People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.66 (20 13), in the process of asset reorganization, the taxpayer transfers all or part of the physical assets and their related creditor's rights and debts for many times, and if the transferee and the labor force recipient are the same unit and individual, the value-added tax will not be levied on the goods transferred for many times. Therefore, when acquiring an asset, if the transferor transfers the creditor's rights, debts and services related to the asset in addition to the asset itself, what the enterprise sells at this time is regarded as a business combination, not a simple asset, which does not belong to the scope of VAT taxation, and even if it is transferred many times, VAT will not be levied.
(2) Business tax
According to the Provisional Regulations on Business Tax, units and individuals that provide taxable services, transfer intangible assets or sell real estate in China are taxpayers of business tax and should pay business tax.
In the acquisition of equity, according to the Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance of People's Republic of China (PRC) on Business Tax on Equity Transfer (Caishui [2002] 19 1No.), no business tax is levied on equity transfer.
In asset acquisition, the transferor transfers intangible assets and real estate to the transferee, and whether the transferee pays the consideration in the form of monetary assets or non-monetary assets, the transferor must calculate and pay business tax. If the consideration paid by the transferee is in the form of non-monetary assets, the intangible assets and the real estate involved in the non-monetary assets of the transferee shall also be regarded as transfers, and business tax shall be paid.
Similarly, the business tax on asset acquisition also involves special matters. According to the Announcement of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Business Tax Related to Taxpayers' Assets Reorganization (People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.511), taxpayers transfer all or part of their physical assets and their related creditor's rights, debts and services to other units through merger, division, sale and replacement.
At the same time, it should be noted that since August 1 2065438, with the expansion of the pilot scope of "VAT reform" to the whole country, VAT should be levied on the sales of labor services, intangible assets or real estate according to the Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance of People's Republic of China (PRC) on comprehensively promoting the pilot of changing business tax to VAT (Caishui [2065438+06] No.36). Enterprises convert intangible assets and real estate into money, invest in shares, etc. Business tax will no longer be levied, but value-added tax will be levied instead. However, in the process of asset reorganization, if all or part of the physical assets and their associated creditor's rights, liabilities and services are transferred to other units and individuals through merger, division, sale and replacement, the transfer of real estate and land use rights involved will not be subject to VAT.
3. Resource tax-land value-added tax
According to the Provisional Regulations on Land Value-added Tax (revised 20 1 1), if the transferor of assets transfers the right to use state-owned land, the above-ground buildings and their attachments and obtains income, it shall pay the land value-added tax on the value-added obtained. The land value-added tax is subject to a four-level progressive tax rate. The Official Reply of State Taxation Administration of The People's Republic of China on the Collection of Land Value-added Tax on the Transfer of Real Estate in the Name of Equity Transfer (Guo [2000] No.687) stipulates that if 100% equity is transferred, the assets in the form of equity are mainly land use rights, above-ground buildings and attachments, and land value-added tax should be paid according to the principle that substance is more important than form.
4. Property tax-deed tax
According to the Provisional Regulations on Deed Tax, the units and individuals who transfer the ownership of land and houses in China are deed tax taxpayers and should pay deed tax. The deed tax rate is 3-5%. In the acquisition of assets, if the assets transferred by the transferee include the right to use houses and land, the transferee shall pay the deed tax at 3%-5% of the transaction price.
5. Behavior tax-stamp duty
According to the Provisional Regulations on Stamp Duty (revised 20 1 1), the units and individuals that set up and receive taxable vouchers in China are taxpayers of stamp duty and should pay stamp duty. Taxable vouchers include:
(1) Purchase and sale, processing contract, construction project contract, property lease, cargo transportation, storage, loan, property insurance, technology contract or documents with contractual nature;
(2) Transfer of property rights;
(3) business books;
(4) rights and licenses;
(5) Other tax vouchers determined by the Ministry of Finance. Both equity acquisition and asset acquisition involve stamp duty, and the vouchers that may involve stamp duty mainly include (1), (2) and (4).
Second, asset acquisition and equity acquisition.
(A) the subject and object are different
The subject of equity acquisition is the shareholders of the acquiring company and the target company, and the object is the equity of the target company. The subject of asset acquisition is the acquiring company and the target company, and the object is the assets of the target company.
(B) Debt risk differences
After the equity purchase, the acquiring company becomes the controlling shareholder of the target company, and the acquiring company only bears the responsibilities within the scope of capital contribution, and the original debts of the target company are still borne by the target company. However, because the original debt of the target company has a great influence on the future shareholders' income, the acquiring company must investigate the debt status of the target company before the equity acquisition. The contingent liabilities of the target company are often unpredictable at the time of acquisition, so there is a certain debt risk in equity acquisition.
In asset acquisition, the creditor's rights and debts of assets are generally clear, except for some legal responsibilities, such as environmental protection and employee placement, there is basically no problem of contingent liabilities. Therefore, the acquisition company can basically control the acquisition risk as long as it pays attention to the creditor's rights and debts of the assets themselves.
(3) Tax differences
In stock acquisition, taxpayers are shareholders of the acquisition company and the target company, and have nothing to do with the target company. In addition to the contract stamp duty, according to the Notice on Some Income Tax Issues of Enterprise Equity Investment Business, the shareholders of the target company can pay income tax on the transfer of equity.
In asset acquisition, the taxpayer is the acquiring company and the target company itself. Taxpayers need to pay different taxes according to different underlying assets, mainly including value-added tax, business tax, income tax, deed tax and stamp duty.
(d) differences in government approvals
Due to the different nature of the target enterprises, the degree of government supervision varies greatly. Where the acquisition of state-owned shares or shares of listed companies is not involved, the examination and approval department is only the foreign trade department and its local authorized department. The main point of examination and approval is whether foreign investment conforms to China's policy of utilizing foreign capital and whether it can enjoy or continue to enjoy relevant preferential treatment for foreign-invested enterprises. Involving state-owned shares, the examination and approval department also includes the department responsible for the management of state-owned shares and its local authorized departments. The main points of examination and approval are whether equity transfer price is fair and whether state-owned assets are lost. For the stocks of listed companies, the examination and approval department also includes the China Securities Regulatory Commission. The main points of examination and approval are whether the listed company still meets the listing conditions, whether it harms the interests of other shareholders and whether it fulfills its information disclosure obligations.
For asset acquisition, due to the different nature of the target enterprises, the degree of government supervision is also different. For foreign-invested enterprises, there are no clear laws and regulations in China that require the transfer of assets of foreign-invested enterprises to be approved by the examination and approval authorities. However, to set up a foreign-invested enterprise, it is necessary to examine and approve the project proposal and feasibility study report, and specify the scale and scope of operation in the project proposal and feasibility study report. If the business scope or content of a foreign-invested enterprise changes after the transfer of assets, does it need approval? Article 13 of the Interim Provisions on Domestic Investment of Foreign-invested Enterprises clearly stipulates that "if a foreign-invested enterprise changes its original business scale or content with its investment in fixed assets, it shall apply to the original examination and approval authority and obtain consent before investing". Because the Interim Provisions only apply to the investment of foreign-invested enterprises, but not directly to the asset transfer of foreign-invested enterprises, it can be considered that the asset transfer of foreign-invested enterprises does not need approval as far as the existing regulations are concerned. In addition, if the transferred assets belong to machinery and equipment that have enjoyed the preferential treatment of tax reduction and exemption for imported equipment and are still within the customs supervision period, according to the provisions of the Measures for Supervision and Exemption of Import and Export Goods of Foreign-invested Enterprises, it is necessary to obtain customs permission and pay customs duties before transferring them. If the target enterprise is a state-owned enterprise, the purchase price of assets should generally be examined and approved by the government. Major asset changes of listed companies shall also be reported to the CSRC for approval in accordance with the provisions of the Notice on Several Issues Concerning Major Purchase, Sale and Replacement of Assets of Listed Companies.
It is worth noting that there is no unified anti-monopoly law in China to regulate the acquisition behavior of companies. Article 9 of the Interim Provisions on Restructuring State-owned Enterprises with Foreign Capital, which came into effect not long ago, stipulates in principle that the competent economic and trade department of the State Council has the right to "organize a hearing before examining and approving matters that may lead to market monopoly and hinder fair competition". However, because the Interim Provisions on the Reorganization of State-owned Enterprises by Foreign Capital only applies to the acquisition of state-owned enterprises by foreign capital, the government has no clear legal basis for antitrust review of the acquisition of other enterprises.
Differences in the influence of third-party rights and interests
In stock purchase, other shareholders of the target company are the most influential. According to the Company Law, the transfer of equity must be agreed by more than half of the shareholders, and other shareholders have the priority to be transferred. In addition, according to China's Joint Venture Law, "if a joint venture party transfers all or part of its equity to a third party, it must obtain the consent of the other joint venture party", so the equity acquisition may be subject to other shareholders of the target company.
In asset acquisition, people who have certain rights to assets are the most influential, such as guarantors, mortgagees, trademark owners, patentees and lessees. The transfer of these properties must obtain the consent of the relevant obligee or fulfill the obligations to the relevant obligee.
Third, the difference between asset acquisition and equity acquisition.
(A) the subject and object of the two are different.
The subject of equity acquisition is the shareholders of the acquiring company and the target company, and the object is the equity of the target company. The subject of asset acquisition is the acquiring company and the target company, and the object is the assets of the target company.
(b) Their responsibilities are different.
Under the share purchase mode, the acquisition company becomes the shareholder of the target company, and the acquisition company only bears the responsibility within the scope of capital contribution, and the original debt of the target company is still borne by the target company. Because the original debt of the target company has a great influence on the future shareholders' income, the acquiring company must investigate the debt status of the target company before the equity acquisition. M&A companies generally employ professional intermediaries such as designers and lawyers to conduct due diligence on the target company, so as to avoid the potential debt risk of the target company in the equity transfer agreement.
In the company's asset acquisition, after the asset acquisition, the original debt of the target company is still borne by it, and there is basically no problem of contingent liabilities. However, the acquisition of assets may be restricted by other property rights, so the acquisition of assets has certain realization risks such as other property rights for the acquisition company.
(3) There are differences in taxation between them.
In stock acquisition, taxpayers are shareholders of the acquisition company and the target company, and have nothing to do with the target company. In addition to stamp duty, shareholders of the target company may pay enterprise or individual income tax due to equity transfer.
In asset acquisition, the taxpayer is the acquiring company and the target company itself. Taxpayers need to pay different taxes according to different underlying assets, mainly including value-added tax, business tax, income tax, deed tax and stamp duty.
(four) the acquisition object and the change procedure are different.
The object of equity acquisition is the equity of the target company, while the object of asset acquisition is the assets of the target company. Due to the change of shareholders, the equity acquisition needs to go through the formalities of industrial and commercial change, and the asset acquisition needs not go through the formalities of industrial and commercial change. However, if there is real estate in the acquired assets, you must go through the formalities of real estate transfer.
Differences in the consequences of the transfer of relevant licenses. In the case of asset transfer, the transferee usually cannot directly obtain the qualification and license of the target company. In equity acquisition, under normal circumstances, the acquirer can naturally obtain the original license of the target company.
(5) Different influences from the third party.
In stock purchase, other shareholders of the target company are the most influential. Equity acquisition must be approved by more than half of the shareholders of the target company, and other shareholders have the priority to be transferred. For foreign-invested enterprises, the consent of other joint ventures must be obtained. Therefore, the equity acquisition may be subject to other shareholders of the target company.
In asset acquisition, people who have certain rights to assets are the most influential, such as guarantors, mortgagees, trademark owners, patentees and lessees. The transfer of these properties must obtain the consent of the relevant obligee or fulfill the obligations to the relevant obligee.
The above is the related content of asset acquisition and equity acquisition tax for you. Equity purchase refers to an enterprise buying the equity of another enterprise to control the transaction of the acquired enterprise. The form of consideration paid by the acquisition enterprise includes equity payment, non-equity payment or a combination of the two. You can consult a lawyer if you have any questions.