According to the Company Law, a company absorbs other companies for merger, and the absorbed company is dissolved. The merger of two or more companies to form a new company is a new merger, and the parties to the merger are dissolved. When a company is merged, the creditor's rights and debts of the merging parties shall be inherited by the surviving company or the newly established company after the merger.
The policy is mainly based on the Reply of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on the Issue of Not Collecting Value-added Tax on the Transfer of All Property Rights of Enterprises (Guo Shui Han [2002] No.420), and the reply is as follows: According to the Provisional Regulations on Value-added Tax in People's Republic of China (PRC) and its detailed rules for implementation, the scope of collection of value-added tax is to sell goods or provide processing, repair and repair services and import goods.
The transfer of all property rights of an enterprise is an act of transferring the assets, creditor's rights, debts and labor force of the enterprise as a whole. Therefore, the transfer of taxable goods involved in the transfer of all property rights of enterprises does not belong to the scope of VAT taxation, and VAT is not levied.
According to the announcement number 13, because one or both parties must cancel in the enterprise merger, the assets, creditor's rights, debts and labor force of the cancelled enterprise will also be transferred. Therefore, business combination does not belong to the scope of value-added tax and does not pay value-added tax.
2. Some enterprises do not pay value-added tax for division and reorganization.
Separation refers to the separation and transfer of part or all of the assets of an enterprise to an existing or newly established enterprise, and the shareholders of the separated enterprise pay the equity or non-equity of the separated enterprise in exchange to realize the legal separation of the enterprise. The Company Law stipulates that when a company is divided, its property shall be divided accordingly. The debts before the division of the company shall be jointly and severally liable by the company after the division.
Unless otherwise agreed, the company and creditors have reached a written agreement on debt settlement before separation. According to the situation of property division, it can be divided into two types: one is the separation and transfer of creditor's rights, debts and labor during property division, such as the division of business departments and branches of enterprises. Obviously, this separation is in line with the provisions of AnnouncementNo. 10. 13 That VAT has not been paid.
3. All net assets and labor transfer and reorganization are not subject to VAT.
In the reorganization of enterprise assets, asset transfer mainly involves shell listing reorganization and asset acquisition reorganization.
In the reorganization of shell listing, the original shareholders quit after transferring their shares, but they have to accept all the assets of the original listed company and all related creditor's rights, debts and services and vacate the shell company.
In this process, the behavior of selling all assets is the behavior of listed companies, not the behavior of business owners. Therefore, the original "Reply of State Taxation Administration of The People's Republic of China on the Issue of Not Collecting Value-added Tax on the Transfer of All Property Rights of Enterprises" (Guo [2002] No.420) does not apply to the provision of not paying value-added tax. On the contrary, enterprises have to pay VAT when they sell all their net assets.
The Reply of State Taxation Administration of The People's Republic of China on the VAT Policy of Taxpayer's Asset Restructuring (Guo [2009] No.585) is as follows: The taxpayer's behavior of transferring its assets, liabilities and related rights and obligations to a holding company in the process of asset restructuring, but retaining the qualification of a listed company, does not belong to the Reply of State Taxation Administration of The People's Republic of China on the transfer of all property rights of enterprises without VAT (Guo [2002] No.40)
The transfer of taxable goods involved in the process of asset reorganization shall be subject to VAT according to regulations.
Similarly, enterprise reorganization, the transfer of enterprise net assets and labor force, and the transfer of property owners are not taxed, while the transfer of asset owners' enterprises is taxed. The document No.585 in Guoshuihan [2009] is not reasonable, which affects the reorganization activities of enterprises. According to the new policy, this kind of behavior will no longer pay VAT.
Extended data
1. Paying off debts with assets
(1) Paying off debts in cash
The debtor shall recognize the difference between the book value of the restructured debt and the cash paid as debt restructuring income and include it as non-operating income in the current profit and loss. Among them, the relevant restructuring debts are derecognized when the conditions for derecognizing financial liabilities are met.
The creditor shall recognize the difference between the book balance of the restructured creditor's rights and the cash received as debt restructuring loss, and take it as non-operating expenditure and count it into the current profit and loss. Among them, the related restructured creditor's rights are derecognized when the conditions for derecognizing financial assets are met.
If the impairment provision has been made for the restructured creditor's rights, the difference will be written off first, and if there are still losses after the write-off, it will be included in the non-operating expenses (debt restructuring losses); If there is still a balance after the write-off of the impairment reserve, it shall be reversed to offset the current asset impairment loss.
(2) Paying off debts with non-cash assets.
The debtor shall recognize the difference between the book value of the restructured debt and the fair value of the transferred non-cash assets as debt restructuring income and include it as non-operating income in the current profit and loss. Among them, the relevant restructuring debts are derecognized when the conditions for derecognizing financial liabilities are met.
Some taxes and fees incurred by the debtor in the process of transferring non-cash assets, such as asset appraisal fees and transportation and miscellaneous fees, are directly included in the profit and loss of transferred assets. For VAT taxable items, if the creditor fails to pay VAT to the debtor separately.
The creditor shall record the transferred non-cash assets at fair value, and the difference between the book balance of the restructured creditor's rights and the fair value of the transferred non-cash assets shall be recognized as the debt restructuring loss and included in the current profit and loss as non-operating expenses. Among them, the related restructured creditor's rights are derecognized when the conditions for derecognizing financial assets are met.
The related freight and miscellaneous expenses incurred when the creditor receives the non-cash assets shall be included in the value of the related assets.
1. Pay off debts with inventory materials and commodities.
The debtor should record it as sales. Enterprises can divide this business into two parts. One is to sell inventory materials and commodity products to creditors to obtain payment. The business of selling inventory materials and commodity products is the same as the normal sales business of the enterprise, and its profits and losses are included in the current profits and losses. The second is to repay the debt with the currency obtained.
2. Pay off debts with fixed assets.
The debtor shall take the difference between the fair value of fixed assets, the book value of fixed assets and the cleaning expenses as the profit and loss of the transfer of fixed assets. At the same time, the difference between the fair value of fixed assets and the book value of debt payable is regarded as debt restructuring income and included in non-operating income. Fixed assets received by creditors shall be measured at fair value.
3. Pay off debts with financial assets such as stocks and bonds.
The debtor shall regard the difference between the fair value of the relevant financial assets and their book value as the gain or loss of the transfer of financial assets; The difference between the fair value of the relevant financial assets and the book value of the restructured debt shall be regarded as the income from debt restructuring. Relevant financial assets received by creditors shall be measured at fair value.
Debt restructuring converts debt into capital.
Debt-to-equity swaps are handled in the following ways:
1, Limited by Share Ltd
If the debtor is a joint stock limited company, the debtor will stop recognizing the restructured debt when the conditions for derecognition of financial liabilities are met, and the total par value of the shares enjoyed by the creditors due to the abandonment of their creditor's rights will be recognized as capital stock;
The difference between the total fair value of shares and share capital is regarded as capital reserve. The difference between the book value of the restructured debt and the total fair value of the shares shall be included in the current profit and loss as debt restructuring income.
2. Other enterprises
When the debtor is another enterprise, if the debtor meets the conditions for derecognition of financial liabilities, the recognition of restructured debts will be derecognized, and the share enjoyed by creditors due to abandonment of creditor's rights will be recognized as paid-in capital; The difference between the fair value of equity and paid-in capital is recognized as capital reserve.
3. Other circumstances
On the date of debt restructuring, the creditor shall confirm the fair value of the equity as an investment in the debtor. The difference between the book balance of the restructured creditor's rights and the fair value of the equity enjoyed by giving up the creditor's rights shall be offset first. If the impairment provision is insufficient to offset, or if the loss provision is not withdrawn, the difference shall be recognized as a debt restructuring loss.
Where the debt is converted into capital, the creditor shall measure the rights and interests enjoyed by giving up the creditor's rights at fair value. The relevant taxes and fees incurred shall be handled in accordance with the provisions on the recognition and measurement of long-term equity investment or financial instruments respectively.
Second, modify the conditions of debt restructuring
Where debt restructuring is carried out by modifying other debt conditions, the debtor and the creditor shall deal with the following situations respectively:
1, unconditional or conditional debt restructuring
For unrelated or conditional debt restructuring, the debtor shall write down the book balance of the restructured debt to the future payable amount, and the write-down amount shall be recognized as debt restructuring income and included in the current profit and loss. The book balance of restructuring debt is the amount payable in the future.
Debt restructuring by modifying other debt terms. If the revised debt terms involve contingent receivables, the creditor shall take the fair value of the creditor's rights after the revision of other debt terms as the book value of the restructured creditor's rights on the reorganization date, and the difference between the book balance of the restructured creditor's rights and the book value of the restructured creditor's rights shall be recognized as the debt restructuring loss and included in the current profit and loss.
2. Contingent or conditional debt restructuring
Contingent debt restructuring, for the debtor, if the revised debt terms involve contingent payable amount, and the contingent payable amount meets the conditions for recognizing contingent liabilities, the debtor shall recognize the contingent payable amount as estimated liabilities.
The difference between the book value of the restructured debt and the sum of the recorded value of the restructured debt and the estimated debt shall be regarded as debt restructuring income and included in non-operating income.
For creditors, if contingent receivables are involved in the revised debt terms, contingent receivables are not recognized and are not included in the book value of the restructured creditor's rights. According to the principle of prudence, contingent receivables belong to contingent assets, or contingent assets are not recognized. Contingent receivables are included in the current profit and loss only when they actually occur.
Third, the combination of three debt restructuring methods.
1. Use a combination of cash and non-cash assets to repay debts.
Where the debtor pays off the debt with a combination of cash and non-cash assets, the difference between the book value of the restructured debt and the fair value of the cash paid and the transferred non-cash assets shall be regarded as the income from debt restructuring. The difference between the fair value of non-cash assets and their book value shall be regarded as the profit and loss of the transferred assets.
Creditors shall take the difference between the book value of restructured creditor's rights and the fair value of cash received, non-cash assets transferred and provision for bad debts as debt restructuring losses.
2. Cash and debt are converted into capital portfolio to pay off debts.
If the debtor pays off the debt by combining cash and converting the debt into capital, the difference between the book value of the restructured debt and the fair value of the cash paid for giving up the creditor's rights and the rights enjoyed by the creditor shall be regarded as the income from debt restructuring. The difference between the fair value of equity and share capital (or paid-in capital) is regarded as capital reserve.
Creditors shall take the difference between the book value of the restructured creditor's rights and the fair value of the cash received and the equity enjoyed by abandoning the creditor's rights as the debt restructuring loss.
3. Converting non-cash assets and debts into capital to pay off debts.
If the debtor uses a combination of non-cash assets and converts the debt into capital to pay off the debt, the difference between the book value of the restructured debt and the fair value of the transferred non-cash assets and the fair value of the equity enjoyed by the creditor due to the abandonment of the creditor's rights shall be regarded as the debt restructuring income.
The difference between the fair value and book value of non-cash assets shall be regarded as the profit and loss of the transferred assets; The difference between the fair value of equity and equity (paid-in capital) is regarded as capital reserve. Creditors should take the difference between the book value of creditor's rights, the fair value of transferred non-cash assets and the fair value of equity that they have given up their creditor's rights, and make provision for bad debts as debt restructuring losses.
4. Cash, assets and debts are converted into capital to pay off debts.
If the debtor pays off the debt by combining cash, non-cash assets and converting the debt into capital, the difference between the book value of the restructured debt and the fair value of the cash paid, the transferred non-cash assets and the equity enjoyed by the creditor due to the abandonment of the creditor's rights shall be regarded as the debt restructuring profit; The difference between the fair value of non-cash assets and their book value shall be regarded as the profit and loss of transferred assets; The difference between the fair value of equity and share capital (or paid-in capital) is regarded as capital reserve.
Creditors shall take the difference between the book value of restructured creditor's rights and the fair value of cash received, transferred non-cash assets, fair value of equity enjoyed by giving up creditor's rights and bad debt provision as debt restructuring losses.
5. Converting assets and debts into capital to pay off debts, etc.
Repay part of the debt by means of assets and converting the debt into capital. And restructure another part of the debt by modifying other debt conditions. In this way, the debtor should first offset the book value of the restructured debt with the cash paid, the fair value of the transferred non-cash assets and the fair value of the equity enjoyed by the creditor due to the abandonment of the creditor's right.
The balance is compared with the future payable amount, and the debt restructuring profit is calculated accordingly. The difference between the fair value of equity and the share capital (or paid-in capital) enjoyed by creditors due to giving up their creditor's rights shall be regarded as capital reserve; The difference between the fair value of non-cash assets and their book value shall be regarded as the current profit and loss of the transferred assets.
Creditors should first write off the book value of restructured creditor's rights with the fair value of cash received, transferred non-cash assets and equity enjoyed due to abandonment of creditor's rights, and compare the difference with the future receivable amount to calculate the debt restructuring loss accordingly.
Usually, after the debtor and the creditor restructure their debts by means of non-cash assets, issuing equity securities, modifying debt conditions, etc., the creditor will make some concessions to the debtor and let the debtor rearrange its financial funds or pay off its debts. Therefore, if in debt restructuring, the fair value of non-cash assets or equity securities issued by the debtor is greater than the debt that the debtor should repay.
Baidu Encyclopedia-People's Republic of China (PRC) and China Company Law