Questions And Answers About Foreign Invested Enterprises (2)

Answer: if a foreign invested enterprise is reorganized or merged into a joint-stock enterprise with other enterprises, the original foreign-funded enterprise has been cancelled by the administrative department for Industry and commerce. The value of its assets converted into subscription investment and the change of its book value should be included in the profit and loss of the original foreign investment enterprise, and the income tax shall be calculated.

Question: if a foreign invested enterprise is reorganized or merged into a joint-stock cooperative enterprise, can the newly formed joint-stock enterprise enjoy the preferential tax reduction and exemption?

Answer: a foreign-invested enterprise is reorganized or merged into a joint-stock enterprise with other enterprises. The original foreign-funded enterprise has gone through the cancellation of registration in the administrative department for Industry and commerce. The newly formed joint stock enterprise conforms to the following conditions, and it can enjoy the regular tax reduction and tax exemption preferential measures in accordance with the provisions of the tax law.

(1) the original foreign-invested enterprises have made tax treatment according to the regulations on their assets revaluation. (2) the actual period of operation of the original foreign investment enterprises has not been able to enjoy the period of business tax reduction and exemption preferential tax stipulated by the tax law. The enterprise income tax which has been exempted or reduced has been paid in accordance with the provisions of the tax law.

If a company fails to meet the above requirements, the newly formed joint-stock enterprise shall not again enjoy the preferential tax reduction and exemption stipulated in the tax law.

However, the preferential tax exemption granted by the original foreign-funded enterprises in accordance with the tax law has not yet started or has not yet expired. The newly formed joint-stock enterprises can continue to enjoy the above tax preferences according to the provisions of the tax law until the expiry date.

Question: will foreign investors buy corporate stocks from profits earned by foreign invested enterprises or joint-stock enterprises, and can they enjoy reinvestment tax rebates?

Answer: a foreign investor who buys profits from a foreign investment enterprise or joint stock enterprise (dividends) to buy shares of the enterprise (including rights issue) or shares of other enterprises shall not apply the preferential tax refund provisions of the tax law.

Question: how should foreign invested enterprises and foreign enterprises pay taxes on the pfer of property?

Answer: a foreign-invested enterprise and a foreign enterprise shall pfer the income obtained from their fixed assets and intangible assets into the enterprise income tax during the current operating income of the enterprise.

The formula for the pfer of property is calculated as follows: income from pfer of property: property pfer income (value of existing property ten pfer fee) value of existing property: the original price of the property has been depreciated or amortized. The pfer fee includes hand renewal, handling fee, demolition clearance fee and other costs related to the pfer of property for the pfer of the property.

Question: how should the management fees of foreign invested enterprises engaged in operation and management in China be calculated and taxed?

Answer: foreign companies, enterprises and other economic organizations are engaged in the management and service of foreign invested enterprises. They belong to establishments and establishments in China. Therefore, in addition to the business tax, the income from management fees should be levied according to the tax law.

When collecting taxes on enterprise income, taxpayers who can not provide accurate cost, account books, credentials, etc. can be collected by approved profit margin.

The profit margin is determined by the tax authorities of provinces, autonomous regions and municipalities directly under the central government where the service providers are located.