The Research On The Tax Planning Of SN Multinational Corporation

Benefiting from the rapid development of economic globalization, Chinese Multinational Enterprises (MNEs) have made an outstanding progress and are involving into a new stage. In the case of acquisition strategy performed by SN Group towards foreign target firms, international tax environment is a big challenge, among which tax planning is the key point.The main objective of tax planning in MNEs is to obtain overseas assets, and maximize the assets after tax value, through legally tax planning, which is usually combined with relatively low cost and risk. Investment holding structure, foreign trading platform and overseas operation mode are the most important aspects. In this paper, the present tax planning and potential risk are illustrated in the case of acquisition activity by SN Group, combining with the level of three key aspects to analyze the improvement of the problem. First, the determinants are considered in establishing a holding structure, and with respect to two important factors of capital gain tax and dividend withholding tax, which suggests that SN (U.S.) controlled by SN (Belgium), SN (Brazil) wholly controlled by SN. Second, regarding the choice of its trading platform, introduction of SN (Cayman) and Hong Kong Service Corporation is proposed to set up the actual trading platform in HK, transfer trade function to SN (Cayman) and achieve the operation through HK Service Corporation. Finally, the function of firms is relocated in the present supply chain of SN Group, parent group as the contract manufacturer, foreign subsidiaries as distributors undertaking limited function, HK international firm as the role collecting surplus profits for reinvestment.Moreover, this paper emphasizes some important problems in the tax planning process. Only with a fully understanding between the taxation system and its external factors, the tax cost can be minimized and the firm's value can be maximized.