Case Study On Income Tax Treatment To Indirect Transfer Equity Of Non-resident Enterprise

In the economic globalization, cross-border investment has become the norm, transfer of ownership of non-resident enterprises is an increasingly common phenomenon. Faced with complex transnational investment matters, investors tend to take tax issues between countries as important considerations, and therefore have a stronger stake in the indirect transfer mode hidden in a growing number of non-resident enterprises to adopt. But alienation often indirect transfer of equity for non-resident corporate tax avoidance coat has become the focus of attention in the field of international taxation. At present, China has promulgated on indirect transfer of ownership of non-resident enterprise aspects of regulatory documents, and the State Administration of Taxation on February 3,2015 launch of the "on non-resident enterprises indirect transfer of property Enterprise Issues income tax notice" (State Administration of Taxation Announcement 2015, No.7, hereinafter referred to as "No.7 Announcement") and "non-resident enterprise indirect transfer of property of enterprise income tax regulations (trial)"(the total tax Fa [2015] No.68, hereinafter referred to as "No. 68 text"), and it is such that the relevant tax provisions of China has been further improved to ensure that the non-resident enterprise income tax smooth storage.However, before No.7 Announcement as the representative of the new tax rules to be promulgated, through analyzing the collection and management of practice of tax authorities, we found that tax authorities generally apply the principle of economic substance directly into the tax practice, to deal with the phenomenon that non-resident companies through indirect transfer of ownership of offshore intermediate holding company. It is short of accurate determination of reasonable business purposes and tax legislation available in actual operation, just in accordance with the "substance over form" principle, the indirect equity transfer the revenue are re-identified as derived from sources within the country, thus the resulting equity transfer income tax. Precisely because of the above problems, there are a lot of controversy for the indirect transfer of ownership of non-resident enterprise income tax treatment, mainly in the legal basis of vulnerability, the determination of reasonable commercial purposes, calculation of the equity transfer income, the declaration and payment of taxes and so on. This article is based in the No.7 Announcement represented an indirect equity transfer new tax rules by a classic case of Acer tide purchasing Fei Anni indirectly, which involved in transfer of ownership of non-resident companies, to analyze our current policy and operational issues of new tax rules in the tax treatment of income tax that may be encountered in practice, from three aspects of the determination of reasonable commercial purpose, calculation on equity transfer of income and tax collection and storage; and then found its deficiencies, finally coming into the inspiration to make our tax provisions more perfect on indirect non-resident enterprises equity transfer, in order to improve our non-resident enterprises indirect equity transfer tax management well.