Case Analysis Of The Determination Of Reasonable Commercial Purposes Of Indirect Equity Transfer In Non-resident Enterprises

With the construction and promotion of the national “Belt and Road” policy,transnational capital flows have become more frequent.At the same time,China's land,housing and other assets have increased rapidly in recent years.Non-resident enterprises have faced greater tax burdens on the transfer of Chinese property,thus making non-residents Equity transfer of enterprises has become an important area of tax planning.The tax disputes that have been revealed by the twists and turns of Vodafone's indirect equity transfer case in India have attracted the attention and concern of the global industry.With the deeper integration of China's economy into the economic globalization chain,the issue of indirect equity transfer by non-resident companies has become an issue.Must pay attention to and concern.The indirect equity transfer of a non-resident enterprise is,in short,an equity transfer model in which an overseas investor indirectly transfers equity in a Chinese resident enterprise by transferring equity in an overseas holding company that holds shares in a Chinese resident enterprise.This paper mainly studies the taxation rights and tax planning issues of non-resident enterprises' indirect equity transfer income tax.The issue of taxation rights judgment mainly refers to the existence of certain supervisory responsibilities in the policy and regulation of overseas holding companies for their reasonable commercial purposes.Cause tax and business differences.From the legal basis of domestic law on the indirect equity transfer,we can see that the tax authorities mainly analyze the main value sources,investment composition,income sources,the actual performance functions and risks,the shareholders,business models and organizations of the overseas enterprises by combining the actual situation.The duration of the price,the income tax to be paid abroad,the substitutability of the transaction,applicable tax treaties and other factors to determine whether the overseas directly transferred company is a shell company and thus penetrates the shell entity located at a low tax rate or a tax shelter,therefore the non-resident enterprises will be indirectly re-classified as indirect transfer of equity and taxation.Taking two indirect equity transfers related to Barbados Company E as an example,this article separately analyzes and compares the two equity transfers from the above factors in terms of reasonable commercial purposes.In the meantime,according to the results of the tax treatment proposed by the tax authorities,this article uses general tax treatment method to calculate taxable income,and analyzes the strategy used by Barbados E in the tax planning of this indirect equity transfer,and sums up its experience and deficiencies.Finally,some suggestions on tax planning for non-resident enterprise equity transfer are proposed,including tax planning proposals for indirect equity transfer of non-resident enterprises and other tax planning proposals for non-resident enterprise equity transfer.