How to Tax Planning for Enterprise Income Tax

Pre-planning and decision-making:

Comparison of tax-related costs of different types of business operations and the construction of tax structures; tax planning is planning in advance, not centralized processing. The business owner's "public and private" issues, to identify and avoid the tax risks in capital borrowing and lending.

The boss with a private account to the staff payroll risk, here the problem is better, the enterprise needs to be flexible labor, business earnings "public to private" approach and risk prevention.

Extended information:

Impact of implementation:

The new Enterprise Income Tax Law and its implementing regulations came into effect on January 1, 2008. Compared with the original tax law, the new tax law has outstanding changes in many aspects. The person in charge of the Income Tax Administration Department of the State Administration of Taxation (SAT) said in a recent interview, "In the long run, the new tax law will have a positive impact on domestic and foreign-funded enterprises in six aspects."

One is to make domestic and foreign-funded enterprises stand on a fair starting line of competition. The new tax law unifies the income tax system for domestic and foreign-funded enterprises in five aspects, including tax law, tax rate, pre-tax deduction, tax incentives and collection and management, and the income tax treatment for all types of enterprises is the same, so that domestic and foreign-funded enterprises can compete on an equal footing under a fair environment of the tax system.

The second is conducive to improving the investment capacity of enterprises. The new tax law adopts the basic model of income tax system for legal persons, and implements aggregate taxation for business organizations set up by enterprises which do not have legal personality, which makes the income and costs within the same legal entity calculate the income after aggregation, reduces the cost of enterprises, and improves the competitiveness of enterprises.

The new tax law adopts a statutory tax rate of 25%, which is at a moderately low level in the international arena, and is conducive to lowering the tax burden of enterprises and increasing after-tax surpluses, which in turn increases the incentive to invest. The new tax law raises the percentage of deductions for domestic enterprises in terms of salaries and wages, donation expenditures, advertising and business promotion expenses.

Baidu Encyclopedia-Enterprise Income Tax