1, the difference between a branch and an office:

There are two main forms of branching: one is branching; One is the office. Branches can engage in business activities, while offices can generally only engage in business liaison activities within the business scope of the head office. Offices and representative offices are not allowed to apply for business licenses, do not have business qualifications, and cannot sign commercial trade contracts in their own names for profit-making trade and investment activities, otherwise the profit-making agreements signed will be invalid. Its duty is only to contact, understand and analyze the market situation and participate in business negotiations. The tax treatment of branches and offices is different, mainly reflected in enterprise income tax and turnover tax.

From the perspective of enterprise income tax, the office has no taxable income and does not need to pay enterprise income tax because it cannot engage in business activities, has no business income and has no profit; For branch companies, enterprise income tax can be paid by the tax authorities where the branch company is located, or collected and remitted by the head office. If the head office collects and pays, the State Taxation Bureau where the head office is located shall issue a certificate that the enterprise income tax has been collected and paid in the head office, and the branches shall go through the relevant formalities at the local State Taxation Bureau with this certificate. Generally speaking, consolidated tax payment is superior to independent tax payment, because the profits and losses of the head office and branches can make up for each other.

From the perspective of value-added tax, the office does not need to pay value-added tax locally because it does not engage in business activities; The business activities of branches must pay value-added tax locally.

Commodities are often transferred between branches of enterprises. In order to avoid paying value-added tax at the location of branches, according to the Notice on the Collection of Value-added Tax on Goods Transferred between Enterprises (Guo Shui Fa [1998]No. 137, and its later supplementary provisions, Guo Fa [1998] No.7 18), in addition,

2, the difference between a subsidiary and a branch:

As an independent legal person, subsidiaries can enjoy many preferential policies stipulated by local taxes. If a branch is established, it cannot be regarded as an independent legal person, and it is difficult to enjoy tax benefits in the region. However, as a unified part of the head office, the branch company accepts unified management, and its profit and loss can be calculated, which can stabilize its own economic fluctuations and partly bear the tax obligation. Moreover, the establishment of branches does not require layers of approval, and financial information can be kept confidential.

The tax treatment of subsidiaries and branches is generally different. The former bears all tax obligations, while the latter often bears only limited tax obligations. Many countries levy enterprise income tax and so-called "branch tax" on foreign companies. Of course, in order to attract investment, some countries only tax profits that are not reinvested in fixed assets. At present, withholding tax of 10% is levied on the profits remitted by the offices or representative offices of foreign-funded enterprises in China.

There are many factors that can be considered when planning the company form, such as the development law of the company, the local tax rate, the width of the tax base, and the preferential tax conditions.

For industries that can't make long-term profits at the beginning, branches are generally set up, so that the expansion cost of the company can be used to offset the profits of the head office, thus reducing the tax burden. However, for industries that turn losses into profits quickly, subsidiaries can be set up, so that they can enjoy preferential tax laws, and the profits during the preferential period do not need to be taxed.

For countries and regions with low tax rates, investors with independent legal personality can be exempted from or only levy lower corporate tax. If an international tax agreement is signed, the withholding tax on after-tax profits can be paid less or exempted. Companies can often set up subsidiaries or even just email companies here (just hanging a name without actual business) to transfer the profits of related companies in high-tax areas and achieve tax avoidance effect.

Considering the width of the tax base, we should generally refer to the business scope of the tax planning subject itself, and make the intersection between the local tax scope and our own business projects as small as possible when choosing the company form.

As far as tax preferential policies are concerned, independent companies generally have many preferential policies, but the preferential conditions are strict and complicated; Branches enjoy fewer benefits, but the requirements of preferential conditions are not as high as those of independent companies. Therefore, when considering setting up a branch or subsidiary, we should fully compare the planning cost and preferential profit.

Finally, in order to achieve the best tax planning effect, the company can adopt two forms of corporate organization, some subsidiaries are set up as branches, and some are set up as subsidiaries. The choice and collocation of company organization form is the first step of tax planning in company establishment, which should be paid attention to.

There is also a so-called sales department, which can carry out business activities.

To sum up, subsidiaries, branches and offices have their own advantages and disadvantages, which can be analyzed from the aspects of taxation, capital and logistics. In order to choose.

Several related tax documents:

Notice on Collection of Value-added Tax on Housing Sales (Guo Shui Fa [1997] 167)

Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on the collection of value-added tax on goods transferred between affiliated institutions of enterprises

Guo shui fa [1998] 137 No.

1998-08-26 People's Republic of China (PRC) State Taxation Bureau

At present, there are different regulations on whether the business activities of the institutions that accept the transferred goods (hereinafter referred to as the receiving institutions) belong to sales or whether they should be taxed locally. Through research, it is now clear as follows:

The term "for sale" as mentioned in Item (3) of Article 4 of the Detailed Rules for the Implementation of the Provisional Regulations of the People's Republic of China on Value-added Tax refers to the business behavior of a collection institution under any of the following circumstances:

1. Invoice the buyer;

2. Collect money from the buyer.

In either case, the consignee shall pay the value-added tax to the local tax authorities; If the above two situations do not occur, the value-added tax shall be paid uniformly by the head office.

If the consignee only issues an invoice to the buyer or collects part of the payment, it shall calculate and pay taxes to the head office or branches respectively according to different situations.

Notice of State Taxation Administration of The People's Republic of China on the Location of VAT Payment by Taxpayers who Pay Payment through the Fund Settlement Network

Guoshuihan [2002] No.802

The State Taxation Bureau of all provinces, autonomous regions, municipalities directly under the Central Government and cities under separate state planning:

According to some surrounding areas, in order to strengthen the fund management of branches and improve the efficiency of fund operation, taxpayers with unified accounting signed agreements with financial institutions where the head office is located, established a fund settlement network, and opened deposit accounts in the name of the head office all over the country (the accounts opened are accounts where branches are located, and only deposits and transfers can be made, but no withdrawals can be made). For the sales realized in various places, the head office directly issues invoices to the buyers, and the buyers directly deposit the payment into the online bank deposit account of the head office. How to determine the tax payment place of this new settlement method has different understandings in different places. Through research, it is now clear as follows:

Taxpayers open accounts in various places in the name of the head office, collect sales money from buyers in various places through the fund settlement network, and the head office directly issues invoices to the buyers, which is not in line with one of two situations that the collection agency stipulated in the Notice of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on the Collection of Value-added Tax on Goods Transferred between Enterprises (Guo Shui Fa [1998] 137) issues invoices to the buyers and collects payment from them.