Foreign businessmen take advantage of the favorable conditions of mastering the production and management rights of enterprises and foreign market information to import raw and auxiliary materials for production at high prices and distribute export products at low prices to earn the difference between purchase and sale. For example: Yangzhou XXXX Co., Ltd. is a Hong Kong-based company. XXXX Co., Ltd. and Yangzhou XX Factory are jointly operated, with each party's investment accounting for 50% of the registered capital. The general manager of the joint venture shall be a Hong Kong employee. Initially, the Hong Kong party was responsible for the establishment, production and operation activities of the joint venture. During this period, the Hong Kong businessman imported US$740,000 of raw and auxiliary materials from Hong Kong XX Co., Ltd. Later, due to serious losses during the period of management by the Hong Kong party, the business The board of directors studied and decided to change the joint venture to be managed by the Chinese party. China purchases the imported raw and auxiliary materials needed for production directly from foreign businessmen, and the price is about 40% cheaper than what was originally imported from Hong Kong. During that period, Hong Kong businessmen have already earned 253,000 yuan by importing raw and auxiliary materials. dollars in business profits.

Some foreign parties achieve the purpose of tax avoidance by importing equipment prices

①In the joint venture contract, the prices of the housing equipment invested by both Chinese and foreign parties are very high, artificially increasing investment The amount of fixed assets is inflated to achieve the purpose of accruing more depreciation and paying less income tax.

② Some foreign businessmen make profits by buying and selling the imported equipment needed by investment enterprises. There are also foreign companies that use old equipment as new equipment, defective equipment as intact equipment, and obsolete equipment as advanced equipment. These are all priced as new equipment, which not only affects the normal production of the joint venture, but also makes the joint venture Enterprises suffered huge economic losses, affecting the country's fiscal revenue.

Transfer profits by establishing 100%-controlled foreign-owned enterprises

Some foreign manufacturers take advantage of my country's coastal areas with convenient transportation, sensitive information, cheap labor and preferential policies to transfer some production activities Transferred from domestic or other areas to coastal areas of our country. Most of these foreign-funded enterprises are manufacturing and processing enterprises with "both ends outside". The enterprise itself does not have an independent overseas purchase and sales network and purchase and sales channels, and mostly relies on its overseas parent company or other subsidiaries of the parent company to purchase raw materials and underwrite products for it. Since the product is transferred within the group company, the settlement between foreign-funded enterprises and overseas affiliated companies mostly adopts internal pricing, and evades my country's tax by increasing the price of raw materials and lowering the price of products. In this way, a strange phenomenon occurs. There is no problem in the sales of the company's products and the production is in a saturated state, but the company shows losses, or although it has profits, the profit level is low. However, although the company loses money or makes a small profit, the scale of production is not It appears to be shrinking, but continues to expand.

The foreign party of a joint venture or cooperative enterprise controls the production and operation of the enterprise through contracting and obtains operating profits alone

At present, some joint ventures and cooperative enterprises also implement contract operation. Enterprises are generally contracted by foreign parties. Through contracting, although the Chinese side is guaranteed a certain amount of income every year, it also provides conditions for the contractor to transfer profits.

Transfer taxable income through transfer pricing

Transfer taxable income between related enterprises through abnormal pricing of goods purchases and sales and financial revenue and expenditure, which is tax avoidance by foreign investors common practice.

6. In the contract for imported projects, include taxable items into tax-free items

In some imported projects, due to the inexperience of Chinese negotiators or other reasons, foreign investors will default on the Chinese side Under the premise that taxable royalties or project fees and other items are included in the equipment price, the contract price only reflects the total price of the equipment. Even technical services or installation operations also include the number of people and no amount. Foreign investors sign such a contract , evading the taxes that should be borne by our country.

7. Use contracted projects to avoid taxes

Since my country implemented its opening-up policy, many foreign companies have come to our country to engage in contracted projects and provide labor services. For the income earned by these foreign companies from contracting projects and providing labor services in our country, the state allows them to deduct 70% of the equipment and material costs, and only the remaining 30% in tax policies based on the principles of preferential treatment and lenient procedures. Income is subject to unified industrial and commercial tax and corporate income tax.

8. Take advantage of my country’s regulations on repatriated profits to avoid taxes

According to my country’s “Income Tax Law on Foreign-Invested Enterprises and Foreign Enterprises”, foreign parties of enterprises must pay taxes when remitting their profits abroad. Income tax on remitted profits will not be taxed if profits are not remitted. In response to this regulation, some joint ventures and foreign-funded enterprises have adopted various methods to transfer profits abroad to avoid my country's taxation.

9. Some foreign-invested enterprises rely on domestic enterprises to avoid taxes

Since foreign-invested enterprises have enjoyed special preferential treatment from the state, the products they produce cannot be exported according to the export regulations of domestic enterprises. Tax refund. However, some foreign businessmen (including agents, intermediaries and foreign business representatives in some "foreign-funded" enterprises), under the guise of increasing investment and introducing equipment for domestic enterprises, do everything possible to affiliate themselves with domestic enterprises and conspire with domestic enterprises. Products produced by foreign-invested enterprises are transferred to domestic enterprises for export, or domestic enterprises transfer their trademarks to other enterprises for export through intermediaries in order to seek tax refunds.

Some foreign businessmen even specialize in using "investment" and "setting up factories" as bait and asking for export tax refund certificates as a condition to coerce local governments and enterprise authorities who are eager to "attract foreign investment" and provide them with convenient conditions for export tax refunds.

10. Take advantage of the preferential provisions of the tax law

According to the provisions of my country’s “Income Tax Law on Foreign-Invested Enterprises and Foreign-funded Enterprises”, “Foreign-invested enterprises established in special economic zones shall Foreign enterprises with institutions and sites engaged in production and operation, as well as productive foreign-invested enterprises in economic and technological development zones, are levied corporate income tax at a reduced rate of 15%.

Productive foreign-invested enterprises located in coastal development zones and old urban areas of cities where economic and technological development zones are located are levied income tax at a reduced rate of 24%