Q: What does the income tax treatment of enterprise liquidation mean? Which enterprises should carry out liquidation income tax treatment?

The answer to the question:

A: According to the Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China on Several Issues Concerning the Handling of Enterprise Income Tax in Enterprise Liquidation Business (Caishui [2009] No.60):

1. The income tax treatment of enterprise liquidation refers to the treatment of liquidation income, liquidation income tax, dividend distribution and other matters when an enterprise stops continuing its business and terminates its own operation, disposes of assets, pays off debts and distributes surplus property to owners. 2. The following enterprises shall be treated with liquidation income tax: (1) Enterprises that need liquidation according to the Company Law and the Enterprise Bankruptcy Law; (2) Enterprises that need to be liquidated during enterprise reorganization. 3. The income tax treatment of enterprise liquidation includes the following contents: (1) Confirm all assets according to the realizable value or transaction price, and confirm the gains or losses of asset transfer; (two) to confirm the gains or losses from the liquidation of creditor's rights and debts. (3) Change the accounting principle of going concern, and deal with the accrued or deferred expenses; (four) to make up the losses according to law and determine the liquidation income; (5) Calculating and paying liquidation income tax; (6) To decide on the remaining property and dividend payable that can be distributed to shareholders.