Answer: 1. According to Article 25 of the Regulations on the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC) (the State Council Order No.512 of the People's Republic of China): "Enterprises exchange non-monetary assets, and donate, repay debts, sponsor, raise funds, advertise, sample, employee welfare or profit distribution with goods, property and services."
2. According to Article 1 of the Notice of the Ministry of Finance, People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China, on Income Tax Policies for Enterprises Investing in Non-monetary Assets (Cai Shui [2014]16No.), the income from the transfer of non-monetary assets recognized by resident enterprises (hereinafter referred to as enterprises) through their foreign investment in non-monetary assets can be included in the corresponding year by stages within a period of no more than five years.
3. According to Article 1 of the Announcement of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on the Administration of Income Tax Collection for Enterprises Investing in Non-monetary Assets (Announcement No.33 of State Taxation Administration of The People's Republic of China No.2015), the income from the transfer of non-monetary assets recognized by resident enterprises (hereinafter referred to as enterprises) with foreign investment in non-monetary assets can be included in the corresponding years by stages within the period of no more than five consecutive tax years, starting from the year when the income from the transfer of non-monetary assets is recognized.
Article 4 stipulates that if an enterprise chooses to apply the provisions of Article 1 of this announcement for tax treatment, it shall fill in line 13 of the enterprise reorganization tax adjustment form in the Annual Tax Return of Enterprise Income Tax in People's Republic of China (PRC) (A 105 100) when the enterprise income tax is settled every year during the deferred confirmation period of non-monetary assets transfer income, in which:
Therefore, if your company invests in equipment overseas, the transfer income obtained can be included in the taxable income of the corresponding year on average, and the enterprise income tax will be paid in five years.
When investing in fixed assets abroad, you can make the following accounting entries:
1, fixed assets transferred to liquidation
Debit: liquidation of fixed assets
accumulated depreciation
Impairment of fixed assets
Loans: fixed assets
2. Foreign investment in fixed assets
Borrow: long-term equity investment
Loan: liquidation of fixed assets