(1) Equity transfer is taxable.
The taxes to be paid include:
1. If the transferor is an individual, individual income tax shall be paid at the rate of 20% (Article 3 of the Individual Income Tax Law of People's Republic of China (PRC)).
2. Taxes involved in equity transfer of domestic-funded enterprises. When a company transfers its equity to a company, the income from the equity transfer will involve corporate income tax, business tax, deed tax, stamp duty and other taxes.
(2) The company's equity transfer involves the following taxes and fees:
No business tax is levied on the company's equity transfer. Therefore, no business tax is levied on the equity transfer of your company.
The income or loss from the transfer of enterprise equity investment refers to the balance after deducting the cost of equity investment from the income from the recovery, transfer or liquidation of equity investment. The income from the transfer of enterprise equity investment shall be incorporated into the taxable income of the enterprise, and enterprise income tax shall be paid according to law. Therefore, if the transfer price of the company's equity investment is fair and equal to the cost of equity investment, enterprise income tax will not be paid.
If the transfer price of the company's equity investment is unfair, according to Article 35 of the Law of People's Republic of China (PRC) Municipality on Tax Collection and Management, if the tax basis declared by the taxpayer is obviously low and there is no justifiable reason, the tax authorities have the right to verify the tax payable.
Personal income tax paid by individual shareholders when transferring shares.
According to Article 8 of the Regulations for the Implementation of the Individual Income Tax Law: "Income from property transfer refers to income obtained by individuals from transferring securities, shares, buildings, land use rights, machinery and equipment, vehicles, ships and other property."
Article 6 of the Individual Income Tax Law stipulates: "The income from property transfer, after deducting the original value of the property and reasonable expenses, is the taxable income." Article 3 stipulates: "The income from property transfer shall be taxed at a proportional rate of 20%." Accordingly, the income from equity transfer belongs to the taxable item of "income from property transfer", and the balance of the income from property transfer after deducting the original value of the property and reasonable expenses is taxable income, and personal income tax is levied at a reduced rate of 20%.
Personal income tax shall not be paid if the personal equity transfer price is fair and equal to the sum of equity investment cost and reasonable expenses. Equity transfer price is unfair. According to Article 35 of the Law of People's Republic of China (PRC) on the Administration of Tax Collection, if the tax basis declared by the taxpayer is obviously low without justifiable reasons, the tax authorities have the right to verify the tax payable.