What are some ways for companies to save taxes? How to save taxes

Several ways to save taxes:

(1) Fixed asset depreciation and tax avoidance

The depreciation expense withdrawal ratio and period are different, which affects the collection of income tax Quantity and class time. Based on this, the company can choose appropriate depreciation policies to achieve tax savings. The first is to use the time difference caused by extending the depreciation life to save taxes. For example, assuming that the year when the equipment of a company starts to depreciate is the same as the year when the company starts to make profits, income tax will be exempted for the first two years and levied at half the rate for the next three years. In order to achieve tax savings, The purpose is to use the time difference caused by extending the depreciation period to reduce the tax burden. The second is to use the time difference caused by shortening the depreciation life to save taxes. This approach is suitable for profitable businesses in their mature stages.

(2) Use the method of acquiring loss-making companies to save taxes

The tax law stipulates that losses are allowed to be carried forward. Profitable enterprises acquire registered companies with accumulated losses through mergers or other method to transfer profits to the accounts of loss-making companies. On the surface, this is to offset losses, but in essence it hides profits and reduces the tax burden of income tax. You can also change the operating business of a loss-making company so that it operates the same profitable business as the company, and use its accumulated losses to offset future profits, which can also achieve the purpose of tax saving.

(3) Use tax preferences to save taxes

When the state promulgates each tax type, it stipulates tax reductions and exemptions. Enterprises can consider tax exemptions based on the taxpayer’s identity, establishment location, investment The preferential tax policies granted by the state shall be considered in terms of direction and other aspects to determine the production and operation behavior of the enterprise. For example, in order to attract foreign investment and introduce technology, our country implements preferential tax policies for foreign-invested enterprises. Taxpayers can achieve the transition from domestic-funded enterprises to Sino-foreign joint ventures, cooperative enterprises and other business models through a series of methods such as negotiating joint ventures, attracting investment, and restructuring, which is a good way to enjoy more tax reductions and exemptions. If a domestic-funded enterprise establishes a new joint venture with a foreign businessman, it can enjoy the "two-year exemption and three-year half-off" discount starting from the profit-making year. There are corresponding preferential tax policies for investments in high-tech industrial zones and "old, young, border and poor" areas recognized by the state. Enterprises can use these preferential policies to invest and achieve tax savings.

For another example, my country currently encourages the recruitment of laid-off workers. Newly established urban labor and employment service enterprises that place unemployed people exceeding 60% of the total number of employees in the enterprise in that year may be exempted from income tax for three years upon review and approval by the competent tax authorities. After the tax exemption period expires, if the unemployed persons placed in the enterprise account for more than 30% of the total number of original employees of the enterprise in that year, the income tax can be reduced by half for 2 years with the approval of the competent tax authorities. In addition, tax savings can also be achieved by arranging a certain proportion of disabled people.

(4) Choose an appropriate organizational structure to save taxes

As the business continues to grow and develop, enterprises are faced with the choice of establishing branches. There are two options for establishing a branch: branch and subsidiary. The two are completely different in terms of taxation. A branch is not an independent legal person. Its business activities and finances are controlled by the head office. All legal responsibilities are borne by the head office. Its profits are turned over to the head office, and the head office collects and pays taxes uniformly. The subsidiary is an independent legal person, operates independently and pays taxes separately, and the company is not directly responsible for it. For example, if an enterprise sets up a branch in a certain high-tech development zone, and if the branch is predicted to suffer losses for a period of time, it should establish a branch, so that it can offset the profits of the head office and pay less corporate income tax. On the contrary, if profits are predicted, a subsidiary should be established to enjoy the country's preferential tax policies for high-tech development zones.