Journalism

Dalian accounting firm tells you to set up branch company or subsidiary company, which is more tax saving?

2021-08-30

The business scale of enterprises is expanding continuously. Many enterprises are ready to open several branches to expand their business areas after operating the main company for several years.At this time, the boss is faced with a huge problem, because there are two forms of setting up branches, one is branch company, the other is subsidiary company, so how to choose between branch company and subsidiary company?What are the differences between them?This should be a question all bosses need to know.

 

First of all, for an enterprise, making more profits is the core purpose. Here, we take a case to see how much corporate income tax should be paid in both cases if the company assumes the establishment of a branch company and the establishment of a subsidiary company.


case


A catering company in Jinan is a well-known enterprise. It plans to open 20 branches in other cities in 2021. As they are all newly established, the initial budget is that the annual profit of each of these 20 stores is less than 1 million yuan.

 

Excuse me: is it more tax saving to set up branches or subsidiaries for the 20 branches?

 

reply:

1. If a branch company is set up, because the enterprise income tax needs to be collected and paid, which exceeds the standard for small and micro profit enterprises, it can not enjoy the tax preference of small and micro enterprises, and it needs to pay enterprise income tax at 25%.

Total corporate income tax of 20 stores = 20 * 100 * 25% = 5 million yuan

 

2. If a subsidiary company is set up, each store can meet the standard of small and low profit enterprises in terms of the number of personnel, total assets and taxable income, so it can enjoy the tax preference of small and micro enterprises, and it needs to pay enterprise income tax according to 5% tax burden.

Total corporate income tax of 20 stores = 20 * 100 * 5% = 1 million yuan


By changing the way of establishment, we can save 4 million yuan.Therefore, from the aspect of tax saving, it is more appropriate for an enterprise to set up a subsidiary company. Of course, how to operate it still depends on the actual situation of the company to learn more about the differences and operation methods of the subsidiary company of the branch company.


Here are a few key points to remind you of


Reminder 1


1. Branches do not enjoy the preferential policies for small low profit enterprises alone. For branches, they should be incorporated into the head office to collect and pay enterprise income tax. If the collected data meet the requirements of small low profit enterprises, they can enjoy the preferential policies of small low profit enterprises as a whole.

 

2. If the branch does not merge into the head office to collect tax, but chooses to pay tax separately according to the independent taxpayer, it can not enjoy the preferential policy of small low profit enterprises, and can only make tax declaration according to the basic tax rate of 25%.

 

3. If the head office calculates itself and all its branches together, such as the annual taxable income, the number of employees and the total assets of the combined calculation meet the requirements, it can enjoy the preferential income tax policy for small low profit enterprises.A single branch can not enjoy the discount even if the indicators meet the requirements.

 

Reminder 2


What filing materials should be submitted by tax collection enterprises?

1. The head office shall report the information of all its secondary and lower branches to the local competent tax authorities for the record, including the name, level, address, postcode, taxpayer identification number, and the name, address and postcode of the competent tax authority for enterprise income tax.


2. A branch shall report the information of its head office, superior branch and subordinate branch to the local competent tax authority for the record, including the name, level, address, postcode, taxpayer identification number and the name, address and postcode of the competent tax authority for enterprise income tax.

 

Reminder 3


The branch does not need to calculate the amount of tax payable by itself, nor does it need to adjust the tax matters when filling in the annual tax return in the process of final settlement. It only needs to make up the tax or refund the tax according to the paid in tax calculated and distributed by the head office.


Since the second quarter of 2018, when reporting the corporate income tax statements, branches do not need to fill in the "enterprise income tax summary and tax distribution form of branches", but only need to fill in the "current apportionment proportion of branches" and the "supplementary (refundable) income tax apportioned by branches in the current period" on line 20 of the main table.


The head office and branch office of tax collection:

The head office shall calculate the proportion of income tax apportioned by each branch according to the three factors of business income, employee compensation and total assets of the branches in the previous year, and the weights of the three factors are 0.35, 0.35 and 0.30 respectively.


The specific calculation formula is: the apportionment proportion of a branch = (the operating income of the branch × the sum of the operating income of each branch)×0.35 + (the employee's salary of the branch / the sum of the employee's salary of each branch)×35 + (the total assets of the branch / the sum of the total assets of each branch)×0.30。



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