Corporate Income Tax Planning In China’s Business Restructure

With the development of market economy, business restructure is becoming more and more popular nowadays. A lot of enterprises have realized strategic objectives through restructuring, as well as boost national economy. Cost-efficiency analysis is one important part of business restructuring’s rich connotations before restructure. In the course of restructuring, a series of actions will definitely have a big impact on corporate income tax, by which the cost brought about should never be overlooked. Therefore, corporate income tax is a big concern as an important factor in restructuring cost.This article analyzes the M Group’s subsidiary Company A’s acquisitions of Company B, by combining theoretical research with case studies. Based on legal document NO.59and announcement NO.4, this article proposes three tax plans, including asset acquisition, share acquisition and merger. In the course of assessment of each plan, not only their respective tax revenue costs are taken into consideration, but also their impact on other relevant costs occurred during restructuring. This article is not trying to point out the optimal method, but to suggest on what conditions can enterprises apply any of such plans. I hope this article can do some help for enterprises to establish a correct concept of tax planning.This article is divided into four parts. The first part is an introduction; the second is the fundamental theory of business restructure and corporate income tax planning; the third is the basic tax planning ideas for business restructure; the forth is a case analysis in which there are four tax plans; the fifth is a conclusion.