Study On Tax Planning Of Multinational General Contracting Project

In recent years,while the domestic enterprises continue to speed up going out,the g overnment has also promulgated the corresponding support and guidance policies.As far as the overseas project contracting is concerned,the engineering contracting enterp rises have got rapid development.Through the accumulation of experience,project co ntracting enterprises can go to various parts of the world to carry out business.Nowad ays,Chinese enterprises are also found in Asia,Africa,Oceania and even many Latin American countries in order to carry out infrastructure construction work.However,with the fierce competition in the international general contracting market,the labor c ost has also increased,and the enterprises have entered the stage of rapid decline in pr ofits.Combined with the external environment,from 2008 onwards,the financial crisi s still has an impact on such enterprises;Combined with the enterprise itself,can not f ully understand the project-related tax risks,making it difficult to fully ensure the effe ctiveness of tax planning,ultimately affecting the overall economic interests of the ent erprise.After entering the 21 st century,with the implementation of the "go out" and "Belt and Road" strategies,as well as the establishment of the Asian Infrastructure Investment Bank,these have created more opportunities for transnational project contracting enterprises.It is conducive to the gradual expansion of the scale of the external contracting market.According to the concise statistics of the Ministry of Commerce,from January to December 2018,the turnover of China’s foreign contracted projects was 1.12 trillion yuan,down 1.7 percent from the same period last year(equivalent to 169.04 billion US dollars,an increase of 0.3 percent over the same period last year).The amount of new contracts signed was 1.6 trillion yuan,down 10.7% from the same period last year(equivalent to $241.8 billion,down 8.8% from the same period last year).However,due to the differences in enterprise income tax system and collection and administration system in various countries,as well as the differences in bilateral tax agreements signed with China,enterprises often lack an understanding of foreign project experience and the tax legal system in the country where the project is located.Increases the likelihood of tax risk.At this stage,countries are constantly strengthening the construction of the tax legal system,tax collection and management work is also gradually strengthened.In this case,abiding by local tax laws and regulations,effective tax risk prevention and control and tax planning are the positive strategies that Chinese enterprises must adopt and master when they "go out".China’s access to the concept of international tax planning is relatively late,the degree of attention to tax planning is not enough.Therefore,it is very necessary to deeply study the tax planning strategy of multinational general contracting projects and provide strong theoretical support for Chinese enterprises to participate in international competition andreduce the tax burden.In view of this,this paper defines the definition of international tax planning and pu ts forward the general ways of international tax planning: minimizing foreign tax,dela ying home country tax payment and making full use of tax credit.Then the definition of transnational general contracting project is defined to provide theoretical support fo r the following planning suggestions.The main contents of this paper first analyze the specific taxes involved in multinational project contracting projects,including value-added tax,tariff,enterprise income tax and individual income tax.Then on the basis o f specific tax types,this paper analyzes the tax risks involved in transnational general contracting projects,mainly from the project bidding stage,the implementation phase and the withdrawal phase in detail.It is analyzed that the multinational general contra cting project mainly involves the risk of tax policy difference,tax clause risk of tender documents,tax risk of splitting contract,export tax rebate risk of export equipment,t ax risk of the country in which the project operates,and tax risk of the country in whic h the project is operated.The risk of domestic credits derived from outside the countr y and the risk of write-off at the time of withdrawal of the project,Finally,on the basi s of this,the author puts forward some planning suggestions on the tax risks involved:(I)in the stage of project bidding,multinational project contracting enterprises should pay attention to tax investigation,first of all,they should pay attention to domestic encouraging tax policy for transnational EPC project,tax law system and tax environment of the country where the project is located;Thirdly,for the tax terms of the contract,we should pay more attention to the taxbearing situation of the owner,such as the type of tax,the way of payment,the time of payment,etc.Finally,we should choose the main body of the contract to make the tax burden of the project lowest.(II)(2)in the stage of project implementation,transnational project contracting enterprises should be divided into two parts,domestic and foreign,for management and planning.For projects executed at home,enterprises should issue a "certificate of identity of Chinese tax residents" in a timely manner.Timely handling of credit-free and duty-free preferential records;As far as foreign projects are concerned,the measures needed to be taken are as follows: strengthening organizational leadership,determining division of labor and cooperation;constructing and perfecting the system,strengthening risk management;guiding the construction of institutions to improve tax compliance;Strengthen the training of talents,build a shared platform and so on.(III)in the project settlement phase,for the domestic component,tax documents relating to the project should be filed and managed;For the foreign part,the multinational EPC enterprises should make clear whether to write off the project company according to the development strategy of the company,the tax status of the project subsidiaries and joint ventures and the actual situation of the local tax administration.If you need to write off,you need to check the relationship between creditor’s rights and debts,writeoff the tax documents,pay the tax and complete the tax clean-up work;if you need to survive,you need to file and sort out the financial tax files and so on.