Tax Risk Research On The Dismantling Of VIE Structure By Q Company

As early as the end of the 20 th century and the beginning of the 21 st century,many growth-oriented companies had financing obstacles,in order to avoid foreign investment access restrictions.However,with the deterioration of the overseas financing environment and geopolitical risks,there are inherent risks in the large and VIE structure,coupled with the thriving domestic capital market,more and more Chinese stock companies choose to return to the domestic listing and dismantle the VIE structure.However,there are also many tax risks hidden in the process of dismantling the VIE structure.Taking Company Q as a case study,on the basis of analyzing and summarizing the relevant theories on the construction and dismantling of the VIE structure,and sorting out relevant tax policies,this paper introduces the process of building and dismantling the VIE structure of Company Q,and focuses on the dismantling of the VIE structure of Company Q.The tax risks involved in several stages are discussed.This paper finds that,in the three stages of setting up a privatization transaction entity and raising funds,the withdrawal of overseas investors or share redemption,the release of agreement control,and the integration of the equity structure,there are three stages in which the debt financing expenditure cannot be fully deducted and indirect transfer.Equity is considered to have no reasonable business purpose,taxable income is difficult to confirm,tax payments in different regions cannot be deducted across regions,overseas companies are identified as controlled foreign companies,transfer pricing tax risks,WFOE tax reli ef conditions disappear and face compensation tax and many other tax issues.In view of the above-mentioned tax risks,this paper puts forward corresponding preventive measures for Company Q.It is recommended that Company Q reasonably design the reorganization structure,increase the commercial substance of the transaction arrangement,plan the transaction method in advance,do a good job in tax compliance review,and actively cooperate with the tax authorities to obtain Maximum tax benefits,etc.,in order to provide reference and reference for other Chinese concept stocks that are preparing to dismantle the VIE structure,and reduce the negative impact of tax issues on the return of Chinese concept stocks.