After paying the 3%, 6%, 9%, and 13% value-added tax, how can I avoid paying the 25% corporate income tax?
The high corporate income tax rate of 25% is the boss's heart disease. After paying the 3%, 6%, 9%, and 13% value-added tax, you also need to pay 25% corporate income tax and 20% dividend tax. In tax planning, sole proprietorship is a common type of enterprise that settles in the park, which has advantages in reducing the tax burden of enterprises. However, many people are unfamiliar with "individual proprietorship". After all, in our daily work and life, we often see "XXX limited liability company", but we have never seen "XXX individual proprietorship".
What is a sole proprietorship? A sole proprietorship is an enterprise that is funded and operated by an individual, is owned and controlled by an individual, and the individual bears operating risks and enjoys all operating income. It has the characteristics of flexible operation and preferential tax policies, and more and more Land is favored and registered by business owners. The name of a sole proprietorship usually ends with XX Center, XX Department, XX Studio, and the words "limited", "limited liability" or "company" must not be used in the name. For example, among the stars with higher personal income, many choose to set up individual studios to conduct tax planning to achieve the purpose of legal tax saving.
A sole proprietorship, as the investor’s personal production and operation income, is subject to the taxable items of "individual industrial and commercial households’ production and operation income" in the Individual Income Tax Law, and applies a five-tier excess progressive tax rate of 5% to 35% to calculate and collect personal income tax.
The total income of a sole proprietorship in each tax year after deducting costs, expenses, and losses is used as the investor’s personal income from production and operation, and is subject to the internal taxable items of "individual industrial and commercial households’ income from production and operation" in the Individual Income Tax Law. The five-level progressive tax rate of 5% to 35% is applied to calculate and collect personal income tax.
Tax advantages of sole proprietorships Sole proprietorships generally involve value-added tax, additional tax and personal income tax. The purpose of tax planning for sole proprietorship is generally to reduce the comprehensive tax rate. 1. The low value-added tax rate of sole proprietorship enterprises Generally speaking, sole proprietorship enterprises are small-scale taxpayers of value-added tax, and the value-added tax rate is 3%. 2. Individual income tax can be applied for verification and collection. In some local government parks, individual income tax can be applied for verification and collection. After the "taxable income rate" is verified, the production and operation tax items of individual income tax can be applied. Income tax payable = total income taxable income rate applicable tax rate-quick deduction
After paying the 3%, 6%, 9%, and 13% value-added tax, how can I avoid paying the 25% corporate income tax?
Set up a sole proprietorship enterprise based on business diversion. The enterprise does not pay corporate income tax, but only personal income tax. All the profits of the enterprise after paying the individual tax belong to the individual and do not need to pay dividend tax. After this method of planning, there is no need to pay another 20% tax when dividends are distributed. This reduces the large tax burden for enterprises. Enterprises change their business models, establish XX studios, XX offices, etc., and enjoy the following preferential policies:
Value-added tax (after the epidemic, the country's preferential policy for small-scale taxpayers can enjoy a 1% tax rate), and the individual will not pay corporate income tax
Personal income tax: 0.5%-2.1% (up to 2.1% for small scale)
The total tax burden does not exceed 5.18%
Case analysis (1)
Case analysis (two):
Assuming that an executive has an annual salary of 3 million yuan (monthly salary of 250,000), if it is salary income, we can see through a tax calculator that after deducting five insurances and one housing fund, he applies a tax rate of 45%. The monthly tax is 97,420 yuan, which is nearly 1.17 million in a year.
Assuming that a senior executive has established a personal studio, the annual billing amount is 3 million yuan, and the approved tax rate is 10%, then it needs to pay:
① Value-added tax (1% preferential policy during 2020): 300÷(1+3%)×3%=87,400
②Additional tax: 8.74×5%=0.437 million
③Individual income tax: 63,000
Total tax: 8.74+0.437+6.3=154,770
Comprehensive tax rate: 15.477÷300=5.16%
Through calculations, we found that when the salary income of executives is transformed into the income of a sole proprietorship, the sole proprietorship tax rate is only 5.16%, which is far less than 45% of the salary tax, and the total tax burden has also dropped by nearly 1 million!