Low input tax for construction companies? Heavy tax burden? The annual tax collection is 3 million yuan and tax savings are over 80%.
The construction industry refers to the material production sector in the national economy that is engaged in the survey, design, and construction of construction and installation projects and the maintenance of original buildings.
From a tax perspective, construction services are mainly divided into: decoration services, repair services, engineering services, and other construction services. Relying on the auxiliary categories born in the construction industry, there are also machinery and equipment leasing, labor dispatch, decoration, logistics and transportation, manufacturing, design planning, marketing, etc.
From the beginning of the VAT reform, the construction service industry has become the foundation of the country's infrastructure, and the country has also introduced many industry preferential policies. However, more complete tax management and compliance requirements follow:
For example, in the past when purchasing raw materials, in order to save costs, they chose not to issue invoices. Construction companies received more favorable prices. Materials vendors also avoided paying taxes. However, with the completion of the third phase of the Golden Tax project, the cost control of construction companies became more and more stringent. , If the corresponding materials are used, the corresponding purchase invoices must be matched, and the unreasonable proportion of the cost will also bring about tax audits.
It is difficult to obtain input invoices. In the construction industry, there are more small-scale operators who have insufficient understanding of tax compliance and cannot obtain the business scale of general taxpayers. As a result, large-scale construction parties cannot obtain input invoice deductions, resulting in inflated profits .
It is no longer feasible to conceal income due to high profits in the industry. Profit is equal to income minus costs. Most of the corresponding costs and expenses must be deducted by obtaining invoices. It is no longer feasible to purchase invoices with high risks. .
Judging from these pain points, most of them are actually due to invoice problems. Outsourcers are unwilling to provide invoices because they want to save tax costs. How to solve this problem?
We can start from the root of the problem, help outsourcers operate in compliance, recommend the other party to enjoy national policies, and achieve reasonable and legal tax reductions.
For example, for machinery and equipment leasing parties, they can be advised to establish a sole proprietorship, which not only can enjoy full corporate income tax deduction, but also can enjoy the preferential policy of 0.5-2.1% personal income tax if they meet the approved conditions. Business parties are willing to provide invoices with reduced tax burdens, and construction companies will also receive real business deductions, which improves the tax compliance of both parties.
Case analysis:
An architectural design company in Shanghai has an annual turnover of 9 million yuan excluding tax. Housing, labor costs and various expenses totaling 2 million yuan can obtain invoices or other valid vouchers. Part of the cost and expense invoices cannot be obtained. Will face high taxes. We recommend that companies split their business into two small-scale sole proprietorships
Original enterprise tax:
Value-added tax: 900*6%=540,000
Additional tax: 54*12%=64,800
Corporate income tax: (900-200)*25%=1.75 million
Personal income tax: (900-200-175)*20%=1.05 million
The total tax payment is about 3.4048 million
Now, with business diversion, a sole proprietorship is established to enjoy the approved and levied preferential policies for reasonable tax saving:
Value-added tax (temporary value-added tax 1% in 2020): 450*1%=45 thousand
Additional tax: 4.5*12%=0.54 million
Corporate income tax: 0
Personal income tax: 94,500
The total tax payment is about 144,900
If compared with a limited company with the same business volume before, the tax saving is about 3 million yuan, and the tax saving ratio is as high as 80%.
Companies can choose to set up one or more individual proprietorships in the park, such as a studio, a service center, a consulting center, etc., and use business splitting or divestiture to reorganize a certain part of the business and taxation in the park Enjoy the approved expropriation policy within.
Companies can also choose to register a sole proprietorship in the Shanghai Park to apply for the assessment and collection. We can register a sole proprietorship related to the sales company’s business in the park, and use the XX business department, XX purchasing center, etc. to correspond to the business operations. The tax paid at the place of registration enjoys the low tax rate approved and levied. The same single enterprise needs to achieve fiscal and tax compliance, "three streams in one", and the business is true and reasonable.
The individual tax of the commerce industry is levied 0.25%~1.75% (both small-scale taxpayers & general taxpayers can be approved)