Local tax incentives to revoke the impact of state - owned enterprises

Postdate: 2016-11-08

Beijing Beichen (588) reported an operating profit of 11.8% in the first half of this year, but net profit fell 10.4%. This year, the State Council demanded that the local government cancel the 15% tax rebate for listed companies. % Profits Tax, which is 18% more tax than before.

Although the policy is not only for state-owned enterprises, but the rise of securities analyst Hu Choi Ping that under this policy, the impact of state-owned enterprises is the largest, because in addition to income tax, state-owned enterprises still have to pay taxes and social responsibility, the amount Add up, often more than half of the profits. However, Anhui Conch (914), which also had to pay 33% income tax, still posted a 45% increase in net profit in the first quarter and a 44% increase in turnover.

(576), Beijing Beichen, Shandong Xinhua Pharmaceutical (719), Shenyang Public (747), Jiangsu Expressway (868), Nanjing Expressway, Shanghai Expressway, , Guangzhou Pharmaceutical (874), Anhui Conch and Anhui Wan Tong (995). Among them, Shandong Xinhua Pharmaceutical has been recognized as a high-tech enterprise by the local taxation bureau, and the income tax rate for this year is 15%.

Hu Cai-ping estimates that China strictly enforces its tax policy, in addition to increasing its revenue, it hopes to rectify some backward or inefficient state-owned enterprises.

Of the nine SOEs listed in Hong Kong, nine are directly affected, but many have different tax rates for parent companies and subsidiaries, or there is no income tax rate listed in the annual report. Therefore, it is not easy to know exactly how much profit is affected. Certainly the highway section is the most affected.

Duddy Wang, senior manager of Grant Thornton, pointed out that not only state-owned enterprises are affected, because the regulations are not only for state-owned enterprises, but all joint ventures or foreign investors. He estimated that many companies set up factories in the mainland earnings will also be affected to a certain extent.

Guangdong high-domain accounting firm partner Zou Haiyan said that from the industry point of view, affected by the policy of the major roads, chemical fiber, chemical, real estate, clothing, nonferrous metallurgy, paper and other traditional industries, the listed companies of these industries technology content relatively low.

At present, the listed companies of electronic information, biomedicine and agriculture enjoy the preferential policies of other income tax. The public utilities, including energy, transportation, ports and terminals, enjoy the preferential policies and the impact will not be too great.

However, some multinational accounting firms hold the opposite view, that this policy has limited impact on listed companies, that the behavior of the first return after the original is not legitimate, but (33% profit tax rate) has not been implemented.

However, in order to attract more investment, local governments may use other means to encourage enterprises, such as changing their views to subsidize enterprises, or granting cheaper land, even if taxpayers are withdrawn.

There are still many exceptions to the new cases, of which there is a strong relationship with Hong Kong listed companies, including those located in the designated economic development zones of the State Council. Was designated as high technology. Waste utilization and designated agricultural enterprises, as well as the nine first batch of listed H-share companies, will continue to receive concessions.

As a result, enterprises can be "relocated" to the Economic Development Zone. For those enterprises that can not be relocated, they can purchase high-tech companies and then inject some of their business into technology companies to reduce the impact of the policy. At present, many highway companies are investing in one or more high-tech companies.

In addition, in the past, the local government received 33% of the tax rate, half of which was to be paid to the state and the other half was owned by the local government (the proportion of different regions). Therefore, the local government can only return 3%. Much smaller. (Extract from Hong Kong China Resources Group "China Resources Network")