Under the modern enterprise system, there are mainly two types of enterprises: partnership enterprises and companies, with companies being the mainstream. Company shareholders establish legal relationships with the target company through equity, and enjoy shareholder rights such as participation, voting, information, and dividend rights based on equity. By exercising shareholder rights to control or participate in company operations, they can achieve their expected business objectives. At present, there are three main ways in which founders hold equity in the target company: natural person shareholding, company shareholding, and partnership shareholding. Against the backdrop of the increasingly standardized management of business tax reform and tax collection, income tax matters are becoming increasingly important. As for shareholders, under different shareholding methods, the same equity but different tax costs result in different investment equity realized. At present, many company shareholders are not yet fully aware of the importance of investment income tax issues and the differences in income tax burden under different shareholding methods, let alone forward-looking optimization of tax burden costs through optimizing shareholding methods. The two core investment returns of the company's shareholders against the target company are dividend income and equity transfer income. This article sorts out the differences in founder income tax policies under three different shareholding methods of natural persons, companies, and partnership enterprises regarding the core investment returns of the above-mentioned company shareholders, for reference.

（一）Dividend income

According to Article 1 of the Enterprise Income Tax Law of China, enterprises and other income earning organizations within the territory of the China are taxpayers of enterprise income tax and shall pay enterprise income tax in accordance with the provisions of this Law, except for individual proprietorship enterprises and partnerships. Article 26 of the Enterprise Income Tax Law stipulates that equity investment income such as dividends and bonuses between eligible resident enterprises shall be tax-free income. Resident enterprises refer to enterprises established in accordance with the law within the territory of China or established in accordance with the laws of foreign countries (regions) but with actual management institutions within the territory of China. Therefore, the equity investment income such as dividends and bonuses received by eligible resident enterprises from eligible resident enterprises is tax-free income, and the holding company is not required to pay corporate income tax, that is, there will be no actual income tax burden cost incurred.

（二）Income from equity transfer

According to the Enterprise Income Tax Law of China, the income from equity transfer obtained by a holding company from transferring the equity of the target company is taxable income and is subject to enterprise income tax. In terms of applicable tax rates, Article 4 of the Enterprise Income Tax Law stipulates that the tax rate for enterprise income tax is 25%; The applicable tax rate for taxable income obtained by non resident enterprises is 20%. Except for special circumstances, such as high-tech enterprises applying a 15% corporate income tax rate. Therefore, when the founder transfers the equity of the target company through their holding company, in principle, a 25% corporate income tax rate should be applied and corporate income tax should be paid.

In terms of tax payment time, Chinese companies implement an annual income tax settlement and payment system. Article 53 of the Enterprise Income Tax Law stipulates that enterprise income tax shall be calculated based on the tax year; The tax year starts from January 1st to December 31st of the Gregorian calendar; If an enterprise starts business or terminates its business activities in the middle of a tax year, resulting in an actual operating period of less than twelve months, the actual operating period shall be considered as one tax year. According to Article 2 of the "Measures for the Administration of Final Settlement and Payment of Enterprise Income Tax" (Guo Shui Fa [2009] No. 79), the final settlement and payment of enterprise income tax refers to the taxpayer's self calculation of the taxable income and payable income tax for the current tax year within 5 months from the end of the tax year or within 60 days from the date of actual business termination, in accordance with tax laws, regulations, rules and other relevant provisions of enterprise income tax, According to the amount of enterprise income tax prepaid monthly or quarterly, determine the amount of tax to be supplemented or refunded in the tax year, fill in the annual enterprise income tax return, handle the annual enterprise income tax return with the competent tax authority, provide relevant information required by the tax authority, and settle the annual enterprise income tax. Therefore, from the perspective of tax payment time, the investment income obtained from the transfer of equity in the target company by the founder's shareholding company is subject to annual settlement and payment, rather than being paid when the equity transfer income is obtained.

In summary, when the founder holds the equity of the target company through a holding company, the dividend of the target company belongs to the tax exemption category, and the holding company does not need to pay corporate income tax; In principle, 25% corporate income tax is applicable to the income from the transfer of equity of the target company by the holding company. Of course, if the holding company continues to distribute dividends to its natural person shareholders, its natural person shareholders need to pay 20% of Personal income tax in accordance with the provisions of the Personal income tax law. It should be pointed out that the company implements a final settlement and payment system. In the case of profit or loss in the holding company, the taxable income when the holding company pays corporate income tax and the income distributed by the holding company from the target company are two different concepts, and the amount may not be equal. For example, the investment income obtained from the transfer of the target company's equity by the holding company is 10 million, and the other operating losses of the holding company are 10 million. The taxable income of the income tax at the annual settlement and payment of the holding company is zero, and the actual income tax payment of the enterprise is also zero.