Tax payment is the legal obligation of enterprises. However, as an important part of operating costs, tax burden also affects enterprise operation and investor income to a certain extent. In the 1930s, Sir Tom Tomlin, a British MP, observed in Commissioner of Taxes v Lord Winston: "Every man has the right to arrange his own business. You can't force him to pay more tax if there are certain arrangements under the law that allow him to pay less tax." The above viewpoint has been recognized by the legal circle and has become the key case of establishing the history of tax planning. Foreign tax planning started earlier, but our tax planning started later. At present, China's tax law system is becoming more and more perfect, and tax collection and management are becoming more and more strict, especially for enterprises. In the daily operation of enterprises, the tax burden cost penetrates into every field and link of the business activities of enterprises, and becomes an important factor affecting the management decision of enterprises. The Enterprise Income Tax Law of the People's Republic of China, which came into effect on January 1, 2008, unified the income tax system of domestic and foreign-funded enterprises, and fundamentally reshaped the tax subjects, tax rates, tax incentives and other aspects. At this stage, more and more enterprises begin to pay attention to tax planning, reduce tax burden costs through legal means, and invest more resources in enterprise development. What kind of corporate structure a company adopts is a business issue and a legal issue, as well as a tax issue. Different enterprise structure, the business tax burden is very different. This paper will discuss the issue of income tax planning in the corporate structure for managers' reference.

Enterprise structure refers to the relationship between the types of business entities and their composition. In the practice of enterprise management, there are single-subject enterprise structure and multi-company enterprise structure. In industries that do not involve special business qualifications, multi-company enterprise architecture is a mainstream enterprise architecture that realizes independent assessment of business projects in management, increases business flexibility in operation, and legally isolates business risks. In multi-company enterprise architecture, the first concern is the type of enterprise of each business entity. As far as the types of enterprises are concerned, there are mainly three kinds in the business practice: sole proprietorship, partnership and company. A sole proprietorship enterprise is an enterprise established by an investor in accordance with the Sole proprietorship Enterprise Law, and the investor shall bear unlimited joint and several liability for the debts of the enterprise. A partnership is an enterprise in which all partners jointly invest, operate, share benefits and share risks in accordance with the Partnership Enterprise Law, and all partners bear unlimited joint and several liability for the debts of the enterprise, except for special partnerships. A company is an enterprise which is jointly funded and established by all shareholders in accordance with the Company Law, shares the income, and bears the risk of the company's debts according to the subscription amount. Legally speaking, the sole proprietor shall be jointly and severally liable for the debts of the sole proprietorship. The partners of the partnership shall be jointly and severally liable for the debts of the partnership, except for the special partnership; The shareholders of a company shall bear limited liability for the debts of the company to the extent of the amount of capital contributed. From the perspective of income tax, the company is the subject of tax payment within the scope of China's Enterprise Income Tax Law, and 25% enterprise income tax is applicable in principle, except for non-resident enterprises, high-tech enterprises, small and micro enterprises and other special cases; The sole proprietorship and partnership are not the subject of tax payment within the scope of the Enterprise Income Tax Law, and no enterprise income tax is levied. The sole proprietorship is the taxpayer of its investment, and the partnership is the taxpayer of its partner. At the same time, China's Individual Income Tax Law stipulates that an individual's income from the operation of a sole proprietorship enterprise or a partnership enterprise is subject to a progressive tax rate of 3% to 35%. Income from interest, dividends and bonuses, income from lease of property, income from transfer of property and incidental income obtained by individuals from the operation of a company shall be subject to a proportional tax rate of 20%. According to the relevant provisions of the Enterprise Income Tax Law, dividends, bonuses and other equity investment income between qualified resident enterprises shall be tax-free income, and enterprise income tax shall not be levied. Therefore, in the multi-company enterprise architecture, the type of enterprise form adopted by each business entity has different tax burden costs. Among them, the corporate income tax rate is 25% in principle; Sole proprietorships and partnerships are exempt from corporate income tax. At the same time, the tax cost of the income obtained by each investor from different types of business entities is also different. Among them, the dividend, bonus and equity transfer income obtained by the company's shareholders from the enterprise shall be subject to a 20% proportional tax rate; Dividends, bonuses and other business income obtained by investors from sole proprietorships and partnerships are subject to a progressive tax rate of 5%-35%.

In addition to the type of enterprise of each business entity, whether the enterprise adopts the parent-subsidiary enterprise structure or the overall company structure will also affect the tax burden cost of the enterprise. The branch company structure can share enterprise qualifications, but the branch company can not isolate business risks well, and it is difficult to flexibly break the arm to survive in the case of operating risks in individual business projects. However, as far as income tax costs are concerned, the corporate structure of the head office company can realize the aggregate calculation and payment of corporate income tax between the head office and the branch company, while the parent-subsidiary company structure can not. Enterprise Income tax Article 50, paragraph 2, where a resident enterprise establishes a business institution within the territory of China that does not have the status of a legal person, it shall make a summary calculation and pay the enterprise income tax. That is, the enterprise Income Tax law shall pay the enterprise income tax for the main body of the taxpayer, and the branches established by the enterprise shall be aggregated to the head office for unified calculation and payment, while the subsidiaries established as independent legal persons shall pay taxes separately. According to this provision, in the case of a loss-making branch and a profitable head office, the group company can offset the loss of the branch with the profit of the head office to reduce the income tax burden of the group. Especially for projects with large investment in fixed assets in the early stage, the income tax burden at the level of the whole group can be well coordinated in the form of the enterprise structure of the branch company. Under the parent-subsidiary corporate structure, both the parent company and the subsidiary are independent corporate legal persons and are tax subjects within the meaning of our income tax law. The parent company and its subsidiaries shall independently account for and pay income tax on their respective operating profits or losses. In terms of income tax planning, the enterprise structure of the parent-subsidiary company also has certain advantages. For example, when the tax rebate support policies in different regions are different, the group can carry out business and income tax planning with reasonable commercial purposes at the group level through the parent-subsidiary company structure, and enjoy the specific tax rebate policies in specific regions through the reasonable distribution of income within the group.

It should be emphasized that: in terms of enterprise structure, whether it is a company, a partnership and a sole proprietorship, or a total enterprise structure and a parent-subsidiary enterprise structure, there are advantages and disadvantages in tax burden, and no advantages and disadvantages can be applied metaphysically. Tax burden cost and tax planning are important factors to determine the enterprise structure, but the design of enterprise structure needs to be designed from many aspects such as operation, management, law and tax. Enterprise architecture design should be legal, in line with the premise of business purposes, based on normal business purposes through legal tax planning to reduce the cost of corporate tax burden. In practice, a variety of enterprise types are usually flexibly used according to business purposes, laws, tax burdens and other factors, and the enterprise structure of the total score and the parent-subsidiary structure are mixed. In the case of cross-border trade, enterprises should also consider the issue of foreign exchange control. In practice, enterprises can set up a dual dumbbell enterprise structure, set up corresponding parent companies in China and overseas respectively, and flow funds independently to meet the needs of enterprise operation. In short, the enterprise structure is a business issue, a legal issue, but also a tax issue, to multi-dimensional, comprehensive perspective assessment, construction. However, no matter what kind of enterprise is set up, the enterprise must carry out tax planning when building the enterprise structure. On the premise of being familiar with the enterprise operation, the enterprise development needs to make legal and suitable planning, rather than paying less tax but affecting the normal operation and development of the enterprise, let alone breaking the boundary to carry out tax planning without reasonable commercial purposes. China's Enterprise Income Tax Law stipulates that if an enterprise reduces its taxable income or income by implementing other arrangements that do not have reasonable commercial purposes, the tax authorities have the right to make adjustments in accordance with reasonable methods.