I. Policy Overview
One or more individual investors acquire 100% of the equity of the acquired enterprise by way of equity acquisition, and before the equity acquisition, the surplus accumulation of "capital reserve, surplus reserve, undistributed profits" and other surplus in the original book amount of the acquired enterprise has not been converted into share capital, and it is included in the equity transfer price and the income tax obligation is fulfilled at the time of the equity transaction. After the equity acquisition, the enterprise will transfer the surplus accumulated in the original book amount to individual investors (new shareholders, the same below) to increase the share capital (Note 1), and the individual income tax issues will be dealt with separately.
a. The new shareholder acquires 100% of the equity from the original shareholder/transfers 100% of the equity of the original shareholder
b. The accumulation of earnings before the equity acquisition has not been converted into share capital
c. The accumulation of earnings is included in the equity transfer price
d. The original shareholders have paid individual income tax on equity transfer
e. The acquired enterprise will accumulate the surplus in the original book amount and transfer the share capital to the new shareholders
According to the regulations, strengthen the management of the conversion of enterprises into registered capital and share capital, and if the undistributed profits, surplus reserves and other capital reserves other than the issuance of stock premiums are converted into registered capital and share capital, individual income tax shall be levied according to the "income from interest, dividends and bonuses".
Note 1 According to the provisions of the 、、、, the income from the premium issuance of shares of joint-stock enterprises forms capital reserve, and the conversion of capital reserve into share capital does not belong to the distribution of dividends and bonuses, and is not subject to individual income tax. If the capital reserve is converted into registered capital and share capital except for the premium issuance of shares, individual income tax shall be levied according to the tax item of "income from interest, dividends and bonuses".
2. Two situations
If the new shareholder acquires the equity at a price not lower than the net asset price, the original earnings accumulation of the enterprise has been fully included in the equity transaction price, and the part of the new shareholder that has accumulated surplus and converted into share capital shall not be subject to individual income tax.
If the new shareholder acquires equity at a price lower than the net asset price, the difference between the equity purchase price and the original share capital has been included in the equity transaction price, and the part of the new shareholder that has accumulated surplus and converted into share capital shall not be subject to individual income tax;
The new shareholder shall increase the share capital after acquiring the equity of the enterprise at a price lower than the net asset price, i.e., first increase the taxable surplus accumulation, and then increase the tax-exempt surplus accumulation.
Folk Understanding:
1. Comparison of the purchase price with net assets
Purchase price> net assets – no personal income tax is levied
The purchase price < net assets – proceed to step 2
Tips: In this case, the accumulation of earnings remains in the company as net assets and is reflected in the equity transfer price, and the original equity transferor has borne the taxes.
2. Comparison of the income from equity transfer (equity purchase price - original share capital) with the accumulation of surplus
Accumulation of surplus > from transfer - no individual income tax is levied on the conversion of share capital after acquisition
Transfer income < surplus accumulation - the difference between the surplus accumulation and the transfer income has not been taxed before the acquisition, and the converted share capital after the acquisition shall be subject to individual income tax according to the item of "interest, dividends and bonus income".
3. Transfer of equity by new shareholders
When the new shareholder transfers the equity held by the new shareholder, the original value of its property is the consideration actually paid by the new shareholder for the acquisition of the equity of the enterprise and the relevant taxes and fees.
Fourth, the provisions on collection and management
After the occurrence of equity transactions and the conversion of share capital, the enterprise shall, within 15 days of the following month, report to the in-charge tax authorities the changes in shareholders and their equity, the amount of surplus accumulation recorded in the original books before the equity transaction, the amount of converted share capital and the withholding tax.
5. Small examples
Example 1 The owner's equity of enterprise A is 50 million yuan, of which the paid-in capital is 10 million yuan and the total surplus accumulation is 40 million yuan. Wang purchased 100% of the equity from the original shareholders of Company A for 42 million yuan. After the acquisition, Company A transferred the surplus accumulation to Wang to increase its share capital. Is there any individual income tax involved?
Analysis: In Wang's 42 million yuan equity purchase price, in addition to the paid-in capital of 10 million yuan, it is actually equivalent to the purchase of 40 million yuan of surplus accumulation of the original shareholder with 32 million yuan, and 8 million yuan is not included in the equity transaction price. Therefore, 32 million yuan is not subject to individual income tax, and 8 million yuan is subject to individual income tax according to the item of "interest, dividends and bonus income".
Example 2 The owner's equity of enterprise A is 50 million yuan, of which the paid-in capital is 10 million yuan and the surplus accumulation is 40 million yuan. Suppose that Wang purchased 100% of the equity of enterprise A from the original shareholders of enterprise A at a price of 53 million yuan, and then decided to convert all the surplus accumulation into paid-in capital, and transferred the equity at a total price of 60 million yuan the following year. Excluding other taxes and fees, how much individual income tax should be paid by the original shareholder and Wang?
Analysis:
1. Conversion of surplus accumulation to share capital of the acquired enterprise: The purchase price > the net assets of the acquired enterprise, and the original surplus of the enterprise has accumulated 40 million yuan, which has been fully included in the equity transaction price of 53 million yuan, so no individual income tax is levied.
2. The new shareholder Wang transferred the equity of enterprise A: (6000-5300) ×0.2=1.4 million yuan
Policy basis: Announcement of the State Administration of Taxation on Individual Income Tax Issues Concerning the Conversion of the Original Surplus Accumulation into Share Capital after Individual Investors Acquire the Equity of Enterprises (Announcement No. 23 [2013] of the State Administration of Taxation)
Example 3 The total original book assets of the enterprise are 30 million yuan, the liabilities are 12 million yuan, and the owner's equity is 18 million yuan, of which the paid-in capital (share capital) is 10.8 million yuan, and the surplus accumulation of capital reserve, surplus reserve, and undistributed profits is 7.2 million yuan. Zhang San purchased 100% of the equity of the company from the original shareholders of enterprise A at the beginning of 2023, with an equity purchase price of 16.8 million yuan. Calculate the individual income tax levied on the basis of dividends and dividends for this business.
Analysis: The purchase price is 16.8 million yuan, which is lower than the net assets of 18 million yuan, and whether to levy individual income tax needs to continue to be judged:
Income from transfer = equity purchase price - original share capital = 1680-1080 = 6 million yuan, less than the accumulation of surplus 7.2 million yuan;
Of the surplus accumulation of 7.2 million yuan, 6 million yuan was included in the equity transaction price and taxed, and the remaining 1.2 million yuan was not included in the equity transaction price, so the 1.2 million yuan should be subject to individual income tax according to the item of "interest, dividends and bonus income". Individual income tax payable = 120×20% = 24 (10,000 yuan).
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