Feng Tai Gave Up A Bright Report Card, Shoe Maker, And Let Go.

Fengtai enterprise, a shoe maker, held a shareholder meeting in June 16th. Last year, Fengtai gave up a bright pcript. The net profit was high. The shareholders were happy and the legal person was praised. However, the chairman Wang Qiuxiong was not happy. Before the meeting, he made a rare 20 minute conversation, which showed that last year, the Fujian provincial taxation bureau investigated Fengtai's "pfer pricing", asking it to pay VAT and interest about RMB 223 million yuan.

In 2016, Fengtai had a surplus of 6.67 yuan per share after tax. Although it had taken pride in its peers, however, the EPS was reduced by 0.87 yuan, which was only 5.2% higher than that of the previous year. The EPS will reach 7.54 yuan if the tax is not paid, and it will grow by 18.9% compared with the previous year. It will be the best pcript for the management team to give the shareholders the best.

It is understood that even if Fengtai put forward a plea for nearly half a year, the two sides still have no overlap in the question of sovereignty. Wang believes that Fengtai's business in China has always been clear and unevaded.

"So called"

It means "the person who orders the bill", which is the biggest controversy about pfer pricing.

Fujian provincial taxation bureau believes that Fengtai's main shoemaking business in Fujian, but through the Growth-Link Overseas, which is set up in the Bermuda subsidiary, orders to Fujian subsidiary and Mitutoyo. It advocates that the main body of the shoemaking should be in mainland China, the order should be in Fujian, China, and then the mainland subsidiary will pay the technical service fee to Taiwan headquarters and administrative support to Growth-Link Overseas, so the tax and interest will be traced back to the past 10 years.

However, Fengtai believes that the Taiwan headquarters is responsible for the actual orders and design and development. It advocates that the Growth-Link Overseas should be placed on the list, and the cost of technical services will be allocated to Taiwan. The manufacturing costs will be allocated to the mainland without controversy.

In the early years, Taiwanese businessmen had to invest in the mainland through third places. Many listed companies set up companies in duty-free paradise, and then invested in mainland China. Growth-Link Overseas, a subsidiary of Fengtai, was born like this. Triangular trade has long been used among Taiwanese businessmen.

It is understood that the tax inspection is very meticulous. The elite in Beijing's tax authorities have also dispatched together with the "small tax guards" of the Fujian provincial taxation bureau. Through the data exchange, they obtained the information of customer pactions of Fengtai and examined them one by one to see if they were evading taxes.

At the shareholders' meeting, Wang Qiuxiong pointed out that if the mainland tax unit could not understand and could not reach a consensus on the determination of sovereignty, he thought, "he can pay the class (tax), but I will withdraw immediately."

It means that it is difficult to yield to the question of "who to order".

The reason why Wang Qiuxiong insisted so much is that the determination of sovereignty will affect Fengtai's profits.

For example, the Growth-Link Overseas in Bermuda received an order of $1 million, and then paid $900 thousand to Mitutoyo shoes in Fujian. In China, it only needs $900 thousand to levy VAT.

If so

The request of the provincial taxation bureau is that 1 million US dollars are in China. Fengtai will calculate 2% vat with us $1 million, and the amount of tax remitted abroad will be 10% and the tax will increase by 66%.

To put it bluntly, the tax break is the portrayal of cross-strait economic seesaw.

In the past, when China needed Taiwan enterprises, it was willing to pay taxes and land incentives in a big way. Now it is no longer the same. China wants to attract more value-added industries, get rid of the name of the world factory and choose to use higher tax standards to view manufacturing.

Not only China, but also Southeast Asian countries, including Vietnam and Indonesia, are learning very fast. They have used "pfer pricing" to deal with foreign capital, and have settled the fact that foreign companies have nowhere else to run.

This time, the outcome of the two sides' struggle will be the direction of China's attitude towards foreign businessmen. If China adopts a strong attitude, foreign investors who will invest in China will face a more severe tax storm.

For more information, please pay attention to the world clothing shoes and hats and Internet cafes.