China Company Taxation Services
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As the China's regulations for the company related law , it is more easily and conveinent for China Corporate Restructuring .Entering the capital market through corporate control of a publicly listed firm provides a plausible channel for private firms to raise funds externally. To acquire a publicly listed company in China is often motivated by buying the "shell" of the target, instead of operation synergy. When the largest shareholder of a publicly listed firm passes his shares on to a new owner, the newly acquired firm tends to engage in large-scale corporate restructuring.
requirements and materials for domestic internal restructuring.
1.The equity or assets are transferred, at net book value, between resident enterprises with 100% direct control relationship, or between resident enterprises which are under 100% direct control of the 2.identical resident enterprise or identical group of resident enterprises.
3.The transfer has reasonable commercial objective and its main objective is not for reduction, waiver, of deferral of taxes
4.The original business activities of the transferred equity or assets remain unchanged within the 12 consecutive months after restructuring.
5.No accounting gain or loss has been recognized by the transferor and transferee.
assets or equity transfer gain or loss should be recognized upon occurrence of corporate restructuring transaction
* The restructuring has reasonable commercial objective and its main objective is not to reduce, waive or defer taxes
* The ratio of the purchased equity to the total equity of the acquired enterprise (or the acquired assets to the total assets of the transferor in the case of asset deal) has to be at least 75%.
* The original business activities of the assets involved remain unchanged over the 12 consecutive months after restructuring.
* A minimum of 85% of the total consideration is settled by equity.
* The original major shareholder does not transfer the equity received within the next 12 consecutive months after restructuring.
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