As the business scale continues to expand, many companies plan to open several branches to expand their business areas after working as a main company for several years. At this time, the boss faced a huge problem, because there are two forms of setting up a branch, one is a branch and the other is a subsidiary. How to choose between a branch and a subsidiary under Zhisheng Finance and Taxation? What is the difference between them? This should be a question that all bosses need to know.
Subsidiaries and branches have these four different aspects
different tax methods . The branch must summarize corporate income tax for the head office. For example, the branch loses 5 million and the company makes a profit of 5 million, so the corporate income tax paid is zero. The subsidiary is independent accounting , and the self-profit
different legal responsibilities , and all legal responsibilities of the branch are The head office bears the responsibility of the subsidiary, and the only responsibility for the subsidiary is
The organizational structure is different . The branch only has the person in charge and no shareholders, but the subsidiary has independent shareholders
External loan . The branch cannot have independent loans, and the subsidiary can independently loan
The difference between the subsidiary and the branch
So is it better to choose a branch or a subsidiary? How to choose to open a subsidiary in
?
If a subsidiary is in terms of kinship, it is like your son who starts a family and starts a business. He has an independent portal and has to bear legal responsibilities. The subsidiary has independent legal person status, so you have to pay taxes by yourself and enjoy some tax benefits. If we have an upstream and downstream relationship, then open a subsidiary.
How to choose to open a branch?
If the subsidiary is in terms of kinship, it is like an unadulterated child. You are the guardian. If something happens to your account, you have to be responsible. If you are a peer, it will definitely be a branch
Assuming that Company A is a clothing company that has been in operation for many years, and plans to open new stores in surrounding cities in 2023, and tentatively open ten. Since they are all newly established, the profits of each of these branches will not exceed one million.
If it is a branch:
The branch summarizes the taxes when calculating taxes, and the profit after summation is 1 million × 10 = 10 million. In this way, the total profit seems to be a lot, exceeding the standards of small and micro enterprises, and cannot enjoy tax incentives. Taxes need to be paid at 25%, which is about 2.5 million.
If you open a subsidiary:
Subsidiaries are separately registered for taxes, so each subsidiary meets the standards for small and micro enterprises in terms of number of personnel and income. Taxes are collected according to five percent. After calculation, the ten subsidiaries are about 500,000, and tax savings are nearly 2 million.
