The separation of enterprises includes the separation of part or whole business from the separated enterprises to two or more than two existing or newly established enterprises (hereinafter referred to as discrete enterprises), in exchange for their shareholders' equity or other property of separate enterprises.

The business of separate businesses shall be dealt with according to the following methods: income tax: (1) the separated enterprises shall be deemed to pfer part or all of their assets at fair value, calculate the assets of the separated enterprises, and determine the cost according to the assessed value at the time of tax assessment.

(two) the exchange price paid by a separate enterprise to a separate enterprise or its shareholders shall not be higher than the amount of non equity payments other than the shares of a separate enterprise, which is not higher than the value of the par value of the shares paid (or the book value of the equity paid). After the verification and confirmation by the tax authorities, the parties to a business separation may also choose the following provisions to deal with the income tax of separate businesses: 1, the separated enterprises can not recognize the proceeds or losses of the pfer of the separate assets, and do not calculate the income tax. 1.

2, the tax matters that have been separated assets of the separated enterprises are inherited by the separate enterprises accepting the assets.

The amount of loss that a company has not exceeded the statutory compensation period can be allocated according to the proportion of the total assets of the discrete assets, and will be made up by the discrete enterprises receiving separate assets.

3, the cost of accepting all assets and liabilities of a separate enterprise shall be determined by the carrying value of the separated enterprise's book net value, and the value of the assessed value must not be adjusted.

The audit authority of the taxation department is: 1. The enterprises involved in the separate business of the enterprise are examined and confirmed by the local tax department after the application is made by the enterprises in the same district. 2, the business of separate businesses involves enterprises not in the same district and county. In order to facilitate the convergence of the tax matters of enterprises, the application is made by the enterprises. The local tax authorities verify them and report them to the Municipal Council for verification. 3, the separation of municipal enterprises, whether they are in the same district or county, must be submitted by the enterprises. After verification by the local tax authorities, they are submitted to the Municipal Council for verification and confirmation. 4, the enterprises involved in the separate businesses of enterprises are not in the same province (autonomous region or municipality directly under the central government), they must be reported to the State Administration of Taxation for examination and confirmation.

When a company has separate business and requires tax department auditing, it should provide the tax department with the following information: 1.

2, a legally binding agreement or contract approved by separate parties.

3, the implementation plan of separate enterprises.

4, provide financial reports or certificates of assets assessment and tax matters audited by certified public accountants and registered tax agents.

5, separate financial statements for the last year.

6, enterprises with competent departments provide relevant information of the competent departments.

7, other information required by the tax department.

(three) the share of a separate enterprise acquired by a shareholder of a separate enterprise (hereinafter referred to as "new shares"), if partial or total abandonment of the shareholding of the original owned enterprise (hereinafter referred to as "old stock") is required, the cost of the "new share" shall be determined on the basis of the cost of the abandoned old stock.

If there is no need to give up the "old stock", the cost of the "new shares" can be chosen from the following two ways: to directly determine the total investment cost of the new shares to zero; or to divide the net assets separated by the separated enterprises into the proportion of the total net assets of the separated enterprises, and to reduce the cost of the old shares held first, and then allocate the adjusted investment cost to the "new shares" equally.

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