What Are Nonmonetary Assets?

^[1] Non-monetary assets refer to assets other than monetary assets, including inventory, fixed assets, intangible assets, equity investments, and bond investments that are not intended to be held to maturity. The most basic feature of non-monetary assets that is different from monetary assets is that it will bring economic benefits to the enterprise in the future, that is, the amount of money is not fixed or uncertain.

Non-monetary assets

From the perspective of economic history, there are three types of non-monetary assets in human economic history:

Non-monetary assets under primitive society or natural conditions;

Non-monetary assets in the context of an underdeveloped market economy;

It is a non-monetary asset under a highly planned economy. ^[1]

Distribution of China's non-monetary assets:

There are several components in China's non-monetary assets:

1. Various types of state-owned enterprises, institutions, institutions, and military units and departments that have gradually formed since the founding of the People's Republic of China

Non-monetary assets

Since the reform and opening up, China's active investment has driven the rapid development of the entire national economy and has achieved world-renowned achievements. However, in the investment process, the loss of state taxes is more serious, especially when investors invest in non-monetary assets. There are many reasons for this loss of taxes, but one of the most important reasons is that investors or related personnel do not have a systematic understanding of the tax regulations involved in investments.

Basic principles of non-monetary assets

Investors investing in non-monetary assets (including the purchase of shares from joint-stock companies by corporate shareholders of joint-stock companies with some non-monetary assets of their operating activities) should be broken down into sales at fair value when investment transactions occur Non-monetary assets and investment are taxed, and related taxes (such as turnover tax, income tax, other taxes, etc.) are calculated and paid in accordance with regulations. The above-mentioned non-monetary assets accepted by the invested enterprise can be determined by the taxable value or the value confirmed by evaluation.

Monetary assets refer to cash held and assets that will be collected in a fixed or determinable amount of currency, including cash, bank deposits, other monetary funds, bills receivable, and accounts receivable. Non-monetary assets refer to assets other than monetary assets. For the convenience of description, this article is specifically divided into inventory, machinery and equipment, real estate, and intangible assets. All units and individuals who have the right to invest can invest abroad and become investors. They can be divided into enterprises, individuals and other units that have the right to invest. Different investors, different assets invested by the same investor, the taxes involved in investing may be different. The following is a description of each type of non-monetary assets.

Non-monetary assets

Investors investing in inventories means that the investor invests in self-produced, commissioned or purchased goods (including raw materials, commodities, finished products, semi-finished products, etc.). The relevant taxes involved are as follows:

1. Involved turnover tax

Article 4 of the Implementing Rules and Regulations of the Provisional Regulations on Value-added Tax stipulates that "providing as an investment the goods produced, commissioned or purchased for investment to other units or self-employed persons" is regarded as a sale of goods. Therefore, investors investing in inventories to levy VAT in accordance with regulations, which is within the scope of consumption tax, should also levy consumption tax in accordance with regulations. The time when the tax liability occurs is the day when the goods are transferred. Regarding the deemed sales of goods, if the price is obviously low and there is no valid reason, the competent tax authority has the right to verify its sales. The determination order and method are as follows:

(1) Determined based on the average sales price of similar goods of the taxpayer in the month;

(2) The average selling price of similar goods sold on the date of the taxpayer is determined;

(3) In the case where the above two methods cannot determine the sales amount, the sales amount can be determined based on the composition tax price. The formula is:

Composition tax price = cost * (1 + cost profit margin)

Consumption tax shall be added to the taxable price of goods subject to consumption tax. The calculation formula is:

Composition tax price = cost * (1 + cost profit margin) + consumption tax

Or: Composition tax price = cost * (1 + cost profit rate) ÷ (1- consumption tax rate)

If the investor is a general VAT taxpayer and invests in stocks abroad, he can issue a special VAT invoice according to the regulations and accept the investor enterprise. If he meets the deduction conditions, he can also deduct according to the regulations.

2. Income tax involved

Investors investing in inventories externally should decompose them into two economic businesses: selling inventories at fair value and investing in economic transactions for tax treatment, and calculating and recognizing gains and losses on asset transfers, and paying income tax. If the investor is an individual, individual business, or other investment unit that is subject to the personal income tax levy (such as a sole proprietorship or a partnership-owned private enterprise), it should pay income tax in accordance with the provisions of "personal income tax", specifically: Income from transfers shall be levied income tax; investors other than individuals shall be levied income tax based on "income from individual businesses". If the investor is an enterprise or other investment unit other than the above, the enterprise income tax shall be paid in accordance with the provisions of the Enterprise Income Tax Law or Foreign Investment Enterprise and Foreign Enterprise Income Tax Law. If it is difficult to confirm the payment of corporate income tax during the tax year, it shall be reported to the tax authority for approval as deferred income, and shall be evenly distributed to the taxable income of each year in the period in which the investment transaction occurs and not later than 5 tax years. The above-mentioned inventory accepted by the invested enterprise can be determined by the taxable value of the relevant inventory cost.

3. Other taxes involved

Investors investing in stocks outside should pay stamp tax based on the agreed investment amount or actual investment amount, and the city maintenance and construction tax and education fee based on the actual turnover tax (such as value-added tax, consumption tax, and business tax). Attached.

Non-monetary assets II, machines

Investors investing in machinery and equipment means that investors invest in machinery or equipment that they have purchased or used, and the relevant taxes involved are as follows:

1. Involved turnover tax

Sales of used goods by taxpayers (including sales of used goods by old business units and sales of taxable fixed assets that have been used by taxpayers), whether they are general taxpayers or small-scale taxpayers of value-added tax, or whether they are approved and recognized Pilot units for the adjustment of used goods shall all levy VAT at a rate of 4%, and shall not deduct the input tax. If the taxpayer sells motor vehicles, motorcycles and yachts that have been subject to consumption tax and the selling price exceeds the original value, the VAT will be levied at a 50% reduction rate; if the selling price does not exceed the original value, VAT will be exempted . The old motor vehicle operating unit sells used motor vehicles, motorcycles and yachts, and levies VAT at half the rate of 4%. Items sold by individuals (excluding self-employed persons) that are used by themselves are exempt from value-added tax, but exclude motorcycles, yachts, and cars that are subject to consumption tax. The above provisions are of course applicable to the deemed sales behavior of investors in the outward investment of machinery and equipment. Therefore, different investors should calculate and pay taxes in accordance with the above provisions, which are within the scope of the consumption tax, and should also collect consumption taxes in accordance with the regulations.

Investors investing in new unused machinery and equipment should levy VAT at half the rate of 4%, without deducting input tax.

2. Income tax involved

Investors investing in machinery and equipment abroad are basically the same as the income tax requirements for investing in inventory. The above-mentioned machinery and equipment accepted by the invested enterprise can be used to determine the cost of machinery and equipment based on the taxable value or the value confirmed by assessment and depreciation.

3. Other taxes involved

It is basically the same as investors investing in stocks.

Non-monetary assets III, real estate

Investors investing in real estate or intangible assets refer to

Non-monetary assets

(Including ownership of real estate such as buildings, structures, land attachments) or intangible assets (ownership or use rights of land use rights, trademark rights, patent rights, non-patented technology, other intangible assets, etc.), and related taxes involved details as follows:

1. Involved turnover tax

Investors who invest in real estate or intangible assets to participate in the distribution of profits of investors and jointly bear investment risks are not subject to business tax. However, if the equity is transferred, it will be issued in accordance with the Notes on the Business Tax Tax Items (Provisional Draft) (Guo Shui Fa [1993] No. 149) and the subsequent Notice on Business Tax Issues Related to Equity Transfer (Caishui [2002] No. 191). It is stipulated that it shall be dealt with separately as follows: (1) Sales tax shall not be levied for transfers after January 1, 2003 (inclusive); (2) Sales tax shall be levied in accordance with regulations for transfers before January 1, 2003. , Should be taxed.

If an investor invests in shares with real property or intangible assets, and does not share the risk with the investor, but receives fixed profits, the business tax shall be levied separately in the following two cases: (1) Investment in shares with real property and land use rights shall be fixed If it is profitable, it belongs to the business of transferring venues, houses, etc. to others for use, and business tax shall be levied according to the "leasing industry" item in the "service industry" tax item; (2) investment with trademark rights, patent rights, non-patent technology, other intangible assets If you buy shares and receive a fixed profit, it is an act of transferring the right to use intangible assets, and business tax shall be levied under the tax item of "transfer of intangible assets".

2. Income tax involved

Investors investing in real estate or intangible assets are basically the same as the income tax requirements for foreign investment in inventory. The above-mentioned real property or intangible assets accepted by the invested enterprise can be determined by the value of the real property or intangible assets after evaluation and confirmation, and calculated amortized.

3. Other taxes involved

Investors who use the land (real estate) as a stock for investment or as a joint venture condition are temporarily exempted from land value-added tax. However, if the investment and joint venture re-transfers the above real estate, it is within the scope of land acquisition value addition; in addition, the investor enterprise is accepted. Deed tax shall be paid in accordance with regulations. Except for the foregoing, the other taxes involved are basically the same as investors investing in stocks.