Those Years When I Was Forced to Top the Forbes List

Chapter 85 First, make a boast
Ren Ying's room.

Chen Xuebing quietly looked at the documents.

Ren Ying, standing next to her, had a deep frown on her brow.

“Actually, your current business situation is really not suitable for paying taxes. To pay income tax, you need to have a source of income. If you investigate, you can find out that you haven’t paid value-added tax. The value-added tax on sales is very high, 17%. You also don’t have input invoices for materials. All of these could be attributed to you. Just continue operating off the books as before! You’re just asking for trouble.”

Off-the-books operations, to put it bluntly, are tax evasion.

Upon hearing this, Chen Xuebing's lips curled into a smile.

Finance staff hate doing things that are full of loopholes. For her to say something like that means she's been pushed to the limit.

"Tax evasion is not a sustainable business. However, tax avoidance is not a big deal. For startups like ours, tax avoidance is very normal. It's good enough if we can pay income tax voluntarily."

Tax law is one thing, enforcement is another. We can just make up for it when the tax authorities find a problem and ask us to come up with a meeting.

We pay taxes to benefit from favorable policies. Large taxpayers get the best policies and are guaranteed to make a profit. You just need to make sure you get the tax deductions and corporate income tax deductions that are within the policy limits.

Don't worry, I understand tax law. This year, the VAT rate will be reduced to 13%, and mobile phone manufacturing is a high-tech industry. Once we have the license, I will move the factory to the high-tech park where there are tax exemptions and reductions. Don't worry about this small amount for now. When our income really increases, you won't need to do the accounting anymore; I'll hire professionals. You just need to help me with my personal accounts.

Having paid taxes for so many years, Chen Xuebing has some understanding of the tax law system.

Value-added tax (VAT) is the largest tax in my country, and it's the most difficult tax to avoid.

This tax is payable at every stage of production and sales. To take a mobile phone as an example, a screen manufacturer buys 20 yuan worth of materials to produce a screen and sells it to him for 50 yuan. The 30 yuan difference is the added value. The screen manufacturer has to give Chen Xuebing an input invoice for the entire screen worth 50 yuan.

Why is the screen manufacturer issuing a 50 yuan invoice when they only make 30 yuan?

Because the screen manufacturer also needs to obtain the 20 yuan input tax invoice from its downstream material suppliers to offset its 20 yuan cost, proving that it only needs to pay 30 yuan in profit tax.

Chen Xuebing bought 300 yuan worth of various materials, received an input invoice of 300 yuan, produced mobile phones, sold them to consumers for 1000 yuan, and also issued an invoice of 1000 yuan to the consumers.

If he uses a 300 yuan input invoice to pay the tax, he only needs to pay the 700 yuan value-added tax. If he doesn't have the input invoice, he has to pay the tax for the entire 1000 yuan.

If someone doesn't get invoices from downstream customers, it's like they have to pay taxes for their downstream customers and also pay taxes for their downstream customers' downstream customers.

This creates layers of oversight. If a tax audit reaches any link in the chain, it can uncover an entire tax evasion network through upstream and downstream relationships.

In this process, a good finance professional can keep track of changes in tax policies and try to adjust the payment terms of accounts receivable and payable to be within the favorable tax payment time and policy period. Therefore, the finance department has to review both purchase and sales contracts and sometimes arrange for relevant departments to modify the entry and exit dates.

This tax is a major tax in developing countries.

The second largest tax is income tax.

This is a universal tax, and most people know about it.

This stage is entirely dominated by finance. A company with excellent performance can completely smooth out its performance through various expenditures, and even avoid paying income tax.

For example, when a company purchases a car, the VAT on the purchase can be deducted as input tax, reducing income tax. Depreciation can also be included in the company's profit and loss. Overall, the cost of purchasing the car is extremely low, and a few years later, it can be sold back to the company owner at a very low price.

For example, donations can also be tax-deductible, and what if the donated money could secretly come back to you? Hehe…

Well, this situation definitely doesn't exist in China. For details, please refer to a certain American billionaire who established a charitable foundation.

Taxation is not only a battle between businesses and the government, but also a game between central and local governments.

Before the 94 tax-sharing reform, the fiscal system was a fixed-income system, with local governments responsible for their own revenue and expenditure, and local governments taking the lion's share, exceeding 70%. After the reform, national and local tax bureaus were established to collect taxes, with local governments taking 25%. The difference was enormous. This also led to the emergence of land-based finance at the local level, using land reform and land auctions to subsidize the deficit, indirectly promoting the development of the real estate market.

As a result, local governments used to take the lion's share of the tax burden, so there was no way they could negotiate tax cuts.

However, in recent years, local governments have been under tremendous pressure to attract investment, and GDP has become a hard indicator for growth. As a result, local governments have been bold in offering tax exemption policies for attracting investment.

Therefore, Chen Xuebing was not worried about taxes. As long as the scale was large enough, taxes would be negotiable no matter where he built the factory.

"Then let me help you with your personal accounts. You need to tell me how much money you have and how much you've spent so I can help you keep track of the accounts," Ren Ying asked.

With such a high salary from Chen Xuebing, she wanted to realize her value as soon as possible.

This question left Chen Xuebing feeling a little embarrassed.

"Um... there's nothing to worry about right now, let's just wait, the money will come soon."

Business was slow during the Chinese New Year, but I still spent 40,000 to 50,000 yuan, leaving me with only 160,000 yuan. I need to put 100,000 yuan in Alipay to manage the inventory, leaving only 60,000 yuan in my bank account. I even hired an accountant. It's a bit embarrassing.

Make money!

Let's get that 300,000 first!
Chen Xuebing put his hands in his pockets and glanced at Ren Ying.

"Come on, let's change our clothes."

……

The next day.

Chen Xuebing did not go to the Land and Resources Bureau, but went to the Investment Promotion Office.

There is no Bureau of Commerce in Longgang. The Investment Promotion Office is a district-level office, and its phone number is available online.

After Chen Xuebing explained his investment and land purchase needs, the other party immediately arranged a meeting time with him and asked if he had arrived and whether he wanted someone to pick him up at the station.

The service was incredibly warm and welcoming.

For the first time since his rebirth, Chen Xuebing wore a suit. The gray woolen fabric of the suit was smooth and flat with a clear weave. Sitting on the sofa, he had the air of a successful boss.

Assistant Ren Ying stood beside her, dressed in a black suit skirt and high heels, and her glasses were now thin-rimmed. Although she seemed a little uncomfortable, her figure was curvaceous and she looked much better than before.

As long as you don't open your mouth.

These days, doing business still requires a certain style and a bit of hype.

Chen Xuebing made a grand entrance and put on quite a show. He had Ren Ying prepare the feasibility report needed for the industrial land application, but changed the name on it.

Investment Plan.

The staff member from the investment promotion office only glanced at the "plan" briefly before offering him a glass of water.

"Mr. Chen, please have a seat. Let me see... what's the meaning of investing in these two projects?"

Chen Xuebing smiled unhurriedly: "It's written in the documents, one for sales and one for production. If you help me solve the production problem, I'll put the sales company here with you. As for sales, we already have turnover. In the past two months, sales reached 77. The turnover certificate from Alibaba is still on its way and will be sent over in a couple of days."

The staff member frowned when he heard the number.

"Your documents state an annual turnover of 20 million..."

Chen Xuebing waved his hand: "It's still growing. You know Alibaba, right? We've already reached a traffic cooperation agreement with Alibaba, so revenue isn't a problem. Besides, once the phones go into production, the revenue won't be in the tens of millions; it'll be at least hundreds of millions."

Each sentence was bigger than the last.

The staff member immediately checked the relevant information about mobile phone production on the computer. "Um... this mobile phone production approval... are you using a borrowed license for production?"

"Well, that's a trade secret, so it's not convenient to talk about it for now. Anyway, we're going to build a production plant, and we can't just build it for nothing! We'll definitely put it into production."

"Oh, I understand, I understand."

Renting out license plates is discouraged, and it's normal not to mention it in the documents.

"The timeline for your investment and factory construction..." The staff member searched for a long time but couldn't find any relevant information.

"Well, it might be a little later! I have a labor service company in Chongqing, and I plan to do the construction myself, but there's a highway project under the Western Development Strategy that's about to start construction there. Once things are settled there, the construction workers and designers will come over."

In fact, Chen Xuebing never intended to build a factory; he couldn't afford to build on such a large plot of land.

We can't afford to wait any longer.

Once the project is approved, the government won't interfere for at all within two years. All he has to do is fence off the land and build a prefabricated factory and warehouse of about a thousand square meters on the very edge, and he can start construction behind closed doors.

Including leveling, the site cost is only two to three hundred thousand.

When we finally have the money to build a proper factory, we can proceed with construction in sections without affecting production.

Now it's all about hype, hyping it up until the other party is tempted and takes the initiative to help them with the procedures for bidding and acquiring the land.

His business is a mix of fact and fiction. The labor service company has already been registered with the agency, and the highway contract will be signed soon. The key is that piece of land worth 280 million yuan, and someone has already paid for it.

Chen Xuebing smiled and continued, "I originally planned to invest in Huaqiangbei, where parts are more readily available. However, after arriving here, I took a liking to a plot of land in Laoxi Village that was up for auction. It's quite large and meets our development requirements, so I decided to bid for it first and do the preliminary work of land leveling and construction. If you can simplify the procedures for us, I will set up my sales company here. Not to mention the mobile phone factory, the annual tax payment of the sales company alone will not be less than 100 million."

As Chen Xuebing spoke, the staff member was also carefully looking at the document.

Invest in building factories and sales companies.

If all of these can be implemented, this would be a huge business opportunity.

Their investment promotion office has a GDP conversion table. Mobile phone production can usually drive five or six times the GDP. If the turnover reaches 30 to 50 million, it can drive 200 to 300 million in GDP. This level of investment usually requires the district leaders to personally go out and attract it.

However, there are many scammers and people who want to take advantage of others these days. The worst thing is that they will ask for government assistance right away. So the section chief asked him to receive them first, so that if anything happens, there will be room for maneuver.

He said somewhat cautiously, "Mr. Chen, is there anything else you need? Feel free to bring it up so I can report it to my superiors."

Chen Xuebing patted the armrest of the sofa and chuckled, "Young comrade, I understand your concerns. I don't have any demands for now, but you have to give me the green light for the land acquisition procedures and company registration. As for taxes, I am, after all, a high-tech enterprise, so you have to give me the tax reductions and exemptions that are due. As for loans, I won't make things difficult for you. I'll talk to you again when my factory construction has reached a certain stage."

The young comrades were all very excited.

Is that all the requirements?

He thought he'd have to borrow at least several million!
"Mr. Chen, which piece of land are you referring to? Let me check!"

“A417-0039, 0040”.

Chen Xuebing gave a number.

The staff member checked and found that it wasn't a popular location, so he immediately stood up and said, "Please wait a moment, I'll report to the section chief right away!"

After saying that, he walked outside.

Halfway there, remembering something, he turned around and asked, "Mr. Chen, you're starting a company, what's the name?"

Chen Xuebing really hadn't thought of that.

After a moment's thought, he said, "Let's go with Breakthrough Technology."

The staff member paused for a moment: "Broken, empty? Broken as in 'broken,' empty as in 'space'?"

He almost said "broken" instead of "broken".

Who would choose a company name with the character "破" (broken/broken)? Aren't they all names like "金" (gold), "富" (wealth), and "贵" (noble/important)?
Chen Xuebing smiled and said, "The 'breaking through the sky' in 'breaking through the sky' means piercing through the heavens."

What he was really thinking about was emptiness.

"Oh, oh, oh! Mr. Chen, please wait a moment!" The staff member patted his head, smiled awkwardly, and quickly went out.

……

3pm.

Chen Xuebing and Ren Ying shook hands with a middle-aged man downstairs at the district government building.

"Mr. Chen, welcome to invest in Longgang! I'll have Xiao Zhang take you through the company paperwork! Once you bring over the documents for the main investment company, we'll report it to the district leaders, and District Head Huang will personally attend to sign the letter of intent with you!"

Chen Xuebing had a fairly large business in his previous life, but he had never truly enjoyed the treatment of an "investor," he laughed and said:
"I've heard that Shenzhen's speed is extraordinary. I hope Section Chief Luo can let me see it for myself."

Section Chief Luo laughed heartily: "Of course! Once we sign the investment agreement, we can proceed with the land procedures! However, once these procedures are completed, we'll have to start paying the land use tax the following month, which is two yuan per square meter per year. The land listing procedures are still in the registration period, so it's not too late to wait a few months. Are you sure you want to do it now?"

Taxes, taxes, taxes.

Chen Xuebing felt a slight pang of heartache, but maintained a cheerful demeanor, saying:
"This tax is nothing! I really hope to start construction and production as soon as possible and become a major taxpayer in Longgang! It's a pity that construction takes time! But once Pokong Technology is registered, I will immediately integrate our sales network and start contributing to Longgang's tax revenue soon!"

"Mr. Chen is very generous, we'll wait and see! However, the name 'Breaking Through the Void Technology' is quite interesting. I hope Mr. Chen won't break through the void too soon. I hope Mr. Chen's company can take root here!"

"Hey! It all depends on Longgang's attitude! As long as Longgang doesn't show a cold face, I'll definitely treat them warmly!"

"Hahaha…"

……

in the afternoon.

Yu Chunyin and Hong Yongqiang sat in Chen Xuebing's room, looking at the "Investment Plan" over and over again.

"Young man."

"You really dare to brag."

Yu Chunyin's face tightened: "A sales company with a turnover of 20 million yuan and a factory with an annual output of 30,000 mobile phones, where did you conjure them up from?"

Chen Xuebing, however, remained relaxed: "What are you bragging about? This is called reality distortion! I'm just distorting things that will happen a year or two from now into the present, letting them see them in advance! Once enough people believe it, it will naturally become reality!"

Hong Yongqiang laughed and said, "This kid is really good at bragging! But, Xiao Chen, I really think you can do great things. Why don't you come and be my factory manager?"

Chen Xuebing smirked: "Uncle Hong, you really can't afford me. If you really want me to help you make money, you're welcome to invest in my fleet when the stock market presents an opportunity."

Having said that, he stretched out his hand in front of Yu Chunyin.

"Uncle, can you give me the 30? I'm going to go distort reality."

　The company name was later changed.
　　
　
(End of this chapter)