introduce
Article 19 of People's Republic of China (PRC) Private Education Promotion Law (revised 20 18) (hereinafter referred to as "New Private Education Promotion Law") stipulates: "The organizers of private schools may choose to set up non-profit or profit-making private schools. However, for-profit private schools that implement compulsory education may not be established. " This means that in private schools other than primary schools and junior high schools, school organizers have the opportunity to choose for-profit or non-profit schools.
On April 7th, 20021year, the State Council issued the revised Regulations for the Implementation of People's Republic of China (PRC) Private Education Promotion Law (hereinafter referred to as the "new regulations"), which will take effect on September 7th, 20021year. The new regulations have strengthened private education in view of the chaos in industries such as excessive capitalization and commercialization in recent years.
After the implementation of the new "Implementation Regulations", the compliance governance of private schools faces three major problems to be solved urgently: first, the choice between profit-making and non-profit-making of private schools; The second is the compliance governance of related party transactions in private schools; Third, the path of separation of multi-level private schools. We will make a legal analysis of the above problems through a series of articles and put forward some suggestions to help private schools and organizers make full preparations for the return of education to the public welfare nature.
The "General Situation of Education in China-National Education Development in 20 16" issued by the Ministry of Education [1] shows that by the end of 2016, there were all kinds of private schools 17 10000, nearly/kloc-0. In this regard, combined with the latest national and local policies and regulations, this paper comprehensively analyzes the factors that need to be considered when private schools choose for-profit and non-profit registration from the perspectives of school income, financial liquidation, surplus property distribution and operating costs after classified registration, so as to provide reference opinions for private schools and school organizers.
Influential factor 1: Income from running a school Article 19 of the new Law on the Promotion of the People stipulates: "The organizers of non-profit private schools shall not obtain income from running a school, and all the school balances shall be used for running a school. The organizers of for-profit private schools can obtain school-running income, and the school-running balance shall be handled in accordance with the Company Law and other relevant laws and administrative regulations. "
Based on the above provisions, we can know that if you choose a non-profit school, the organizer will not get the income from running the school; If you choose a for-profit school, the organizer can get school income.
Articles 44 and 46 of the new "Implementation Regulations" clearly stipulate the distribution methods and conditions for profit-making school organizers to obtain school-running income, which are summarized as follows:
Contrastive terminology
nonprofit organization
profitability
Ways of earning income
(1) may not be able to obtain school income;
(2) The school's school balance is all used for running a school.
(1) can earn school income;
(2) Distribution basis: the balance of running a school shall be handled in accordance with the Company Law and other relevant laws and administrative regulations;
(3) Distribution time: the distribution of school balance should be carried out after the annual financial settlement;
(4) Precondition: The development fund shall be withdrawn from the audited annual net income at a rate not less than 10% of the annual unrestricted net assets increase or net income, before distribution can be made.
It is common for organizers to obtain school income through related transactions such as providing educational services to private schools. Article 45 of the new "Implementation Regulations" makes more detailed provisions on related party transactions, and article 13 also makes provisions on the independence between multiple schools run by the same actual controller. The basic requirements are:
* (1) Private schools that implement compulsory education shall not conduct related transactions;
* (2) Schools outside compulsory education can conduct related party transactions, and should follow the principles of openness, fairness and justice, set reasonable prices and standardize decision-making, and must not harm the interests of the state, schools and teachers and students;
* (3) When many private schools (group-run schools) have non-profit private schools, they may not directly or indirectly obtain the income of non-profit private schools in disguise.
We will discuss how private schools can legally conduct related party transactions in subsequent articles.
Influencing factor 2: The financial liquidation is based on the NPC Standing Committee's decision to amend the "
Then specific how to operate, Beijing, Qingdao, Nanjing and other places have introduced relevant measures [2].
For the existing schools to choose to register as non-profit legal persons, Order No.55 only requires to continue running schools after amending the school articles of association. Beijing has not yet issued corresponding regulations, and Qingdao requires property inspection and Nanjing to carry out financial liquidation.
We believe that the existing school chooses to register as a non-profit legal person because the legal person nature and asset ownership of the school have not changed, and the school can continue to run without cancellation or financial liquidation. So is it necessary for the school to conduct a financial inventory? Although there is no clear requirement in the new Implementation Regulations, from the perspective of compliance and risk control, it is suggested that school operators consider comprehensively sorting out, checking and properly handling school assets, creditor's rights and debts. On the one hand, this will help the school to operate legally and legally in the future; On the other hand, when the school is terminated, the organizer can be compensated or rewarded based on the current situation in the property inspection. From this point of view, considering that the sponsor may not be able to obtain the school income or distribute the remaining property after choosing to become a non-profit private school, if the sponsor's capital contribution is not in place, he should make up the capital contribution in time before registering as a non-profit school.
Choose to register the existing school as a profit-making legal person. Decree No.55 and above all require financial liquidation, clear ownership of property rights according to law, and pay relevant taxes and fees. Based on the regulations of Beijing, Nanjing and Qingdao, we believe that when a private school is registered as a profit-making legal person, the school property should be disposed of according to the following principles:
Asset type
Disposal principle
Sponsor's opinion
All transferred to the new profit-making legal person name.
Accumulation of running schools
All of them are transferred to the new for-profit legal person name, which is mainly used for education and teaching activities, improving school conditions and ensuring the treatment of teaching staff.
State-owned assets and financial distribution
Can be disposed of by continuing to use, transfer, return or participate in running schools.
Social donation
Dispose of it in accordance with the donation agreement or transfer it to other non-profit legal persons in accordance with relevant regulations.
In the process of financial liquidation and property confirmation, private schools and organizers also need to pay attention to the following issues:
First, about making up the capital contribution. If you choose to run a school for profit, you must carry out financial liquidation. An important task of financial liquidation is to verify whether the sponsors have fulfilled their capital contribution obligations. If the sponsor made a capital contribution commitment when the private school was established, but it was not actually fulfilled after the school was established, especially if the sponsor promised to invest in the school with physical assets such as land and school buildings, but the land and school buildings have not been transferred to the school name, then when choosing to register the school as for-profit, it is necessary to make up for its unfinished capital contribution.
Second, about the payment of land transfer fees. When some private schools are established and choose to register them as for-profit, they should go through the land transfer procedures and pay the land transfer fee.
Third, about the conditions for running a school. In the process of financial liquidation and property confirmation, all other properties may no longer be owned or used by the school except the investment of the sponsor and the accumulation of the school, which may further affect the conditions for running the school. Therefore, in order to ensure the existing conditions and scale of running a school, the organizers may need to increase their investment after choosing to register for-profit private schools.
Fourth, about paying taxes. Decree 55 stipulates that existing private schools need to "pay relevant taxes and fees" when they are registered as for-profit private schools. In this regard, Guizhou Province stipulates that if an existing private school chooses to register as a for-profit private school, the tax reduced or exempted according to law before classified registration will not be paid back, and the reduced value-added tax and enterprise income tax will be implemented according to tax laws and regulations. Hainan Province stipulates that if an existing private school chooses to register as a profit-making private school, the taxes and fees exempted according to law before classified registration and the land transfer fees that should be paid back shall be handled in accordance with relevant regulations. In addition, the new "Implementation Regulations" and the provinces (autonomous regions and municipalities directly under the Central Government) have almost no substantive provisions on "related taxes and fees".
As far as value-added tax is concerned, according to Article 1 of Annex 3 of the Notice on Comprehensively Pushing Forward the Pilot Project of Changing Business Tax to Value-added Tax (Caishui [2065438+06] No.36), the care and education services provided by nurseries and kindergartens and the education services provided by schools engaged in academic education are exempt from value-added tax, that is, there is no difference in paying value-added tax when such private schools choose for-profit or non-profit.
As far as enterprise income tax is concerned, according to the requirements of the Notice on Relevant Issues Concerning the Administration of Tax Exemption Qualification of Non-profit Organizations (20 18), if existing private schools want to be exempted from enterprise income tax, they must apply to the competent tax authorities for tax exemption qualification of non-profit organizations, and they can be exempted only after being recognized by the tax authorities. If a private school fails to fulfill the corresponding tax exemption application procedures in compliance with the law, there is a tax risk that it cannot enjoy tax reduction and exemption in accordance with the law when choosing to register as a for-profit private school, and it may be necessary to complete the final settlement in accordance with relevant requirements.
Influencing factor 3: Distribution of surplus property When a private school is terminated, it shall conduct financial liquidation according to law. According to the provisions of Article 59 of the new Promotion Law, after the non-profit private schools pay off their debts, the remaining property will continue to be used to set up other non-profit schools; The surplus property of for-profit private schools shall be disposed of in accordance with the relevant provisions of the Company Law.
In view of the fact that investors can get a "reasonable return" in the existing private schools, Decree No.55 specifically stipulates that for private schools established before 20161.7, if they choose to register as non-profit private schools, and the property of private schools remains after being paid off according to the provisions of this law, they should comprehensively consider the investment and acquisition before the implementation of this decision according to the application of investors.
So how much compensation or reward can you give investors? Beijing, Shanghai, Shandong, Jiangsu and other places have successively issued specific regulations.
provinces and cities
Compensation amount
Award amount
Shanghai
(1) The compensation amount shall be the sum of the capital contribution and the converted interest of the capital contribution over the years, after deducting the reasonable return obtained by the investor over the years and the converted interest of the reasonable return over the years, but it shall not exceed the remaining property amount after deducting the assets formed by financial support and social donation.
(2) The converted interest shall be calculated from the time of investment, the time when the school stops running or the expiration time of the school license, and according to the average of the benchmark interest rate of RMB loans of financial institutions for one to three years or one to five years and the benchmark interest rate of RMB time deposits of financial institutions for one year.
(1) The reward amount is based on the highest annual tuition income in the five years before the school stops running or the school license expires, and the annual inspection results after September of 1 20 17 are converted as coefficients. The maximum reward amount shall not exceed the remaining property after liquidation minus the assets formed by financial support and social donation and the amount after compensation.
(2) Where both the initial value and the lowest value of the coefficient are 0, the coefficient will increase by 0.1every time the school obtains a "qualified" conclusion in the annual inspection; For each "unqualified" conclusion, the coefficient will be deducted by 0.5.
(3) If a private school fails to pass the annual inspection two years before its school license or legal person registration is cancelled, or its school license or legal person registration certificate is revoked, its investors will not be rewarded.
Jiangsu Province
Give the investor corresponding compensation from the school's remaining net assets. The amount of compensation is the amount of capital contribution (that is, the amount of start-up funds registered by the school in the registration authority) and its value-added amount. The appreciation rate is calculated according to the benchmark interest rate of 5-year deposits of the People's Bank of China in the year of liquidation.
Considering the reasonable return of investors, the cost of running a school, the benefit of running a school, social reputation and other factors, investors can be rewarded in the form of one-time settlement and installment reward from the special funds for private education and the remaining net assets of private schools. The reward amount is not higher than 20% of the remaining net assets of the private school after compensation, and the remaining property will continue to be used to start other non-profit schools.
Shandong Province
The maximum amount of compensation and reward shall not exceed the remaining net assets after deducting the assets formed by state-owned assets, financial investment and social donations.
Beijing
The amount of compensation or reward shall not exceed 30% of the net assets under the name of the school legal person on August 3 1 day. If the investor obtains a reasonable return, it shall be deducted accordingly.
Zhejiang Province
The amount of compensation or reward comprehensively considers the original investment of the organizer and the subsequent investment before August 3, 20 17, the reasonable return obtained, the benefit of running a school and other factors. Where the local government of the private school has issued relevant regulations or has an agreement with the private school and it still has legal effect, its regulations (agreement) shall prevail; Otherwise, it shall be determined by the government at or above the county level where the private school is located.
Sichuan Province
According to the investor's application, the competent department, together with relevant functional departments, comprehensively considers the investor's contribution before September 1 20 17, the reasonable return and the school-running benefit, and gives the investor corresponding compensation or reward from the school's surplus property that has been paid off according to law. Compensation and rewards are extracted from the monetary funds in the school surplus property; If the monetary fund is insufficient, it shall be drawn from the monetary fund obtained after the transfer of other assets according to law.
Therefore, the organizers should calculate the amount of compensation or reward that may be obtained when terminating the school according to the relevant regulations of local provinces and cities, especially if they choose to register as a non-profit legal person, and should fully consider the uncertainty of the distribution of remaining property.
Influencing factors 4: Policy comparison after classified registration The first three parts of this paper mainly analyze the factors that existing private schools should consider when classified registration. In addition, private schools and their organizers should fully realize that after choosing to register, schools may face different operating costs in the actual teaching management process in the future. In a word, there are great differences between non-profit private schools and for-profit private schools after classified registration, which are mainly manifested in land allocation, tax and fee concessions, government support policies, financing methods and so on.
Land distribution mode of newly built and expanded schools
According to the provisions of the new Promotion Law, the new Implementation Regulations, Several Opinions of the State Council on Encouraging Social Forces to Establish Education to Promote the Healthy Development of Private Education (Guo Fa [2016] No.81) and relevant normative documents of Shandong Province and other provinces and cities, the similarities and differences of land allocation methods between newly built and expanded private schools and for-profit schools can be summarized as follows:
Contrastive terminology
nonprofit organization
profitability
Distribute land supply
Land can be allocated, and non-profit private schools give land concessions in the same way as public schools.
The land cannot be allocated. The land for for-profit private schools is provided according to the corresponding national policies. If there is only one intended user, the land can be provided according to the agreement.
Leased land supply
Private schools that implement preschool education and academic education use land. Local people's governments can supply land through agreements, tenders and auctions. According to the law, or they can supply land through long-term lease, first lease and then lease. The land transfer price and rent can be paid in installments within the prescribed time limit according to the contract.
Nature of land
The construction land of private schools is managed according to the land for science and education.
Change use
If the land use right holder applies for changing all or part of the land use, the government shall recover the land for changing the use, price it on time, and re-supply it according to law.
In addition, the normative documents of Yunnan Province, Weifang City, Shandong Province and Binzhou City also make it clear that the relocation and expansion of non-profit and for-profit private schools can be carried out in accordance with the law and regulations on the premise of conforming to the overall land use planning and urban planning and being approved.
(2) Preferential taxes and fees
After classified registration of existing private schools, there are also significant differences in tax preferential policies between non-profit private schools and for-profit private schools. The main difference between them lies in whether they enjoy the preferential policy of enterprise income tax payment.
Contrastive terminology
nonprofit organization
profitability
Tax eligibility
Enjoy the same preferential tax policies as public schools.
General enterprise legal person tax payment qualification
industrial and commercial income tax
After determining the tax exemption qualification in accordance with the provisions of the tax law, the non-profit income shall be exempted from enterprise income tax.
If there is no special relief, enterprise income tax will be levied.
Other taxes
Enjoy preferential policies according to Annex 3 of Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Education Tax Policy (Caishui [2004] No.39) and Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Comprehensively Promoting the Pilot Project of Changing Business Tax to VAT, including but not limited to:
(1) Property and land used by various schools and kindergartens run by real estate enterprises are exempt from property tax and urban land use tax;
(2) The promoters of the asset transfer private school use real estate as their capital contribution. If the real estate needs to be registered in the name of a private school due to the obligation of capital contribution, only the license fee and registration fee will be paid.
Preferential payment
Private schools use electricity, water, gas and heat, and implement the same price policy as public schools.
(3) government support
In terms of government support, the new promotion law, the new implementation regulations and the normative documents of provinces and cities distinguish the government support policies enjoyed by non-profit private schools and for-profit private schools from the aspects of government purchasing services, fund allocation, priority support for idle state-owned assets, government subsidies, and the establishment of special funds. Non-profit private schools will receive more government support policies.
Contrastive terminology
nonprofit organization
profitability
Government purchase of services
People's governments at the county level may, according to the needs of implementing preschool education, compulsory education or other public education services in their respective administrative areas, sign agreements with private schools and entrust them to undertake corresponding educational tasks by purchasing services. If a private school is entrusted to undertake inclusive preschool education, compulsory education or other public education tasks, it shall allocate corresponding education funds in accordance with the entrustment agreement of the relevant local education stage.
——
allocation of funds
Local people's governments at or above the county level may give appropriate subsidies to non-profit private schools with reference to the relevant funding standards and per capita funding policies of similar public schools at the same level.
——
Priority support for idle state-owned assets
When leasing or transferring idle state-owned assets, local people's governments should give priority to supporting non-profit private schools.
——
Government subsidies, with awards instead of compensation, to ensure the treatment of teachers.
Local people's governments at or above the county level can encourage and support non-profit private schools to ensure the treatment of teachers through government subsidies and incentives.
——
The government has set up a special fund.
Local people's governments at or above the county level may, according to the specific conditions of their respective administrative regions, set up special funds for the development of private education, support private schools to improve the quality of education and the level of running schools, and reward the organizers.
Encourage the establishment of education funds.
The state encourages social forces to set up foundations or special funds for the development of private education according to law to support the development of private education.
(4) Financing
According to the Civil Law of People's Republic of China (PRC), judicial interpretations and normative documents of various provinces and cities, there are many differences in financing channels between non-profit private schools and for-profit private schools, as follows:
Contrastive terminology
nonprofit organization
profitability
Mortgage financing
land
prohibit
Obtaining mortgage with compensation
Educational facilities
prohibit
unrestricted
Non-educational teaching facilities
unrestricted
unrestricted
Pledge financing
receivables
unrestricted
unrestricted
Charge right
unrestricted
unrestricted
Future operating income
unrestricted
unrestricted
intellectual property
unrestricted
unrestricted
Financial leasing
-
unrestricted
unrestricted
Equity incentive
-
prohibit
encourage
Capital market financing
-
prohibit
Shandong province encourages no restrictions on other provinces and cities.
label
Private education is an important part of socialist education, which effectively increases the supply of educational services and makes positive contributions to promoting educational modernization and economic and social development. Classified management of private schools is a major reform direction determined by the CPC Central Committee and the State Council, an important measure to implement the spirit of the revision of the new Promotion Law, and an important content to deepen the comprehensive reform in the field of education.
[attention]
[1] website of the Ministry of Education: general situation of education in China-the development of national education in 2016, website:/JYB _ SJZL/S5990/20171/T 20/kloc-. According to the report, in 20 16, there were all kinds of private schools 17 10000, including private kindergartens 154000, private ordinary primary schools 5975, private junior high schools 5085, private ordinary high schools 2787 and private secondary vocational schools 26555.
[2] Implementation Measures for Change of Legal Person Registration Type of Existing Private Schools in Beijing (Trial) (J.M.P. [20 19] 12), Implementation Plan for Classified Registration of Private Schools in Qingdao (J.M.P. [2020] No.74) and Measures for Financial Liquidation of Private Schools in Qingdao (J.M.P. [2020])
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Compliance Governance of Private Schools after the Implementation of the Regulations on the Promotion of the People's Republic of China —— The Choice of Profit and Non-profit