Melamine, a chemical raw material that brought down an entire industry—Sanlu went bankrupt, Mengniu lost billions, Yili stocks plummeted... The intangible asset value of China's dairy industry has been completely wiped out. In this article, the author attempts to analyze how enterprises can control and adjust production processes in multiple operational stages to ensure product quality, and furthermore, how they can legally save on taxes through tax policies.
Dairy companies have relatively simple and concentrated raw materials, clear production processes, enormous advertising expenses, and wide marketing coverage. Based on these characteristics, the integrated production process can be divided into several segments, with independent legal entities set up for each segment to separately calculate and pay taxes. For example, a certain dairy company originally did not have its own milk production base and entirely relied on purchasing milk from individual dairy farmers. This led to uncertain milk sources, difficulty in quality control, and purchase prices fluctuating with the market...