Huayu: A master director who debuted as a singer

After Li Zongming left, Zheng Hui walked to the door of the finance office next door.

The door was open, and the sounds of abacus beads turning and papers being flipped could be heard from inside.

Chen Jianguo was sitting at a desk, holding a red and blue pencil, his brow furrowed as he looked at an account book.

Opposite him sat an old man with gray hair, wearing reading glasses, holding a purple clay teapot, slowly sipping his tea.

This is Mr. Qian, introduced by President Wang. He's a retired accountant from the publishing house who has spent his entire life dealing with numbers.

"Jianguo, Master Qian." Zheng Hui knocked on the door frame with his knuckles, breaking the silence inside the room.

Chen Jianguo was engrossed in checking the documents at his desk when he heard the sound. He immediately put down his pen, stood up, and greeted, "Boss, you've arrived."

Master Qian also put down his purple clay teapot, smiled and nodded in greeting: "Boss Zheng."

Zheng Hui walked into the room, pulled up a chair and sat down, his gaze sweeping over the ledgers spread out on the table: "How's it going? How's your learning been these past few days with Master Qian? Have you figured out the ins and outs of commercial accounting?"

Chen Jianguo scratched his head: "Boss, the accounts in business are much more complicated than those of a quartermaster in the army."

Back in the military, everything was very straightforward, but now the intricacies of taxation and invoicing require flexibility, and it's giving me a headache.

However, Master Qian taught me very well. Now I at least understand the rules and why I couldn't just fill in a random name on that receipt last time.

Zheng Hui turned to Master Qian and said politely, "Master Qian, thank you for your trouble. This kid has been in the army for a long time, and he's too straightforward and inflexible. I'll need you to give him some pointers."

"Don't mention it."

Master Qian waved his hand and looked at Chen Jianguo with kind eyes: "Jianguo is a good kid. He's good at calculating and meticulous. That's enough. In our line of work, we're not afraid of you being slow, we're afraid of you being slippery."

No matter how well you manage to keep your promises, if your intentions are impure, you're just planting a time bomb for yourself.

Zheng Hui nodded slightly; these words resonated with him.

"Mr. Qian, I happen to have some free time today. I'd like to ask about the company's taxes."

Zheng Hui said seriously, "Although we're just a shell company now, our revenue is already quite substantial. This time, we've brought in six million, and adding that to what we did before, our total sales have exceeded eight million. So, how should we pay the taxes?"

When Master Qian realized that they were getting down to business, he dropped his leisurely demeanor. He opened the ledger in front of him and ran his finger over the rows of numbers.

"Boss Zheng, I was just about to report this to you."

Master Qian pushed the ledger in front of Zheng Hui: "I've gone through all our invoices these past few days. Up to this afternoon's receipt of six million, our company's total sales are eight million four hundred thousand."

Zheng Hui looked at the red number on the ledger and nodded.

"Our company is registered in Hengqin, Zhuhai. Because you are a Macao resident, the company is classified as a wholly foreign-owned enterprise."

Master Qian held up two fingers: "According to the national preferential policies for foreign-invested enterprises in special economic zones, we enjoy two years of tax exemption and three years of tax reduction."

In other words, starting from the year of profitability, corporate income tax is exempted for the first two years, and reduced by half from the third to the fifth year.

"This is the first year, and although we made money, our corporate income tax is zero. The government has exempted us from this major expense."

Zheng Hui did some mental calculations. With sales of eight million, the profit would be at least four or five million. If taxed at 33% corporate income tax, that would be over a million. Even for his company in Zhuhai, the tax would be 15%.

The money saved is indeed a large sum.

"What about the other taxes?" Zheng Hui pressed.

"The bulk of it is value-added tax," Master Qian said, pointing to another column in the ledger. "Are we small-scale taxpayers or have we applied to become general taxpayers?"

"The general taxpayer applicant, that's what the agent said when I applied for the business license."

Master Qian nodded: "For general taxpayers, the tax rate is 17%. We sell cassette tapes, which falls under the category of selling goods. With sales of 8.04 million, the output tax is approximately 1.16 million."

Upon hearing this number, Chen Jianguo gasped: "Over a million? That many?"

Master Qian glared at him: "What's the rush? Let me finish."

"This is output tax, but we also have input tax that we can deduct."

Master Qian opened another voucher: "The production fees we pay to the publisher and the processing fees we pay to the factory can all be deducted as long as a special VAT invoice is issued."

I've done the math. The initial production costs we invested, plus the two million you just paid as an advance payment, amount to about four hundred thousand in input tax.

After this deduction, the actual value-added tax payable will be around 700,000 yuan.

"Seven hundred thousand..." Zheng Hui murmured.

"That's not all," Master Qian continued. "Besides the value-added tax, there's also the urban construction tax and the education surcharge, which follow the value-added tax and are about 10% of it, which is about 70,000 yuan."

"So, if we don't do any planning, the taxes we have to pay this quarter will be around 770,000."

770,000 yuan could buy several apartments in Guangzhou these days.

Master Qian glanced at Zheng Hui's expression, picked up the teapot, took a sip, and said slowly, "However, accounting is about finding room for maneuver within the rules."

He put down the teapot and lowered his voice: "Although our company mainly sells cassette tapes, our operating costs are still quite high."

The office space you rent, the Jinbei van you bought, the usual fuel costs, toll fees, airfare and accommodation for business trips, your salaries and bonuses, and even the meal expenses for business-related entertainment—as long as you have invoices, all of these can be included in the cost.

"Especially the fees for promotion and advertising; as a singer, these are the biggest expenses. We can allocate some of our budget to these areas."

Master Qian picked up the abacus and started clicking away.

"I've roughly estimated it, taking into account the expenses you mentioned for going to Beijing, as well as some other miscellaneous costs, and also certifying some input invoices that haven't been certified yet."

Ultimately, we can keep our actual tax payment for this quarter to around 300,000 yuan.

More than three hundred thousand.

The price dropped from over 700,000 to over 300,000; that's the value of a professional accountant.

Chen Jianguo, listening nearby, stared wide-eyed: "Goodness, this in and out has saved us a Mercedes!"

Zheng Hui frowned.

He looked at Mr. Qian, his tone serious: "Mr. Qian, I want to ask clearly. Once this 300,000+ yuan is handed over, is everything completely clean? Are there any gray areas? Or, to put it another way, can it withstand a thorough investigation by the tax bureau?"

Master Qian was taken aback; he hadn't expected the young boss to ask such a question. Most private business owners would be overjoyed at the prospect of paying less tax, and wouldn't care about whether their businesses could withstand scrutiny.

"Boss Zheng, what do you mean?"

"What I mean is, I don't want any risks. I'm a singer, a public figure, and I'm going to appear on CCTV and do even bigger business in the future."

If I get caught evading taxes, my future will be ruined. Forget saving hundreds of thousands, even saving millions wouldn't work.

"What I want is legality and compliance. Deducting what is due and calculating costs where appropriate is fine. But if it involves buying invoices or falsifying accounts, that is absolutely unacceptable."

Seeing Zheng Hui's serious expression, Master Qian put down his pen and said solemnly, "Boss Zheng, don't worry. I've been an accountant all my life, and the word I value most is stability."

What I just told you is all legal tax avoidance within the scope permitted by tax law.

Since your car is registered under the company name, the fuel and toll fees are considered company costs. Your trip to Beijing for a performance includes airfare and accommodation – those are travel expenses. Inviting Li Zongming and his team to dinner to discuss business is considered business entertainment expenses.

For every single transaction, I'll have Jianguo properly affix the invoices and ensure the supporting documentation is accurate. Even if the tax bureau comes to audit the accounts tomorrow, I can confidently show them the ledgers.

Upon hearing this, Zheng Hui's brows relaxed.

"That's good, Master Qian. You're the expert in this area, so I'll leave everything to you. As long as it's legal, save money where you can. But absolutely do not cross the red line."

He turned to Chen Jianguo and said, "Jianguo, did you hear that? Learn from Master Qian properly. From now on, the company's accounts cannot be short by a single penny, nor can they contain a single penny of dishonest money."

"I'm going to Beijing this time. You stay in Zhuhai and go with Master Qian to the tax bureau to pay the taxes on this 300,000+ yuan. Pay it all, not a penny less, and get the tax payment certificate back."

Chen Jianguo straightened his back: "Yes, sir! Don't worry, boss, I guarantee I'll complete the task!"

Zheng Hui stood up and patted Chen Jianguo on the shoulder: "Work hard, and I'll give you a bonus when I get back."

……

The next morning, at Guangzhou Baiyun Airport.

Back then, Baiyun Airport was still located in the old city, at the foot of Baiyun Mountain.

The waiting hall was bustling with noise, and flight information was constantly being broadcast over the loudspeaker.

Li Zongming was checking in with three plane tickets in his hand. Lin Dashan, carrying two large suitcases, stood behind Zheng Hui like an iron tower, warily scanning the surrounding crowd.

"All done." Li Zongming walked over with his boarding pass: "China Southern Airlines, Boeing 777. It's a big plane, it flies very steadily."

Zheng Hui took the boarding pass and glanced at the seat number: "First class?"

"Of course."

Li Zongming laughed and said, "What's your worth now? Going to record a program on CCTV means representing the face of Guangdong's music scene. Besides, Boss Duan and Boss Zong offered such generous endorsement fees, we can't shortchange ourselves."

"Let's go, board the plane."

The three of them went through security and entered the waiting area.

Through the floor-to-ceiling windows, you can see the huge plane on the tarmac. The red kapok flower logo on the fuselage is particularly dazzling in the sunlight.

Looking at the plane, Zheng Hui felt a surge of pride.

BJ.

That political and cultural center of China, the place where countless people dream of taking flight.

"Dashan, would you like to go see Tiananmen Square?" Zheng Hui suddenly asked.

Lin Dashan paused for a moment, then grinned and said, "Yes, I want to! I've wanted to go since I was in the army, but I never had the chance. I want to see the flag-raising ceremony and salute it."

"Okay." Zheng Hui patted his shoulder. "Once we get to Beijing and we've finished our business, I'll take you there. We'll watch the flag-raising ceremony, climb the Great Wall, and eat Peking duck."

The boarding announcement came over the loudspeaker, and Zheng Hui strode towards the boarding gate:

"Let's go, we're heading to the capital!"