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Summary of Deduction Items and Standard for CIT in China (1)
Summary of Deduction Items and Standard for CIT in China. Deduction Items: Entertainment expenses; Standard of Deduction/Proportion of Limit: MIN（60%，5‰）; Remark: 60% of the acutal entertainment expense versus 5‰ of the sales revenue, the lower one is allowed to be deducted；The dividend, equity transfer income of equity investment enterprise can be calculated as sales revenue
Related Regulations on Business Entertainment Expense in China
Business entertainmnet expenses refer to the various entertainment expenses paid by enterprises for the reasonable needs for daily operation, which mainly include expenses incurred in business negotiation, product promotion, external liaison, public relations, conference reception, etc.
Tax-related Issues on Commission Charges in China
Commission refers to the remuneration given by an operator to a middleman in sales business, the middleman shall be an entity or individual who are entitled to engage in intermedirary services, however, the employees shall be excluded. Commission includes agency fees, referral fees, intermediary fees, recommendation fees and brokenrage service fees.
Taxes Payable by Individuals for the Purchase of Housing in China
Property transfer income from the sale of second-hand houses by individuals shall be calculated after deduction of original value of the house, taxes paid in ownership transfer and reasonable expenses from the transfer income. The reasonable expenses refer to the house furnishing expenses, handling fees, notary fees and other expenses actually paid by taxpayers according to the regulations.
Supplementary Assessment, Review and Amendment for Taxation Credit in China
There are 5 grades of taxation credit for enterprises in China: A, B, M, C, D. Taxpayers of A grade can enjoy the incentive measures rendered by tax authorities, such as easier procurement of invoices(general VAT taxpayers are allowed to apply for the amount of special VAT invoices for 3 months at once), no restrictions on ordinary VAT invoices purchase(taxpayers are allowed to purchase ordinary VAT invoices as required)
Tax-related Issues on Individual's Equity Transfer in China
According to Individual’s Income Tax Law, Industrial and Commercial Bureau shall verify the duty-paid certificate in change registration for individual’s equity transfer. Therefore, the tax payment certificate shall be obtained before the transfer of individual’s equity.
Provisions on Disabled Employment Security Fund in China
Disabled employment security fund is a governmental fund collected from employers to support the development of undertakings for people with disabilities. The fund is collected to protect the interests of disabled people and to promote their employment, which shall be paid by the government authorities, organizations, enterprises, public institutions and private non-enterprise organizations who fail to arrange employment for disabled people according to provisions.
New Administration Policy on Taxation Credit in China
The State Taxation Administration of China announced a Notice on Taxation Credit Administration on 13 September 2020, which introduced four measures to optimize taxation credit management and would come into force from 1st November 2020. The new policy will loosen the evaluation criteria of taxation credit by implementing following measures
List of Tax Risks for VAT General Tax Payers in China（2）
Not declare and prepay Land Value Increment Tax according to the type of real estate and tax rate in presale.Not declare and pay tax for employee welfare, reward, investment, distribution to shareholders/investors and in exchange for non-monetary assets with own products of real estate enterprises.
China Taxation - Tax-related Issues of Annual Party
Chinese New Year is coming, enterprises usually hold an annual party to show gratitude to customers, boost employee morale, deepen internal communication and promote strategic sharing. For the annual party, certain tax-related risks such as venue leasing, employee’s reward, According to Chinese tax law, salary income includes salary, bonus, year-end salary raises, dividend, allowance, subsidy and other income incurred from employment.