1. Borrowing interest expenses
(1) Taxpayers in the production and operation period, the interest expenses on borrowing from financial institutions, in accordance with the actual number of deductions; the interest expenses on borrowing from non-financial institutions, including interest expenses on borrowing from taxpayers, according to the interest rate of the financial institutions is not higher than the amount calculated for the same kind of loans at the same time, are allowed to deduct the part within the amount of interest rate. Interest expenses on loans from non-financial institutions, including interest expenses on loans between taxpayers, are allowed to be deducted up to the amount calculated by not higher than the interest rate of the same type of loans of the same period in financial institutions. The so-called financial institutions refer to all kinds of banks, insurance companies and non-banking financial institutions approved by the People's Bank of China to engage in financial business. Interest expense refers to the interest expense on loans incurred after the completion of the construction or purchase of fixed assets and the commencement of production. However, the interest incurred before the completion of the construction or purchase of the fixed assets is finalized and put into operation shall be fully included in the original value of the fixed assets and shall not be deducted. In addition, the taxpayer is approved by the capital of interest expenses are not higher than the same period, the same type of commercial bank loan interest rates are also allowed to deduct the part that exceeds the part shall not be deducted.
(2) engaged in the business of real estate development of taxpayers for the development of real estate and borrowing funds incurred by the borrowing costs incurred prior to the completion of the real estate should be included in the development costs of the real estate.
(3) If the amount of borrowings obtained by a taxpayer from a related party exceeds 50% of its registered capital, the interest expenses on the excess shall not be deducted before tax.
(4) Borrowing expenses incurred by a taxpayer for funds borrowed for outward investment can be directly deducted in accordance with Article 6 of the Provisional Regulations on Enterprise Income Tax of the People's Republic of China and Article 36 of the Measures for Deductions from Enterprise Income Tax (Guoshuifa [2000] No. 84), and do not need to be counted as the cost of the investment concerned.
(5) The enterprise bonds issued by telecommunication enterprises with the approval of the State Council and the National Development and Reform Commission are part of the normal borrowing costs of the enterprises, and the interest paid by the enterprises is allowed to be deducted according to the actual amount when calculating the taxable income of the current period.
Regarding whether the borrowing costs are capitalized or not, the following circumstances should be noted:
(1) When acquiring fixed assets, if abnormal interruption occurs and the interruption lasts for a long period of time, the borrowing costs incurred during the interruption period shall not be included in the cost of the fixed assets acquired and shall be directly deducted in the period in which they are incurred; however, if the interruption is a procedure necessary to bring the acquired fixed assets to a serviceable state. However, if the interruption is a procedure necessary to bring the acquired fixed assets to a usable state, the borrowing costs incurred during the interruption should still be capitalized.
(2) Unless an enterprise borrows money for the purpose of developing an intangible asset explicitly, in general, the borrowing costs for non-specified purposes are not allocated to the cost of the intangible asset. If the cost of the enterprise's self-development and development of intangible assets has been attributed to technology development costs (research and development costs), the interest costs on the borrowings required for the development in question can be directly charged to the administrative expenses of the period in which they are incurred without being capitalized in accordance with the relevant provisions of the technology development costs.
(3) The capitalization of borrowing costs is not directly related to the length of the borrowing period. If an enterprise incurs long-term borrowing in a tax year and does not specify the purpose, and does not incur expenditure on the acquisition of fixed assets in the current period, all of its borrowing costs can be directly deducted. However, enterprises engaged in real estate development business are excluded.
(4) Long-term borrowing costs incurred during the preparatory period of an enterprise, except for long-term borrowing costs incurred for the acquisition of fixed assets and foreign investment, are included in the start-up costs.
2. Wages and Salary Expenditures
Wages and salary expenditures are all labor remuneration in cash or non-cash form paid by the taxpayer to the employees serving in the enterprise or with whom it has an employment relationship in each taxable year, including basic wages, bonuses, allowances, subsidies (including regional subsidies, price subsidies and meal allowance for missed meals), end-of-the-year raises, overtime work and other expenditures in connection with the service or employment. Other expenditures are specified as follows:
(1) Enterprises that implement taxable wage deduction for wage and salary expenditures shall deduct them in accordance with the taxable wage and salary regulations. The so-called taxable wages and salaries refer to the wages and salary expenses that are allowed to be deducted when calculating taxable income. Taxable wages and salaries are deducted according to the regulations of the Ministry of Finance and the State Administration of Taxation. Starting from the year 2000, the Ministry of Finance stipulates that the per capita monthly deduction of taxable wages is limited to RMB 800. The specific standards for taxable wages shall be determined by the people's governments of the provinces, autonomous regions and municipalities directly under the central government within the scope prescribed by the Ministry of Finance and reported to the Ministry of Finance for the record.
Since July 1, 2004, the pre-tax deduction standard for taxable wages of enterprises in the Northeast Region (Liaoning, Jilin and Heilongjiang Provinces) has been raised to RMB 1,200 per capita per month, with the specific deduction standard to be determined by the people's governments at the provincial level based on the average wage level of the locality, within the above limit. Wages actually paid by enterprises within the standard determined by the provincial people's government can be deducted before tax.
Enterprises' annual taxable, salary deduction standard The average number of employees serving and employed by the enterprise in a year * The per capita monthly taxable salary standard determined by the local government * 12
Enterprises implementing the taxable salary deduction method may deduct the wages and salaries actually paid by them within the taxable salary deduction standard; the portion exceeding the standard shall not be deducted in calculating the taxable income.
Finance
The Ministry of Finance will make appropriate adjustments to the limits of taxable wages and salaries according to the price indexes published by the National Bureau of Statistics, and localities can adjust the standards of taxable wages and salaries accordingly.
First, the determination of the employees employed by the enterprise.
Employees who work in the enterprise or have a commission relationship with it include fixed workers, contract workers and temporary workers.
Except for the following:
1) personnel of infirmaries, staff bathrooms, barber shops, kindergartens, and nurseries, who shall be charged to the employees' welfare expenses;
2) retired employees, laid-off employees, and employees to be laid-off, who have already received old-age insurance and unemployment benefits;
3) managers of rental housing, who have already sold their houses or whose rental income is counted as housing revolving fund; and
4) employees who have been employed by the enterprise. Managers of rental housing.
Second, the determination of the scope of wage and salary expenses.
Wages and salaries expenses include basic salaries, funds, allowances, subsidies, year-end raises, and overtime pay. However, the following expenditures are not regarded as wage and salary expenditures:
1) Dividend income distributed by employees investing in taxpayers;
2) Social security contributions paid for employees in accordance with the provisions of the national or provincial government;
3) Welfare expenditures paid from the withdrawn Employee Welfare Funds (including employees' living hardship allowance, family visit fees, etc.);< /p>
4) Welfare expenditures paid from the Employees' Welfare Fund;< /p>
Funding for the Employees' Welfare Fund.
4) Expenses for labor protection;
5) Travel and settlement expenses for employees' transfer to other jobs;
6) Expenses for employees' retirement and pension;
7) Allowance for a single child;
8) Housing provident fund borne by taxpayers;
9) Other items determined by the State Administration of Taxation not to be part of the salary and wage expenses. expenditures as determined by the State Administration of Taxation.
(2) For enterprises that have been approved by the relevant authorities to implement the method of linking total wages and salaries with economic benefits, if the growth rate of wages and salaries actually paid out in total wages and salaries is lower than the growth rate of economic benefits, and if the growth rate of the average wages and salaries of employees is lower than that of the growth rate of labor productivity or less, the enterprise is permitted to deduct them in calculating its taxable income. The amount of wages and salaries withdrawn by the enterprise in accordance with the approved labor efficiency linkage method exceeds the part of wages and salaries actually issued, and shall not be deducted before the enterprise income tax; the part exceeding the part used for the establishment of the wage reserve fund shall be deducted before the enterprise income tax of the year of actual issuance when it is actually issued in the following years after the examination and approval of the competent tax authorities.
(3) Deductions are allowed in calculating taxable income for the commission wages extracted by food service enterprises in accordance with state regulations.
(4) Institutions that implement the wage system for staff of enterprise units stipulated by the State Council should strictly follow the stipulated wage standard for pre-tax deduction; institutions that implement the linkage between total wages and economic benefits as approved by the relevant state authorities should deduct the approved wage standard in accordance with the linkage method for work efficiency before tax deduction.
Enterprise employees' winter heating subsidies, employees' summer cooling costs, employees' labor protection fees and other expenditures can be deducted according to the actual facts within the limits. The limit can be determined by the provincial tax authorities according to the local actual situation.
(5) The total wages actually paid by the software development enterprise are allowed to be deducted when calculating the taxable income. But must also have the following conditions:
1) with the provincial science and technology departments to review the documents, certificates;
2) self-development and development to meet the needs of certain users for the production of software for sale, the software product in the form of a record of the computer program and its related documents on the storage media (including floppy disks, hard drives and CD-ROMs, etc.):
3) the development and production of software products as the main business:
4) the development and production of software products as the main business. development and production of software products as the main business, in line with the conditions for enterprise income taxpayers;
4) annual revenue from the sale of self-produced software accounted for more than 35% of the enterprise's total annual revenue;
5) annual revenue from software technology transfer accounted for more than 50% of the enterprise's total annual revenue (subject to registration of the technology market contract);
6) annual research and development expenditure for software technology accounted for more than 50% of the enterprise's total annual revenue;
6) annual research and development expenditure for software technology accounted for more than 50% of the enterprise's total annual revenue Research and development funds accounted for more than 5% of the enterprise's annual gross revenue.
3. Employee labor union expenses, employee welfare expenses, and employee education expenses
The Enterprise Income Tax Law stipulates that the above three expenses shall be deducted in accordance with the calculation of 2%, 14%, and 1.5% of the taxable gross salary, respectively (except for special provisions).
Taxpayers whose actual wages are higher than the determined taxable wages shall calculate the deduction of employees' labor union funds, employees' welfare and education funds according to the total taxable wages; taxpayers whose actual wages are lower than the determined taxable wages shall calculate the deduction of employees' labor union funds, employees' welfare and education funds according to the total wages actually paid.
Enterprises, institutions and social organizations that have established trade union organizations shall deduct the funds withdrawn and allocated to the trade unions in accordance with the regulations, and shall deduct the funds before tax with the Special Receipt for Allocation of Trade Union Funds issued by the trade union organizations. Where a "special receipt for labor union fund allocation and payment" cannot be issued, the extracted labor union fund shall not be deducted before the enterprise income tax.
According to the Decision of the State Council on Vigorously Promoting the Reform and Development of Vocational Education (Guo Fa [2000] No. 16), enterprises with high technical quality requirements for employees, heavy training tasks, and good economic benefits can extract 2.5% of the employee education funds, which are included in the cost of expenditures. Telecommunications waiting for the industry requires a high quality of employees, the need to continuously increase the actual situation of staff training, allowing telecommunications enterprises to extract the staff education expenses in accordance with the standard of 2.5% of the total taxable wages deducted before the enterprise income tax.
4. Public welfare and relief donations
(1) Taxpayers (except for finance and insurance) for public welfare and relief donations, within 3% of the annual taxable income, are allowed to deduct. Financial and insurance enterprises for public welfare, relief donations within the standard not exceeding 1.5% of the enterprise's taxable income for the year can be deducted, and the excess is not deductible.
The so-called public welfare, relief donations, refers to taxpayers through the Chinese territory of non-profit social organizations, state organs to education, civil affairs and other public welfare undertakings and natural disasters, poverty-stricken areas of donations. The social organizations mentioned here include China Youth Development Foundation, Project Hope Foundation, Soong Ching Ling Foundation, Disaster Reduction Committee, Red Cross Society of China, China Disabled Persons' Federation, China Youth Volunteer Association, Stiff Old Age Foundation, Old Area Promotion Association, Friends of China Research Foundation, China Youth Volunteer Association, National Foundation for the Elderly, Old Area Promotion Association, Friends of China Research Foundation, China Greening Foundation, Guanghua Science and Technology Foundation, China Literature and Art Foundation, China Population Welfare Foundation, and other non-profit public welfare organizations approved by the civil affairs department.
(6) Donations made to the Red Cross cause by enterprises, institutions, social organizations and other social forces through non-profit social organizations and state organs (including the Red Cross Society of China) are allowed to be fully deducted from taxable income when calculating the payment of enterprise income tax. The Red Cross undertaking refers to the Red Cross Society at or above the county level (including the county level), and the relevant activities carried out in accordance with the duties assigned by the Law of the People's Republic of China on the Red Cross Society and the Statutes of the Red Cross Society of China are "Red Cross undertakings". Specifically, the following provisions:
First, the identification of the "Red Cross cause":
1) the construction and management of disaster-preparedness and relief facilities by the Red Cross Society for the purpose of carrying out disaster relief work; the rescue and relief activities carried out by the Red Cross Society in the event of natural disasters and social events;
2) the health care and knowledge of disease prevention carried out by the Red Cross Society;
3) the construction and management of disaster-preparedness and relief facilities by the Red Cross Society for the purpose of carrying out disaster relief work. publicity and popularization of health care and disease prevention knowledge; primary health care training for industries and groups of people prone to accidental injuries, as well as on-site rescue for accidental injuries and natural disasters;
3) publicity, initiation and recognition of gratuitous blood donations;
4) the construction and management of the Chinese Hematopoietic Stem Cell Donor Data Bank (Chinese Bone Marrow Bank), as well as other related humanitarian
5) social welfare undertakings run by Red Cross societies at all levels in line with the aims of the Red Cross; Red Cross staff training and organization building;
6) Red Cross youth work and activities carried out by the Red Cross;
7) international humanitarian aid work;
8) fund-raising activities carried out in accordance with the law;
9) publicizing and publicizing international humanitarian law, the Red Cross and Red Crescent Movement, and the Red Cross and Red Crescent Movement;
9) publicizing and publicizing the work of the Red Cross and the Red Crescent Movement. International humanitarian law, the Fundamental Principles of the Red Cross and Red Crescent Movement, and the Law of the Red Cross Society of the People's Republic of China;
10) other "Red Cross undertakings" entrusted to the Society by the people's governments at or above the county level (including the county level).
Secondly, the eligibility of recipients and subrecipients of donations is determined as follows:
1) full and complete support for the Society's activities; and p>
1) Red Cross societies that are fully qualified as grantees and sub-grantees. The management system and the offices and establishments of the Red Cross societies at or above the county level (including the county level) are approved by the establishment department at the same level. Donations to these Red Cross societies and their "Red Cross undertakings" are allowed to enjoy the preferential policy of full deduction in the calculation of enterprise income tax and individual income tax.
2) Some Red Cross societies are qualified to receive and transfer donations. Red Cross societies at or above the county level (including the county level) that are administered by or attached to a government department are some of the Red Cross societies with the qualifications of grantees and sub-grantees. These Red Cross societies and their "Red Cross undertakings" can only enjoy the preferential policy of full deduction in the calculation of enterprise income tax and individual income tax for donations and sub-donations received when the Red Cross Society of China calls for major activities (subject to the documents of the General Committee). In addition, the acceptance of targeted donations or transfer of gifts must be recognized by the Red Cross Society of China before the donor can enjoy the preferential policies of full deduction in the calculation of payment of enterprise income tax and individual income tax.
3) Donations made by enterprises, public institutions, social organizations and other social forces to welfare and non-profit senior service organizations through non-profit social organizations and government departments are permitted to be fully deducted from the income before payment of enterprise income tax.
Elderly service institutions refer to welfare, non-profit institutions specializing in providing life care, culture, nursing care, fitness and other aspects of services for the elderly, mainly including: social welfare homes for the elderly, homes for the elderly (nursing homes), elderly service centers, senior citizen apartments (including senior citizen nursing homes, rehabilitation centers, and day-care centers), and so on.
4) Since July 1, 2001, donations to rural compulsory education by enterprises, public institutions, social organizations and other social forces through non-profit social organizations and state organs are allowed to be fully deducted from the income before payment of enterprise income tax.
The scope of rural compulsory education refers to elementary school and practices in rural townships (excluding towns where county and county-level city governments are located) and villages organized by the government and social forces, as well as special education schools belonging to this stage. Taxpayers donations to rural compulsory education and high school together in the school, also enjoy the policy of deduction before income tax.
State organs that accept donations or handle the transfer of non-profit social organizations, should be in accordance with the financial affiliation, respectively, by the central or provincial financial departments to use the unified printing (supervision) of the donation bills, and another acceptance of donations or transfer of the unit's financial seal. Tax authorities accordingly to the donor unit for pre-tax deductions.
(5) enterprises and public institutions, social organizations and other social forces through non-profit social organizations and state organs of the public welfare of youth activities (including new) donations, in the payment of enterprise income tax before the full deduction is allowed.
Public welfare youth activity places, refers to the youth palace, youth activity center off-campus activities for the public welfare of science and technology, culture, moral education, patriotic education, sports activities specifically for young students.
(6) enterprises and other social forces through the China Social and Cultural Development Foundation for the following propaganda and cultural causes, enterprise income taxpayers donations within 10% of the annual taxable income, can be deducted in the calculation of taxable income:
1) to the national key symphony orchestras, ballet troupes, opera troupes, Peking Opera Troupe, and other national art performing groups The donations of these organizations.
2) Donations to public libraries, museums, science and technology museums, art museums, and memorials of revolutionary history.
3) Donations to key cultural relics protection units.
4) the cultural administration of the non-productive cultural centers or mass art museums to accept the public welfare activities, projects and cultural facilities and other donations.
Enterprises and public institutions, etc., through the China Foundation for Social and Cultural Development of other public welfare, relief donations (other than the above four), within 3% of the annual taxable income, can be deducted before paying corporate income tax.
(7) All donations made by taxpayers directly to the donee are not allowed to be deducted before paying enterprise income tax.
(8) Calculation and Adjustment of Public Welfare Donations
1) Deduction Limit for Public Welfare Donations = "Income before Tax Adjustment" on Line 43 of the EIT Return * 3% (1.5% for financial enterprises; 10% for public welfare donations in line with the cultural undertakings)
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2) The total amount of actual donation expenditure = all the donation expenditure charged in the non-operating expenditure
3) Donation expenditure tax adjustments = the total amount of actual donation expenditure - the actual amount of public welfare relief donations that are allowed to be deducted
It is worth noting that: a taxpayer has only one public welfare relief donations, the actual amount of its donations is less than the limit of donations deduction, the actual amount of donations shall be deducted according to the actual amount of donations, there is no tax adjustment amount;; the actual amount of donations shall be deducted according to the actual amount of donations. If a taxpayer at the same time there are several public welfare relief donations, or public welfare relief donations in the pre-tax deduction allowed in full, then the "actual amount of public welfare relief donations allowed to be deducted", should be a donation deduction limit and allow full deduction of public welfare relief donations and this.
5. Business hospitality
Taxpayers incur business hospitality expenses directly related to their production and operation of business, in the following ratio range, can be deducted; more than the standard portion of the pre-tax deduction is not allowed.
The annual sales (operating) income amounting to 15 million yuan and below shall not exceed 5% of the net sales (operating) income; the portion of the annual net sales (operating) income exceeding 15 million yuan shall not exceed 3% of such portion.
Taxpayers declaring the deduction of business entertainment expenses, the competent tax authorities require the provision of supporting information, should be provided to color proof of the true grand enough effective vouchers or information. Can not provide, shall not be deducted before tax. Specific deduction standards are as follows:
Level distance Annual sales (business) income Deduction ratio Accrual deduction
1 more than 15 million yuan 5% 0
2 more than 15 million yuan 3% 30,000 yuan
Business hospitality deduction standard can be calculated according to the income segments, but also can be used in a simple way to calculate. The formula for easy calculation is:
Business hospitality deduction standard = net sales (operating) income x the level of deduction ratio + level of quick increase
Net income is the taxpayer engaged in production, business activities limited to income after deducting sales discounts, sales returns and other expenditures, including basic business income and other business income. Specific items of sales (business) income, according to the "Enterprise Income Tax Return" Schedule I "scope of recognition.
6. Various Insurance Funds and Coordinated Funds
(1) Supplementary pension insurance and supplementary medical insurance paid by an enterprise for all its employees in accordance with the proportions or standards stipulated by the State Council or the people's government at the provincial level can be deducted before tax.
(2) Supplementary basic or supplementary pension, medical and unemployment insurance paid by an enterprise for all employees in accordance with the proportion or standard prescribed by the State Council or the provincial people's government may be directly deducted in the period in which the supplementary contributions are made; if the amount is large, the competent tax authority may require the enterprise to deduct the amount in even installments over a period of not less than three years.
7. Property and Transportation Insurance Costs
Taxpayers participating in property and transportation insurance are allowed to deduct the insurance costs paid in accordance with the regulations.
The no-claim preference given by insurance companies to taxpayers should be included in the taxable income of the year. The so-called no-claims preference refers to the incentives given by insurance companies to taxpayers who have taken out insurance policies with insurance companies and have not suffered any accidents or other accidents stipulated by the insurance companies within the agreed insurance period, and thus have not incurred any compensation.
The statutory personal safety insurance premiums paid by taxpayers for employees of special types of work in accordance with state regulations are allowed to be deducted on an actual basis when calculating taxable income.
8. Fixed Asset Leasing Fees
Lease fees paid by taxpayers for leasing fixed assets according to the needs of production and operation shall be handled in accordance with the following provisions respectively;
(1) Taxpayers obtaining fixed assets from leasing under operating leases, and their rents in line with the principle of independent taxpayers' transactions may be deducted evenly according to the time of benefit.
(2) Taxpayers acquiring fixed assets by way of finance leasing are not allowed to deduct their rental expenses, but they can take depreciation expenses according to the regulations. A finance lease is a lease that transfers in substance all the risks and rewards associated with ownership of an asset. A lease that meets one of the following conditions is a finance lease:
1) ownership of the leased asset is transferred to the lessee at the end of the lease term;
2) the lease term is for most of the asset's useful life (75% or more);
3) the minimum lease payments during the lease term are greater than or substantially equal to the fair value of the asset as of the start date of the lease.
9. Bad Debt Losses and Allowance for Bad Debts
Bad debt losses incurred by taxpayers shall, in principle, be deducted in accordance with the actual amount incurred. With the approval of the tax authorities, bad debt reserves can also be withdrawn. The bad debt losses incurred by the taxpayer who has withdrawn the bad debt reserve shall be deducted from the bad debt reserve; the actual bad debt losses incurred in excess of the bad debt reserve withdrawn may be directly deducted in the period in which they occur; when the bad debts that have been written off are recovered, the taxable income of the current period shall be increased accordingly.
Taxpayers who have been approved to withdraw bad debt reserve, unless otherwise specified, the bad debt reserve withdrawal ratio is 5% of the year-end accounts receivable balance. The year-end accounts receivable for bad debt provision is the taxpayer due to the sale of the specific scope of the enterprise allowed to make bad debt provision can be implemented in accordance with the provisions of the "Enterprise Accounting System".
Taxpayers meet one of the following conditions of accounts receivable, should be treated as bad debts; '
(1) the debtor was embezzled declared bankruptcy, revocation, its remaining property is really insufficient to pay off the accounts receivable;
(2) the debtor is dead, or according to law was declared dead, disappeared, and its property or inheritance is really insufficient to pay off the accounts receivable;
(3) The debtor suffers from a major natural disaster or accident, the loss is huge, and the accounts receivable that really can't be settled with its property (including insurance compensation, etc.);
(4) The debtor fails to fulfill the obligation of repaying the debt for a long period of time, and the accounts receivable that is really can't be settled by the court's decision;
(5) The accounts receivable that has been overdue for more than 3 years is not yet recovered;
(6) Accounts receivable approved by the State Administration of Taxation for write-off.
All current accounts between related parties incurred by a taxpayer are generally not subject to bad debt reserve. Nor shall any current accounts between related parties be recognized as bad debts. However, the accounts receivable of the related parties can be deducted before tax as bad debt losses by the court judgment debtor enterprise.
10 Losses on permanent or substantial damage to enterprise assets
Since January 1, 2003, permanent or benefit damage to enterprise assets shall be handled in accordance with the following provisions:
(1) Each asset of an enterprise shall be recognized as a property loss when there is conclusive evidence that it has been permanently or substantially damaged, after deducting the realization income, the recoverable amount as well as the liability and insurance indemnity, and shall be recognized as a loss of property.
(2) Enterprises are required to file timely declarations for deduction of property losses, and those that need to be audited by the relevant tax authorities shall be filed for verification in a timely manner, and shall not be transferred artificially in different tax years. Enterprises not due to calculation errors or other objective reasons and intentionally did not declare property losses in a timely manner, no deduction shall be made after the due date. Indeed, because of the tax authorities failed to deduct the reasons, to the competent tax authorities to review and approve, must be adjusted to the year of the return, and the corresponding tax refund, shall not change the property losses belonging to the tax year.
(3) The property losses declared by the enterprises accepted by the tax authorities must, in principle, be examined and approved before filing the year-end tax return. Tax authorities at all levels must issue the examination and approval procedures in accordance with the prescribed time limit, unless there is a dispute over the judgment of whether the assets are permanently or materially impaired, and there shall be no undue delay, or else they will be held liable in accordance with the "People's Republic of China*** and the State Taxation Levy and Administration Law" and the relevant provisions of the tax law enforcement responsibility system; in the event of a dispute, the Qing will promptly ask for instructions to the higher-level tax authorities.
(4) Inventories shall be deemed to be permanently or materially impaired when one or more of the following occurs:
1) moldy and deteriorated inventories;
2) expired inventories without transferable value;
3) inventories no longer needed for operation and no longer of use or transferable value;
4) other inventories which are sufficiently proved to be of no use or transferable value;
5) inventories with no use or transferable value;
6) inventories with no use or transferable value;
7) inventories with no use or transferable value. Inventory that has no use or transfer value.
(5) Fixed assets shall be deemed to be permanently or materially impaired in one of the following cases:
1) Fixed assets that have been idle for a long period of time, will not be used in the foreseeable future, and have no transferable value;
2) Fixed assets that are unusable due to technological advances, etc.
3) Fixed assets that have been destroyed and have no more use or transferable value;
4) Other inventory that is sufficient to prove that it has no more use or transferable value. and transfer value of fixed assets;
4) because of the fixed assets themselves, the use of the fixed assets will produce a large number of defective products
5) other fixed assets in essence can no longer bring economic benefits to the enterprise.
(6) Intangible assets shall be regarded as permanently or materially impaired when one or several of the following circumstances exist;
1) unlisted assets that have been replaced by other new technologies and have no more use or transfer value;'
2) intangible assets that have exceeded the term of their legal protection and can no longer bring economic benefits to the enterprise intangible assets;
3) other intangible assets that are sufficient to prove that they have lost their use value and transfer value.
(7) An investment shall be deemed to be permanently or substantially impaired when one or more of the following circumstances exist:
1) the investee unit has been declared bankrupt in accordance with the law;
2) the investee unit has been revoked in accordance with the law;
3) the investee unit has ceased operation for more than three consecutive years and there is no reorganization or other plan for resumption of operation;
4 ) Other circumstances sufficient to prove that an investment in essence can no longer bring economic benefits to the enterprise.
11. Fixed Asset Transfer Costs
Taxpayers are allowed to deduct the costs incurred in the transfer of various types of fixed assets.
12. Net Loss of Inventory and Destruction
Taxpayers are allowed to deduct the net loss of inventory and destruction of fixed assets and current assets incurred in the current period after they provide the information of inventory and examination by the competent tax authorities.
Except for financial and insurance enterprises and other enterprises which are allowed to engage in credit business under the state regulations, other enterprises shall not deduct the money directly lent by them as property loss before tax if it cannot be recovered due to the debtor's bankruptcy, closure or death or if it cannot be recovered after the expiration of the time limit; and other enterprises shall not deduce the money entrusted by them to financial and insurance enterprises and other enterprises which are allowed to engage in credit business under the state regulations due to the debtor's bankruptcy, closure or death or if it cannot be recovered after the expiration of the time limit. Other enterprises entrusting financial and insurance enterprises and other enterprises permitted to engage in credit business with loans due to the debtor's bankruptcy, closure, death and other reasons can not be recovered or can not be recovered after the expiration of the period of time, are permitted to be deducted as property losses before tax.
Enterprises that are not allowed to deduct from the VAT output tax due to inventory loss, destruction, scrapping, etc., shall be regarded as property loss of the enterprise, and shall be allowed to deduct it together with the inventory loss before income tax according to the regulations.
13. Exchange gains and losses
Taxpayers in the production and operation of foreign currencies during the period of deposit, borrowing and settlement of transactions in foreign currencies, due to changes in the exchange rate with the currency of the accounts of the exchange gains and losses occurring in the current income or deducted in the current period.
14. Management paid to the head office
Taxpayers are required to pay to the head office of the production and operation of the enterprise related to the management fee, must provide the head office of the collection of management fee scope, quota, distribution basis and method of documentation, after examination by the competent tax authorities, deductions are allowed. The savings in management fees of the head office can be carried forward for use in the following year, but the withdrawal ratio for the following year must be reduced accordingly.
The head office which has the legal personality and comprehensive management function, and provides management services for the subordinate branches and enterprises and has no fixed source of business income can withdraw the management fee.
The approval of the management fee, generally the amount of reasonable expenditure on management fees actually incurred in the previous year as a base, and consider the increase or decrease in the cost of the year to determine a reasonable factor. Increase or decrease factors are mainly price levels, salary levels, functional changes and personnel changes. Normally, the previous year's level should be maintained or slightly reduced. Under special circumstances, the increase shall not exceed the growth rate of total sales revenue or total profit, the lower of the two comparisons.
Management fee extraction is controlled by ratio and quota, and the extraction ratio is generally not allowed to exceed 2% of the total revenue. According to the regulations, the management fee is calculated and paid to the general organization based on the total income of the member enterprises.
The management fee of the head office does not include the technology development fee.
15. Membership fee
The membership fee paid by a taxpayer for joining the Federation of Industry and Commerce is allowed to be deducted in calculating taxable income. Savings from membership fees of the Federation of Industry and Commerce can be carried forward for use in the following year, subject to a corresponding reduction in the amount of membership fees paid.
Taxpayers pay membership fees to associations, societies and other
social organizations established by law according to the standards approved by the civil affairs, price and finance departments at or above the provincial level, and are allowed to deduct such fees before income tax after examination by the competent tax authorities.
16. Employment Guarantee Fund for the Disabled
The Employment Guarantee Fund for the Disabled paid by taxpayers in accordance with the unified regulations of the people's governments of provinces, autonomous regions and municipalities directly under the central government is allowed to be deducted before tax.
17. If the acquisition cost of tax-controlled cash register reaches the standard of fixed assets, it should be managed as fixed assets, and the depreciation amount extracted according to the regulations can be deducted before the enterprise calculates and pays the income tax; if the standard of fixed assets is not reached, the acquisition cost can be deducted once before the income tax.
18. Research and development costs of new products, new technologies and new processes
Enterprise research and development of new products, new technologies and new processes incurred various costs, including new product design costs, process protocol development costs, equipment adjustment costs, raw materials and semi-finished products testing costs, technical library costs, intermediate testing costs not included in the national plan, research institution staff salaries, research and development costs, depreciation of equipment and costs related to new products and semi-finished products. Depreciation of research equipments, other expenses related to the trial production of new products and technical research, and expenses for entrusting other units to carry out scientific research and trial production, are not subject to the proportion limitation, and are included in the deduction of administrative expenses.
Since January 1, 2003, the above policy has been extended from the original state-owned, collective industrial enterprises and state-owned, collective enterprises holding and engaged in industrial production and operation of the joint-stock enterprises, joint ventures, to all the financial accounting system is sound, the implementation of the checking of accounts for the collection of corporate income tax of various ownership of profitable industrial enterprises (including those engaged in the mining industry, manufacturing industry, electricity, gas and water production and supply industry), all the enterprises that are engaged in mining, manufacturing, electricity, gas and water production and supply industry. (including enterprises engaged in mining, manufacturing, electric power, gas and water production and supply), where the technology development expenses incurred in the current year have increased by 10% (including 10%) compared with the actual amount incurred in the previous year, the actual expenses incurred in the current year, in addition to the actual expenses in accordance with the provisions of the law, shall be examined and approved by the competent tax authorities
.