Subsidies and allowances are generally not subject to individual income tax if they are uniformly paid to employees in accordance with state regulations. The income is exempt from personal income tax. However, if the subsidies are given to the employees by the unit on its own initiative and are included in the gross salary, they need to be taxed according to the income from wages and salaries.
I. Subsidies
Subsidies are governmental measures by which the government of a member or any public *** agency provides financial contributions to certain enterprises and support for prices or revenues in order to increase, directly or indirectly, the export of a certain product from or reduce the importation of a certain product into its territory or to the detriment of the interests of other members. Subsidies must be associated with a government or public * * * agency, even if not a state authority, and so long as they exercise governmental functions, they fall within the category of government, which includes both the central government and the government at a subordinate level.
Second, the company subsidies need to pay tax
Can be exempt from personal income tax welfare expense items.
Difficulty grants, relief payments, medical subsidies, employee convalescence fees, compensation for work-related injuries, funeral and burial expenses, pensions, one-child fees, and employee relocation fees paid to employees from corporate welfare fees are exempt from personal income tax.
The Circular of the State Administration of Taxation on the Deduction of Wages and Salaries and Employee Welfare Expenses of Enterprises (Guo Shui Han [2009] No. 3) stipulates that there are three main categories of enterprise employee welfare expenses that can be deducted before the limit of the enterprise income tax:
1. Including equipment, facilities and maintenance costs of the collective welfare departments such as the employees' canteens, the employees' bathrooms, the barbers' offices, the infirmary, the nurseries, the nursing homes, etc. and the staff of the welfare departments. Repair and maintenance costs and welfare department staff wages, salaries, social insurance premiums, housing provident fund, labor costs, etc.
2. Subsidies and non-monetary benefits granted for employees' health care, living, housing, transportation, etc., including the costs of medical treatment outside of the country on official business paid by the enterprise to the employees, medical expenses of employees of enterprises without medical coordination, medical subsidies for employees' dependent immediate family members, Heating subsidies, summer cooling prevention expenses for employees, hardship subsidies for employees, relief expenses, subsidies for employees' canteen expenses, transportation subsidies for employees, etc.;
3. Other employee welfare expenses incurred in accordance with other regulations, including funeral subsidies, compassionate care expenses, settling-in expenses, and travel expenses for family visits. Welfare expense items that are not exempt from personal income tax.
The following incomes do not belong to the scope of tax-exempt welfare expenses, and should be included in the taxpayer's "wages and salaries" income for individual income tax:
1. All kinds of subsidies and grants paid to the individual from the welfare expenses and labor union funds beyond the proportion or base stipulated by the state; (Remark: within the limit of 14% of the total wages). 14% of total wages, if the amount does not exceed 14%, it will not increase the enterprise income tax.)
2. Subsidies and grants paid to employees from welfare and labor union funds;
3. Expenditures for the purchase of automobiles, housing, and computers for individuals that are not temporary hardship assistance.
4. Transportation subsidies and communication subsidies: the income from subsidies for official vehicles and communication obtained by individuals as a result of the reform of the official vehicle and communication system, after deducting a certain standard of official expenses, shall be subject to individual income tax in accordance with the income item of "wages and salaries". If the subsidy is paid on a monthly basis, it will be included in the "wages and salaries" income of that month to calculate the individual income tax; if the subsidy is not paid on a monthly basis, it will be broken down to the month to which it belongs and combined with the "wages and salaries" income of that month to calculate the individual income tax.
5. Meal allowance: In addition to wages and salaries, bonuses, year-end raises, labor bonuses, allowances and subsidies have also been identified as wages and salaries. Among them, the year-end salary increase, labor bonuses, regardless of the type and circumstances of acquisition, are taxed as wages and salaries.
Three notes on tax payment
1. The social insurance premiums, housing provident fund and individual tax which are directly deducted and paid by the unit from the salary of the employee should be included in the contribution base.
2. Transportation subsidies, telephone subsidies, lunch subsidies, festival expenses paid by the unit to individual employees in the form of cash or bank deposits, as well as allowances paid to special positions such as high temperature, high altitude, underground, toxic and harmful, etc., shall be included in the contribution base.
3. Salaries paid by the unit to individual employees through after-tax profit commission or dividends shall be included in the contribution base.
4. Employees who are on a base salary system shall be included in the contribution base if they receive income based on turnover or commission from business performance.
5. Pension insurance can be paid back, but will bear the corresponding late payment fees. If the unit has not been paid, you can ask the unit to make up the contributions. However, if the medical insurance is interrupted for three months, it will not be able to calculate the number of consecutive years.
6, medical insurance can be paid back. The state began to implement the medical insurance system around 2001. In general, you don't have to pay for the medical insurance, but the regulations vary from region to region. Some regions require you to pay for the medical insurance, some regions require you to pay for the medical insurance, some regions require you to pay for the medical insurance, some regions require you not to pay for the medical insurance until the time of your retirement, so whether you need to pay for the medical insurance or not should be determined according to the regulations of your region.
7. Unemployment insurance can be repaid, but it must be repaid by the unit, and individuals can not make up.
8. Workers' compensation insurance can not be paid, if the **** injury occurs during the period of non-payment of workers' compensation insurance, the costs incurred by the employee's injury are borne by the unit.
9, maternity insurance can be retroactive, you can ask the unit to make up for the payment, otherwise the company will have to pay the money for maternity insurance, do not give you can go to the labor bureau to complain about the company.
Financial funds obtained from the financial departments and other departments of the people's governments at or above the county level should be included in the total income, where the following conditions are met at the same time, it can be treated as non-taxable income, and subtracted from the total income when calculating the taxable income:
(a) the enterprise is able to provide the documents of fund allocation, and the documents stipulate that the funds of the special purpose;
(b) the funds of the financial departments or other departments of the people's governments at or above the county level should be included in the total income. (ii) the finance department or other governmental department that allocated the funds has a special fund management method or specific management requirements for the funds;
(iii) the enterprise accounts for the funds and the expenditures incurred with the funds separately.
Legal Basis
The Individual Income Tax Law of the People's Republic of China
Article 4 The following individual incomes are exempted from individual income tax:
(1) the provincial people's governments, ministries and commissions of the State Council, and units of the Chinese People's Liberation Army above the military level, as well as the awards issued by foreign organizations, international organizations, for the purposes of science, education, technology, culture, health, sports, environmental protection, etc.
(2) interest on national bonds and financial bonds issued by the state;
(3) subsidies and allowances granted in accordance with uniform state regulations;
(4) welfare payments, pensions, and relief payments;
(5) insurance payouts;
(6) military personnel's transfer, demobilization, and retirement payments;
(7) the payment of awards to military personnel in accordance with uniform state regulations;
(8) the payment of awards to military personnel in accordance with uniform state regulations;
(9) the payment of awards to military personnel in accordance with uniform state regulations; and p>(vii) Settlement fees, retirement fees, basic pensions or retirement fees, severance pay, and severance living allowance paid to cadres and employees in accordance with the unified regulations of the State;
(viii) Income of diplomatic representatives, consular officials and other personnel of embassies and consulates of various countries in China which shall be exempted from taxation in accordance with the provisions of the relevant laws;
(ix) Income exempted from taxation under the provisions of international conventions and agreements signed by the Chinese government;
(x) Income exempted from taxation under the provisions of international conventions and agreements signed by the Chinese government. agreements to which the Chinese government is a party;
(j) other tax-exempt income as prescribed by the State Council.
The tenth exemption provision of the preceding paragraph shall be reported by the State Council to the Standing Committee of the National People's Congress for the record.
Regulations on the Implementation of the Individual Income Tax Law
Article 6 Scope of the Individual Income of each individual as stipulated in the Individual Income Tax Law:
(1) Income from wages and salaries refers to wages, salaries, bonuses, year-end raises, labor bonuses, allowances, subsidies, and other incomes derived by an individual in connection with his office or employment.
(2) Income from remuneration for labor services refers to the income derived by an individual from performing labor services, including design, decoration, installation, drafting, laboratory, testing, medical, legal, accounting, consulting, lecturing, translating, reviewing, painting, calligraphy, sculpture, film and television, audio-recordings, video-recordings, performances, performances, advertisements, exhibitions, technical services, referral services, brokering services, agency services, as well as other income derived from labor services. income.
(3) Income from remuneration for manuscripts refers to the income obtained by an individual for the publication and dissemination of his/her works in the form of books, newspapers and magazines.
(4) Royalty income refers to the income obtained by an individual by providing the right to use patent rights, trademark rights, copyrights, non-patented technologies and other franchises; the income obtained by providing the right to use copyrights is excluded from the income from manuscripts.
(5) Business income refers to:
1. Income derived from production and business activities of individual industrial and commercial households, and income derived from the production and business activities of sole proprietorships and partnerships registered within the country by investors of sole proprietorships and partners of partnerships;
2. Income derived from the running of schools, medical treatment, counseling, and other remunerated services;
3. Income derived from the provision of patent rights, trademark rights, copyrights, non-patented technologies, and other franchises; income derived from the provision of the right to use copyrights is not included in the income from manuscripts. Income from contracting, leasing, subcontracting and subletting to enterprises and institutions;
4. Income from other production and business activities.
(6) interest, dividend and bonus income, refers to the interest, dividend and bonus income obtained by an individual who owns debt, equity and so on.
(7) Income from property leasing refers to the income obtained by an individual from the leasing of real estate, machinery and equipment, vehicles and vessels, and other property.
(h) Income from property transfer refers to the income derived from the transfer of securities, equity, shares in partnerships, real estate, machinery and equipment, vehicles and vessels, and other property.
(ix) Incidental income refers to income from winning prizes, jackpots, lotteries and other incidental income.
If it is difficult to define the items of taxable income obtained by an individual, the competent tax authorities under the State Council shall determine