(1) borrowing interest expenses. Production, business period, interest expenses on borrowing from financial institutions, according to the actual number of deductions; interest expenses on borrowing from non-financial institutions, not higher than the financial institutions of the same type, the same period of the loan interest rate calculated within the amount of the portion of the deduction is allowed.
Taxpayers who have borrowed more than 50% of their registered capital from related parties are not allowed to deduct the interest expenses on the exceeding portion before tax.
(2) Wage and salary expenses.
(3) Employee labor union expenses of 2%, employee welfare expenses of 14%, and employee education expenses of 2.5%.
(4) Public welfare and relief donations. Taxpayers for public welfare, relief donations, within 12% of the total annual accounting profit, is allowed to deduct in the calculation of taxable income.
(5) Business entertainment expenses.
Business entertainment expenses incurred by an enterprise in connection with production and operation shall be deducted at 60% of the amount incurred, and the total amount of deduction for the whole year shall not exceed a maximum of 0.5% of the current year's sales (operating) income.
(6) Various types of insurance funds and integrated funds. All kinds of insurance funds and integrated funds, including basic or supplementary pension, unemployment, medical care, work-related injuries and other insurances, contributed to the social insurance agency according to the proportion prescribed by the State Council or the provincial people's government, may be deducted according to the actual situation within the prescribed proportion.
(7) Fixed asset leasing fees. Fixed assets acquired from the lessor by way of operating lease, its rent in line with the principle of independent transaction can be evenly deducted according to the time of benefit; taxpayers who acquire fixed assets by way of finance lease, its rental expenses shall not be deducted, but depreciation expenses can be extracted in accordance with the provisions.
(8) Bad debt losses and bad debt reserves.
Enterprises bad debt quasi-withdrawal ratio of five thousandths of the balance of accounts receivable at the end of the year.
(9) Property and transportation insurance costs.
(10) Losses on assets
(11) Exchange gains and losses
(12) Management fees paid to the head office.
(13) Housing fund
(14) Advertising and business promotion expenses. The portion not exceeding 15% of the sales (business) income of the year is allowed to be deducted in real terms; the excess is allowed to be carried forward for deduction in subsequent tax years.
(15) research and development costs. Taxpayers incurred in the research of new products, new processes, new technologies, research and development costs can be deducted, regardless of whether the formation of intangible assets, do not need to be capitalized. If the research and development expenses incurred by a profitable enterprise increase by more than 10% over the previous year, an additional deduction of 50% of the actual amount incurred can be made.
(16) Other deductions. Deductions are made in accordance with laws, administrative regulations and relevant state tax provisions.
II. In calculating taxable income, the following items shall not be deducted:
(i) capital expenditures;
(ii) intangible asset assignment and development expenditures;
(iii) fines for illegal business and losses of confiscated property;
(iv) late fees, penalties and fines for various taxes;
(v) Natural disasters or accidental losses with compensation;
(vi) donations of public welfare and relief in excess of the deduction allowed by the state, as well as donations that are not of public welfare and relief;
(vii) all kinds of sponsorship expenditures;
(viii) various other expenditures not related to the acquisition of income.
2. 〈Methods for Deduction before Enterprise Income Tax〉〉Supplement:
(A)illegal expenditures such as bribes;
(B)(C)the fines, penalties, and late fees delivered for violating the laws and administrative regulations;
(C)the reserve for the decline in the value of inventory, the reserve for decline in the value of short-term investment, the reserve for the impairment of long-term investment
, the risk reserve fund (including investment risk reserve fund), and any form of reserves other than those that can be made
under national tax regulations;
(iv) Tax regulations have specific deduction ranges and standards (ratios or amounts), and the portion of the actual incurred
expenses exceeds or is higher than the statutory ranges and standards.
Methods for Pre-tax Deduction of Enterprise Income Tax
Guo Shifa [2000] No. 084
Chapter I. General Principles
Article 1 According to the "Provisional Regulations of the Chinese People's Republic of China on Enterprise Income Tax and its Implementing Rules" (hereinafter referred to as the "Regulations" and the "Rules"), the "Provisional Regulations on Enterprise Income Tax and its Implementing Rules" (hereinafter referred to as the "Regulations" and the "Rules"), the "Provisional Regulations on Enterprise Income Tax" and its Implementing Rules are applicable to all enterprises in the PRC. Hereinafter referred to as the "Regulations", "Rules"), the spirit of the provisions, the formulation of these Measures.
Article 2, Article 4 of the Regulations provides that the total income of a taxpayer for each taxable year, less allowable deductions, is the taxable income. Allowable deductions are all necessary and normal costs, expenses, taxes and losses incurred by the taxpayer in each taxable year in connection with the acquisition of taxable income.
Article 3 The deductions declared by taxpayers should be true and legal. Real means that it can provide appropriate evidence to prove that the expenditure has actually occurred; legal means that it is in line with the national tax regulations, other regulations and tax regulations are inconsistent with the provisions of the tax laws and regulations, the provisions of the tax laws and regulations shall prevail.
Article 4 In addition to the tax laws and regulations provide otherwise, the recognition of pre-tax deduction should generally follow the following principles:
(a) the principle of accrual system. That is, the taxpayer shall recognize the deduction when the expense is incurred rather than when it is actually paid.
(ii) Matching principle. That is, the expenses incurred by the taxpayer should be declared for deduction in the period in which the expenses should be matched or allocated. Taxpayers should declare the deductible expenses in a tax year shall not declare the deduction in advance or behind.
(C) the principle of relevance. That is, the taxpayer's deductible expenses must be related to the nature and source of the taxable income.
(d) The principle of certainty. That is, the taxpayer can deduct expenses regardless of when they are paid, the amount must be certain.
(v) The principle of reasonableness. That is, the method of calculation and allocation of deductible expenses of the taxpayer should be consistent with general business routines and accounting practices.
Article 5 The expenses incurred by taxpayers must be strictly differentiated between operating and capital expenditures. Capital expenditures shall not be directly deducted in the period in which they are incurred, but shall be depreciated, amortized or included in the cost of the relevant investment in accordance with the provisions of the tax laws and regulations.
Article 6 In addition to the provisions of Article 7 of the Regulations, the following expenditures shall not be deducted in the calculation of taxable income:
(1) illegal expenditures such as bribes;
(2) fines, penalties, late fees for violation of laws and administrative regulations;
(3) reserve for decline in the value of inventories, reserve for decline in the value of short-term investments, long-term investment impairment reserve, risk reserve fund (risk reserve fund). (c) Reserves for inventory decline, reserves for short-term investment decline, long-term investment impairment, risk reserve fund (including investment risk reserve fund), and any form of reserves other than those that can be withdrawn as stipulated by the state tax regulations;
(d) The portion of the actual incurred expenses that exceeds or is higher than the legal scope and standard when there are specific deduction ranges and standards (proportion or amount) in the tax laws and regulations.
Article 7 The determination of the cost of inventory, fixed assets, intangible assets and investments shall follow the principle of historical cost. In the event of merger, demerger and recapitalization of taxpayers and other restructuring activities, the implied value-added or loss of the relevant assets has been recognized for tax purposes, the cost of the relevant assets can be determined on the basis of the value of the assets after assessment and confirmation.
Chapter II Costs and Expenses
Article VIII cost is the cost of taxpayers selling goods (products, materials, scraps, scrap, waste materials, etc.), the provision of labor services, the transfer of fixed assets, intangible assets (including technology transfer).
Article IX taxpayers must be the costs incurred in business activities are reasonably divided into direct costs and indirect costs. Direct costs are directly attributable to the relevant costing object or labor in the operating costs of direct materials, direct labor and so on. Indirect costs are multiple departments to provide services for the same cost object *** with the same cost, or the same inputs can be manufactured to provide two or more products or services of the joint cost.
Direct costs can be based on the relevant accounting documents, recorded directly into the operating costs of the relevant costing object or labor. Indirect costs must be based on the cause and effect relationship with the costing object, the output of the costing object, etc., in a reasonable way to allocate the costing object in question.
Article 10 The various inventories of taxpayers should be valued at the actual cost at the time of acquisition. The actual cost of the taxpayer's purchased inventory includes the purchase price, purchase costs and taxes.
Taxes included in the cost of inventories refer to consumption tax, customs duty, resource tax and input VAT that cannot be deducted from output tax incurred in purchasing, self-manufacturing or commissioned processing of inventories.
The cost of self-manufactured inventory includes overhead expenses such as manufacturing costs.
Article 11 The cost valuation method for the issue or adoption of each inventory of a taxpayer may adopt individual valuation method, FIFO method, weighted average method, moving average method, planned cost method, gross profit margin method or retail price method. The LIFO method may also be used to determine the cost of inventory issued or received if the physical process of the inventory being used by the taxpayer is consistent with the LIFO method. Taxpayers using the planned cost method or retail price method to determine the cost of inventory or cost of goods sold, must be carried forward in a timely manner at the end of the year when filing tax returns cost differences or commodity purchase and sales differences.
Article 12 The taxpayer's costing method, indirect cost allocation method, inventory valuation method, once determined, shall not be changed arbitrarily, if there is a need to change, should be reported to the competent tax authorities for approval before the beginning of the next tax year. Otherwise, if the taxable income is affected, the tax authorities have the right to adjust.
Article 13 Expenses refers to the deductible selling expenses, administrative expenses and financial expenses incurred by a taxpayer in each tax year, except for those expenses that have been included in the cost.
Article 14 The cost of sales is to be borne by the taxpayer for the sale of goods and the costs incurred, including advertising, transportation, loading and unloading costs, packaging costs, exhibition costs, insurance, sales commissions (can be directly identified as import commissions to adjust the cost of goods), the sale of commission, operating leases, and the sales department of the travel expenses incurred, wages, benefits and other costs.
Taxpayers engaged in the business of commodity distribution of purchased inventory to the warehouse before the arrival of packaging costs, transportation and miscellaneous expenses, transportation and storage process of insurance, loading and unloading costs, reasonable wear and tear during transportation and warehousing before the selection of sorting costs and other costs of purchases can be directly accounted for in the cost of goods sold. If the taxpayer according to the accounting needs of the above purchase costs have been included in the cost of inventory, shall not be repeated in the name of selling expenses to declare the deduction.
The selling expenses of taxpayers engaged in real estate development business also include modification and repair costs before the sale of development products, caretaker fees, heating costs and so on.
Taxpayers engaged in other businesses, such as post and telecommunications, the sales costs incurred by taxpayers have been included in the operating costs shall not be included in the sales costs to repeat the deduction.
Article 15 of the administrative expenses of the taxpayer's administrative department for the management of the organization's business activities to provide support services and the costs incurred. Administrative expenses include the unified burden of the taxpayer's headquarters (company) funds, research and development costs (technology development costs), social security contributions, labor protection costs, business hospitality, labor union funds, employee education expenses, shareholders' meeting or board of directors' fees, amortization of start-up costs, amortization of intangibles (including land use fees, land loss compensation), mineral resources compensation, losses on bad debts, stamp duties and other taxes, fire protection fees, sewage charges, greening fees, and so on. fire protection fee, sewage fee, greening fee, foreign affairs fee, legal, financial, data processing and accounting costs (consulting fee, litigation fee, intermediary agency fee, trademark registration fee, etc.), and reasonable management fees paid to the head office (head office of the same legal entity in the nature of a head office) in connection with its own profit-making activities. Unless approved by the State Administration of Taxation or its authorized tax authorities, taxpayers are not allowed to charge the management fees paid to their affiliates.
Headquarter expenses, also known as corporate expenses, include wages and salaries of headquarter executives, fringe benefits, travel expenses, office expenses, depreciation, repair costs, material consumption, amortization of low-value consumables and so on.
Article 16 of the financial expenses are taxpayers to raise operating funds and expenses incurred, including net interest expenses, net foreign exchange losses, financial institutions and other non-capitalized expenses.
Chapter III Wage and Salary Expenses
Article 17 Wage and salary expenses are all cash or non-cash labor remuneration paid by a taxpayer to employees who work in the enterprise or have employment relationship with the enterprise in each taxable year, including basic wages, bonuses, allowances, subsidies, end-of-year raises, overtime wages, and other expenditures in connection with the position or employment.
Regional subsidies, price subsidies, and meal allowances shall be treated as salary and wage expenses.
Article 18 The following expenditures incurred by a taxpayer shall not be regarded as salary and wage expenditures:
(1) Dividend income distributed by employees investing in the taxpayer;
(2) Social security contributions paid on behalf of employees in accordance with the provisions of the national or provincial government;
(3) Welfare expenditures paid from the withdrawn Employee Welfare Fund (including Employee hardship allowance, family visit expenses, etc.);
(d) Labor protection expenses;
(e) Travel and settlement expenses for employees' transfer to other jobs;
(f) Expenditures for employees' retirement and retiring benefits;
(g) Allowance for one-children;
(h) Housing provident fund borne by the taxpayer;
(i) The state government's contribution to the housing fund;
(j) The state government's contribution to the housing fund;
(k) The state government's contribution to the housing fund;
(l) The state government's contribution to the housing fund;
(m) The state government's contribution to the housing fund > (ix) Other items that the State Administration of Taxation (SAT) determines are not part of salary and wage expenses.
Article 19 Employees who work in the enterprise or have employment relationship with it include fixed workers, contract workers and temporary workers, except for the following cases:
(1) personnel of infirmary, staff bathroom, barber shop, kindergarten, nursery school, which shall be charged to the employee welfare expenses;
(2) retired employees who have received pension insurance, unemployment benefits, laid-off employees, employees waiting to be laid off; (3) employees who are not in receipt of pension insurance, unemployment relief. (b) Laid-off workers, laid-off workers;
(c) Management and service personnel of housing sold or rental housing whose rental income is included in the housing revolving fund.
Article 20 Unless otherwise specified, salary expenses are subject to taxable salary deduction, and the taxable salary deduction standard is implemented in accordance with the regulations of the Ministry of Finance and the State Administration of Taxation.
Article 21 The taxpayers who have been approved to implement the linkage between work and payroll expenses paid to employees, the food service industry in accordance with state regulations to extract and issue commission wages, can be deducted according to the facts.
Chapter IV Depreciation or Amortization of Assets
Article 22 The depreciation expenses of fixed assets used in the business activities of taxpayers, and the amortization expenses of intangible assets and deferred assets can be deducted.
Article 23 The valuation of fixed assets of a taxpayer shall be carried out in accordance with the provisions of Article 30 of the Rules. After the value of fixed assets has been determined, it generally shall not be adjusted except in the following special circumstances:
(i) liquidation of assets under the unified regulations of the State;
(ii) dismantling of a part of a fixed asset;
(iii) permanent damage to a fixed asset, which may be adjusted to the recoverable amount of such fixed asset and recognized as a loss upon examination and approval by the competent tax authorities;
(iv) Adjustment of the original provisional valuation based on the actual value or discovery of errors in the original valuation.
Article 24 The scope of depreciation of fixed assets for taxpayers shall be as provided in Article 31 of the Rules. Unless otherwise provided, the following assets shall not be subject to depreciation or amortization expense:
(1) housing that has been sold to individual employees and housing that has been rented to individual employees and the rental income is not included in the gross income but is included in the housing revolving fund;
(2) self-created or purchased goodwill;
(3) fixed assets that have been accepted as donations, intangible assets.
Article 25 Unless otherwise provided, the minimum years for depreciation of fixed assets shall be as follows:
(1) 20 years for houses and buildings;
(2) 10 years for trains, ships, machines, machineries, and other production equipments;
(3) 5 years for electronic equipments and means of transportation other than trains and ships, as well as appliances, tools, furniture, etc., which are related to production and operation. tools, furniture, etc. for five years.
Article 26 of the promotion of scientific and technological progress, environmental protection and the state to encourage investment in key equipment, as well as perennial vibration, super-intensity use or acid, alkali and other strong corrosive state of the machinery and equipment, there is a need to shorten the depreciation period or to take the accelerated depreciation method, by the taxpayer to submit an application, by the local tax authorities in charge of the examination, and then reported to the State Administration of Taxation for approval.
Article 27 The calculation of depreciation of fixed assets deductible by taxpayers shall be based on the straight-line depreciation method.
Article 28 The value of intangible assets purchased by a taxpayer includes the purchase price and related expenses incurred in the purchase process.
Taxpayers who develop intangible assets on their own should accurately collect the research and development costs, which have been directly deducted as research and development costs at the time of the occurrence of the intangible assets, the use of the intangible assets, and shall not be amortized in installments.
Article 29 The land concession price paid by the taxpayer to the state or other taxpayers for the acquisition of land use rights shall be managed as an intangible asset and amortized equally over a period of time not shorter than the period of use specified in the contract.
Article 30 The software attached to the computer hardware purchased by a taxpayer, which is not separately valued, shall be merged into the computer hardware and managed as a fixed asset; the software, which is separately valued, shall be managed as an intangible asset.
Article 31 The taxpayer's fixed asset repair expenditure can be directly deducted in the period in which it occurs. The fixed asset improvement expenditure of a taxpayer may increase the value of fixed assets if the relevant fixed assets have not been fully depreciated; if the relevant fixed assets have been fully depreciated, they may be treated as deferred expenses and amortized equally over a period of not shorter than five years.
Fixed asset repairs meeting one of the following conditions shall be considered as fixed asset improvement expenditures:
(i) the repair expenditures incurred amount to more than 20% of the original value of the fixed assets;
(ii) the economic useful life of the assets concerned is extended for more than two years after the repairs;
(iii) the repaired fixed assets are utilized for a new or different purpose. (iv) the fixed asset is used for a new or different purpose.
Article 32 The cost of a taxpayer's foreign investment shall not be depreciated or amortized, and shall not be directly deducted as an expense of the current period of the investment, but it may be deducted from the income from the transfer of property when the investment asset is transferred or disposed of, and the income or loss from the transfer of property shall be calculated accordingly.
Chapter V. Borrowing Costs and Rental Expenses
Article 33 Borrowing costs are borne by taxpayers for the needs of their business activities, and the interest costs associated with borrowed funds, including:
(a) interest on long-term and short-term borrowings;
(b) amortization of discounts or premiums related to bonds;
(c) amortization of ancillary costs incurred in arranging the borrowing;
(d) amortization of ancillary costs incurred in arranging the borrowing;
(e) amortization of the interest on the borrowing;
(f) amortization of the interest on the borrowing amortization of ancillary costs incurred in arranging the borrowings;
(iv) differences arising from foreign currency borrowings related to funds borrowed as an adjustment to interest expense.
Article 34 The operating borrowing costs incurred by a taxpayer can be directly deducted if they meet the conditions set by the regulations on the level of interest. For the acquisition, construction and production of fixed assets, intangible assets and the borrowing incurred during the purchase and construction of the assets concerned, the borrowing costs incurred during the construction of the assets concerned, should be included in the cost of the assets concerned as a capital expenditure; the borrowing costs incurred after the delivery and use of the assets concerned can be deducted in the period in which they are incurred. If the taxpayer does not specify the purpose of the borrowing, the borrowing costs should be reasonably calculated according to the proportion of funds occupied by operating activities and capital expenditures, and should be included in the cost of the assets concerned and the borrowing costs that can be directly deducted.
Article 35 Taxpayers engaged in real estate development business for the development of real estate and borrowing funds incurred by the borrowing costs incurred before the completion of real estate, shall be included in the development costs of the real estate.
Article 36 If the amount of loan obtained by a taxpayer from a related party exceeds 50% of its registered capital, the interest expenses on the exceeding part shall not be deducted before tax.
Article 37 The borrowing costs incurred by a taxpayer for the funds borrowed for foreign investment shall be included in the cost of the investment concerned, and shall not be deducted before tax as the taxpayer's operating expenses.
Article 38 Where a taxpayer acquires fixed assets from a lessor by way of operating lease, its rent in line with the principle of independent taxpayer transactions can be evenly deducted according to the time of benefit.
Article 39 A taxpayer who acquires fixed assets from a lessor by way of finance lease shall not deduct its rental expenses, but may draw depreciation expenses according to the provisions. A finance lease is a lease that transfers in substance all the risks and rewards associated with the ownership of an asset.
A lease that meets one of the following conditions is a finance lease:
(i) ownership of the leased asset is transferred to the lessee at the end of the lease term;
(ii) the lease term is for a majority (75% or more) of the useful life of the asset;
(iii) the minimum lease payments during the lease term are greater than or substantially equal to the fair value of the asset at the commencement date of the lease.
Chapter VI Advertising and Business Entertainment Expenses
Article 40 Taxpayers incurring advertising expenses not exceeding 2% of their sales (business) income in each tax year may deduct the expenses according to the actual amount; the excess may be carried forward indefinitely to the subsequent tax years. No pre-tax deduction shall be made for advertising expenses of grain-based liquor. Taxpayers due to industry characteristics and other special reasons really need to increase the proportion of deduction of advertising expenses, must be reported to the State Administration of Taxation for approval.
Article 41 Taxpayers shall declare the deduction of advertising expenses strictly differentiated from sponsorship expenses. The advertising expenses declared by taxpayers for deduction must meet the following conditions:
(1) the advertisements are produced through specialized agencies approved by the industrial and commercial departments;
(2) the expenses have been actually paid and the corresponding invoices have been obtained;
(3) the advertisements have been disseminated through certain media.
Article 42 The business publicity expenses (including advertising expenses not through the media) incurred by a taxpayer in each taxable year may be deducted within the range of not exceeding 5‰ of the sales operating income.
Article 43 The business entertainment expenses incurred by taxpayers directly related to their business operations can be deducted within the following ratios: annual net sales (operating) income of 15 million yuan and below, not exceeding 5 per cent of the net sales (operating) income; annual net sales (operating) income of more than 15 million yuan, not exceeding 3 per cent of the part.
Article 44 The taxpayer declares the deduction of business entertainment expenses, the competent tax authorities require the provision of supporting information, shall provide sufficient valid certificates or information that can prove the authenticity. If they cannot be provided, they shall not be deducted before tax.
Chapter VII Bad Debt Losses
Article 45 Bad debt losses incurred by taxpayers shall, in principle, be deducted according to the actual amount incurred. Upon reporting to the tax authorities for approval, bad debt reserves may also be withdrawn. Bad debt losses incurred by taxpayers who have withdrawn bad debt reserves shall be deducted from the bad debt reserves; the actual bad debt losses incurred in excess of the bad debt reserves withdrawn may be directly deducted in the period in which they occur; the recovery of bad debts that have been written off shall correspondingly increase the taxable income of the current period.
Article 46 The approval of the taxpayers can withdraw bad debt reserve, unless otherwise specified, the bad debt reserve withdrawal ratio shall not exceed 5 per cent of the balance of accounts receivable at the end of the year. The accounts receivable at the end of the year for which provision for bad debts is made is the amount of money that should be collected from the customers who purchased the goods or accepted the services, including the transportation and miscellaneous fees on behalf of the advances, due to the sales of commodities, products or the provision of labor services by the taxpayer. Accounts receivable at year-end include the amount of notes receivable.
Article 47 Accounts receivable of a taxpayer that meets one of the following conditions shall be treated as bad debts:
(i) the debtor is declared bankrupt by law, revoked, and its remaining property is really insufficient to settle the accounts receivable;
(ii) the debtor is dead or has been declared dead by law, disappeared, and his or her property or estate is really insufficient to settle the accounts receivable;
(iii) 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.);
(iv) The debtor overstays its obligation to repay the debt, and the accounts receivable that really can't be settled by the court's ruling;
(v) The accounts receivable that has been overdue for more than three years and still hasn't been recovered;
(vi) Accounts receivable approved for writing off by the State Administration of Taxation's approval of the write-off of accounts receivable.
Article 48 No bad debt provision shall be made for claims receivable of taxpayers incurring non-purchase and sale activities and any current accounts between related parties. Nor shall any current accounts between related parties be recognized as bad debts.
Chapter VIII Other Deductions
Article 49 The basic old-age insurance premiums, basic medical insurance premiums, basic unemployment insurance premiums paid by taxpayers to the tax authorities, labor and social security departments or their designated agencies for all employees in accordance with state regulations, the employment security premiums for disabled persons paid in accordance with the standards confirmed by the provincial tax authorities, and the statutory personal safety insurance paid for special types of employees in accordance with state regulations can be deducted. Personal safety insurance can be deducted.
Article 50 Life insurance or property insurance taken out by taxpayers for their investors or individual employees with commercial insurance organizations, as well as supplementary insurance taken out for their employees in addition to the basic insurance, shall not be deducted.
Article 51 The consumption tax, business tax, resource tax, customs duty, urban maintenance and construction fee, education surcharge and other product sales tax and surcharge paid by taxpayers, as well as property tax, vehicle and vessel use tax, land use tax, stamp duty and so on, are deductible.
Article 52 Taxpayers incur reasonable travel expenses related to their business activities, meeting expenses, board of directors' fees, the competent tax authorities require the provision of supporting information, should be able to provide legal evidence to prove the authenticity of the tax, or else, shall not be deducted before tax.
Proof of travel expenses should include: name of the traveler, location, time, task, payment vouchers and so on.
Meeting expenses should include: meeting time, location, attendees, content, purpose, cost standards, payment vouchers and so on.
Article 53 The commission incurred by the taxpayer meets the following conditions, can be included in the cost of goods sold:
(a) there are legal and authentic certificates;
(b) the object of payment must be independent taxpayers or individuals entitled to engage in intermediary services (the object of payment excludes the employees of the enterprise);
(c) commissions paid to the individual, unless otherwise specified (c) Commissions paid to individuals, unless otherwise specified, shall not exceed 5% of the amount of the service.
Article 54 Reasonable labor protection expenses actually incurred by a taxpayer are deductible. Labor protection expenditure refers to the expenditure incurred on equipping or providing employees with working clothes, gloves, safety protection articles, heat-prevention and cooling articles, etc., which are necessary for the work.
Article 55 Taxpayers incurring asset losses, scrapping net losses, less the balance of compensation and insurance claims, can be deducted after examination by the competent tax authorities. Taxpayers shall not deduct property losses incurred in the sale of employee housing.
Article 56 Taxpayers in accordance with the provisions of the economic contract to pay the liquidated damages (including bank penalties), fines and court costs can be deducted.
Chapter IX Supplementary Provisions
Article 57 According to these Measures and the relevant tax provisions, subject to the tax authorities to review and approve the pre-tax deduction, the provincial tax authorities can make provisions requiring taxpayers to report to the tax authorities for review and approval, accompanied by a certificate of audit by a certified tax accountant or certified public accountant in China.
Article 58 These Measures shall be implemented from January 1, 2000 onwards.
Article 59 If the previous provisions are inconsistent with these Measures, they shall be implemented in accordance with these Measures. Matters not provided for in these measures, in accordance with the relevant provisions.
Article 59