1. Non-taxable income:
Fiscal appropriations, administrative fees and governmental funds collected and included in the financial management in accordance with the law, and other non-taxable incomes stipulated by the State Council.
2. Interest income from treasury bonds:
It is not included in the amount of income tax payable, but the income from midway transfers should be taxed.
Second, the income tax returns need to be adjusted expenditure items
1. Employee benefits:
Enterprises incurring employee benefits expenditure, not more than 14% of the total wages and salaries actually incurred in the part of the total amount of deduction is allowed. The excess is treated as a tax adjustment and is accounted for as a permanent business.
2. Labor Union Funds:
Enterprises allocated to the labor union funds, not more than 2% of the total wages and salaries are allowed to deduct. The Announcement of the State Administration of Taxation on the Problem of the Vouchers for the Pre-tax Deduction of Trade Union Funds for Enterprise Income Tax (SAT Announcement No. 24 of 2010) stipulates that since July 1, 2010, the trade union funds paid by enterprises for their employees shall be deducted before the enterprise income tax with the Special Receipt for Revenue from Trade Union Funds issued by the trade union organization.
3. Employee education expenses:
Enterprises incurring expenditure on employee education expenses, not exceeding 2.5% of total wages, are allowed to be deducted; more than part of the deduction is allowed to be carried forward to the next tax year, which will give rise to timing differences, and should be done as a tax incremental item.
4. Five insurance and one gold:
Enterprises in accordance with the relevant departments of the State Council or the provincial people's government of the scope and standard for employees to pay "five insurance and one gold", allowed to be deducted; the enterprise for the investor or the employee to pay for supplemental pension insurance premiums, supplemental health insurance premiums in the State Council, the State Council, the tax authorities to pay the insurance premiums, allowed to be deducted. The insurance premiums paid by the competent department of the State Council in charge of finance and taxation are allowed to be deducted. Enterprises in accordance with relevant state policies, for all employees working in the enterprise or employed in the supplemental pension insurance premiums, supplemental medical insurance premiums, respectively, within the standard of not more than 5% of the total wages of employees, in the calculation of the taxable amount of deduction, more than the portion of the deduction, no deduction.
5. Interest expenses:
Enterprises are allowed to deduct the following interest expenses incurred in production and business activities: (1) interest expenses on loans from non-financial institutions to financial institutions, interest expenses on deposits in financial institutions and interest expenses on interbank lending, and interest expenses on bonds issued by the enterprise upon approval; (2) interest expenses on borrowings from non-financial institutions, not exceeding the amount calculated in accordance with the interest on similar loans of financial institutions for the same period of time; (3) interest expenses incurred on bonded investments accepted by an enterprise from its related parties in excess of the ratio of the bonded investment to its equity investment over the prescribed standard, and the excess shall not be deducted in the period in which it is incurred and in subsequent years. The specific ratio of bond investment to its equity investment is: 5:1 for financial enterprises, 2:1 for other enterprises.
6. Business hospitality:
Enterprises incurring business hospitality expenses related to production and operation activities, in accordance with the amount of the 60% deduction, but the maximum shall not exceed the current year's sales revenue (operating) income of 0.5%. At the same time, we must strictly distinguish between the customer kickbacks, bribes and other illegal expenditures, which can not be used as business hospitality and should be directly for tax adjustments. Special attention to the State Taxation Letter [2010] No. 79, Article VIII provides that enterprises engaged in the equity investment business (including the headquarters of the Group, venture capital enterprises, etc.), the dividends and bonuses distributed from the invested enterprises and the income from the transfer of equity can be calculated in accordance with the prescribed proportion of the deduction limit of business hospitality.
7. Expenditure on advertising and business promotion:
Enterprises incurring qualified expenditure on advertising and business promotion, except as otherwise provided by the competent financial and taxation authorities of the State Council, are allowed to deduct the portion not exceeding 15% of the sales revenue (business) of the current year, and the portion exceeding such portion shall be allowed to be carried forward for deduction in the subsequent taxable years, generating timing differences.
8. Fines, penalties, late fees:
(1) Tax late fees refers to taxpayers violating tax laws and regulations, the tax authorities imposed late fees, which shall not be deducted, and shall be made as a tax adjustment;
(2) Fines, penalties, and the loss of confiscated finances refers to the taxpayers violating the provisions of the relevant state laws, regulations, and the fines imposed by the relevant departments, as well as the fines and losses imposed by the judicial authorities, which shall be made as a tax adjustment. The fines and confiscated finances imposed by the judicial authorities are administrative fines, which are not deductible and should be tax adjusted.
9. Donations:
Enterprises incurring public welfare donations, not more than 12% of the total annual profits, are allowed to deduct, while non-public welfare donations shall not be deducted and shall be taxed as a tax increase.
Edited on 2020-07-23 by Questioner
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