1, "Enterprise Income Tax Law"
Article 30 The following expenditures of an enterprise can be added and deducted when calculating taxable income:
(a) research and development costs incurred in the development of new technologies, new products, and new crafts;
(b) payments made to place disabled persons and other employed persons encouraged by the state to be placed on Wages.
Article 34 Enterprises may take tax credits for a certain percentage of their investment in acquiring specialized equipment for environmental protection, energy and water conservation, and production safety.
2. Regulations for the Implementation of the Enterprise Income Tax Law
Article 96 The additional deduction for the wages paid by enterprises for the placement of disabled persons referred to in Article 30(2) of the Enterprise Income Tax Law means that if an enterprise has placed disabled persons, it shall, on top of the actual deduction for the wages paid to the disabled employees, deduct an additional 100% of the wages paid to the disabled employees. The scope of disabled personnel applies to the relevant provisions of the Law of the People's Republic of China on the Protection of Persons with Disabilities.
Methods for the additional deduction of wages paid by enterprises for the placement of other employment personnel encouraged by the state, as referred to in Article 30(2) of the Enterprise Income Tax Law, shall be separately provided by the State Council.
3. The Law on the Protection of Persons with Disabilities
Article 36 The State shall, in accordance with the law, grant tax concessions to employers who have arranged for the employment of persons with disabilities to reach or exceed the prescribed ratio or have centrally arranged for the employment of persons with disabilities and to persons with disabilities who are engaged in self-employment and give them support in the areas of production, operation, technology, capital, materials and venues. The State exempts persons with disabilities engaged in self-employment from administrative fees.
4. Circular on Issues Concerning Preferential Policies on Enterprise Income Tax for the Placement of Persons with Disabilities in Employment (Cai Shui [2009] No. 70)
I. Enterprises placing persons with disabilities in employment may, on the basis of actual deduction of the wages paid to the disabled workers, make additional deduction of 100% of the wages paid to the disabled workers in calculating taxable income.
5. Circular on Preferential Tax Policies for Promoting the Employment of Persons with Disabilities (Cai Shui [2007] No. 92)
The actual wages paid to persons with disabilities by a unit can be deducted before the enterprise income tax on the basis of the actual wages paid to persons with disabilities and can be deducted in accordance with the addition of 100% of the actual wages paid to persons with disabilities.
If the deducted portion of wages paid to the disabled is greater than the current year's taxable income, the unit may be allowed to deduct the portion that does not exceed the taxable income, and the excess portion may not be deducted in the current year or in the following years. Loss-making units are not eligible for the above deduction of taxable income from wages.
Units can enjoy other enterprise income tax incentives while implementing the above method of deducting taxable income from wages.
Units whose average monthly ratio of the disabled persons actually accommodated to the total number of on-the-job employees of the unit is less than 25% (not including 25%) but more than 1.5% (including 1.5%), and the number of disabled persons actually accommodated is more than 5 (including 5) may enjoy the preferential policies on enterprise income tax "plus deduction" as stipulated in Article 2(1) of this Circular, but may not enjoy the preferential policies on value-added tax or business tax "plus deduction" as stipulated in Article 1 of this Circular. The preferential policy of value-added tax or business tax "immediate refund or reduction".
Enterprise income tax shall be exempted for the income from VAT refund or business tax reduction obtained by the units in accordance with the provisions of this Circular.
II. Value-added Tax and Business Tax
1. Circular on Preferential Tax Policies for Promoting the Employment of Persons with Disabilities (Cai Shui [2007] No. 92)
For the units that have accommodated persons with disabilities, the method of immediate refund of value-added tax (VAT) or reduction of business tax (BT) is implemented with a quota set by the tax authorities in accordance with the number of persons with disabilities that have been accommodated in the units.
The specific limit of VAT refund or business tax reduction per year for each person with disabilities actually placed in the unit shall be determined by the tax authorities at or above the county level on the basis of six times the minimum wage standard approved by the people's government at the provincial (including autonomous regions, municipalities directly under the central government, and municipalities separately listed in the plan, hereinafter, the same) level applicable to the district and county where the unit is located, but the maximum shall not be more than 35,000 yuan per person per year.
The units shall be exempted from enterprise income tax on the income from VAT refund or business tax reduction obtained in accordance with the provisions of this Circular.
Units whose average monthly ratio of the disabled persons actually accommodated to the total number of on-the-job employees of the unit is less than 25% (not including 25%) but more than 1.5% (including 1.5%), and the number of disabled persons actually accommodated is more than 5 (including 5) may enjoy the preferential policies on enterprise income tax "plus deductions" as stipulated in Article 2(1) of this Circular, but shall not enjoy the preferential policies on value-added tax or business tax "plus deductions" as stipulated in Article 1 of this Circular. The preferential policy of value-added tax or business tax "immediate refund or reduction".
2. Circular on Measures for the Administration of Preferential Tax Policies for Promoting the Employment of Persons with Disabilities (Guo Shui Fa [2007] No. 67)
VAT is implemented in the form of immediate levy and immediate refund. If the taxable amount of a taxpayer for the current year is not sufficient for refund, it shall not be carried forward to be refunded in the following years. The amount of VAT refundable by a taxpayer in the current month is calculated according to the following formula: ?
The amount of value-added tax to be refunded in the current month = the number of disabled persons actually accommodated by the taxpayer in the current month × the specific limit of value-added tax to be refunded to each disabled person per year as determined by the tax authorities at or above the county level ÷ 12
The business tax is implemented in the form of monthly tax reduction. The competent tax authorities shall reduce the business tax on a monthly basis, and if the business tax payable in the month is insufficient to reduce the business tax, it shall not be carried forward to reduce the business tax in the following months of the year. The amount of business tax payable by the taxpayer for the month shall be reduced according to the following formula: ?
The amount of business tax to be reduced in the current month = the number of disabled persons actually accommodated by the taxpayer in the current month × the specific limit of business tax reduction per disabled person per year determined by the tax authorities at or above the county level ÷ 12
Third, other taxes
Notice on the Policy of Urban Land Use Tax for the Units of Placement of Disabled Persons for Employment (Cai Shui [2010] No. 121)
I. >I. Issues Concerning Urban Land Use Tax for Units Employing Persons with Disabilities
For units in which the ratio of the number of persons with disabilities actually employed to the total number of employees on duty in a taxable year is higher than 25% (inclusive) on average per month, and the number of persons with disabilities actually employed is higher than 10 (inclusive), the urban land use tax for that year may be reduced or exempted. The specific tax reduction or exemption ratio and management methods shall be determined by the competent departments of finance and taxation of provinces, autonomous regions and municipalities directly under the central government.