What Are the Different Types of IRS Deductions?

The pre-tax deduction mainly refers to the pre-tax deduction items, including the items that can be deducted before corporate income tax and personal income tax.

Tax deduction

Pre-tax deductions are calculated
The pre-tax deduction items mainly include:
Reasonable and actual expenditures related to income earned, including costs, expenses, taxes, losses and other expenses, are allowed to be deducted when calculating taxable income.
1. Taxes: Refers to sales taxes and surcharges
(1) Six taxes and one fee: Consumption tax, business tax, urban construction tax, resource tax, land value added tax, export duty and education surcharge paid;
(2) Value-added tax is a non-value tax and is not included in the tax calculation. It cannot be deducted when calculating taxable income.
(3) Real estate tax, vehicle and vessel tax, land use tax, stamp tax, etc. paid by the enterprise have been included in the management fee and are no longer deducted separately as sales tax.
2. Other expenses refer to reasonable expenses related to production and operation activities incurred by an enterprise in addition to costs, expenses, taxes, and losses.
Reminder: The company incurred the fees and commission expenses related to production and operation, and the deduction is allowed if it does not exceed the calculation limit of the following regulations; the deduction is not allowed for the excess.
Insurance companies: Property insurance companies calculate the limit based on 15% (including the principal, the same below) of the total premium income for the current year after deducting the surrender payments, etc .; life insurance companies calculate 10% of the balance of the current year's total premium income after deducting the surrender payments, etc. Calculate the limit.
Other enterprises: 5% of the amount of revenue recognized in service agreements or contracts signed with intermediary service agencies or individuals with legal operating qualifications (excluding the parties to the transaction and their employees, agents and representatives, etc.). [1]
Since the merger of the two taxes in 2008,
I. Notice of the State Administration of Taxation on "Pre-tax Deduction Measures for Corporate Income Tax"
In order to standardize the pre-tax deduction of corporate income tax and strengthen the management of corporate income tax, the State Administration of Taxation has formulated the "Pre-tax Deduction Method of Corporate Income Tax", which is now issued to you, please implement it.
Attachment: Pre-tax deduction measures for corporate income tax
Chapter I General Provisions
Article 1 These Measures are formulated in accordance with the spirit of the Provisional Regulations of the People's Republic of China on Enterprise Income Tax and its detailed rules for implementation (hereinafter referred to as "the Regulations" and "Details").
Article 2 of Article 4 of the Regulations stipulates that the balance of the total income of a taxpayer for each tax year minus the deductible items is the taxable income. Allowable deductions are all necessary and normal costs, expenses, taxes and losses incurred by the taxpayer in each tax year related to obtaining taxable income.
Article 3 Deductions declared by taxpayers must be true and legal. True means that it can provide appropriate evidence that the relevant expenditures have actually occurred; legal means that it conforms to national tax regulations, and other regulations are inconsistent with tax regulations, which shall prevail.
Article 4 Except as otherwise provided in tax regulations, the confirmation of pre-tax deductions shall generally follow the following principles:
(1) Principle of accrual basis. That is, the taxpayer should confirm the deduction when the expenses occur instead of when they are actually paid.
(B) the matching principle. That is, the expenses incurred by the taxpayer should be deducted in the current period when the expenses should be matched or allocated.
Deductible expenses that should be reported by a taxpayer in a certain tax year shall not be reported in advance or deferred.
(3) Relevance principle. That is, the deductible expenses of the taxpayer must be related to obtaining taxable income from the nature and source.
(4) The principle of certainty. That is, whenever the taxpayer's deductible expenses are paid, the amount must be determined.
(5) The principle of rationality. That is, the calculation and distribution method of taxpayer's deductible expenses should conform to general business practices and accounting practices.
Article 5 Expenses incurred by taxpayers must strictly distinguish between operating expenses and capital expenses. Capital expenditures shall not be deducted directly in the current period. They must be depreciated, amortized or included in the cost of the relevant investment in accordance with the tax regulations.
Article 6 In addition to the provisions of Article 7 of the Regulations, the following expenses shall not be deducted when calculating taxable income:
(1) illegal payments such as bribery;
(2) fines, penalties, and late fees paid for violations of laws and administrative regulations;
(3) Inventory depreciation reserve, short-term investment depreciation reserve, long-term investment impairment reserve, risk reserve fund (including investment risk reserve fund), and any form of reserve other than the reserve that can be withdrawn as required by national tax regulations ;
(4) Tax regulations have specific deduction scopes and standards (proportion or amount), and the actual expenses incurred exceed or exceed the legal scope and standards.
Article 7 The taxpayer's determination of the cost of various assets such as inventories, fixed assets, intangible assets and investments shall follow the principle of historical costs. If taxpayers undergo reorganization activities such as mergers, divisions, and capital structure adjustments, and the hidden value-added or loss of relevant assets has been confirmed and realized in taxation, the cost of the relevant assets may be determined based on the value after evaluation and confirmation.
Chapter II Costs and Expenses
Article 8 Cost is the cost of the taxpayer selling goods (products, materials, scraps, scraps, waste materials, etc.), providing labor services, transferring fixed assets, and intangible assets (including technology transfer).
Article 9 Taxpayers must reasonably divide costs incurred in operating activities into direct costs and indirect costs.
Direct costs are direct materials, direct labor, etc. that can be directly included in the operating costs of related cost calculation objects or labor services. Indirect cost refers to the common cost of services provided by multiple departments for the same cost object, or the joint cost of the same input that can manufacture and provide two or more products or services.
Direct costs can be directly included in the operating costs of related cost calculation objects or labor services based on relevant accounting documents and records. The indirect costs must be allocated to the relevant cost calculation objects in a reasonable way according to the causal relationship with the cost calculation objects and the output of the cost calculation objects.
Article 10 The various inventory of the taxpayer shall be priced at the actual cost at the time of acquisition. The actual cost of the taxpayer's outsourced inventory includes the purchase price, purchase cost and taxes.
Taxes included in the cost of inventories refer to the consumption tax, customs duties, resource tax and VAT input tax that cannot be deducted from the output tax on the purchase, self-made or commissioned processing of inventory.
The cost of taxpayer's own inventory includes indirect costs such as manufacturing costs.
Article 11 The costing methods for the issuance or receipt of taxpayer's various inventories can adopt individual valuation method, first-in-first-out method, weighted average method, moving average method, planned cost method, gross profit method or retail price method, etc. . If the physical process of the inventory being used by the taxpayer is consistent with the LIFO method, the LIFO method can also be used to determine the cost of issuing or receiving the inventory. Taxpayers adopt the planned cost method or retail price method to determine the cost of inventory or cost of sales, and they must carry forward the cost difference or the difference between the purchase and sale of goods in a timely manner when they declare taxes at the end of the year.
Article 12 Once the taxpayer's cost calculation method, indirect cost allocation method, and inventory valuation method are determined, they cannot be changed at will. If it is really necessary to change, it should be reported to the competent tax authority for approval before the start of the next tax year. Otherwise, the tax authorities have the right to adjust if the corresponding amount of taxable income is affected.
Article 13 Expenses refer to the deductible sales expenses, management expenses and financial expenses incurred by the taxpayer in each tax year, with the exception of relevant expenses that have been included in costs.
Article 14 Sales expenses are expenses incurred for the sale of goods that should be borne by the taxpayer, including advertising costs, transportation costs, loading and unloading costs, packaging costs, exhibition costs, insurance costs, and sales commissions (adjustment of import commissions that can be directly identified) Commodity purchase cost), commissioning commissions, operating lease fees, and travel expenses, wages, and welfare expenses incurred by the sales department.
Commodity circulation business taxpayers may purchase expenses such as packing costs, miscellaneous charges, insurance costs during transportation and storage, loading and unloading costs, reasonable losses during transportation, and sorting and finishing costs before entering the warehouse. Directly counted into selling expenses. If the taxpayer has already included the aforesaid purchase expenses into the cost of inventory in accordance with the needs of accounting, he shall not repeat the deduction in the name of sales expenses.
The sales expenses of taxpayers engaged in real estate development business also include the cost of modification and repair before the sale of development products, care, heating, etc.
Sales expenses incurred by taxpayers engaged in other businesses such as post and telecommunications have been included in operating costs and may not be included in sales expenses for repeated deductions.
Article 15 Administrative expenses are expenses incurred by the taxpayer's administrative department in providing various supporting services for the management of the organization's business activities. Management costs include headquarter (company) expenses, research and development expenses (technical development expenses), social security contributions, labor protection expenses, business entertainment expenses, union funds, employee education funds, shareholder meeting or board fees , Amortization of start-up expenses, amortization of intangible assets (including land use fees, land loss compensation fees), mineral resources compensation fees, bad debt losses, stamp taxes and other taxes, fire fees, sewage charges, greening fees, foreign affairs costs, and legal, financial, Data processing and accounting affairs costs (consultation fees, litigation fees, employment agency fees, trademark registration fees, etc.), and payments to the head office (referred to as the head office of the head office of the same legal person) related to its own profit-making activities Reasonable management fees. Except with the approval of the State Administration of Taxation or its authorized taxation authority, taxpayers shall not set out the management fees paid to their affiliated enterprises.
Headquarters funds, also known as company funds, include salaries, benefits, travel expenses, office expenses, depreciation costs, repair costs, materials consumption, and amortization of low-value consumables for headquarters administrative staff.
Article 16 Financial expenses are expenses incurred by taxpayers in raising operating funds, including net interest expenses, net exchange losses, financial institution fees, and other non-capitalized expenses.
Chapter III Salary and Expenditure
Article 17 Wages and salaries are all cash or non-cash remuneration paid by taxpayers to employees who work in or have an employment relationship with them in each tax year, including basic wages, bonuses, allowances, subsidies, year-end plus Salaries, overtime pay, and other expenses related to tenure or employment.
Regional subsidies, price subsidies, and meal subsidies should be used as wages and salaries.
Article 18 The following expenses incurred by the taxpayer shall not be regarded as salary expenses:
(1) dividend income distributed by employees' investments in taxpayers;
(2) Social security contributions paid to employees in accordance with national or provincial government regulations;
(3) Various welfare expenses (including subsidies for employees' living difficulties, road visits, etc.) paid from the employee welfare funds that have been withdrawn;
(4) various labor protection expenditures;
(5) Travel expenses and settlement expenses for employees' transfer work;
(6) Expenses for employee retirement and retirement benefits;
(7) Subsidies for the only child;
(8) The housing provident fund borne by the taxpayer;
(9) Other items recognized by the State Administration of Taxation that are not part of salary and salary expenditure.
Article 19 The employees serving in or having an employment relationship with this enterprise include fixed employees, contract workers, and temporary workers, except for the following:
(1) The staff of the medical office, staff bathroom, barber room, kindergarten, and nursery should be listed from the drawn employee welfare expenses;
(2) Retired employees, laid-off workers, and post-employed workers who have received pension insurance and unemployment benefits;
(3) The management service personnel of the sold house or rental house whose rental income is included in the housing turnover fund;
Article 20 Except as otherwise provided, wage and salary expenditures shall be subject to tax deduction and wage deduction. The tax deduction criteria shall be implemented in accordance with the provisions of the Ministry of Finance and the State Administration of Taxation.
Article 21 Salaries and salaries paid to employees by taxpayers who have been approved to implement the ergonomics-related measures can be deducted based on the actual commissions paid and paid by the food service industry in accordance with state regulations.
Chapter IV Asset Depreciation or Amortization
Article 22 The depreciation expenses of fixed assets used in the taxpayer's business activities, the amortization expenses of intangible assets and deferred assets may be deducted.
Article 23 Valuation of fixed assets for taxpayers shall be implemented in accordance with Article 30 of the Detailed Rules. After the value of a fixed asset is determined, it may not be adjusted except for the following special circumstances:
(1) the verification of capital for clearing assets uniformly stipulated by the state;
(2) demolishing part of the fixed assets;
(3) Permanent damage to a fixed asset can be adjusted to the recoverable amount of the fixed asset and the loss recognized after review by the competent tax authority;
(4) Adjusting the original tentative valuation value based on the actual value or finding an error in the original valuation.
Article 24 The scope of depreciation of taxpayers' fixed assets shall be implemented in accordance with Article 31 of the Detailed Rules. Unless otherwise specified, depreciation or amortization expenses shall not be accrued for the following assets:
(1) The houses that have been sold to individual workers and the houses that have been leased to individual workers and whose rental income has not been included in the total income and included in the housing turnover fund;
(2) Goodwill created or purchased;
(3) Fixed assets and intangible assets that have received donations.
Article 25 Unless otherwise specified, the minimum period for depreciation of fixed assets is as follows:
(1) Houses and buildings are 20 years old;
(2) 10 years for trains, ships, machinery, machinery and other production equipment;
(3) 5 years for electronic equipment, transportation vehicles other than trains and ships, and appliances, tools, and furniture related to production and operation.
Article 26 For key equipment that promotes scientific and technological progress, environmental protection, and state-encouraged investment, and machinery and equipment that are in constant vibration, ultra-intensive use, or subjected to strong corrosion such as acid and alkali, it is necessary to shorten the depreciation period or adopt accelerated depreciation. If the method is adopted, the taxpayer shall submit an application, and after review by the local competent tax authority, it shall be reported to the State Administration of Taxation for approval.
Article 27 For the calculation of depreciation of fixed assets that taxpayers can deduct, the straight-line depreciation method is adopted.
Article 28 The value of intangible assets purchased by taxpayers, including the purchase price and related expenses incurred during the purchase.
Taxpayers should research and develop intangible assets on their own, and they should accurately collect research and development expenses. Where they are directly deducted as research and development expenses when incurred, the intangible assets may not be amortized in stages when used.
Article 29 The land transfer price paid by the taxpayer to the state or other taxpayers to obtain the right to use the land shall be managed as an intangible asset and amortized evenly over a period of use not shorter than that stipulated in the contract.
Article 30 If the taxpayer purchases the software attached to the computer hardware and does not separately price it, it shall be incorporated into the computer hardware as fixed asset management; the separately valued software shall be managed as intangible assets.
Article 31 The taxpayer's fixed asset repair expenses may be deducted directly in the period in which they occur. The taxpayer's fixed asset improvement expenditures can 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 can be used as deferred expenses and evenly amortized over a period of not less than 5 years .
Repairs of fixed assets that meet one of the following conditions shall be considered as expenditures for improvement of fixed assets:
(1) The repair expenses incurred exceed 20% of the original value of the fixed assets;
(2) After the repair, the economic service life of the relevant assets is extended by more than two years;
(3) The repaired fixed assets are used for new or different purposes.
Article 32 The cost of a taxpayer's external investment shall not be depreciated or amortized, nor shall it be directly deducted as the current expense of the investment, but it may be deducted from the income from property transfers obtained when the relevant investment assets are transferred or disposed of, and calculated on the basis of this calculation Income or loss from property transfer.
Chapter V Borrowing Costs and Rental Expenses
Article 33 Borrowing costs are the interest expenses that taxpayers need to bear for operating activities and related to borrowed funds, including:
(1) Interest on long-term and short-term loans;
(2) Amortization of discounts or premiums related to bonds;
(3) Amortization of auxiliary expenses incurred when arranging loans;
(4) Differences arising from foreign currency borrowings related to borrowed funds as adjustments for interest expenses.
Article 34 The operating borrowing costs incurred by the taxpayer may be directly deducted if they meet the conditions for the regulation of interest levels. The borrowing costs incurred for the purchase, construction and production of fixed assets and intangible assets, the borrowing costs incurred during the purchase and construction of the relevant assets shall be included as capital expenditures in the cost of the relevant assets; the borrowing costs incurred after the relevant assets are delivered for use may be Deducted in the current period. If the taxpayer's borrowing does not specify the purpose, the borrowing costs should be reasonably calculated according to the proportion of funds occupied by operating activities and capital expenditures, and the borrowing costs that should be included in the cost of assets and borrowing costs that can be directly deducted.
Article 35. Borrowing costs incurred by taxpayers engaged in real estate development business to borrow funds for the development of real estate, incurred before the completion of real estate, shall be included in the cost of real estate development.
Article 36 If the taxpayer's borrowing amount from a related party exceeds 50% of its registered capital, the excess of interest expenses shall not be deducted before tax.
Article 37 Borrowing costs incurred by taxpayers for funds borrowed for foreign investment shall be included in the cost of the relevant investment and shall not be deducted before tax as business expenses of the taxpayer.
Article 38. Taxpayers acquire fixed assets from the lessor in the form of operating leases, and their rents that meet the principle of independent taxpayer transactions may be deducted evenly according to the benefit time.
Article 39 A taxpayer who obtains fixed assets from a lessor in the form of a financial lease may not deduct its rental expenses, but may withdraw depreciation expenses in accordance with regulations. A financial lease is a lease that essentially transfers 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) when the lease term expires, the ownership of the leased assets is transferred to the lessee;
(2) The lease term is the majority (75% or more) of the useful life of the asset;
(3) The minimum lease payment during the lease period is greater than or substantially equal to the fair value of the assets at the lease start date.
Chapter VI Advertising Fees and Business Entertainment Fees
Article 40 Taxpayers whose advertising expenses incurred in each tax year do not exceed 15% of sales (operating) income may be deducted according to actual conditions; the excess may be carried forward to future tax years indefinitely. Advertising fees for grain liquors shall not be deducted before taxes. Taxpayers who really need to increase the deduction ratio of advertising expenses due to special reasons such as the characteristics of the industry must report to the State Administration of Taxation for approval (Caishui 2012-48 document and interpretation).
Article 41 The advertising expenses deducted by taxpayers shall be strictly distinguished from sponsorship expenses. Taxpayers reporting deductions for advertising expenses must meet the following conditions:
(1) The advertisement is produced by a special agency approved by the industrial and commercial department;
(2) the expenses have been actually paid and the corresponding invoices have been obtained;
(3) Dissemination through certain media.
Article 42 The business promotion expenses (including advertising expenses that have not passed through the media) incurred by a taxpayer in each tax year may be deducted according to the fact that they do not exceed 5 of the sales revenue.
Article 43 Business entertainment expenses incurred by taxpayers that are directly related to their business operations may be deducted according to the actual proportions within the following specified proportions:
Business entertainment expenses incurred by the enterprise related to production and operation activities shall be deducted according to 60% of the amount incurred, but the maximum shall not exceed 5 of the sales (operating) income of the year.
Article 44 Where the taxpayer declares business entertainment expenses deducted, the competent tax authority shall provide sufficient valid evidence or information that can prove the authenticity. If it cannot be provided, it cannot be deducted before tax.
Chapter VII Bad Debt Loss
Article 45 Bad debt losses incurred by taxpayers shall, in principle, be deducted according to the actual amount actually incurred. With the approval of the tax authorities, the reserve for bad debts can also be drawn. The bad debt loss incurred by the taxpayer withdrawing the bad debt reserve shall be offset against the bad debt reserve; the actual bad debt loss that exceeds the bad debt reserve that has been withdrawn may be directly deducted in the current period; when the written off bad debt is recovered, it shall be Correspondingly increase the current taxable income.
Article 46. Taxpayers who have been approved to withdraw bad debt reserves shall, unless otherwise specified, the proportion of withdrawal of bad debt reserves shall not exceed 5 of the balance of accounts receivable at the end of the year. Accounts receivable at the end of the year for the provision of bad debts are the amounts that taxpayers should collect from customers who purchase goods or receive services for reasons such as selling goods, products, or providing labor services, including transportation and miscellaneous charges. Accounts receivable at the end of the year include the amount of notes receivable.
Article 47 Accounts receivable that satisfy one of the following conditions for taxpayers shall be treated as bad debts:
(1) The debtor is declared bankruptcy or cancelled according to law, and its remaining property is indeed insufficient to pay off the accounts receivable;
(2) Accounts receivable where the debtor died or was declared dead or missing according to law, and his property or inheritance was indeed insufficient to pay off;
(3) Accounts receivable that the debtor suffered a major natural disaster or accident and suffered huge losses, and whose assets (including insurance compensation, etc.) were indeed unable to be settled;
(4) Accounts receivable that the debtor has failed to perform its debt repayment obligations within the time limit, and has been determined by the court to be unable to be repaid;
(5) Accounts receivable that have not been recovered for more than 3 years;
(6) Accounts receivable written off approved by the State Administration of Taxation;
Article 48 A taxpayer's debt receivables for non-purchasing and sales activities and any transactions between related parties shall not withdraw bad debt reserves. Accounts between related parties shall not be recognized as bad debts.
Chapter VIII Other Deductions
Article 49 The basic endowment insurance premiums, basic medical insurance premiums, and 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 shall be in accordance with the standards recognized by provincial tax authorities. The paid employment security benefits for the disabled can be deducted according to the statutory personal safety insurance paid by the state for employees of special types of work.
Article 50 Taxpayers shall not deduct life insurance or property insurance from commercial insurance institutions for their investors or individual employees, as well as supplementary insurance for employees in addition to basic protection.
Article 51: Consumption tax, sales tax, resource tax, customs duties, sales tax and surcharges on products such as urban maintenance and construction fees, education surcharges, etc., as well as real estate tax, vehicle and vessel use tax, land use tax, stamp tax, etc. deduction.
Article 52 The taxpayer's reasonable travel expenses, conference expenses, and board fees incurred in connection with his business activities. If the competent tax authority requires certification information, it should be able to provide legal evidence to prove its authenticity. Otherwise, it must not be before tax. deduction.
The supporting materials for travel expenses shall include: name, place, time, task, payment voucher, etc. of the traveler.
The proof of meeting fee shall include: meeting time, place, attendees, content, purpose, fee standard, payment voucher, etc.
Article 53 Commissions incurred by taxpayers that meet the following conditions may be included in sales expenses:
(1) Have legal and authentic credentials;
(2) The object of payment must be an independent taxpayer or individual entitled to engage in intermediary services (the object of payment does not include employees of the enterprise);
(3) Commissions paid to individuals shall not exceed 5% of the service amount unless otherwise specified.
Article 54 The reasonable labor protection expenditure actually incurred by the taxpayer may be deducted. Labor protection expenditures refer to expenditures incurred when employees are required to be provided or provided with work clothes, gloves, safety protection supplies, heatstroke prevention supplies, etc. due to work needs.
Article 55 The taxpayer's asset inventory loss, net loss from retirement, and the balance after deducting the liability of the responsible person and the insurance compensation can be deducted after review by the competent tax authority. The property loss incurred by the taxpayer on the sale of employee housing shall not be deducted.
Article 56 Liquidated damages (including bank penalties), fines, and litigation fees payable by taxpayers in accordance with economic contract provisions may be deducted.
Chapter IX Supplementary Provisions
Article 57 In accordance with these measures and relevant tax regulations, matters that need to be deducted before tax after review and approval by the tax authority, the provincial tax authority may make regulations requiring taxpayers to attach the Chinese registered tax to the tax authorities when they report to the tax authority for review and approval Certified Public Accountant or Certified Public Accountant.
Article 58 These Measures shall be implemented as of January 1, 2000.
Article 59 If the previous relevant provisions are inconsistent with these Measures, these Measures shall be implemented. Matters not specified in these Measures shall be implemented in accordance with relevant regulations.
The latest supplement of the State Administration of Taxation and the State Council on pre-tax deductions
1. State Administration of Taxation: Pre-tax deductions are not allowed for administrative fines
Can a company's vehicle pay a fine for violating regulations, before the invoice can be deducted? In response, the State Administration of Taxation made a clear reply today that administrative fines paid by enterprises are not allowed to be deducted before taxes. The basis is Article 10 of the "People's Republic of China Enterprise Income Tax Law" stipulating that the following expenses shall not be deducted when calculating taxable income: (1) dividends, dividends and other equity investment income payments to investors; (2) enterprises Income tax; (3) late payment of taxes; (4) penalties, fines and losses of confiscated property; (5) donation expenditures other than those specified in Article 9 of this law; (6) sponsorship expenditures; (7) unapproved Expenditure on reserves; (8) Other expenditures not related to income earned. According to the above regulations, administrative fines paid by enterprises are not allowed to be deducted before taxes. [3]
In addition, the SAT also identified the following issues:
The rent paid by the individual who obtained the sublet income to the house lessor shall be allowed to be deducted from the sublet income based on the house lease contract and the legal proof of payment.
Enterprises donate real estate to investors or their family members for free, and they need to pay taxes in different situations. According to Article 1 of the "Notice of the Ministry of Finance and the State Administration of Taxation on Regulating the Management of the Collection of Individual Income Taxes for Individual Investors", individual investors of individual proprietorships and partnerships shall pay corporate funds for themselves, family members and their related personnel. Consumption expenditures not related to production and operation, and property expenditures such as the purchase of automobiles and housing are considered as the profit distribution of the individual investor by the enterprise and are incorporated into the individual production and operation income of the investor. Levy personal income tax. Individual investors of enterprises other than sole proprietorships and partnerships, who use corporate funds as their own, family members and their related personnel to pay consumer expenses and property expenses such as purchasing automobiles and housing that are not related to the production and operation of the enterprise, shall be deemed as The distribution of profits of individual investors by enterprises shall be levied on individual income tax in accordance with the items of "income, dividends and dividend income". The aforementioned expenses of the enterprise are not allowed to be deducted before income tax.
2. Tax deductions for donations from non-profit organizations
The Ministry of Finance, State Administration of Taxation and the Ministry of Civil Affairs issued a notice today. In 2012, a total of 148 non-profit social organizations donated and were eligible for pre-tax deduction. These associations include 148 such as China Peace Development Foundation, China Birth Defect Intervention and Relief Fund, and China Human Rights Development Foundation.
Notice regarding the announcement of the list of non-profit social organizations that have obtained the pre-tax deduction qualification for public welfare donations in 2012
The Ministry of Finance, the State Administration of Taxation and the Ministry of Civil Affairs jointly reviewed and confirmed the list of non-profit social organizations that were eligible for the 2012 pre-tax deduction of public welfare donations .
List of non-profit social organizations eligible for 2012 deduction for non-profit donations
1) Oceanwide Charity Foundation
2) Amway Charity Foundation
3) Education Foundation of Central South University
4) China Peace Development Foundation
5) Hengtong Charity Foundation
6) China Social Work Development Foundation
7) Education Development Foundation of Northwest A & F University
8) Huang Yicong Charity Foundation
9) Education Development Foundation of Henan University
10) Education Foundation of Sichuan University
11) Dekang Pok Oi Foundation
12) China Birth Defect Intervention Relief Foundation
13) China Biodiversity Conservation and Green Development Foundation
14) Jiren Charity Foundation
15) China Social Organization Promotion Association
16) China Blind Association
Wait, please visit the website of the Ministry of Finance for details.
3. State Council: Expanding the scope of pre-tax deduction of enterprise R & D expenses
Recently, the Central Committee of the Communist Party of China and the State Council issued the "Opinions on Deepening the Reform of the Science and Technology System and Accelerating the Construction of the National Innovation System" (hereinafter referred to as "Opinions"), which proposed that the main position of enterprises in technological innovation should be established during the "12th Five-Year Plan" period.
The "Opinions" pointed out that China's independent innovation capability is not strong enough, the main body of technological innovation in enterprises has not been established, the allocation of some scientific and technological resources is over-administrated, and the enthusiasm and creativity of scientific and technological personnel have not been fully exerted.
The "Opinion" proposes that during the "Twelfth Five-Year Plan" period, to establish the dominant position of enterprises in technological innovation, the whole society's R & D expenditure should account for 2.2% of GDP. It is necessary to form more core technologies with independent intellectual property rights, give full play to the role of the technological innovation backbone of large enterprises, and cultivate a number of innovative enterprises and technological SME innovation clusters with comprehensive competitiveness at the forefront of the world.
The "Opinions" put forward the need to establish an institutional mechanism for the R & D and innovation of enterprises' leading industries. Accelerate the establishment of an enterprise-oriented, market-oriented, and closely-integrated technology innovation system that combines production, education, and research. Give full play to the main role of enterprises in technology innovation decision-making, research and development investment, scientific research organization and achievement transformation, and attract enterprises to participate in decision-making of national science and technology projects. Major national science and technology projects with clear industry goals are led and implemented by qualified enterprises.
At the same time, it is necessary to implement the pre-tax deduction policy for corporate R & D expenses, which covers R & D activities in strategic emerging industries, traditional industry technological transformation and modern service industries, etc .; improve the method of calculating corporate R & D expenses, and reasonably expand R & D expenses The scope of deductions was increased, and the implementation of policies such as accelerated depreciation of R & D equipment for enterprises was strengthened.
In terms of personnel training, the Opinions propose that to stimulate the enthusiasm and creativity of scientific and technological personnel, the R & D manpower investment per 10,000 employees must reach 43 person-years; the proportion of citizens with basic scientific quality must exceed 5%.
The "Opinions" proposes that by 2020, China's original innovation capability should be significantly improved, and the innovation environment should be further optimized. A national innovation system with Chinese characteristics adapted to the socialist market economic system and in accordance with the laws of scientific and technological development will basically be established and enter the ranks of innovative countries.
In recent years, the central government has continuously called for deepening the reform of the scientific and technological system. In May 2012, Hu Jintao chaired a meeting of the Political Bureau of the Central Committee of the Communist Party of China to study and deepen the reform of the scientific and technological system and accelerate the construction of the national innovation system. The meeting pointed out that to build an innovative country, the most fundamental thing is to rely on the power of science and technology, and the most important thing is to greatly improve the ability of independent innovation.
In July 2011, Premier Wen Jiabao of the State Council and State Councilor wrote articles in Qiushi magazine about the reform of the scientific and technological system. Wen Jiabao pointed out that for better development of science and technology, we must continue to deepen the reform of the science and technology system. Liu Yandong said that the unreasonable system and mechanism is an important reason for the lack of innovative capacity at the source of basic research in China. It is necessary to deepen the reform of the scientific and technological system and deepen the reform to remove obstacles and stimulate momentum.
In order to help enterprises handle their accounts properly, and assist small businesses to familiarize themselves with the pre-tax deduction of accounts under the small standard, create benefits for enterprises, and help enterprises successfully complete tax declarations with tax authorities, Chanjet Accounting Home has held a series of Expert video lectures on pre-tax deductions, including the national tax department s personally sitting in the town, supporting enterprises, and explaining on-site hot topics of concern to enterprises, including sun tax saving, contracts and tax payment, and small business audit risk prevention, Lectures on pre-tax deductions, etc., and more than 10 experts interacted online to answer questions, helping finance and taxation personnel to learn and understand the implementation of pre-tax deductions in specific accounting practices.

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