What are the Most Common Income Tax Deductions?

Corporate income tax relief refers to a flexible adjustment measure adopted by the state to encourage and support the development of enterprises or certain special industries by using tax economic leverage.

Corporate income tax relief

enterprise

• enterprise

  It mainly includes the following:

  (1) High-tech enterprises in the high-tech industrial development zone approved by the State Council shall be levied at a reduced tax rate of 15%

  enterprise

  Tax reductions and exemptions refer to tax reductions and exemptions granted to taxpayers in accordance with tax laws and regulations and relevant national tax regulations (hereinafter referred to as tax laws). Tax reduction refers to the reduction of part of the tax from the tax payable; tax exemption refers to the exemption of taxes for a certain tax type or a certain item.

  Tax reduction and exemption are classified into tax reductions for approval and tax reductions for filing. The tax deduction and exemption for approval refers to the tax deduction and exemption items that should be approved by the tax authority; the tax deduction and exemption for the filing type refers to the tax deduction and exemption items that cancel the approval procedures and the tax deduction and exemption items that do not require approval by the tax authority.

  Taxpayers who are eligible for tax deduction or exemption should submit corresponding materials, submit an application, and implement it after approval by a tax authority with approval authority. Taxpayers shall not enjoy tax reduction or exemption if they have not applied in accordance with the regulations or have not applied for approval from the competent tax authorities.

  Taxpayers who wish to enjoy tax deductions and exemptions for filing purposes shall apply for filing, and shall be implemented from the date of registration after being registered with the tax authorities. No tax deduction or exemption can be made for taxpayers who fail to file records in accordance with regulations.

  Where a taxpayer engages in both deducted and exempted items, he shall account separately and calculate the tax basis and deducted amount of the deducted and exempted items independently. Those that cannot be accounted for separately are not eligible for tax deductions and exemptions; those with unclear accounts shall be approved by the tax authorities according to reasonable methods.

  Various types of corporate income tax reduction and exemption shall be handled in accordance with the relevant provisions of the Notice of the State Administration of Taxation on Printing and Distributing (Administrative Measures for Tax Reduction and Exemption (Trial)) (Guo Shui Fa [2005] No. 129).

  If the provisions of Guoshuifa [2005] No. 129 are inconsistent with the provisions of the "People's Republic of China Enterprise Income Tax Law" ^[1] and its implementing regulations, the provisions of the "People's Republic of China Enterprise Income Tax Law" and its implementing regulations shall apply.

  For taxpayers to apply for tax deduction and exemption for approval, they must be subject to approval by laws and regulations such as the "Enterprise Income Tax Law of the People's Republic of China" and its implementing regulations, and by the State Council. And within the period of tax reduction and exemption provided by the policy, a written application is submitted to the competent tax authority and the following materials are submitted:

  (1) Application report of tax reduction and exemption, which sets out the reasons, basis, scope, period, quantity and amount of tax reduction and exemption.

  (2) Financial accounting statements and tax returns.

  (3) Certification materials issued by relevant departments.

  (4) Other materials required by the tax authorities.

  The materials submitted by taxpayers shall be true, accurate and complete. Tax authorities shall not require taxpayers to submit technical materials and other materials that are not related to the tax reduction and exemption items they apply for.

  Taxpayers can apply to the competent tax authority for tax reduction or exemption, or they can apply directly to the tax authority that has the authority to approve.

  If the period of tax reduction or exemption exceeds one tax year, a one-time approval is conducted.

  Before implementing tax deductions and exemptions for tax purposes, taxpayers must report to the competent tax authority for the record:

  (I) Implementation of tax reduction and exemption policies.

  (2) Relevant materials required by the competent tax authority.

  The filing requirements for corporate income tax preferential policies are:

  1. Record of income of qualified non-profit organizations;

  2. Records of preferential policies for enterprises to comprehensively utilize resources and generate income from products that meet national industrial policy requirements

  3. Record the research and development expenses incurred in the development of new technologies, new products and new processes;

  4. Record of salary paid for resettlement of disabled persons;

  5. Vegetables, cereals, potatoes, oilseeds, beans, cotton, hemp, sugar, fruits, nuts, cultivation of new varieties of crops, cultivation of traditional Chinese medicine, cultivation and planting of forest trees, livestock Recording of farming, forestry, animal husbandry, and fishery service industry projects such as breeding, forest product collection, irrigation, veterinary medicine, agricultural technology promotion, agricultural machinery operation and maintenance, and ocean fishing;

  6. Recording of preliminary processing of agricultural products;

  7. Records of cultivation of flowers, tea and other beverage crops and spice crops, marine aquaculture, and inland aquaculture;

  8. Record of income from investment and operation of public infrastructure projects supported by the state;

  9. Recording of income from qualified environmental protection, energy saving and water saving projects;

  10. Record of eligible technology transfer income;

  11. Record of qualified small and small profit enterprises;

  12. The high-tech enterprises that the state needs to support for the record;

  13. The part of the corporate income tax payable by enterprises in ethnic autonomous areas that is part of the local record is filed;

  14. Recording of taxable income deducted by venture capital enterprises;

  15, the company's investment for environmental protection, energy saving and water saving, production safety special equipment credit for the record;

  16. Recording of fixed assets by shortening the depreciation period or adopting accelerated depreciation.