Q：
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What is Trade Union Fund?
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A：
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Trade union fund is a kind of fund that companies can make accrued expenses according to the total salary in accordance with the accounting system of enterprises.
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Q：
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Can company not pay the trade union fund if it not established a trade union?
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A：
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No. The Trade Union Law stipulates that the company establishing the trade union organization shall allocate funds to the trade union every month at the rate of 2% of the total monthly salary of all employees. There are similar regulations in various regions, where companies that have not established trade union organizations shall be charged a reserve fund for the establishment of the association at 2% of the total wages of all employees, of which 40% shall be paid to the tax department. Moreover, some regions have also introduced penalties, fines and late fees for not paying trade union funds.
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Q：
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How are trade union funds returned?
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A：
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Levy first and then refund. Where small and micro enterprises enjoy the full return of trade union funds in 2020, they are based on the 2019 identification data. If they enjoy the full return of trade union funds in 2021, they are based on the 2020 identification data.
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Q：
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Since it can be returned in full, can it not be declared or paid?
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A：
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No. “Levy first and then refund” means it is still declared and paid first, then apply for a return. The reason is that the enterprise may go beyond the scope of small and micro enterprises in its business activities, such as the increase in personnel or the increase in operating income, and become a medium-sized enterprise, so that it is no longer eligible for preferential treatment. Therefore, only after the declaration, the government department can judge whether this part of the fee should be refunded.
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Q：
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The refund of trade union fund is taxable or not?
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A：
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Non-taxable. The returned trade union funds are mainly used for employees or trade union activities, which are separately accounted for and are earmarked for special purposes.
According to the document of Cai Shui [2011] No. 70, it can be regarded as non-taxable income and is not subject to corporate income tax. It is also not a taxable act of VAT and does not require VAT payment.
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FAQ
