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Q：
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What are the contents of other income referred to in the Enterprise Income Tax Law?
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A：
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Article 22 of the Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China (Order No. 512 of the State Council of the People's Republic of China) stipulates that "Income from other sources, mentioned in Subparagraph (9) of Article 6 of Enterprise Income Tax Law, refers to the income derived by an enterprise other than those incomes prescribed in Subparagraphs (1) through (8) of Article 6 of Enterprise Income Tax Law, including income from enterprise asset surplus, income from overdue deposits on packaging materials, accounts payable that cannot be settled, accounts receivable recovered after being written off as bad debts, income from debt restructuring, income from subsidies, income from penalties for breach of contract, exchange gains, etc.”
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Q：
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How can employee training fees for integrated circuit design companies and eligible software companies be deducted before enterprise income tax?
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A：
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According to the "Notice of the Ministry of Finance and the State Administration of Taxation on Further Encouraging the Development of Enterprise Income Tax Policies in the Software Industry and Integrated Circuit Industry" (Caishui [2012] No. 27), "the training expenses of employees in integrated circuit design enterprises and eligible software enterprises should be separately accounted for and deducted from the taxable income based on the actual amount incurred.”
According to the "Notice of the State Administration of Taxation on Several Tax Treatment Issues in the Implementation of Enterprise Income Tax" (Guoshuihan [2009] No. 202), "The employee training expenses incurred by software production enterprises in employee education funds can be fully deducted before enterprise income tax in accordance with the" Notice of the Ministry of Finance and the State Administration of Taxation on Several Preferential Policies for Enterprise Income Tax "(Caishui [2008] No. 1)”.
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What are the materials for retaining and filing enterprise income tax at a reduced rate of 15% for high-tech enterprises that require key support from the state government?
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According to the "Announcement of the State Administration of Taxation on the Revised Measures for the Handling of Preferential Policies for Enterprise Income Tax" (Announcement No. 23 of 2018), the attached "Catalogue of Management of Preferential Policies for Enterprise Income Tax (2017 Edition)" stipulates that enterprises enjoy the preferential policy of "reducing the tax rate of enterprise income tax by 15% for high-tech enterprises that require key support from the state government ". The main retained materials for future reference include: "1. Qualification certificate for high-tech enterprises; 2. Identification materials for high-tech enterprises; 3. Intellectual property related materials; 4. Explanation that the technology that plays a core supporting role in the annual main products (services) belongs to the scope of" National Key Supported High tech Fields ", high-tech products (services) and corresponding income data; 5. Annual employee and technology certification materials. Proof of personnel situation; 6. The total amount of research and development expenses for the current year and the previous two accounting years, their proportion to the same period's sales revenue, research and development expense management information, research and development expense auxiliary accounts, and a detailed table of research and development expense structure.”
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Q：
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Can the tax base of fixed assets be adjusted if there is appreciation or impairment during the period when the enterprise holds them?
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A：
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According to the Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China, "The fixed assets of an enterprise are taxed based on their historical cost. Historical cost refers to the expenses actually incurred by an enterprise when acquiring the specific assets.”
During the period when an enterprise holds various assets, if the value of the assets increases or decreases, the tax basis of the assets shall not be adjusted, except that losses or gains may be recognized as prescribed by the finance and taxation departments of the State Council.
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Q：
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Are foreign-funded enterprises within the country resident enterprises?
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A：
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According to the Enterprise Income Tax Law of the People's Republic of China, "Article 2 Enterprises are categorized into resident enterprises and non-resident enterprises. For the purposes of this Law, a resident enterprise is an enterprise established in China in accordance with the law, or which is established in accordance with the law of a foreign country (region) but with effective management located in China.
Therefore, domestic foreign-funded enterprises that meet the above conditions belong to resident enterprises.
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