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FAQ after Shenzhen Social Insurance Levied by SAT

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Q: The company’s previous accounts records for wages and salaries is the minimum wage required by the city, and the remaining wages and salaries were paid by personal bank account. Is this possible after the social insurance is collected by the tax department?
A: After the social insurance is collected by the tax department, employees’ individual income tax and social insurance data will be compared and matched in the future. It can be easily discovery of suspects for the data, such as the inconsistent of age, employers’ name and wages for social insurance and tax system.

Q:
The company’s account records for wages and salaries is the minimum wage required by the city, and allows employees to provide fapiaos, even to help them buy fapiaos for the remaining wages and paid to them as reimbursement. Is there any risk in this situation?
A:
The tax risk for this situation is extremely high. Once the fapiaos are out of control, it will bring great risks to the enterprises. If there are serious dishonest behaviours such as failure to participate in social insurance according to relevant regulations and refusal to rectify, failure to truthfully declare the social insurance payment base and refusal to rectify, corresponding restrictive measures will be imposed, such as appropriately restricting the use of civil aircraft within a certain period of time.

Q:
Is it feasible to treat full-time employees as casual workers without paying social insurance and prepare the payroll list to pay wages?
A:
As long as the casual worker has an employment relationship with the company and signs a labour contract, and participates in the unit's attendance and obeys the unit's rules and regulations at the same time, they shall enjoy the same treatment as the employees and need to purchase social insurance. Enterprises should conduct self-examination early to reduce the risks.

Q:
If employees give up for purchasing social insurance voluntarily, can company not purchase social insurance for them?
A:
No, the purchase of social insurance by a company for employees is not only the legal rights and interests of employees, but also an obligation that must be fulfilled under the "Social Security Law". Even if the employee signs a written statement with the company stating that the company does not need to bear the consequences, it is invalid due to violation of the "Social Security Law." After the social insurance is collected by the tax department, the tax department can require the company to pay social insurance and surcharge fees for late payment, and also impose fines on companies and individuals.

Q:
Can companies not purchase social insurance during the probation period?
A:
No. According to the "Social Security Law", once the labour relationship is established, the employer should fulfill the obligation to purchase. The "Labour Law" has clarified that the probation period is included in the labour contract period, so the company cannot use this reason to delay the purchase of social insurance.

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