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Q:
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Can the enterprises enjoy the income tax reduction and exemption policy for small and low-profit enterprises if they are deemed levy approved enterprise?
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A:
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"Announcement on Issues Concerning the Implementation of Inclusive Income Tax Reduction and Exemption Policies for Small and Low-Profit Enterprises" issued by the State Taxation Administration (Announcement No. 2 of 2019 of the STA), it clarified the specific implementation caliber, enterprises that meet the required conditions are allowed to enjoy the policy, regardless of whether the enterprises are levied EIT on a deemed basis or an actual basis.
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Q:
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Can the loss-making enterprises enjoy preferential income tax policy for small and low-profit enterprises?
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Corporate income tax is levied on the "net income" when the company has profitable income. Therefore, there is no need to pay corporate income tax in the current period for the loss-making enterprises. However, the losses can be carried forward and made up in subsequent tax years.
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Q:
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Is it allowed to deduct the expenses for purchasing medical protective equipment before the corporate income tax?
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The cost of masks purchased by the company for employees can be deducted before the corporate income tax. If companies pay cash subsidies for employees, it can be deducted before tax as welfare fee.
The expenditure incurred in mainland China are taxable of value-added tax, VAT invoices, including invoices issued by tax authorities in accordance with regulations, shall be used as pre-tax deduction vouchers for the expenditures if the counterparty is a registered VAT taxpayer.
If the counterparty is a unit does not require tax registration in accordance with the law or an individual engaged in small sporadic business operations, the internal receipt or the VAT invoice issued by the tax authorities shall be used as the pre-tax deduction voucher.
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Q:
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Can the individual income tax paid by the enterprise be deducted before the enterprise income tax, if company bears the individual income tax on employees’ wages.
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In accordance with the provisions of Article 4 of the "Announcement of the State Taxation Administration on Issues Concerning the Calculation of Individual Income Tax on the Employer's Part of the Annual One-time Bonus for Employees" (State Administration of Taxation Announcement No. 28, 2011), "The individual income tax borne by the employer for the employee should be part of the individual's salary. Those that are separately included as corporate management fees cannot be deducted before income tax. " Therefore, the company bears the individual income tax on the employee’s wages, which is recorded as "Wage and Salary Payable" subject, can be deducted from before tax. Otherwise, the expenses cannot be deducted from the tax.
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A company has R&D projects, but it is not a high-tech enterprise. Can the R&D expenses incurred be deducted before enterprise income tax?
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High-tech enterprise qualification is not a necessary condition for enjoying the R&D fee additional deduction policy. Enterprises without high-tech enterprises qualifications can also enjoy the preferential policy of R&D expenses deduction, as long as they have eligible R&D expenditures and do not belong to the restrictive industries stipulated by the policy.
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