Q:
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Could the late penalty for patent annual fee of National Intellectual Property Administration, the overdue of export goods parking at ports and import goods overdue declaring to Customs be deducted before tax?
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A:
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According to the Enterprise Income Tax Law Article 10, the expenses of late penalty, compensation, fines and losses of confiscated property is not deductible when calculating taxable income. The expenditures mentioned above can be deducted before tax because they are not ‘late penalty, compensation, fines and losses of confiscated property’.
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Q:
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What kind of materials are needed for enterprises to take pre-tax deduction except vouchers?
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A:
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Enterprises need to obtain pre-tax deduction vouchers if expenditure occurs. They serve as basis of relevant expenditures pre-tax deduction during taxable income calculation. To demonstrate the authentic of pre-tax deduction vouchers, enterprises shall obtain relevant pre-tax deduction documents including contracts, expenditure vouchers, payment vouchers etc., for future reference.
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Q:
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Could enterprises declare additional deductions for R&D expenditures, if they make loss in the year?
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A:
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No matter of gain or loss, enterprises can enjoy the preferential policy of additional deduction for R&D expenditures, as long as they met the relevant provisions standard in a notice of MoF, STA and MoST [2015] No.119 and STA [2015] No.97.
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Q:
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If a labour dispatch enterprise belongs to small and low-profit enterprises, should those dispatched workers be counted as the enterprise employees?
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A:
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The number of employees in small and low-profit enterprises includes employees who have established labour relations with the enterprises and labour dispatch workers accepted by enterprises. Hereby, the dispatched workers should not be counted as employees of the labour dispatch enterprise.
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Q:
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Could enterprises have EIT reduced or exempted for selling agricultural products bought from farmers that are homegrown and self-sold?
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A:
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The EIT could be exempted or reduced if the enterprise directly engages in, or entrusts other enterprises or individuals to engage in, agriculture, forestry, husbandry, or fishery projects that meet the requirements under the ‘company + farmer’ business model. However, enterprises cannot enjoy the preferential policies for the above-mentioned projects if the income comes directly from sales of agricultural products.
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Q:
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Can those branches which are independently accounting and self-responsible for profit and loss enjoy the preferential policies for small and low-profit enterprises?
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A:
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No. The secondary branches that are regarded as independent taxpayers can not enjoy the preferential policies for small and low-profit enterprises. The branches without corporate capacity shall incorporate their business conditions into the headquarters and the amount of tax payable should be aggregated and calculated by the headquarters. These branches can enjoy the preferential policies for small and low-profit enterprises.
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Q:
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How should the enterprise declare the asset loss before tax deduction?
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A:
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For the annual declaration of enterprise income tax in and after 2017, enterprises only need to fill the Schedule of Pre-tax Deduction and Tax Adjustment for Loss of Assets when declaring the deduction of asset losses to the tax bureau. Enterprises no longer need to hand in other materials but retain all the relevant documents for future reference.
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FAQ
