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Tax benefits for sole proprietorships

The tax benefits for sole proprietorships are as follows:

1. Sole proprietorships are exempt from corporate income tax. There are four main types of taxes involved in business operations, namely value-added tax, value-added tax surcharge, corporate income tax and personal income tax. Compared with a limited company, the biggest policy advantage of a sole proprietorship is that a sole proprietorship does not need to pay corporate income tax, while a limited company must pay it;

2. It is easier to apply for a sole proprietorship Compared with limited liability companies, sole proprietorships have relatively simpler and faster procedures in terms of registration and cancellation;

3. The total tax burden of sole proprietorships is low. Under normal circumstances, a sole proprietorship can enjoy a lower income tax rate than a limited company. For a sole proprietorship that is a certified tax payer and a small-scale taxpayer, the highest comprehensive tax rate is around 5.18%, which is much lower than that of a limited company.

The forms of tax preferences are as follows:

1. Tax reduction: Tax reduction is a measure to reduce a portion of the tax payable by taxpayers calculated according to the tax rate stipulated in the tax law. The state stipulates tax reductions in tax regulations to provide encouragement and support to certain taxpayers. Tax reductions are all carried out in accordance with the provisions of the tax law; there are two specific methods of tax reduction. One is the proportional reduction method, which means reducing a certain percentage of the calculated tax payable. For example, our country’s tax law stipulates that foreign-invested enterprises engaged in service industries established in special economic zones, with an investment of more than 5 million US dollars and an operating period of more than 10 years, can be exempted from corporate income tax in the first year starting from the year of profit. , the tax is reduced by half from the second to the third year. The second is the rate reduction and tax reduction method, which means reducing the tax rate to reflect the tax reduction. For example, our country's tax law stipulates that foreign enterprises that establish institutions and places and engage in operations in special economic zones can levy corporate income tax at a reduced rate of 15%;

2. Tax exemption: Tax exemption is a tax exemption that taxpayers should pay in accordance with the tax law. The amount of tax paid is not collected, which is also a measure to encourage certain taxpayers or certain specific behaviors. For example, my country's tax law stipulates that agricultural production units and individuals selling self-produced primary agricultural products can be exempted from value-added tax; tax exemption is different from exemption amount. The so-called exemption amount refers to the amount of tax exemption deducted from the taxable objects. . If the tax object is less than the exemption amount, no tax will be levied; if it exceeds the exemption amount, only the excess portion will be taxed. The exemption amount is not a tax preference. It is the same for everyone and does not form a preference for anyone. It is an element that constitutes the tax system. The exemption amount is also different from the threshold point. The threshold point is the tax on the tax object. Quantity limits. If the tax object does not reach the threshold, no tax will be imposed. If the tax reaches and exceeds the threshold, the entire amount will be taxed. For example, my country's current business tax regulations stipulate that for regular tax payment, the starting point is 200 yuan to 800 yuan in monthly business; for time-based taxation, the starting point is 50 yuan per daily turnover. Each locality can determine the starting point for the region based on local conditions. If it does not exceed the threshold, no tax will be levied. If it exceeds the threshold, it will be levied on the full amount of the turnover, and the threshold will not be deducted from the total amount. The threshold seems to be a tax benefit, but in fact, it is to take care of taxpayers with less taxable income. Its purpose is to make the tax policy comply with the principle of reasonable burden. The threshold is also an integral part of the tax system. ;

3. Export tax rebate: Export tax rebate refers to the tax department’s measure to refund the turnover tax originally borne by the export enterprise on the exported goods in accordance with the provisions of the tax law. The purpose is to encourage exports. Taxpayers exporting goods with an applicable tax rate of zero can apply for tax refund on the goods to the tax authorities on a monthly basis with the export declaration form and other documents after completing the export procedures with the customs;

4. Collection first, refund later: "Collect first, then refund" is a measure that first collects the taxes payable by taxpayers in accordance with the tax law, and then refunds them in full or in part by the financial department. For example, after the tax system reform in 1994, foreign-invested enterprises were refunded for excess turnover tax burdens, that is, they were first taxed according to unified turnover tax regulations, and then refunded to foreign-invested enterprises whose tax burdens under the new turnover tax system exceeded the original turnover tax system. The difference in tax burden.

In summary, sole proprietorships must strictly abide by relevant laws and regulations while enjoying tax policies, and must not operate in violation of regulations, otherwise they will face penalties such as fines or even license revocation.

Legal basis:

Article 10 of the Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China

Loss referred to in Article 5 of the Enterprise Income Tax Law , refers to the amount less than zero after deducting non-taxable income, tax-free income and various deductions from the total income of an enterprise in each tax year in accordance with the provisions of the Enterprise Income Tax Law and these Regulations.