Tax treatment for units purchasing insurance for employees

The "Regulations on the Implementation of the Enterprise Income Tax Law of the People's Republic of China" states: Enterprises shall comply with the provisions of the relevant competent departments of the State Council or the provincial people's government. The scope and standards are basic social insurance premiums and housing provident funds paid by employees such as basic pension insurance premiums, basic medical insurance premiums, unemployment insurance premiums, work-related injury insurance premiums, and maternity insurance premiums, which are allowed to be deducted. Supplementary pension insurance premiums and supplementary medical insurance premiums paid by enterprises for investors or employees are allowed to be deducted within the scope and standards prescribed by the financial and taxation authorities of the State Council. Except for personal safety insurance premiums paid by enterprises for employees in special types of work in accordance with relevant national regulations and other commercial insurance premiums that can be deducted according to the provisions of the financial and taxation authorities of the State Council, commercial insurance premiums paid by enterprises for investors or employees shall not be deducted.

The "Notice of the State Administration of Taxation on Income Tax Issues that Need to Be Clarified in the Implementation of Enterprise Accounting Systems" Guoshuifa [2003] No. 45 also pointed out: Enterprises provide all employees with the proportion or proportion stipulated by the State Council or the provincial people's government. Standard back-payment of basic or supplementary pension, medical and unemployment insurance can be directly deducted in the current period of back-payment; if the amount is larger, the competent tax authority may require the enterprise to deduct it evenly in installments over a period of no less than 3 years.

The above documents stipulate that the social insurance premiums paid and overpaid by enterprises for employees in accordance with the prescribed proportions can be deducted, and the personal safety insurance premiums paid for employees in special types of work in accordance with relevant national regulations and the financial and taxation authorities of the State Council Other commercial insurance premiums that can be deducted according to regulations can be deducted again. In addition, the insurance premiums paid by the enterprise for its employees shall not be deducted.

The "Regulations on the Implementation of the Individual Income Tax Law of the People's Republic of China" stipulates that in accordance with national regulations, the basic pension insurance premiums, basic medical insurance premiums, and unemployment insurance premiums paid by the unit for individuals and paid by individuals , housing provident fund, deducted from the taxable income of the taxpayer.

The State Administration of Taxation's "Reply on the Collection of Personal Income Tax on Supplementary Pension Insurance Funds Issued by Enterprises" (Guo Shui Han [1999] No. 615) stipulates that the remaining wages, etc. linked to the work performance of the unit shall be paid in cash to For current employees and retirees, as a supplementary pension, the income obtained by the current employees shall be fully included in the personal wages and salary income of the month of payment, and the personal income tax shall be calculated together. The income obtained by retired employees should be treated as one month's wages and salary income separately, and personal income tax shall be calculated and levied in accordance with the provisions of tax laws.

The "Reply of the Ministry of Finance and the State Administration of Taxation on Issues Concerning Personal Income Tax" (Caishui [2005] No. 094) stipulates that when units purchase commercial supplementary pension insurance for individual employees, they should Wage and salary income items as personal income tax are subject to personal income tax in accordance with tax laws; if the insurance is surrendered due to various reasons and the individual does not obtain actual income, the personal income tax paid shall be refunded.

It can be seen from the above three documents that in addition to the basic pension insurance premiums, basic medical insurance premiums, and unemployment insurance premiums paid by the unit for individuals and paid by individuals, other insurance premiums purchased by the unit for employees , personal income tax must be paid according to the income items of wages and salaries in accordance with the tax law, and the tax will be withheld and paid by the unit.