The court determined whether the compensation is subject to tax is related to the nature of the compensation. The specific content is as follows:

1. If it is state compensation, the law stipulates that the state compensation obtained by the party does not need to pay any tax, and accordingly it should be regarded as tax-free income for corporate income tax. The principle of non-taxation of compensation means that the victim does not need to pay taxes to the tax authorities on the compensation received from the agency responsible for compensation. Compensation is not taxable, on the one hand, because state compensation is a liability arising from illegal administrative acts and is a compensation to the victim. If the victim is also required to return part of the compensation to the state treasury in the form of taxes, It deviates from the principle and purpose of state compensation;

2. If it is civil compensation, the loss compensation obtained by the party due to the provision of taxable services, the transfer of intangible assets or the sale of real estate should be calculated and levied according to the provisions of business tax VAT. For example, if a court awards compensation for trademark infringement, it can be considered that the compensation obtained is income obtained from the transfer of the right to use the trademark, and the relevant turnover tax and income tax will need to be paid.

Legal basis: Article 39 of the "State Compensation Law of the People's Republic of China"

The statute of limitations for a compensation claimant to request state compensation is two years. It should be known that the behavior of state agencies and their staff in the exercise of their powers will be calculated from the date on which their personal rights and property rights are infringed, but the period of restriction of personal freedom such as detention will not be included in the calculation. When applying for administrative reconsideration or filing an administrative lawsuit together with a claim for compensation, the relevant statute of limitations provisions of the Administrative Reconsideration Law and the Administrative Litigation Law shall apply.

If the claimant for compensation is unable to exercise the right to claim due to force majeure or other obstacles within the last six months of the statute of limitations for the claim for compensation, the statute of limitations shall be suspended. The limitation period for compensation claims will continue to be calculated from the date the reason for suspending the limitation period is eliminated.

Article 41

If the compensation claimant requests state compensation, the compensation obligation agency, the reconsideration agency and the people's court shall not charge any fees from the compensation claimant.

The compensation received by the compensation claimant will not be taxed.