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Is it necessary to pay taxes on government funds? What taxes do taxpayers pay?
1. If the government appropriation belongs to special funds, it does not need to be taxed, and it shall be handled in accordance with the Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance of People's Republic of China (PRC) on the Treatment of Enterprise Income Tax on Special Financial Funds (Cai Shui [201/kloc-0] No.70);

2. If it is not a special fund, it shall be included in the taxable income as the taxable income of the enterprise, and the enterprise income tax shall be paid according to law.

The object of enterprise income tax is the income obtained by taxpayers. Including sales of goods, provision of services, transfer of property, dividends, interest, rent, royalties, donations and other income.

Extended data

Classification of financial funds:

1. The state investment is included as share capital and the paid-in capital or share capital of the enterprise is increased. The bank deposit is debited and the paid-in capital or share capital is credited.

2. The principal required to be returned after the use of funds shall be taken as liabilities, included in loans or other payables, debited to bank deposits, and credited to loans or other payables.

3. Other financial funds obtained by the enterprise except for the above two situations are treated as profits and losses, originally included in the subsidy income, and now all of them are included in the current non-operating income, debited to the bank deposit and credited to the non-operating income.

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