I. Policy basis
The Administrative Measures for Tax Relief (Trial) (Guo Shui Fa [2005]129) stipulates that tax relief can be divided into approval tax relief and filing tax relief. Filing tax reduction and exemption refers to the tax reduction and exemption items that have been cancelled and those that do not need the approval of the tax authorities. Taxpayers who enjoy the filing of tax reduction or exemption shall submit them for filing, and after being registered by the tax authorities, they shall enjoy them as required from the date of registration and filing. Taxpayers who fail to declare according to regulations shall not be exempted from tax reduction or exemption.
The Supplementary Notice on Tax Preferential Management of Enterprise Income Tax (Guo [2009] No.255) stipulates that all kinds of enterprise income tax preferential management include tax-free income, regular tax reduction and exemption, preferential tax rate, additional deduction, taxable income deduction, accelerated depreciation, income reduction, tax credit and other special preferential policies; Except for the transitional preferential policies for enterprise income tax clearly defined in the State Council, the original preferential policies for enterprise income tax that continue to be implemented after the implementation of the new tax law, the preferential policies for tax reduction and exemption for enterprises in ethnic autonomous areas as stipulated in Article 29 of the new enterprise income tax law and the preferential policies for enterprise income tax that are subject to examination and approval management as stipulated separately in the State Council, other preferential policies for enterprise income tax are subject to record management. The specific ways of filing management are divided into two types: filing in advance and submitting relevant materials afterwards.
Taxpayers shall submit relevant materials to the tax authorities for the record, which shall be implemented after being registered by the tax authorities for the record. Taxpayers who need declare in advance but fail to declare according to regulations shall not enjoy preferential tax treatment.
Taxpayers should attach relevant information to the annual tax return in accordance with the regulations. If the competent tax authorities, after examination, find that they do not meet the conditions for enjoying preferential tax policies, they shall cancel their own preferential tax policies and recover the tax accordingly.
Generally speaking, tax-free income, making up for losses in previous years and tax reduction and exemption belong to declare in advance.
The tax law also clearly stipulates how to deal with non-taxable income. The Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance of People's Republic of China (PRC) on Enterprise Income Tax Treatment of Special Financial Funds (Cai Shui [2011] No.70) stipulates that the financial funds that should be included in the total income obtained by enterprises from the financial departments and other departments of the people's governments at or above the county level can be regarded as non-taxable income and deducted from the total income when calculating the taxable income: enterprises can provide special funds. The financial department or other government departments that allocate funds have special fund management measures or specific management requirements for funds; An enterprise shall separately account for funds and expenditures incurred with funds.
Caishui [2011] No.70 also stipulates that the expenses incurred by non-taxable income used for expenditure shall not be deducted when calculating taxable income; Depreciation and amortization of assets used for expenses shall not be deducted when calculating taxable income. After the enterprise treats the financial funds that meet the prescribed conditions as non-taxable income, the part that has not been spent within five years (60 months) and has not been returned to the financial department or other government departments that allocated the funds should be included in the total taxable income in the sixth year after obtaining the funds; Financial expenditures included in taxable income are allowed to be deducted when calculating taxable income.
Therefore, for non-taxable income, although it is not a tax preference, it is actually deducted from income when income tax is paid in advance. Taxpayers are obliged to provide proof materials that meet the conditions of non-taxable income, that is, they can only be excluded from the prepayment income tax return from the date of registration and filing. As for making up for the losses in previous years, although the current tax law does not explicitly stipulate tax preference, it is also deducted from income when paying income tax in advance, and taxpayers are also obliged to provide qualified certification materials.
Second, the project is filed in advance.
At present, the following items are included in the enterprise income tax for declare in advance:
1. tax-free income.
2. Tax-free income.
3. Make up for the losses in previous years.
4. Eligible small-scale low-profit enterprises shall be subject to enterprise income tax at a reduced rate of 20% or at a reduced rate of 20%.
5. High-tech enterprises that need special support from the state shall be subject to enterprise income tax at a reduced rate of 15%.
6 income from agriculture, forestry, animal husbandry and fishery projects. Among them, the income of enterprises engaged in the following projects shall be exempted from enterprise income tax: planting vegetables, grain, potatoes, oilseeds, beans, cotton, hemp, sugar, fruits and nuts; Cultivate new crop varieties; Chinese herbal medicine cultivation; Cultivation and planting of trees; Raising livestock and poultry; Collecting forest products; Agricultural, forestry, animal husbandry and fishery services such as irrigation, primary processing of agricultural products, veterinary medicine, agricultural technology popularization, operation and maintenance of agricultural machinery; Marine fishing. Corporate income tax will be levied by half on the income of the following projects: the cultivation of beverage crops and spice crops such as flowers and tea; Marine aquaculture, inland aquaculture.
7. State-supported public infrastructure projects (including ports, airports, railways, highways, urban public transportation, electric power, water conservancy and other projects specified in the Catalogue of Preferential Enterprise Income Tax for Public Infrastructure Projects) shall be exempted from enterprise income tax from the first year to the third year, and from the fourth year onwards. Enterprises engaged in contracted management, contracted construction and self-built self-use projects do not enjoy the above enterprise income tax concessions.
8. Income from qualified environmental protection, energy saving and water saving projects, including public sewage treatment, public garbage treatment, comprehensive development and utilization of biogas, technological transformation of energy saving and emission reduction, seawater desalination and other projects, shall be exempted from enterprise income tax from the first year to the third year.