Non-operating income refers to all kinds of income obtained by an enterprise outside its main business, such as income from the disposal of non-current assets, income from the exchange of non-monetary assets, income from the sale of intangible assets, income from debt restructuring, profit and loss from enterprise merger, and income from inventory surplus. These incomes are usually not generated by the business activities of enterprises, and do not require enterprises to pay extra costs for them, so they are regarded as net income. Since non-operating income does not belong to the taxpayer's taxable sales behavior, there is no need to pay VAT. This is different from the main business income and other business income, and is the object of value-added tax. In accounting, enterprises should strictly distinguish between non-operating income and non-operating income to ensure correct tax treatment.

Classification of non-operating income:

1. government subsidy: refers to the free funds obtained by enterprises from the government for specific purposes;

2. Donation income: refers to the income recognized when the enterprise accepts the donation;

3. Income from exchange of non-monetary assets: refers to the income recognized when an enterprise exchanges non-monetary assets;

4. Debt restructuring income: refers to the income recognized by the debtor in the process of debt restructuring;

5. Income from fines and liquidated damages: refers to the fines or liquidated damages obtained by the enterprise due to the other party's breach of contract;

6. Asset disposal income: refers to the income recognized when an enterprise disposes of long-term assets such as fixed assets and intangible assets;

7. Others: including but not limited to investment income, exchange income and other non-main business income.

To sum up, non-operating income, including the income from the exchange of non-current assets and non-monetary assets, is regarded as net income and does not belong to taxable sales activities because it is not generated by the main business activities of the enterprise and does not require additional costs, so there is no need to pay value-added tax, which is in contrast with the main business income and other business income, requiring enterprises to strictly distinguish in accounting to ensure the accuracy of tax treatment.

Legal basis:

People's Republic of China (PRC) enterprise income tax law

Article 6

The income obtained by enterprises from various channels in monetary and non-monetary forms is the total income. Including: (1) income from sales of goods; (2) Income from providing labor services; (3) Income from property transfer; (four) dividends, bonuses and other equity investment income; (5) Interest income; (6) Rental income; (7) Royalty income; (8) Receiving donation income; (9) Other income.