Every month, the individual tax in the employee's salary is withheld from the payroll, and then the enterprise declares and pays the employee's individual tax to the national tax.

According to Article 17 of the Individual Income Tax Law of the People's Republic of China, the withholding agent shall be paid a handling fee of 2% of the tax withheld. According to the document, the enterprise can calculate the 2% handling fee according to the actual amount of tax paid, and apply to the national tax for handling fee refund every year.

According to the Notice of the Ministry of Finance of State Taxation Administration of The People's Republic of China on comprehensively pushing forward the pilot project of changing business tax to value-added tax (Caishui [2016] No.36), the handling fees obtained by enterprises withholding and remitting taxes shall be paid value-added tax according to "economic agency services".

However, the specific implementation needs to look at local regulations:

1. Fujian State Taxation Bureau:

Value-added tax shall be levied according to the brokerage services provided, with the tax rate of 6% and the collection rate of 3%.

2. State Taxation Administration of The People's Republic of China, Hunan:

According to the third paragraph of Article 4 of the Law of the People's Republic of China on the Administration of Tax Collection, "Taxpayers and withholding agents must pay taxes, withhold taxes and collect taxes in accordance with the provisions of laws and administrative regulations." That is, withholding and remitting is a legal obligation entrusted to withholding agents by the tax administration law, and if the legal obligation of withholding is not fulfilled according to the regulations, it is necessary to bear the corresponding legal consequences. The refund of the handling fee for withholding personal income tax by taxpayers is not a business activity and does not need to pay value-added tax.

3. State Taxation Administration of The People's Republic of China, Hunan:

According to the Law of the People's Republic of China on the Administration of Tax Collection and the Notice of the People's Bank of China, State Taxation Administration of The People's Republic of China, Ministry of Finance on Further Strengthening the Management of Handling Fees for Withholding and Collecting Taxes, taxpayers who have the obligation to withhold and remit personal income tax are not required to pay VAT for withholding and remitting personal income tax fees obtained in accordance with relevant regulations. Caihang [2005] No.365 stipulates that the fee income obtained by the third generation units should be accounted for separately, included in the income of the unit, used for the management expenses of the third generation, and relevant staff can also be appropriately rewarded.

Therefore, the tax handling fee obtained by your company will be refunded, without paying value-added tax, but enterprise income tax should be paid.

The above is the answer to "Do I have to pay VAT for tax refund?" Do you understand? For more knowledge of dry goods in finance and taxation, please pay attention to the column of accounting practice.