2023 Annual Inventory It is already December, 2023 has entered the countdown, and 2024 is coming. So, what are the preferential corporate income tax policies that will continue to be implemented in 2024?Today, Boyu Accountant's Xiaobo will take stock for you.
1. Preferential income tax policies for small and micro enterprises
For small and low-profit enterprises, the taxable income will be calculated at a reduced rate of 25%, and the enterprise income tax policy will be paid at a rate of 20%, which will be extended to December 31, 2027.
Policy basis: Announcement of the Ministry of Finance and the State Administration of Taxation on Further Supporting the Development of Small and Micro Enterprises and Individual Industrial and Commercial Households (No. 12 [2023]).
2. Preferential treatment for enterprises in the western region
From January 1, 2021 to December 31, 2030, enterprise income tax will be levied at a reduced rate of 15% for enterprises in encouraged industries located in the western region.
Policy basis: Announcement of the Ministry of Finance, the State Administration of Taxation and the National Development and Reform Commission on Extending the Enterprise Income Tax Policy for the Development of the Western Region (Announcement No. 23 [2020] of the Ministry of Finance).
3. Preferential corporate income tax in Hainan Free Trade Port
From January 1, 2020 to December 31, 2024, the enterprise income tax will be levied at a reduced rate of 15% for enterprises in encouraged industries registered in Hainan Free ** Port and operating substantively.
Policy basis: Notice of the Ministry of Finance and the State Administration of Taxation on the Preferential Policies for Enterprise Income Tax in Hainan Free Port (June 23, 2020).
4. Additional deduction of R&D expenses
If the R&D expenses actually incurred by integrated circuit enterprises and industrial machine tool enterprises in R&D activities are not included in the current profit or loss as intangible assets, they will be deducted before tax according to 120% of the actual amount from January 1, 2023 to December 31, 2027 on the basis of deduction according to the regulationsIf an intangible asset is formed, it shall be amortized before tax at the rate of 220% of the cost of the intangible asset during the above-mentioned period.
Policy basis: Announcement of the Ministry of Finance, the State Administration of Taxation, the National Development and Reform Commission and the Ministry of Industry and Information Technology on Increasing the Proportion of Additional Deduction of R&D Expenses of Integrated Circuit and Industrial Machine Tool Enterprises (No. 44 [2023]).
5. Individual investment credit for corporate venture capital enterprises, limited partnership venture capital enterprise partners and angel investors.
If a company-based venture capital enterprise directly invests in a seed-stage or start-up technology-based enterprise (hereinafter referred to as a start-up technology-based enterprise) in the form of equity investment for two years (24 months, the same below), it can deduct the taxable income of the company-based venture capital enterprise in the year in which the equity is held for two years according to 70% of the investment amountIf the deduction is insufficient in the current year, it can be carried forward and deducted in the following tax years.
If a limited partnership venture capital enterprise (hereinafter referred to as a partnership venture capital enterprise) has directly invested in a start-up technology-based enterprise by way of equity investment for two years, the legal person partner of the partnership venture capital enterprise may deduct the income of the legal person partner from the partnership venture capital enterprise according to 70% of the investment amount in the start-up technology-based enterpriseIf the deduction is insufficient in the current year, it can be carried forward and deducted in the following tax years.
Policy basis: Announcement of the Ministry of Finance and the State Administration of Taxation on Extending the Implementation of Relevant Policy Conditions for Venture Capital Enterprises and Angel Investment Individuals to Invest in Start-up Technology Enterprises (No. 17 [2023]).
6. Absorb the employment tax reduction and exemption policy for retired soldiers
From January 1, 2023 to December 31, 2027, if an enterprise recruits self-employed retired soldiers, signs a labor contract with them for a period of more than one year and pays social insurance premiums in accordance with the law, the value-added tax, urban maintenance and construction tax, education surcharge, local education surcharge and enterprise income tax concessions will be deducted according to the actual number of employees within three years from the month of signing the labor contract and paying social insurance. The quota standard is 6,000 yuan per person per year, which can be increased by up to 50%, and the people of all provinces, autonomous regions and municipalities directly under the Central Government can determine the specific quota standard within this range according to the actual situation of the region.
Policy basis: Announcement of the Ministry of Finance, the State Administration of Taxation and the Ministry of Veterans Affairs on Further Supporting the Entrepreneurship and Employment of Self-employed Retired Soldiers (No. 14 [2023]).
7. Absorb the employment tax reduction and exemption policy for key groups
From January 1, 2023 to December 31, 2027, starting from the month of signing the labor contract and paying social insurance, value-added tax, urban maintenance and construction tax, education surcharge, local education surcharge and enterprise income tax incentives will be deducted according to the actual number of employees within three years. The quota standard is 6,000 yuan per person per year, up to 30%, and the people of all provinces, autonomous regions and municipalities directly under the Central Government can determine the specific quota standard within this range according to the actual situation of the region.
Policy basis: Announcement of the Ministry of Finance, the State Administration of Taxation, the Ministry of Human Resources and Social Security, and the Ministry of Agriculture and Rural Affairs on Further Supporting Tax Policies for Entrepreneurship and Employment of Key Groups (No. 15 [2023]).
8. Third-party enterprises engaged in pollution prevention and control shall be levied enterprise income tax at a reduced rate of 15%.
Qualified third-party enterprises engaged in pollution prevention and control will be levied enterprise income tax at a reduced rate of 15%, and the implementation period will be extended to December 31, 2027.
Policy basis: Announcement on the Income Tax Policy of Third-Party Enterprises Engaged in Pollution Prevention and Control (Announcement No. 38 [2023] of the Ministry of Finance, the State Administration of Taxation, the National Development and Reform Commission, and the Ministry of Ecology and Environment).
9. Enterprises that produce and assemble special supplies for the disabled are exempt from enterprise income tax
Before December 31, 2027, enterprises that produce and assemble special supplies for the disabled will be exempted from corporate income tax.
Policy basis: Announcement on the Exemption of Enterprise Income Tax for Enterprises Producing and Assembling Special Supplies for the Disabled (Announcement No. 57 [2023] of the Ministry of Finance, the State Administration of Taxation and the Ministry of Civil Affairs).
10. Deduction of equipment and appliances related to enterprise income tax policies
If the unit value of the newly purchased equipment and appliances purchased by the enterprise during the period from January 1, 2024 to December 31, 2027 does not exceed 5 million yuan, it is allowed to be included in the current cost and expense at one time and deducted in the calculation of taxable income.
Policy basis: Announcement on the Enterprise Income Tax Policy on the Deduction of Equipment and Appliances (Announcement No. 37 of 2023 of the Ministry of Finance and the State Administration of Taxation).
11. Support the deduction of income from enterprise income tax for small loans
Before December 31, 2027, 90% of the interest income from small loans obtained by microfinance companies established with the approval of provincial-level local financial supervision and administration departments shall be included in the total income when calculating the taxable income. The term "small loan" refers to a single loan with a total loan balance of less than 100,000 yuan (inclusive).
Policy basis: Announcement on Extending the Implementation of Relevant Preferential Tax Policies for Microfinance Companies (Announcement No. 54 [2023] of the Ministry of Finance and the State Administration of Taxation).
12. Support the income of enterprise income tax reduction for rural financial development
Before December 31, 2027, the interest income of small loans to rural households of financial institutions shall be included in the total income at 90% when calculating the taxable income;90% of the premium income obtained by insurance companies for planting and breeding shall be included in the total income when calculating the taxable income.
Policy basis: Announcement on Extending the Implementation of the Enterprise Income Tax Policy to Support Rural Financial Development (Announcement No. 55 [2023] of the Ministry of Finance and the State Administration of Taxation).
13. Insurance protection ** specific income is exempt from enterprise income tax
Before December 31, 2027, the following income obtained by China Insurance Security ** Co., Ltd. (hereinafter referred to as Insurance Security ** Company) in accordance with the "Measures for the Administration of Insurance Security**" will be exempted from enterprise income tax.
Policy basis: Notice on Tax Policies on Insurance Protection** (CS 2023 No. 44).
14. The interest income of railway bonds shall be reduced by half
The corporate income tax will be reduced by half on the interest income obtained by corporate investors from holding railway bonds issued from 2024 to 2027.
Policy basis: Announcement on the Income Tax Policy on Interest Income from Railway Bonds (Announcement No. 64 [2023] of the Ministry of Finance and the State Administration of Taxation).
15. In the reform of the cultural system, the for-profit cultural institutions were transformed into enterprises
Before December 31, 2027, for-profit cultural institutions transformed into enterprises will be exempted from enterprise income tax for five years from the date of registration of the transformation, and enterprises can continue to enjoy the preferential treatment for less than five years on December 31, 2027 until the expiration of the five-year period.
Policy basis: Announcement of the Ministry of Finance, the State Administration of Taxation and the Propaganda Department on the Tax Policies Concerning the Conversion of For-profit Cultural Institutions into Enterprises in the Continuation of the Implementation of the Reform of the Cultural System (Announcement No. 71 [2023] of the Propaganda Department of the Ministry of Finance and the State Administration of Taxation).
16. Pre-tax deduction of advertising expenses
From January 1, 2021 to December 31, 2025, the part of the advertising expenses and business promotion expenses incurred by cosmetics manufacturing or sales, pharmaceutical manufacturing and beverage manufacturing (excluding alcohol manufacturing) enterprises shall be allowed to be deducted if they do not exceed 30% of the sales (operating) income of the current yearThe excess amount is allowed to be carried forward and deducted in subsequent tax years;
For an affiliated enterprise that has signed an agreement on the allocation of advertising expenses and business promotion expenses, the advertising expenses and business promotion expenses incurred by one of the parties that do not exceed the proportion of the pre-tax deduction limit of sales (business) income in the current year can be deducted in the enterprise, or part or all of them can be collected and deducted by the other party in accordance with the sharing agreement. When calculating the pre-tax deduction limit of enterprise income tax for the advertising expenses and business promotion expenses of the other party, the advertising expenses and business promotion expenses that are collected in accordance with the above methods may not be counted.
Tobacco advertising expenses and business promotion expenses of tobacco enterprises shall not be deducted in the calculation of taxable income.
Policy basis: Announcement of the Ministry of Finance and the State Administration of Taxation on Matters Concerning the Pre-tax Deduction of Advertising Expenses and Business Publicity Expenses (Announcement No. 43 [2020] of the Ministry of Finance and the State Administration of Taxation).
17. Poverty alleviation donation expenses shall be deducted according to the facts
From January 1, 2019 to December 31, 2022, enterprises are allowed to deduct the poverty alleviation donation expenses in targeted poverty alleviation areas through public welfare social organizations or people** at or above the county level (including county level) and their constituent departments and directly affiliated institutions, which are allowed to be deducted according to the facts when calculating the taxable income of enterprise income tax. During the policy implementation period, if the target poverty alleviation areas achieve poverty alleviation, the above policies may continue to be applied. The implementation period has been extended to December 31, 2025.
Policy basis: Announcement on Extending the Implementation Period of Some Preferential Tax Policies for Poverty Alleviation (Announcement No. 18 [2021] of the Ministry of Finance, the State Administration of Taxation, the Ministry of Human Resources and Social Security, and the National Rural Revitalization Administration).
18. Foreign institutions invest in the domestic bond market
From January 1, 2021 to December 31, 2025, corporate income tax and value-added tax will be temporarily exempted on bond interest income obtained by foreign institutions investing in the domestic bond market.
Policy basis: Announcement of the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation on Extending the Enterprise Income Tax and Value-Added Tax Policies for Overseas Institutions Investing in the Domestic Bond Market (Announcement No. 34 [2021] of the Ministry of Finance and the State Administration of Taxation).
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