Kunpeng Project
How do employee benefits affect a business's input tax? Tax strategy analysis
The impact of employee benefits on a company's input tax is an important and complex issue that is directly related to the company's financial costs and tax policy. In order to understand this problem, we can do it from two aspects**: purchased goods or services and goods produced by the company or commissioned by the company.
1.Goods or services purchased for employee benefits:
Impact on input tax of enterprises: According to the regulations, if the goods or services purchased by the enterprise are used for employee welfare, such as employee social welfare, employee birthday gifts, etc., this part of the expenditure will not be deductible from input tax.
Transfer-out of deducted input VAT: If the company has deducted the input VAT on these purchased goods or services in accordance with the regulations, it must carry out the corresponding transfer-out operation to refund the deducted input VAT to the tax authority.
2) Self-produced or commissioned products for employees:
Calculate VAT production: If the company produces goods itself or orders goods for processing for use by employees, it must treat them as sales and calculate VAT production.
Input tax deduction: In this case, the company can deduct the input tax involved in the sale as needed in accordance with the normal VAT tax policy.
For example. Scenario 1: The company purchases birthday gifts (e.g. gift cards, gift hampers, etc.) for employees, which are employee welfare expenses and cannot be deducted from GST.
Scenario 2: The company's own products are issued as employee benefits and need to calculate output tax, which can be deducted from the corresponding input tax.