Author: Wang Quan, lawyer, Gui Yiwei, lawyer|Note: Yes.
【Tax Law Writing】Press
The financial subsidies obtained by enterprises from ** are generally divided into two types: first, financial subsidies are closely related to the sales of products by enterprises; Second, financial subsidies are financial allocations with special purposes. For the first type of subsidy, it is related to the business activities of the enterprise and needs to be taxed; For the second type of ** subsidy, it is a financial allocation, and the enterprise can be used as non-taxable income. In practice, most of the ** subsidies belong to the second type, and when the business owner receives this type of subsidy, he will basically choose to treat it as non-taxable income. In this regard, with regard to the ** subsidy, is the non-taxable income necessarily more economical than the taxable income? This article tries to share.
[Lawyer's point of view].
1. Laws and policies that can be treated as non-taxable.
According to Article 7 of the Announcement of the State Administration of Taxation on Abolishing the Verification and Confirmation Period of VAT Deduction Vouchers and Other VAT Collection and Administration Issues (Announcement No. 45 of 2019 of the State Administration of Taxation), "if the financial subsidy income obtained by a taxpayer is directly linked to the income or quantity of its sales of goods, services, services, intangible assets and immovable property, it shall be calculated and paid VAT in accordance with the regulations." The financial subsidy income obtained by taxpayers under other circumstances is not taxable income of VAT and is not subject to VAT. ”
According to Article 7 of the Enterprise Income Tax Law, "the following income in the total income is not levied income: (1) fiscal allocation. According to Article 26 of the Regulations for the Implementation of the Enterprise Income Tax Law, "the financial appropriation referred to in Article 7 (1) of the Enterprise Income Tax Law refers to the financial funds allocated by the people at all levels to public institutions, social organizations and other organizations included in the budget management, unless otherwise stipulated by the competent financial and taxation authorities." According to the notice of the State Administration of Taxation on the treatment of enterprise income tax on special purpose fiscal funds, "the financial funds that should be included in the total income obtained by enterprises from the people's financial departments and other departments at or above the county level can be regarded as non-taxable income and deducted from the total income when calculating the taxable income, provided that the following conditions are met at the same time: (1) the enterprise can provide the fund allocation documents for the special purpose of the specified funds; (2) The financial department or other first-class departments that allocate funds have special fund management measures or specific management requirements for the funds; (3) The enterprise shall separately account for the funds and the expenditures incurred with the funds. Therefore, according to the above provisions, enterprises can choose to treat the financial subsidies obtained from ** that are not related to the operation of goods and services as non-collection income or according to the collection income. 2. No tax or tax, enterprises enjoy the right to choose, and different treatment methods have different tax effects.
As mentioned above, enterprises have the right to choose the ** subsidy obtained as non-taxable income or taxable income. As a general rule, why choose to be taxed if you can avoid taxation? Business owners often have the brains to choose to treat it as non-taxable income. Then, in view of the following situations, if the enterprise chooses not to tax the income, it may be detrimental to the enterprise, but instead chooses the taxable income, which is more tax-efficient:
1. The enterprise has unmade losses before obtaining the first subsidyA small low-profit enterprise has lost 3 million since its establishment in 2016, and in 2017, 2018, 2019 and 2020, the company has made a total profit of 1 million, and at the end of 2021, the company still has 2 million losses that cannot be made up. In 2021, the enterprise received a financial subsidy of 1 million, and the accounting profit of the year was 900,000, and the enterprise did not use the financial subsidy for expenditure in the year of receipt, and used it for special expenditure of 1 million in 2022. Suppose that in 2022, the accounting profit of the enterprise is 2 million yuan (the special expenditure in 2022 has been treated as the cost of the enterprise in accounting). In this case, is it cost-effective for enterprises to treat the financial subsidy for 2021 as non-taxable income or as taxable income? (1) If the enterprise chooses to treat non-taxable income, although the accounting profit of the enterprise in 2021 is 900,000, but considering the ** subsidy of 1 million in the current year, the enterprise chooses to treat the non-taxable income, therefore, the tax declaration is reduced, and the enterprise loses 100,000 yuan in tax and does not need to pay tax. Accordingly, the balance of the unfinished loss of 2 million yuan in 2016 shall not continue to make up for the loss due to the expiration of the five-year period; For a loss of 100,000 yuan formed in 2021, the company can choose to make up for the loss in the next 5 years. In addition, considering that the expenses of non-taxable income cannot be deducted before tax, therefore, the taxable income of the enterprise in 2022 will be increased, and the taxable income of the enterprise will be 3 million yuan. Considering that the loss of 100,000 yuan in 2021 can be made up, the enterprise can declare and pay taxes of 2.9 million yuan in 2022. According to the existing preferential tax policies for small and low-profit enterprises, the enterprise income tax payable by enterprises in 2022 is 120,000 yuan (100*2.).5%+190*5%）。2) If the enterprise chooses to treat the taxable incomeIf the enterprise chooses to treat the taxable income, the accounting profit formed in 2021 does not need to be adjusted or reduced, and all taxes are paid. However, the company still has a loss of 2 million yuan in 2016 that cannot be made up, and 2021 is the last year of 5 years, and the company does not need to pay income tax after making up for the loss in 2021. Because the enterprise chooses to treat the taxable income, the 1 million expenses of the enterprise for the financial subsidy can be deducted before tax, so the accounting profit of the enterprise in 2022 is 2 million, and there is no need to increase the tax payment. Accordingly, the corporate income tax payable by enterprises in 2022 is 750,000 (100*2.)5%+100*5%）。To sum up, if enterprises treat financial subsidies as taxable income, they can compare it to non-taxable income and save taxes450,000 yuan.
2. If the special funds for technology research and development obtained by manufacturing enterprises are treated as taxable income, they can be deductedIn 2021, a manufacturing enterprise obtained a special fund of 2 million yuan for the research and development of environmental protection technology, and the company invested all the 2 million yuan in the research and development activities of environmental protection technology that year. Assuming that the enterprise is not a small and low-profit enterprise, the applicable income tax rate is 25%, and the accounting profit in 2021 is 2 million yuan. In this case, is it cost-effective for the enterprise to treat the ** subsidy in 2021 as non-taxable income or as taxable income? (1) If the enterprise chooses to treat non-taxable income, the R&D expenditure of 2 million yuan in the current year shall not be deducted before tax, therefore, the tax payable of the enterprise shall be increased by 2 million, the taxable income shall be 4 million, and the enterprise income tax shall be paid of 1 million yuan (400*25%).
2) If the enterprise chooses to treat the taxable income, if the enterprise chooses to treat the taxable income, the accounting profit formed in 2021 does not need to be adjusted. In addition, the R&D expenses of manufacturing enterprises due to R&D can be deducted by 2 million, therefore, the 2 million profits of enterprises can be further deducted by 2 million, the taxable income is 0 yuan, and the enterprise income tax should be 0 yuan. To sum up, if an enterprise treats financial subsidies as taxable income, it is comparable to a tax saving of 1 million yuan on non-taxable income.
3. When high-tech enterprises choose not to be taxed or taxed income, they should also consider the conditions for the identification of high-tech enterprisesDifferent from general enterprises, high-tech enterprises enjoy preferential income tax policies, with the general enterprise tax rate being 25% and that of high-tech enterprises being 15%. However, enterprises applying for high-tech enterprises need to meet eight criteria, one of which is that "the proportion of high-tech products (services) income in the past year to the total income of the enterprise in the same period is not less than 60%", which is expressed by the formula: high-tech income (total income - non-taxable income) > 60%. It should be noted that the total income and non-taxable income here are calculated in accordance with the provisions of the Enterprise Income Tax Law and the Regulations for the Implementation of the Enterprise Income Tax Law, not in accordance with accounting standards. It can be seen that if a high-tech enterprise chooses the financial subsidy as the taxable income, it may affect the denominator of the above calculation formula, resulting in a larger denominator value and a smaller proportion of high-tech income, thus affecting the identification conditions of high-tech enterprises. In addition, according to the provisions of the tax policy related to high-tech enterprises, high-tech enterprises shall enjoy a preferential tax rate of 15% from the year of identification, and if they do not meet the conditions for recognition in the future, they shall not enjoy preferential tax policies, and the tax rate of 25% for general enterprises shall still be followed. Therefore, when high-tech enterprises choose taxable income or non-taxable income for ** subsidies, they should also consider the impact factor of high-tech enterprise identification standards. 