April 30 2019
The General Office of the State Council released on April 4, 2019 the Comprehensive Plan for Reducing Social Security Contribution Rates. Starting from May 1, 2019, provinces can reduce employer's contribution rate of basic endowment insurance for urban workers to 16% if the rate is higher at present.
The plan also said China will cut the premium rates for unemployment insurance and work-related injury insurance. Starting from May 1, 2019, provinces can continue to reduce premium for unemployment insurance until April 30, 2020 if the premium rate is 1%; they can also cut the premium for work-related injury insurance until April 30, 2020.
April 30 2019
The Ministry of Finance recently issued the Circular about Strengthening Financial Management of Enterprises' Staff Education Expenditures (Exposure Draft) to gather public opinions.
According to the exposure draft, a company shall set aside a certain percentage (1.5% to 8%) of the total staff wages in the previous year to be used for funding staff education programs, and the percentage cannot be changed arbitrarily. The staff education expenditures can be provided either on an annual basis or monthly basis. The way to draw staff education expenditures cannot be changed arbitrarily after it's determined.
April 30 2019
The Ministry of Finance, the State Administration of Taxation and the State Council's Poverty Alleviation Office recently issued the Announcement about Tax-deductible Income Tax Policies for Poverty-related Donations by Enterprises. The SAT drafted a separate Q&A paper to answer questions related to these tax policies.
How a company claims tax-deductible benefits if it makes donations to both poverty relief programs and other charity projects in 2019?
According to the Enterprise Income Tax Law, a company can claim tax deductions as much as 12% of annual profit on charity donations in a year, and any additional charity donations can become tax-deductible in the next three years. If a company makes donations to both poverty relief programs and other charity projects, poverty-related donations shall not be tax-deductible in the category of charity donations
April 30 2019
The Ministry of Finance recently released an interpretation of the relevant issues concerning the application of the VAT Accounting Regulations to the Announcement on the Policies on Deepening VAT Reform.
According to the interpretation, the provision that "From April 1, 2019 to December 31, 2021, taxpayers of production and living service industries are allowed to deduct the taxable amount by the current deductible input tax amount plus 10% thereof" as stipulated in the Announcement No. 39 is interpreted as follows: When the value-added tax is actually paid, the taxable amount is debited to the accounts such as "tax payable -- unpaid value-added tax", the actual tax amount is credited to the "bank deposit" account, and the additional deduction amount is credited to the "other income" account.