On the calculation method of corporate income tax for small-scale enterprises in China

2020/12/03

Calculation method of enterprise income tax for Chinese small-scale enterprises:

Enterprise income tax is generally paid in advance according to the month (quarter), the year-end settlement. The enterprise income tax rate is applicable to 25%. For small and small profit-making enterprises that meet the requirements, after examination and approval by the competent tax authorities, the tax rate may be reduced by 20%.The collection way of enterprise income tax has 2 kinds, one kind is to examine an account to collect, another kind is check and ratify collects.

1. Audit collection is based on the "actual profits" calculated and paid in accordance with the applicable tax rate, and the actual profits = total profits - the amount of losses to be made up in the previous year - non-taxable income - tax-free income. Wherein: total profit = operating revenue - operating cost - operating taxes and surcharges - administrative expenses - sales expenses - financial expenses + other business profit + non-operating income + investment income.

2. Therefore, the actual profit is not the concept you mentioned (1000-100), because 100 RMB does not represent the actual operating costs, expenses and taxes (excluding VAT and enterprise income tax) of your Chinese company.

3. Verified collection shall be calculated and paid in accordance with sales (business) income * verified income rate * applicable tax rate. Among them: sales (business) income includes: taxable sales and other business income and are regarded as sales, income rate of check and ratify is set, the competent tax authorities according to different industry advance generally range between 5% and 30%, specific to your Chinese company shall be determined according to the local competent tax authorities where the income rate calculation, applicable tax rate 25%, verification collection shall not apply to the tax rate of 20%.

On the calculation method of enterprise income tax for small enterprises in China

What is the corporate income tax rate for small-scale Chinese taxpayers?

The tax rates of small-scale taxpayers in China are:

1. The RATE of VAT levied on small-scale Chinese taxpayers is 3%.

2. Income Tax rate:

The general corporate income tax rate is 25%,

For small and small profit-making enterprises that meet the requirements, the enterprise income tax shall be levied at a reduced rate of 20%.

The enterprise income tax shall be levied at a reduced rate of 15% for the high-tech enterprises that need the key support of the state.

The enterprise income tax is not levied at 25% of the business income, but at 25% of the profit (taxable income).

1. There are two ways of levying income tax: levy it on audit of accounts and levy it by verification.

2. In case of verification collection, income tax shall be calculated and paid on the basis of income.

Calculation formula:

Income tax payable = total income * taxable income rate * income tax rate

Taxable income rates vary between 5 per cent and 15 per cent across industries

3. If it is levied on audit of accounts, income tax shall be calculated on the basis of profits.

Calculation formula:

Income tax payable = total profits * income tax rate

If it is levied on audit of accounts, income tax shall be calculated on the basis of profits

Calculation formula:

Income tax payable = total profits * income tax rate

How to avoid corporate income tax?

There are several ways to avoid enterprise income tax reasonably.

(1) Enterprises increase costs to avoid tax rationally

When materials are delivered, the accounting system provides that first-in, first-out method, weighted average method, moving average method, individual valuation method and last-in, first-out method can be used to calculate the actual cost of materials. Once the method of material valuation is determined, it cannot be changed at will. However, enterprises can increase the cost of material consumption by changing the method of material valuation to increase the cost of material production, or do not calculate the cost of material production in accordance with the prescribed method of valuation, increase the unit price of material delivery, more transfer of material cost, so that the current profit will be reduced, so as to achieve reasonable avoidance of enterprise income tax.

According to the provisions of the accounting system, enterprises that calculate the cost of materials at the planned price must adjust the planned cost of materials to the actual cost through the allocation and carry-over of "material cost difference" when calculating the cost of products. Enterprises can calculate the cost of materials, the material cost difference account as the enterprise to adjust the profit of the "control valve ", the difference in the amount and rate of adjustment. Expand production cost thereby, squeeze profit, achieve the goal that reduces current period should pay income tax.

(2) Reasonable tax avoidance on the treatment of employees

Double salary without subsidy. The characteristic of Chinese enterprise welfare system is to have human interest, meet the year to celebrate a festival to will have a little so called save fee, according to the regulation of policy of individual income tax, save fee needs to merge into that month salary pays individual income tax. According to the tax policy, the annual double salary can be calculated as one month's salary separately. Since there is no need to combine with the monthly salary to pay personal income tax, the tax rate can be reduced and the personal income tax burden of employees can be reduced. It is to send a little money, save cost to pay tax much, pay tax of double salary is little, pay tax to pay tax less so, should change the way that kind of New Year hair points to save cost, change the way that pays double salary at the end of the year.

(3) Adopt the method of "eating by cooking stove" to avoid tax reasonably

To spread out the business, so a Chinese company to do business is divided into two or three Chinese companies do, this can increase the cost of booth, and can reduce the enterprise income: Chinese companies such as you do now for a year, 300000, 90000 of the income tax do you pay, if into three Chinese companies do, every Chinese company is p.a. 90000 9, so the income tax for three Chinese companies is a total of 80000 1, but actually because of the increase of the cost channel, three Chinese companies will not do p.a. 300000, many costs are repeated stand and elimination to mention, the tax savings is more than nearly 20000 tax.

(4) Reasonably avoid tax by moving from the high-tax zone to the low-tax zone

Each special zone and development zone has preferential policies in terms of tax rates. Chinese companies are transferred to these places. For example, the corporate income tax in Shenzhen is only 15%.The factories of Chinese companies and all the business accounting of Chinese companies even go to the headquarters of Chinese companies, also enjoy the preferential policies of the state. The enterprise settlement: high income tax to low income tax to go; Regions with a tax rate go to those without one.

(5) Which enterprises are applicable to small and micro enterprise income tax preferential policies?

Answer: on tax revenue it is to use total assets, number of people in employment and tax revenue index comprehensive quantity "type" and "small profit", with other branch to small and micro business affirm method slightly different.

Article 92 of the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China stipulates, "Small and micro enterprises that may enjoy preferential enterprise income tax policies refer to enterprises engaged in non-restricted or prohibited industries of the State and meeting the following conditions:

1. In an industrial enterprise, the annual taxable income shall not exceed 300,000 RMB, the number of employees shall not exceed 100, and the total assets shall not exceed 30 million RMB;

2. For other enterprises, the annual taxable income shall not exceed 300,000 RMB, the number of employees shall not exceed 80, and the total assets shall not exceed 10 million RMB."