Announcement of the State Administration of Taxation on the implementation of preferential income tax policies for small and micro-profit enterprises.
In order to implement the preferential income tax policies for small and micro-profit enterprises, the State Administration of Taxation issued the Announcement of the State Administration of Taxation on the Implementation of the Preferential Income Tax Policies for Small and Micro-profit Enterprises (hereinafter referred to as the “Announcement”). It is now interpreted as follows:
I. What is the background for the formulation and issuance of the Proclamation?
In order to implement the decision-making and deployment of the Party Central Committee and the State Council, the Ministry of Finance and the State Administration of Taxation issued the Announcement on the Preferential Income Tax Policies for Small and Micro Enterprises and Individual Industrial and Commercial Enterprises (No. 6 of 2023), optimizing the preferential income tax policies for small and micro-profit enterprises with annual taxable income not exceeding 1 million yuan. In order to ensure that the preferential income tax policies for small and micro-profit enterprises are implemented in place and support the development of small and micro enterprises, the State Administration of Taxation has issued the Announcement to clarify relevant collection and management issues.
2. What is the meaning of small and micro-profit enterprises in tax policy?
Small and micro-profit enterprises refer to resident enterprises that meet the regulations of the Ministry of Finance and the State Administration of Taxation and can enjoy preferential income tax policies for small and micro-profit enterprises. At present, resident enterprises can enjoy preferential income tax policies for small and micro-profit enterprises in accordance with the relevant provisions of the Announcement of the State Administration of Taxation of the Ministry of Finance on Further Implementing the Preferential Income Tax Policies for Small and Micro Enterprises (No. 13 of 2022) and the Announcement of the State Administration of Taxation of the Ministry of Finance on the Preferential Income Tax Policies for Small and Micro Enterprises and Individual Industrial and Commercial Enterprises (No. 6 of 2023). In the future, if the policy is adjusted, its provisions shall prevail.
3. How to apply the preferential income tax policy for small and micro-profit enterprises when an enterprise establishes a branch without legal personality?
The current enterprise income tax implements the corporate tax system, and enterprises should calculate and pay enterprise income tax with legal persons as the main body. Paragraph 2 of Article 50 of the Enterprise Income Tax Law of the People’s Republic of China stipulates that if a resident enterprise establishes a business establishment without legal personality within the territory of China, it shall calculate and pay enterprise income tax in a consolidated manner. Therefore, if an enterprise establishes a branch office without legal personality, it should first summarize and calculate the number of employees, total assets and annual taxable income of the head office and its branches, and then judge whether it meets the conditions of a small and small profit enterprise based on the sum of each index.
4. What are the procedures for handling preferential income tax policies for small and micro-profit enterprises?
Eligible small and micro-profit enterprises can easily enjoy preferential policies by filling in the tax return without other procedures. Small and micro-profit enterprises should accurately fill in basic information such as the number of employees, total assets, and industries restricted or prohibited by the state, and after calculating the taxable income, the information system will use the relevant data to intelligently prefill preferential items for small and micro-profit enterprises and automatically calculate the tax deduction.
5. How can enterprises enjoy preferential policies when paying enterprise income tax in advance?
First, determine if you meet the conditions. When an enterprise pays enterprise income tax in advance in the middle of the year, it can enjoy preferential policies if it meets the conditions of small and micro-profit enterprises according to policy standards. The indicators of total assets, number of employees, and annual taxable income shall be judged according to the situation of the current year as of the end of the period to which the current prepayment declaration belongs. Among them, the indicators of total assets and number of employees are calculated according to the calculation formula of “annual quarterly average” in the policy standard, and the quarterly average value of the period to which the current prepayment declaration belongs is calculated. Second, calculate the tax payable in accordance with the policy. In the future, if the policy is adjusted, its provisions, calculation methods and so on. Examples are as follows:
Example: Company A was established in 2022 and engaged in national non-restricted and prohibited industries, with 120 and 200 employees at the beginning and end of the first quarter of 2023, the total assets at the beginning and end of the first quarter were 20 million yuan and 40 million yuan respectively, and the taxable income in the first quarter was 900,000 yuan.
Analysis: In the first quarter of 2023, the quarterly average of “number of employees” of enterprise A was 160, the quarterly average of “total assets” was 30 million yuan, and the taxable income was 900,000 yuan. Meet the judgment criteria for small and micro-profit enterprises when paying enterprise income tax in advance: Engaging in non-restricted and prohibited industries by the state, and at the same time meeting the quarterly average of total assets at the end of the period to which the current prepayment declaration does not exceed 50 million yuan, the quarterly average number of employees does not exceed 300, and the taxable income does not exceed 3 million yuan, can enjoy preferential policies.
The Announcement of the State Administration of Taxation of the Ministry of Finance on the Preferential Income Tax Policies for Small and Micro Enterprises and Individual Industrial and Commercial Enterprises (No. 6 of 2023) stipulates that the portion of the annual taxable income of small and micro-profit enterprises not exceeding 1 million yuan shall be reduced by 25% as taxable income, and enterprise income tax shall be paid at a rate of 20%. Therefore, the tax payable by enterprise A in the first quarter is: 90×25%×20%=4.5 (million yuan).
6. Implementation time of the Announcement
Enterprise income tax is calculated according to the tax year, and the Announcement will come into force on January 1, 2023. The Announcement of the State Administration of Taxation on the Collection and Administration of Preferential Income Tax Policies for Small and Small-Profit Enterprises (No. 5 of 2022) is abolished at the same time.
