income tax

[suǒ de shuì]

Accounting terminology

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Income tax is government In different periods, individuals should pay taxes Definition and collection Of percentage They are different. Sometimes they pay taxes separately according to the income from contribution fees, wages, and incidental income (such as lottery winning). Income tax is also called Income tax 、 Income tax , refers to the national legal person 、 natural person and Other economic organizations A type of income collection within a certain period tax revenue 。

income tax (Hong Kong, China is referred to as "income tax"; Mainland China, Taiwan, Japan and South Korea are referred to as "income tax"; English income tax) is one of the taxes, which is taxed by natural persons, companies or legal persons. There are different tax rate systems around the world, such as Progressive tax rate There are also a variety of single flat tax rates.

The term "income tax" refers to the general term for all income tax objects. In some countries, the tax on companies is called enterprise tax, which is often referred to as company tax, or corporate income tax, or comprehensive income tax on profit-making undertakings.

Some countries tax on personal income. individual income tax A portion of the revenue that a natural person is required by law to turn over to the government. Local governments have different definitions and percentages of individual taxable income in different periods, and sometimes pay taxes separately according to the income of contribution fees, salary income and incidental income (such as lottery winning). Of all the countries in the world, only Bahrain and Qatar People in these two small Middle East countries do not have to pay the so-called income tax.

Chinese name: income tax
Foreign name: income tax
Definition: Local governments have different definitions and percentages of individual taxable income in different periods, and sometimes pay taxes separately according to the income from contribution fees, wages, and incidental income (such as lottery winning)

Properties: Tax Category I

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seven Tax system design
eight Foreign tax law

main features

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First: usually based on net income Tax objects 。

Second, the taxable income calculated is usually taken as the tax basis.

Third: The taxpayer and the actual bearer are usually the same, so the income of the taxpayer can be directly adjusted. Especially in the case of progressive tax rate, income tax plays an obvious role in adjusting the personal income gap. Levying income tax on enterprises can also play a leverage role in implementing specific national policies and regulating the economy. Fourth: The calculation of tax payable involves all aspects of taxpayers' costs and expenses, which is conducive to strengthening tax supervision and promoting the establishment and improvement of taxpayers Financial accounting system And improve business management.

Encyclopedia x ignorance: graphic exemption amount

For a long time after the founding of New China, the income tax revenue was Tax revenue The proportion of income tax is very small, and the role of income tax is very small until the reform and opening up, especially the state-owned enterprises in the mid-1980s“ Profit to tax "And Industrial and commercial tax It was only after the system reform that it was changed. Current in China tax system Income tax in Including corporate income tax Income tax of foreign-invested enterprises and foreign enterprises , personal income tax, etc.

Chinese enterprise income tax payer Within the territory of the People's Republic of China, enterprises and other income generating organizations (hereinafter collectively referred to as enterprises) are taxpayers of enterprise income tax (sole proprietorship enterprises Partnership Except).

A resident enterprise shall pay for its income from sources inside or outside China corporate income tax 。 (Resident enterprises refer to enterprises established in China according to law, or established in accordance with the laws of foreign countries (regions), but Actual management organization Enterprises in China.)

Non resident enterprises Where an entity or place is established in China, it shall pay enterprise income tax on the income derived from sources within China and the income generated outside China but actually connected with the entity or place it has established. (If a non resident enterprise does not have an organization or place in China, or if it has an organization or place but has no actual connection with its organization or place, it shall pay enterprise income tax on its income from sources in China.

Non resident enterprises refer to those that are established in accordance with the laws of foreign countries (regions) and whose actual management organization is not in China, but have an organization or place in China, or have no organization or place in China place , but with income from within China enterprise 。

China income tax rate The corporate income tax rate is 25%. In addition, in order to focus on supporting and encouraging the development of specific industries and projects. Two gears are specified Preferential tax rate : 20% and 15%.

In terms of nature, the income can be classified into four categories:

Income tax - individual income tax legal person Income tax, etc;

Profits tax - capital gains (from capital activities);

Income tax - land income, property income;

Social insurance tax (for personal income As a deduction).

economic significance

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In contrast, Commodity taxation More efficient, but income redistribution Limited capacity; Income tax can better promote fairness, but there is a lack of efficiency. It is generally believed that it is necessary to pay a certain collection cost to improve the social fairness.

Income tax and equity

Income tax has tax base The tax system is characterized by extensive and progressive tax rates, and the establishment of various exemptions ("wide" refers to the wide and inclusive tax base, "exemption" refers to the exemption of the tax base range) and deduction items can effectively promote horizontal fairness and vertical fairness.

Wide tax base, income tax is second only to Goods and services tax Collection of

Income tax and efficiency

Economic effectiveness and improvement through income tax Resource allocation efficiency And efficiency loss. Income efficiency includes economic efficiency and Administrative efficiency 。 Economic efficiency refers to whether income tax can be allocated most effectively economic resources , which brings the least burden or the greatest benefit to the society. Administrative efficiency refers to whether the tax collection cost is reduced to the minimum tax degree, which brings real income The largest and the smallest additional burden on taxpayers.

Impact on the economy

Economy determines taxation, and taxation affects economy.

(1) Income tax and economic stability 。 Economic stability - income tax vs economic fluctuation Large countries rely on income tax to "burn" flat.

① The government decides to change the scale and direction of financial expenditure.

② Tax Automatic stabilizer 。 Due to the nature of income tax, it has the characteristics of "automatic stabilizer".

③ The tax policy of discretion.

(2) Income tax and economic growth

In the process of economic growth, consumption, investment and other factors are the most direct to economic growth. Individual income tax directly affects consumption demand, and indirectly Investment demand 。 The level of disposable income after tax of enterprise income tax directly affects the level of disposable income after tax and affects the ROI And then affect investment.

In short, corporate income tax has a direct impact on economic growth. Its function of promoting economic growth is realized by two functions: reducing the income tax rate; The impact of the application of different specific policies, such as depreciation, inventory, and investment credit, on the micro economy.

Main features

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First, the tax burden is direct, so it is not easy to transfer.

Secondly, the tax base is extensive. As Taxable object The income of tax payment can be the net personal income that can be obtained by various taxpayers such as families, enterprises and social organizations within a certain period of time.

Thirdly, tax management is complex. Because the tax basis of income tax is based on complex calculation Taxable income On this basis, the tax payable can be calculated. In enterprises, taxable income ≠ Accounting profit , distribution deduction is required. In the home, complex computing is also required.

Then, the progressiveness of tax distribution. Progressive means that the cumulative tax rate is usually adopted for recurring items, and the tax rate design should reflect the principle of fairness of charging according to capacity as far as possible. To reflect the positive role of vertical equity.

Finally, the elasticity of tax revenue.

The elasticity of tax revenue means that under the progressive income tax system, the marginal tax of income tax changes with the change of taxable income tax, so that the income of income tax increases with economic prosperity and decreases with economic recession Tax revenue It is flexible and can play the role of "automatic stabilizer" for economic regulation.

Foreign income tax

The income tax was founded in England at the end of the 18th century. Positive value at that time Anglo French War During the period, in order to raise war costs, British Prime Minister W. Pitt (1759~1806) created a new tax, called "three-level tax", which was actually the prototype of income tax. However, because the tax law was not perfect and there were many tax evasions, in 1799, the "three-level tax" was abolished and the new income tax law was adopted, which laid the foundation of the British income tax system. After the 19th century, capitalist country Income tax has been levied successively. Income tax has developed from temporary tax to "regular tax", and from secondary tax to main tax in many modern western countries. Income tax in capitalist countries mainly adopts classified income tax system and global income tax Some also adopt the system of classification and syndrome. The classified income tax system refers to the separate taxation of various incomes of taxpayers, such as Industrial and commercial enterprises Profitability levy Corporate income tax , levy payroll tax on payroll, levy interest income tax on interest, etc; The comprehensive income tax system refers to the taxation on the total income of taxpayers. Most contemporary countries implement a tax system that combines classification with comprehensive taxation, that is, first pay taxes according to the classification of income, and then calculate the taxable income of taxpayers based on all their income Tax amount And allow the tax paid to be credited. The current income tax has developed into an important international tax in the contemporary era, which is not only widely implemented in capitalist countries, but also in many third world countries and some Socialist country (such as Romania, Hungary, Yugoslavia, etc.) have also been implemented. With international economic and trade exchanges and transnational corporations With the development of WTO, the problem of repeated taxation of transnational income of transnational taxpayers has emerged, which is the main content of the agreement between countries to avoid double taxation.

For individual income tax, most countries implement different tax ranges according to whether the taxpayer has resident status. According to the country of residence Tax jurisdiction All domestic residents, whether domestic or foreign, shall be taxed on their income at home and abroad; According to the tax jurisdiction of the source country of income, the income of non residents who have income from their own country shall be taxed only on their income obtained in their own country.

Countries that levy income tax on state-owned enterprises have different ways of doing so. Some countries levy taxes on all state-owned enterprises; Some only levy taxes on for-profit enterprises, but not on railway, aviation, postal, telecommunications and other departments.

Income tax in China

China has long been in a feudal and Semi colonial and semi feudal society The development of capitalism is slow, and there is no income tax system Socio economic conditions It was not until the end of the Qing Dynasty that there was an initiative to implement income tax, but it was repeatedly discussed and dropped out. During the period of the Republic of China, the Kuomintang government began to levy income tax on salaries and interest on securities deposits in October 1936. After 1937, it began to levy income tax on profit-making enterprises, excessive profits in extraordinary periods, and income tax on property lease and sale. These income taxes constituted the direct tax system of the Kuomintang government. Among them, the profit making enterprise income tax income is the largest, and its burden mainly falls on the national industrial and commercial workers in difficult situations after the Anti Japanese War, including small and medium-sized industrial and commercial workers.

After the founding of the People's Republic of China, the old income tax system was abolished. In 1950, the government council announced《 Key Principles for the Implementation of National Tax Administration 》Among them, the prescribed income taxes include payroll income tax (not levied), deposit interest income tax (changed to interest income tax in October 1950 and ceased to be levied in 1959) and industrial and commercial income tax (including Industrial and commercial tax Medium). stay Ownership of means of production Before the basic completion of the socialist transformation of the private sector, the industrial and commercial income tax was mainly levied on capitalist industry and commerce, which played a certain role in regulating the income of all classes, promoting the socialist transformation of private industry and commerce, and supporting and developing the cooperative economy. After the socialist transformation of ownership of the means of production has been basically completed, industrial and commercial income tax will mainly Collectively owned enterprises Collection. From 1963 to 1978, the collection of industrial and commercial income tax accumulated some construction funds for the country, improved the quality of enterprise management, and promoted the consolidation and development of the collective economy. Before 1982, Enterprises owned by the whole people No income tax shall be levied on profits handed over to the state.

Since 1980, China's income tax system has undergone considerable changes. To meet the needs of foreign economic cooperation and technological exchange, and to safeguard the rights and interests of the country, the Standing Committee of the National People's Congress promulgated the Income Tax Law of the People's Republic of China for Chinese Foreign Equity Joint Ventures and the Individual Income Tax Law of the People's Republic of China on September 10, 1980, and the Income Tax Law of the People's Republic of China for Foreign Enterprises on December 13, 1981. In order to correctly solve the distribution relationship between the state and enterprises state-owned enterprise To establish and improve the economic responsibility system and ensure the stable growth of fiscal revenue, the State Council approved the Ministry of Finance's Tentative Measures on the Change of Profits to Taxes for State owned Enterprises on April 12, 1983, and issued the Provisional Regulations of the People's Republic of China on Income Tax for State owned Enterprises and its implementation rules in September 1984. As of 1986, China had five major income taxes, namely, state-owned enterprise income tax and adjustment tax Industrial and commercial income tax 、 Income tax of Sino foreign joint ventures 、 income tax on foreign enterprises Individual income tax.

State owned enterprise income tax and adjustment tax Operating income And other income taxes. In the past, China did not levy income tax on state-owned enterprises, but instead implemented that enterprises should hand in all profits, make up losses by financial appropriation, and apply for appropriation from the financial department for major expenditures, namely“ Unified revenue and expenditure ”System. This system is not conducive to correctly solving the distribution relationship between the state and enterprises. After 1979, the state made many improvements to this system. In 1983, the State Council, in order to fix the distribution relationship between the state and enterprises in the form of tax, make enterprises relatively independent economic entities, gradually achieve "independent operation and self financing", and mobilize the enthusiasm of enterprises and employees, decided to implement“ Profit to tax ”We will transform the profit handed over by state-owned enterprises into an income tax payment system. In September 1984, it was promulgated by the State Interim Regulations on Enterprise Income Tax And its implementation rules further improved the income tax system of state-owned enterprises. Taxpayers of state-owned enterprise income tax are Independent accounting State owned enterprises. Tax basis Is the taxable income. Income tax rate of state-owned enterprises It is formulated by enterprise type. The proportional tax rate of 55% applies to large and medium-sized enterprises; small business Catering service enterprises and commercial hotels, restaurants, guest houses, etc Excess progressive tax rate 。 The profits of state-owned large and medium-sized enterprises after paying income tax are generally retained by the enterprise, but a few enterprises with more surplus profits still have to pay adjustment tax.

adjustment tax of state-run enterprises It is a tax levied on the profits of state-owned large and medium-sized enterprises that exceed the reasonable retained profits after paying income tax. It is income tax of state-run enterprises The supplementary form of. Due to price, resource conditions, organic composition of funds, geographical location, traffic conditions Production structure , product structure, etc. The profit level of China's state-owned enterprises is very different in different regions and industries, and the same industry in different regions is also different, and some are very different. After the income tax is levied at the same proportion, some enterprises still have more surplus profits. Adjustment tax is a kind of tax that adjusts the surplus profits of these enterprises. State owned enterprise adjustment tax rate Mainly based on the base period profit and retained profit level of the enterprise in 1983 finance and tax The department shall consult with the competent department of the enterprise to check and approve by account. In order to encourage enterprises to increase production and income, 70% of the adjustment tax will be levied on the profit growth of enterprises in the current year compared with that in the base period.

Industrial and commercial income tax Collective ownership The tax levied on their profit income by industrial and commercial enterprises and individual industrial and commercial households. Taxpayers include industrial and transportation enterprises under urban collective ownership Township enterprises Grass roots supply and marketing cooperatives below county level, urban and rural self-employed workers and some Rural specialized households Etc. Before 1984, the industrial and commercial income tax rates were determined according to different types of taxpayers, and the tax rates were complex. After the implementation of the second step of the reform from profit to tax in 1984, all kinds of taxpayers, like small state-owned enterprises, implemented a new eight level progressive tax rate for excess. The minimum tax rate is 10% and the maximum tax rate is 55%.

Sino foreign joint venture Income tax and Foreign enterprises Income tax Tax levied on income from production, business operations and other income of Chinese foreign equity joint ventures and foreign enterprises. along with productivity With the continuous development of and the rapid progress of science and technology, international economic ties are also developing rapidly. Many countries are using this international economic link to develop their own economies. China has rich resources and a huge market, which has great attraction for foreign capital. China's foreign-related tax law is formulated to meet the needs of the new situation. It embodies“ Tax burden The principle of "light, preferential and lenient" provides good investment environment To create conditions for attracting more foreign capital and introducing international advanced technology, so as to accelerate China's economic development.

Joint venture income tax is 30% Proportional tax In addition, 10% local income tax shall be levied on the amount of income payable. In order to encourage customers to use their profits in China or convert them into investment, 10% Withholding income tax And those not remitted will not be collected. joint venture Enjoyable Tax preference It mainly includes: ① tax reduction and exemption for new enterprises. ② Long term tax cuts will be given to investments in specific economic sectors and economically backward areas. ③ Tax reduction on reinvestment. 40% of the income tax already paid on the reinvested part of the profits shared by the joint venturer from the enterprise, if the period of reinvestment is not less than five years. ④ The annual losses incurred by a joint venture may be profit Medium compensation, but no longer than five years. ⑤ Where rapid depreciation is really necessary, accelerated depreciation is allowed after approval.

The income tax of foreign enterprises adopts five levels of progressive tax rate for excess, the lowest level of tax rate is 20%, and the highest level of tax rate is 40%; At the same time, the local income tax shall be paid at 10% of the taxable income of the enterprise. When the after tax profits are remitted abroad, no tax shall be levied. A foreign enterprise does not have a business establishment in China, but has dividends, interests, rents Royalties For such income, 20% of income tax (usually referred to as withholding income tax) shall be paid and withheld by the paying unit. At the same time, foreign enterprises engaged in agriculture, forestry, animal husbandry and other industries with low profits will be given certain tax relief.

In November 1984, the State Council decided to Special Economic Zones The income tax of foreign-related enterprises in 14 coastal port cities will be exempted and reduced. In the special economic zones (hereinafter referred to as SEZs) and 14 coastal port cities Economic-Technological Development Area Domestic Sino foreign joint ventures, Sino foreign Cooperative operation And customers Sole proprietorship The enterprise income tax shall be levied at a reduced rate of 15% on the income from production, business operation and other income of enterprises. In these cities and in the old urban areas of the special zones, Chinese foreign equity joint ventures, Chinese foreign cooperative joint ventures and wholly foreign-owned enterprises are established, which are technology intensive and knowledge intensive projects; Or projects with an investment amount of more than 30 million dollars and a long time to recover the investment; Or for projects involving energy, transportation and port construction, the enterprise income tax shall also be levied at a reduced rate of 15% after approval. For the local income tax levied by the above enterprises in these regions, the local government shall decide if it is necessary to give preferential relief; The income tax on dividends, interest, rent, royalties and other income obtained by merchants shall be levied at a reduced rate of 10%. Income tax shall be exempted when profits shared by investors of joint ventures in special zones and development zones are remitted abroad. In addition Industrial and commercial consolidated tax There are also provisions for reduction and exemption. Taking the above measures will help these regions expand foreign economic and technological cooperation, absorb foreign capital, introduce advanced technology, improve labor productivity, and accelerate Socialist Modernization Drive 。

Individual income tax: Yes natural person (including residents and non residents) a tax levied on their personal income. China Individual Income Tax Law It is stipulated that individuals who have resided in China for more than one year should pay individual income tax on their income from within and outside China, which is the application of the jurisdiction of tax collection in the place of residence; Individuals who do not reside in China or have resided in China for less than one year shall be taxed only on income derived from within China. This is Tax jurisdiction of income source Application of. China adopts a classified income tax system for individual income tax, which includes: wages salary Income, Income from labor remuneration ， income from franchise royalties ； Interest dividend 、 income from bonuses ， Income from property lease , other income. Two kinds of tax rates are stipulated for the above income: ① the tax rate of income from wages and salaries is excessive Progressive tax rate There are seven levels in total, the lowest level tax rate is 5%, and the highest level tax rate is 45%, which is collected monthly. ② Other items Income tax rate , a proportional tax rate of 20% shall be adopted, and the tax shall be levied by time. yes taxpayer The income of each item shall be calculated by item and expenses shall be deducted. The monthly fixed deduction of 800 yuan from the salary income is used as living expenses and other necessary expenses for myself and the supporting family members, and only the part exceeding 800 yuan is used as taxable income taxation according to fixed rates ； For other income such as labor remuneration, the quota and fixed rate are adopted Expense deduction The method is to deduct 800 yuan if the income is less than 4000 yuan, and 20% if the income is more than 4000 yuan. At the same time, according to relevant national policies and by reference International tax Reciprocal convention, list some tax-free items.

Local conditions:

On December 7, 2015, Shenzhen Municipal Civil Affairs Bureau The 13th Five Year Plan for the Development of Shenzhen's Elderly Care Service Industry (Draft for Comments) (hereinafter referred to as the Draft for Comments) was released on the official website for public opinion. The opinion draft mentioned that Shenzhen will explore a new mode of property endowment for the elderly and introduce relevant Preferential tax policies The elderly who adopt the housing pension mode are conditionally exempted from property tax, and the elderly who transfer housing for pension purposes are conditionally exempted from business tax and personal income tax. It is worth mentioning that in the opinion draft, "preferential policies will be given to children living with the elderly, and the salary of children living with the elderly will be increased moderately" Income tax expense The deduction amount shall be the pre tax deduction of maintenance expenses. "

favoured policy

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Preferential policies for enterprise income tax

(1) The state gives preferential treatment to enterprise income tax for industries and projects that are supported and encouraged to develop.

⑵ The following income of the enterprise is tax exempt income.

A、 Interest income from treasury bonds ；

B、 Between qualified resident enterprises dividend , dividends, etc Equity investment income ；

C、 Non resident enterprises that establish institutions or places in China obtain dividends, bonuses and other equity investment income from resident enterprises that are actually connected with the institutions or places;

D、 Income of qualified non-profit organizations.

(3) The following income of an enterprise may be exempted or reduced from enterprise income tax.

A、 Income from agricultural, forestry, animal husbandry and fishery projects;

B、 Engaged in key national support Public infrastructure Income from project investment and operation;

C、 Income from qualified environmental protection, energy and water conservation projects;

D、 Income from eligible technology transfer;

⑷ Qualified small low-profit enterprises The enterprise income tax shall be levied at a reduced rate of 20%.

Small low profit enterprises refer to enterprises engaged in industries not restricted or prohibited by the state and meeting the following conditions:

A、 For industrial enterprises, the annual taxable income shall not exceed 300000 yuan, the number of employees shall not exceed 100, and the total assets shall not exceed 30 million yuan;

B、 For other enterprises, the annual taxable income shall not exceed 300000 yuan, the number of employees shall not exceed 80, and the total assets shall not exceed 10 million yuan.

(5) What the state needs to support High tech enterprises The enterprise income tax shall be levied at a reduced rate of 15%.

⑹ Organs of self-government in national autonomous areas To this National autonomous areas The part of the enterprise income tax that should be paid by an enterprise that belongs to the local share may be reduced.

Announcement on Preferential Income Tax Policies for Small and Micro Enterprises and Individual Businesses

Announcement No. 6, 2023 of the Ministry of Finance and the State Administration of Taxation

In order to support the development of small and micro enterprises and individual businesses, the relevant tax policies are announced as follows:

1、 For small low profit enterprises whose annual taxable income does not exceed 1 million yuan, a reduction of 25% shall be included in the taxable income, and the enterprise income tax shall be paid at the rate of 20%.

2、 On the basis of the current preferential policies, the individual income tax will be halved for the part of the annual taxable income of individual businesses that does not exceed 1 million yuan.

3、 The term "small low profit enterprises" as mentioned in this announcement refers to enterprises that are engaged in industries not restricted or prohibited by the state and meet the three conditions of annual taxable income not exceeding 3 million yuan, number of employees not exceeding 300, and total assets not exceeding 50 million yuan.

The number of employees includes the number of employees who have established labor relations with the enterprise and the number of labor dispatch employees accepted by the enterprise. The indicators of the number of employees and total assets shall be determined according to the quarterly average value of the enterprise throughout the year. The specific calculation formula is as follows:

Quarterly average value=(value at the beginning of the quarter+value at the end of the quarter) ÷ 2

Annual quarterly average=sum of annual quarterly average ÷ 4

If business is started or terminated in the middle of the year, the actual business period shall be taken as a tax year to determine the above indicators.

4、 The implementation period of this announcement is from January 1, 2023 to December 31, 2024.

It is hereby announced.

State Administration of Taxation, Ministry of Finance

March 26, 2023^[1]

Exemption notice

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Ministry of Finance: Local government bond interest is exempted from income tax in recent three years

On September 22, the Ministry of Finance Trust network The Notice on the Exemption of Income Tax on Interest Income from Local Government Bonds was issued on, which said that the interest income from local government bonds issued in 2009, 2010 and 2011 obtained by enterprises and individuals was exempted from income tax corporate income tax and individual income tax 。

It is reported that, Local government bonds It refers to the bonds issued and repaid by the governments of provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan with the approval of the State Council to realize the benefit of the people Gain wealth Distribution pattern.

Circular of The State Council of The People's Republic of China on The Exemption of Income Tax on Interest Income from Local Government Bonds

CS [2011] No. 76

The financial departments (bureaus), national tax bureaus, and local tax bureaus of all provinces, autonomous regions, municipalities directly under the Central Government, and cities specifically designated in the state plan, Finance Bureau of Xinjiang Production and Construction Corps ：

With the approval of the State Council, the relevant income tax policies on interest income from local government bonds are hereby notified as follows:

1、 Interest income from local government bonds issued in 2009, 2010 and 2011 by enterprises and individuals is exempted corporate income tax and individual income tax 。

2、 Local government bonds refer to the bonds approved by the State Council and issued and repaid by the governments of provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan.

Tax presentation

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Presentation of income tax

deferred tax assets and Deferred Tax Liability Generally, they should be Non current assets and Non current liabilities stay Balance Sheet The income tax expenses shall be separately listed in the income statement, and the information related to income tax shall also be disclosed in the notes.

1. When the following conditions are met at the same time, the enterprise shall present the current income tax assets and current income tax liabilities as the net amount after offset:

(1) The enterprise has the legal right to settle with net amount;

(2) It is intended to settle or acquire assets and settle liabilities at the same time with net amount.

2. When the following conditions are met simultaneously, the enterprise shall present the deferred income tax assets and deferred income tax liabilities in the net amount after offset:

(1) The enterprise has the legal right to settle current income tax assets and current income tax liabilities on a net basis;

(2) Deferred income tax assets and deferred income tax liabilities are related to the income tax levied by the same tax collection and management department on the same tax payer or different tax payers, but in each future period of reversal of significant deferred income tax assets and deferred income tax liabilities, The involved tax payer intends to settle the current income tax assets and current income tax liabilities on a net basis or acquire assets and settle liabilities at the same time.

Tax system design

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Type of levy system

(1) Classified income tax means that income is divided into several categories in a certain way, and income of different categories is calculated and collected separately. For example, income from operating profits, interest, dividends, wages and salaries, etc. The advantages of collecting different types of income are that: corresponding tax policies and methods can be determined according to different types of income, and most of them are applicable to developing countries with low collection and management technology; Its disadvantage is that the tax system is more complex and the tax collection is more complicated.

(2) The term "comprehensive income tax" refers to the collection of all the income of taxpayers and the collection of tax at a unified tax rate, such as enterprise income tax. Its advantages are that it is simple to calculate and levy, relatively suitable for progressive tax system, and conducive to fair tax burden; Its disadvantage is that it is difficult to calculate comprehensive income when taxing, and it is also tedious to carry out comprehensive deduction. At the same time, it requires a high level of collection and management technology. Therefore, it is mainly used in developed countries.

(3) Mixed income tax refers to the combination of classified income tax and comprehensive income tax, which means that certain incomes are taxed separately by category, while other incomes are consolidated and comprehensively taxed.

Regulations on expense deduction

(1) The actual reimbursement method, also known as the actual deduction method, determines the pre tax deduction amount completely according to the taxpayer's costs, expenses or actual expenses. (2) The standard deduction method refers to the pre determination of one or more standards for taxpayers' necessary costs, expenses or basic living expenses, which are allowed to be deducted before tax as a fixed amount.

Tax rate form selection

(1) Proportional tax rate. The proportional tax rate is adopted, and the income of taxpayers is taxed at the same rate no matter how much, and the burden level of taxpayers always maintains a certain proportion.

(2) Progressive tax rate. The progressive tax rate refers to the tax with different tax rates according to the amount of income of taxpayers. Its tax rate rises and falls with the increase and decrease of income. The tax system is flexible and can fully reflect the principle of affordable and fair tax burden.

Determination of specific levy methods

(1) The source tax method is the abbreviation of the source tax method, which refers to the taxation of income tax at the place where the income occurs. Generally, it is applicable to the classified taxation system and cannot reflect the principle of reasonable tax burden.

(2) The Declaration Law, also known as the Comprehensive Tax Law, means that taxpayers declare their taxable income in accordance with the provisions of the tax law, and after investigation and verification by the tax authorities, the tax payable is calculated at the rate of the declared taxable income, which is paid by the taxpayer in one or several installments. It is generally applicable to the comprehensive tax system, and conforms to the principles of affordability and fair tax burden.

Foreign tax law

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According to the provisions of the US federal tax law, any US non-profit organization verified by the US Internal Revenue Service and granted tax exemption qualification can be fully exempted from income tax, property tax, unemployment tax, etc. Australia has a wide range of tax exemptions for non-profit organizations, including income tax.^[2]

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