Collection and management of withholding income tax and sales and payment of foreign exchange

According to the Income Tax Law of People's Republic of China (PRC) on Enterprises with Foreign Investment and Foreign Enterprises, if a foreign enterprise does not set up an institution or place in China, but comes from profits (interest), rents, royalties and other income in China, or has set up an institution or place, but has no actual connection with its institution or place, it shall pay income tax. Income tax is based on the actual beneficiary; The payer is the withholding agent. This is what we call withholding income tax. Withholding income tax itself is not an independent tax. It means that the government of a country does not set up institutions or places in its own territory, but exercises the priority tax right on profits (interest), rents, royalties and other income originating in its own territory. In recent years, with China's accession to the WTO and further opening to the outside world, the number of imported items has been increasing, and the tax items involving withholding income tax have also increased year by year. According to statistics, there were 8 tax items involving withholding income in Huishan District in 2002, with withholding income of 2.8 million yuan. In 2003, there were 1 1 tax items involving withholding income. Withholding income tax of 800,000 yuan. Due to the characteristics of the object of withholding income tax in Huishan District and the limitation of the management mechanism of the national tax system, it is difficult to collect and manage the withholding income tax and foreign exchange settlement and sale. 1. Withholding income tax and settlement and sale of foreign exchange: 1. The daily collection and management work is separated from the issuance of foreign exchange sales and payment certificates. Withholding income tax is levied on foreign enterprises that have not established institutions in China, and the tax source is characterized by concealment, liquidity and fragmentation. Withholding and paying withholding income tax involves both foreign taxpayers and domestic withholding agents, and it is quite difficult to collect it. Withholding income tax, as a special way of income tax collection, is called "footless tax" because of its particularity of collection and management. For a long time, the source of withholding income tax has been controlled by issuing foreign exchange sales and payment vouchers by special personnel. Although this is conducive to the professional development, it has been neglected for a long time because of the wide coverage of this tax and the separation of tax authorities of domestic and foreign-funded enterprises in China's tax collection and management system. Many enterprises usually pay a large amount of taxable expenses, but only. It is common for enterprises to withhold taxes in time or even less. 2. Raising costs and shifting profits In recent years, the foreign exchange expenditure of non-trade royalties has increased year by year. Although this is the cost of introducing foreign advanced technology, compared with the profitability of enterprises, the charging prices of these projects are debatable. For example, a large company pays tens of millions of yuan in royalties every year, but the company makes little profit. Imagine, what is the significance of a company with meager profits continuing to introduce advanced technology? 3. It is difficult to verify the overseas labor costs, which makes the issuance of the Tax Exemption Certificate for Sale and Payment of Foreign Exchange face challenges. According to the tax agreement, the labor service expenses incurred abroad belong to the scope of tax exemption, and enterprises must provide tax exemption certificates issued by tax authorities when paying foreign exchange. So what kind of information can prove that the labor service really happened abroad? In the case of large payment of foreign exchange, enterprises may be required to provide proof materials issued by the notary office, but who will prove the notary fee of the notary office? Although it is currently stipulated that the tax exemption certificate should be submitted to the Municipal Bureau for approval, enterprises can only be required to provide certification materials, contract agreements and enterprise commitment statements. 4. The income items are complex and the definition of tax law is not clear. With the development of information technology, some new things such as online trading have appeared. It has become more and more common to use high-tech means to carry out the production and business activities of enterprises. At present, foreign enterprises are getting more and more income from China, but some items, such as certification fees, consulting fees, qualification fees, network service fees, DDN special line fees, etc. , has not been strictly recognized in the tax law. These factors also restrict the collection and management of foreign enterprise income tax. 2. Countermeasures for strengthening the collection and management of withholding income tax and foreign exchange sales and payment 1. Strengthening the publicity of tax law Because of the characteristics of the object of withholding income tax, the difficulty of tax collection and management is determined. To solve the problems existing in the management and collection of withholding income tax, we must first start with tax publicity. Although the Income Tax Law of People's Republic of China (PRC) for Enterprises with Foreign Investment and Foreign Enterprises clearly stipulates the tax items, taxable objects and withholding period of income tax, due to the tax jurisdiction of the "territoriality principle" and the principle of unified tax management, only some large multinational companies and foreign-invested enterprises explicitly withhold income tax, and most domestic-funded enterprises are unaware of the withholding obligation and fail to perform it. When we look at the withholding income tax items of enterprises or companies, especially institutions, we find that the withholding income tax clauses of withholding income tax are not involved when enterprises sign contracts with overseas companies. With the issuance of sales and payment certificates, this is even more prominent. Therefore, it is urgent to increase tax publicity through various channels. 2. Break the "territorial principle" of tax jurisdiction and implement unified collection and management. Due to the principle of territorial tax management in China, and the management of two kinds of taxes, the State Taxation Bureau and the Local Taxation Bureau, it is common to fail to declare the withholding income tax items, which leads to the following problems: (1) The tax object and tax jurisdiction overlap; There is also a "blind area", where the tax target involves enterprises, institutions and other departments, which is difficult to manage, which is not conducive to the collection and management of this tax; For example, in Huishan District in 2002, there were 30 foreign-funded enterprises 18, 2 domestic-funded enterprises 12, 25 foreign-funded enterprises 15 which withheld income tax for 26 times and 22 domestic-funded enterprises15. The above-mentioned domestic-funded enterprise income tax collection objects are managed by the second and third branches of Huishan District State Taxation Bureau and Huishan Local Taxation Bureau. (2) From the tax jurisdiction, withholding income tax belongs to the tax content in the Income Tax Law of People's Republic of China (PRC) for Enterprises with Foreign Investment and Foreign Enterprises, and should be managed and collected by foreign-related tax authorities; From the perspective of tax jurisdiction, withholding income tax can also be managed and collected by local tax authorities; Although it is mainly collected by Guan Yi Branch, which is in charge of foreign-related taxes, it involves tax jurisdiction issues during the investigation and inspection, and requires the support and cooperation of local branches and tax groups during the inspection; (3) As the withholding income tax is levied on a project basis, there is no need for tax registration at present. When the tax warehousing management discovers and checks the enterprise's withholding income tax, it temporarily opens a tax registration number in the first branch of State Taxation Administration of The People's Republic of China, which is in charge of foreign-funded enterprises, and issues invoices for tax payment. This is not conducive to the analysis and statistics of tax structure. Therefore, it is necessary to break the tax jurisdiction of the "territorial principle" of withholding income tax, implement unified collection and management, and reduce tax loss. 3. Actively cooperate with various departments to establish an accounting system for withholding income tax collection and management, and strengthen close cooperation with various departments is an important measure to reduce tax loss. According to the items of withholding income tax and the characteristics of tax collection and management, tax authorities should exchange information with relevant departments regularly. Although the withholding income tax is levied by the national tax department, it is necessary to cooperate with the local tax, industry and commerce, foreign economic and trade commission, foreign exchange administration and banks and other relevant departments to investigate and understand the items of withholding income tax, and establish an accounting system for withholding income tax collection and management in time to prevent tax loss. 4. The collection and management of withholding income tax should be combined with the daily collection and management. Withholding income tax, as a special way of collecting income tax of foreign-invested enterprises and foreign enterprises, cannot be separated from the tax authorities under the jurisdiction of the paying unit. Therefore, the tax authorities should regard the withholding income tax as a part of the income tax management of foreign-invested enterprises and foreign enterprises, and understand the equipment investment and profit (interest) distribution according to the characteristics of the industry. The borrowing of funds and the use of proprietary technology should be combined with the annual income tax settlement and anti-tax avoidance work, and the management of withholding income tax of enterprises and companies under their jurisdiction should be strengthened. Pay special attention to the use of business dealings with affiliated enterprises, adjust the interest rate of financing loans, royalties and other means to transfer profits through human factors, and achieve the purpose of tax avoidance. In short, to improve the collection and management of withholding income tax and foreign exchange sales and payment, firstly, break the tax jurisdiction of "territoriality principle", implement unified collection and management, first manage the declaration of withholding income tax, and strengthen the monitoring of withholding income tax collection and management enterprises; Second, on the basis of establishing the ledger of collection and management, strengthen the cooperation of various departments and improve the quality of collection and management.