* daily necessities * masks 10605 1299. According to the provisions of the tax business classification code in China, the tax classification code of masks can generally be found in the commodity items of billing software.
Tax treatment of masks
Situation 1: The company buys masks and distributes them to employees.
During the epidemic period, the protective articles such as masks and alcohol purchased by the company were used to resume production, belonging to labor protection articles in a special period.
Tax treatment:
(1) VAT:
According to the Provisional Regulations on Value-added Tax and other relevant regulations, the input tax can be deducted from the output tax if the labor insurance product expenditure has obtained a valid tax deduction certificate.
(2) Personal income tax:
According to the Announcement of State Taxation Administration of The People's Republic of China, Ministry of Finance on Supporting the Prevention and Control of Infectious Pneumonia in novel coronavirus (No.10, State Taxation Administration of The People's Republic of China, Ministry of Finance, 2020):
Drugs, medical supplies, protective equipment and other physical objects (excluding cash) sent by units to individuals to prevent novel coronavirus from contracting pneumonia are not included in wages and salaries, and are exempt from personal income tax.
So this expenditure is exempt from personal income tax.
(3) Enterprise income tax:
According to Article 48 of the Regulations for the Implementation of the Enterprise Income Tax Law, reasonable labor protection expenses incurred by enterprises are allowed to be deducted.
Therefore, if the enterprise is within a reasonable range and has obtained a legal pre-tax tax deduction certificate, it is allowed to deduct the enterprise income tax before tax.
Case 2: The company gives mask subsidies in cash.
Tax treatment:
(1) Personal income tax:
According to Article 10 of the Regulations for the Implementation of the Individual Income Tax Law, the forms of personal income include cash, physical objects, securities and other forms of economic benefits. At the same time, according to the second paragraph of Article 2 of the Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Determining the Scope of Living Allowance (Guo Shui Fa [1998] 155):
Subsidies and subsidies paid to employees of this unit from welfare funds and trade union funds do not belong to the scope of tax-free welfare funds, and should be incorporated into taxpayers' wages and salaries to collect personal income tax.
Therefore, the mask subsidy in cash obtained by individuals should be included in the salary of the month and pay personal income tax.
(2) Enterprise income tax:
According to the "Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC)", if the employee welfare expenses incurred by an enterprise do not exceed 14% of the total wages and salaries, they shall be deducted.
Therefore, this expenditure can be deducted as employee welfare expenses within the prescribed scope.
Situation 3: The company purchases masks and donates them to Wuhan Hospital.
Tax treatment:
(1) VAT:
According to the Announcement of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Supporting the Prevention and Control of Pneumonia in novel coronavirus (Announcement No.9 of State Taxation Administration of The People's Republic of China of the Ministry of Finance in 2020), in order to support the prevention and control of pneumonia in novel coronavirus, the relevant donation tax policies are hereby announced as follows:
"Units and individual industrial and commercial households donate goods produced, processed or purchased by their own units through public welfare social organizations, people's governments at or above the county level and their departments and other state organs, or directly to hospitals undertaking epidemic prevention and control tasks, and are exempt from value-added tax, consumption tax, urban maintenance and construction tax, education surcharge and local education surcharge."
Therefore, the epidemic prevention supplies donated by the company are exempt from value-added tax and related additional taxes.
(2) Enterprise income tax:
According to the Announcement of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Supporting the Prevention and Control of Infectious Pneumonia in novel coronavirus (Announcement No.9 of the Ministry of Finance and State Taxation Administration of The People's Republic of China in 2020):
"1. Cash and articles donated by enterprises and individuals through public welfare social organizations or state organs such as people's governments at or above the county level and their departments are allowed to be deducted in full when calculating taxable income. 2 enterprises and individuals in the calculation of taxable income directly donated items used to deal with the novel coronavirus epidemic. "
Therefore, this expenditure can be fully deducted when calculating taxable income.
(3) Import duties
According to the Announcement of the Ministry of Finance, the General Administration of Customs and State Taxation Administration of The People's Republic of China on Tax Exemption Policy for Imported Materials for Prevention and Control of Pneumonia in novel coronavirus (Announcement No.6 of the General Administration of Customs and the Ministry of Finance in 2020), imported materials imported from abroad or directly donated for epidemic prevention and control are exempted from import duties, import value-added tax and consumption tax.
As mentioned above, if a mask manufacturer distinguishes according to the mask fabric, according to the different types of masks, its tax code is divided into several types. Therefore, when an enterprise issues a mask invoice, it is best to determine which tax code it is before adding it.