Answer: Article 30 of the Enterprise Product Cost Accounting System (Trial) (17 [2065438]) stipulates that software and information technology service enterprises generally set up direct labor, outsourcing software and service fees, site rental fees, depreciation of fixed assets, amortization of intangible assets, travel expenses, training fees, subcontracting fees, utilities, office expenses and other cost items.
Notice of the Ministry of Finance of State Taxation Administration of The People's Republic of China on Comprehensively Promoting the Pilot Project of Changing Business Tax to VAT (Caishui [2016] No.36), Annex II: Provisions on Relevant Matters Concerning the Pilot Project of Changing Business Tax to VAT.
5. When the original VAT general taxpayer purchases labor services, intangible assets or real estate, the input tax amount of the following items shall not be deducted from the output tax amount:
(1) is used for simple tax items, VAT-exempt items, collective welfare or personal consumption. The intangible assets and real estate involved only refer to the intangible assets dedicated to the above projects (excluding other equity intangible assets) and real estate.
Taxpayers' social and entertainment consumption belongs to personal consumption.
......
(6) purchased passenger services, loan services, catering services, daily services for residents and entertainment services.
According to the above regulations, the input tax deducted by software includes outsourcing software and service fees, fixed assets, intangible assets, subcontracting fees, utilities, office supplies, etc.
What preferential tax policies can ordinary taxpayers engaged in software development enjoy in value-added tax?
Article 1 of the Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China on the Value-added Tax Policy for Software Products (Caishui [201]100) stipulates that the value-added tax policy for software products is as follows:
(1) After the general VAT taxpayer sells the software products developed and produced by himself, the VAT will be levied at the rate of 13%, and the part with the actual VAT tax burden exceeding 3% will be refunded immediately.
(2) The general VAT taxpayer sells the imported software products after localization and transformation abroad, and the software products it sells can enjoy the VAT refund policy stipulated in the first paragraph of this article. Localization transformation refers to the redesign, improvement and transformation of imported software products, excluding the simple Chinese character processing of imported software products.
(3) If a taxpayer is entrusted to develop a software product, the copyright belongs to the entrusted party, and if the copyright belongs to the entrusting party or both parties, the value-added tax shall not be levied. No value-added tax is levied on taxpayers registered with the National Copyright Administration and transferring their copyright and ownership at the time of sale. Article 3 stipulates that software products that meet the following conditions can enjoy the value-added tax policy stipulated in this notice after being examined and approved by the competent tax authorities: (1) Obtaining test certification materials issued by software testing institutions recognized by provincial software industry authorities; (2) Obtaining a software product registration certificate issued by the competent department of software industry or a computer software copyright registration certificate issued by the copyright administrative department.
What are the investments of software companies? The biggest deduction item for software enterprises is outsourcing software and services. In addition, such as the purchase of movable property, real estate, special invoices for tourism, usual travel expenses, tickets and so on. They can also calculate and fill in the deduction according to the requirements of the tax law to pay less taxes.