1. In the new income tax law, Article 7 clearly stipulates:
The following income in the total income is non-taxable income:
(1) Finance Appropriations;
(2) Administrative fees and government funds collected in accordance with the law and included in financial management;
(3) Other non-taxable income stipulated by the State Council.
2. Article 26 of the Implementation Regulations of the Income Tax Law explains the above clauses: The fiscal appropriation mentioned in Article 7, Item (1) of the Enterprise Income Tax Law refers to the allocation of funds included in the budget by the people's governments at all levels. Financial funds allocated by managed institutions, social groups and other organizations, unless otherwise specified by the State Council and the State Council’s financial and taxation authorities.
3. Notice of the Ministry of Finance and the State Administration of Taxation on Taxation of Enterprise Subsidy Income and Other Issues, Caishui [1995] No. 81, Article 1 stipulates: Enterprises receiving state fiscal subsidies and other subsidy income, except for the State Council, the Ministry of Finance Except for those that are not included in profits and losses according to the regulations of the Ministry of Finance and the State Administration of Taxation, they shall be included in the taxable income of the year in which the subsidy income is actually received.
IV. The Approval Guo Shui Han [2007] No. 408 on the Income Tax Treatment of Foreign-Invested Enterprises and Foreign Enterprises Obtaining Government Subsidies stipulates: Foreign-invested enterprises and institutions and places established by foreign enterprises in China (hereinafter Enterprises) that obtain monetary assets or non-monetary assets free of charge from the government in various ways (hereinafter referred to as government subsidies) shall be subject to tax treatment under the following circumstances:
(1) In accordance with laws, administrative regulations and the provisions of the State Council , if the government subsidies obtained by an enterprise are exempt from corporate income tax, the enterprise shall treat the government subsidies obtained as investments, that is, the government subsidy assets received shall be valued according to the tax treatment regulations on investment assets and may be depreciated or amortized; The value of this government subsidy asset is not included in the enterprise's taxable income.
(2) Except for the circumstances specified in item (1) of this article, if the government subsidy obtained by the enterprise meets one of the following conditions, the amount of the government subsidy shall not be included in the current profit and loss of the enterprise, but shall be used as the government subsidy The cost, depreciation or amortization of assets purchased or formed shall be calculated based on their value after deducting the amount of government subsidies. 1. Government-subsidized assets are non-current assets owned by the enterprise for a long time; 2. Although the enterprise obtains government subsidies in the form of current assets, it has been or must be used for the purchase, construction or improvement of non-current assets in accordance with the conditions of government subsidies.
(3) If the government subsidy obtained by the enterprise does not fall under the circumstances specified in items (1) and (2) of this article, the amount of the government subsidy shall be included in the current profit and loss of the enterprise to calculate and pay corporate income tax.
5. However, there are exceptions: According to the "Notice of the Ministry of Finance and the State Administration of Taxation on the Exemption of Corporate Income Tax on Special Reemployment Subsidy Income" (Caishui [2004] No. 139), taxpayers absorb Social insurance subsidies obtained by relocating laid-off and unemployed persons shall be obtained in accordance with the scope, items and standards specified in the "Notice of the Ministry of Finance and the Ministry of Labor and Social Security on Issues Concerning the Management of Funds for Promoting the Re-employment of Laid-off and Unemployed Persons" (Caishe [2002] No. 107) and job subsidy income are exempt from corporate income tax. Small-amount guaranteed loan interest discounts, re-employment training subsidies, job introduction subsidies and other re-employment subsidy income obtained by taxpayers that exceed the scope, items and standards specified in Caishe [2002] No. 107 document should be included in the taxable income. Provides for the payment of corporate income tax.
Caishe [2002] No. 107 mentioned that re-employment funds are mainly used for social insurance subsidies to promote the re-employment of laid-off workers, small loan guarantee funds and small guaranteed loan interest discounts for low-profit projects. Reemployment training and job introduction subsidies (hereinafter referred to as employment service subsidies), public welfare job subsidies, labor market construction and other expenditures, as well as other expenditures approved by the provincial finance and labor and security departments. Various vocational training and employment agency agencies that meet the qualifications can apply for employment service subsidies from the local labor and social security department based on the actual number of employees after employment services.