How to Pay Gifts

At the end of the year and a few years, some companies will award rewards to their employees and related personnel in the relationship unit, including cash, outsourced physical goods, and self-produced products. These payment methods all involve taxation.

Cash distribution of VAT does not involve the processing of VAT. The issue of outsourced or self-produced products is stipulated in Article 4 of the “Implementation Rules for the Provisional Regulations on Value-added Tax”, in which goods that are self-produced, commissioned, or purchased are free to be donated to other units or individuals, and are regarded as selling goods and they are subject to VAT.

Corporate income tax is distributed in cash to the festival's employees. The "Regulations on the Implementation of the Enterprise Income Tax Law" stipulates that the employee welfare expenses incurred by the company shall not exceed 14% of the total salaries and wages, and shall be allowed to be deducted. The Circular of the State Administration of Taxation on the Deduction of Wages, Salaries and Staff Welfare Expenses of Enterprises clearly stipulates various subsidies and non-monetary benefits for employees’ health care, living, housing, transportation, etc. Public medical expenses, medical expenses for employees of non-medical coordinating enterprises, medical subsidies for immediate dependents of workers, heating subsidies, heatstroke cooling costs for employees, difficulties for workers, subsidies for relief for workers, subsidies for employee canteens, and transportation subsidies for employees. Gifts issued by enterprises to employees of their own units should be spent on welfare expenses. As long as the payment of welfare expenses does not exceed the standard, they can be deducted before tax, and those exceeding the standard cannot be disbursed.

Gifts issued by the employees of their units in kind or issued to their affiliates. Article 2 of the “State Administration of Taxation Circular on Issues Concerning the Processing of Income Taxes on Assets Disposed by Enterprises” stipulates that the transfer of assets by an enterprise to another person is due to the fact that the ownership of the assets has changed. Not belonging to internal disposal assets, should be deemed as sales revenue determined according to regulations: for marketing or sales; for entertainment; for employee rewards or benefits; for dividend distribution; for external donations; other changes in asset ownership The use of the genera. Article 3 stipulates that when an enterprise occurs the circumstances stipulated in Article 2 of this Circular, it belongs to the enterprise's self-made assets, and sales revenue shall be determined according to the external sales price of the same type of enterprise's assets for the same period. For assets that are outsourced, sales revenue can be determined at the time of purchase. Article 43 of the "Regulations on the Implementation of the Enterprise Income Tax Law" stipulates that business hospitality expenses relating to production and business activities incurred by an enterprise shall be deducted at 60% of the amount incurred, but the maximum amount may not exceed 5% of sales (business) income for the year. Therefore, the company’s outsourcing gifts to the customer’s individual are for social communication and should be treated as sales tax, and the pre-tax deductions should be made in accordance with the business entertainment requirements.

Personal income tax pays out gifts for the employees of this unit. The Implementation Regulations of the Personal Income Tax Law stipulates that wages and salary income refer to wages, salaries, bonuses, year-end salary increases, labor dividends, allowances, subsidies, and the amount of wages, salaries, and bonuses earned by individuals when they are employed or employed. Other income related to employment or employment. The gifts received by employees are part of the salary and salary income and should be incorporated into the current month's salary, salary and personal income tax. If cash is issued directly, the employee’s bonus will be incorporated into the current month’s salary and salary and individual income tax. If a physical item is issued, the amount of taxable income shall be calculated according to the price stated on the obtained certificate.

For the distribution of gifts for other units, the "State Administration of Taxes' Relevant Questions Concerning Individual Income Tax Issues" stipulates that some units and departments shall release cash for the relevant personnel of other units and departments during the year-end summary, various celebrations, business contacts and other activities. , physical or securities. For an individual to obtain such income, a personal tax shall be calculated according to the “other income” item stipulated in the “Individual Income Tax Law”, and the tax shall be withheld and paid by the unit paid.