The new enterprise income tax law (hereinafter referred to as the new tax law) will take effect on June 65438+ 10/day, 2008. At present, the new detailed rules for the implementation of enterprise income tax are being drafted intensively. Compared with the current Provisional Regulations on Enterprise Income Tax (hereinafter referred to as the "current regulations"), the new tax law has the following main features.
First, the level of legal effectiveness has improved.
The grade of legal effect refers to the grade system of legal effect formed by different subjects, procedures, time and scope of application of various laws in a country's legal system, which leads to different effects of various laws. The level of legal effect follows certain principles, mainly the principle of supremacy of law, the principle of equal order and the principle of priority of new law stipulated in the Constitution. According to the Constitution, the Organic Law of the National People's Congress, the Organic Law of the State Council and the Organic Law of local people's congresses and local people's governments at all levels, China's legislative system is as follows: the National People's Congress and its Standing Committee exercise legislative power and enact laws; The State Council and its subordinate ministries and commissions have the right to formulate administrative regulations and rules according to the Constitution and laws; Local people's congresses and their standing committees have the right to formulate local regulations on the premise that different constitutions, laws and administrative regulations are inconsistent, but they must be reported to the National People's Congress Standing Committee (NPCSC) and the State Council for the record; The people's congresses of ethnic autonomous areas have the right to formulate autonomous regulations and separate regulations according to the local ethnic political, economic and cultural characteristics. In the national tax, all basic and overall taxes need to be formulated and implemented by the National People's Congress and its Standing Committee in the form of tax law, and are generally applicable to domestic taxpayers and foreign-related taxpayers nationwide. In the tax legal system, apart from the Constitution, the tax law enacted by the National People's Congress and its Standing Committee has the highest legal effect and is the legal basis for other organs to formulate tax laws and regulations. The new Individual Tax Law was formulated and passed by the National People's Congress, and its legal effect is higher than the administrative regulations formulated by the State Council. As a legal form, administrative regulations are lower than the Constitution and laws and higher than local regulations, departmental regulations and local regulations in our legal system. The current regulations were promulgated and implemented by the State Council 1993 12 13, which is obviously inferior to the new tax law in terms of legal effect.
2. Enterprises are divided into resident enterprises and non-resident enterprises.
According to their legal status, natural persons can be divided into resident individuals and non-resident individuals in taxation. Residents and non-residents are a pair of related concepts with special meanings in the field of taxation. The so-called residents refer to those who are fully liable to pay taxes in the country according to the laws of the country because of their domicile, residence time, place of registration or place of management organization, or other similar standards, including individual residents and legal person residents. A non-resident refers to a person who does not meet the resident status of the country and has limited tax obligations in the country. The identification of residents and non-residents can distinguish different types of taxpayers and clearly define tax jurisdiction. Anyone who is determined to be a resident of this country will become an unlimited taxpayer in the country's taxation, that is, his income from domestic and foreign sources will be taxed. Non-residents, as limited taxpayers, only pay taxes on their domestic income. The determination of resident status is also related to whether the foreign income tax paid by residents can be deducted.
The new tax law divides enterprises into resident enterprises and non-resident enterprises. A resident enterprise refers to an enterprise established in China according to law, or an enterprise established in accordance with the laws of a foreign country (region) with its actual management institution located in China. Resident enterprises shall pay enterprise income tax on their income from sources inside and outside China. A non-resident enterprise refers to an enterprise established in accordance with the laws of a foreign country (region), whose actual management institution is not in China, but has institutions and places in China, or has no institutions or places in China, but has income from China. Where a non-resident enterprise establishes an institution or place in China, it shall pay enterprise income tax on the income obtained by its institution or place from China and the income generated outside China but actually related to its institution or place. If a non-resident enterprise has no institution or place in China, or if it has an institution or place, but its income has no actual connection with its institution or place, it shall pay enterprise income tax on its income originating in China.
Third, implement the "four unifications"
Under the original enterprise income tax model of "two laws" separation, there are double injustices between domestic enterprises and foreign-funded enterprises, and between private enterprises and state-owned enterprises. There are differences between the two laws in terms of actual tax rate, pre-tax deduction standard and tax preference. These differences have made great contributions to reform and opening up, attracting foreign investment, introducing advanced technology and promoting economic development. However, with China's accession to the WTO, this arrangement has not adapted to the requirements of the new situation, making the actual tax burden of domestic-funded enterprises higher than that of foreign-funded enterprises; In addition, in corporate income tax, private enterprises have less deductible expenses before tax and more restrictions on enjoying tax preferences, resulting in higher actual tax burden of private enterprises. This difference in tax burden caused by different sources of funds and the nature of enterprise ownership has artificially formed the unequal position of domestic, foreign, private and state-owned enterprises in market competition, which violates the principle of national treatment of WTO. In order to embody the principle of fairness in tax law, the new tax law stipulates "four unifications". The first is to unify the scope of application. That is, except for sole proprietorship enterprises and partnership enterprises, domestic-funded enterprises and foreign-funded enterprises uniformly apply the new tax law and pay enterprise income tax in accordance with the provisions of the new tax law. The second is the unified tax rate. The corporate tax rate is 25%, and two special tax rates are stipulated at the same time: a caring tax rate of 20% is implemented for small and low-profit enterprises that meet the requirements, and a preferential tax rate of 15% is implemented for high-tech enterprises that need key support from the state. The third is to unify the pre-tax deduction methods and standards. Deduction methods and standards for wages, donation expenses, research and development expenses, advertising expenses, etc. Is unified. The fourth is to unify preferential tax policies. Establish a new tax preferential system of "giving priority to industries, supplemented by regional preferential treatment" and "giving priority to indirect preferential treatment, supplemented by direct preferential treatment", and give preferential treatment to industries and projects supported and encouraged by the state. "Industrial preference orientation" refers to providing tax incentives and guiding funds and resources to industries and projects that need to be encouraged and supported by the country at present, including promoting technological innovation and progress, encouraging infrastructure construction, encouraging agricultural development, environmental protection, saving energy and water, and supporting safe production. The above-mentioned "four unifications" can make the tax burden of domestic and foreign-funded enterprises fair and enjoy the same preferential tax policies and pre-tax deduction standards. It is conducive to reducing the distortion of tax on market competition, mobilizing the enthusiasm of domestic and foreign-funded enterprises, and promoting the harmonious development of domestic and foreign-funded enterprises.
Four, the implementation of source withholding
Source withholding refers to the practice of withholding on behalf of the income payer every time he pays the relevant income to the taxpayer. The new Individual Tax Law adopts the method of source withholding. For a non-resident enterprise that has not established an institution or place in China, or if it has established an institution or place, but its income has nothing to do with the institution or place it has established, the enterprise income tax payable for its income originating in China shall be withheld at the source, and the payer shall be the withholding agent. The tax shall be withheld by the withholding agent from the paid or due tax when the tax is paid or due. The tax authorities may designate the payer of the project price or service fee as the withholding agent of the income tax payable by the non-resident enterprise engaged in the project operation and service within the territory of China.
Verb (abbreviation for verb) implements special tax adjustment.
Special tax adjustment is relative to general tax adjustment. General tax adjustment refers to the tax adjustment that should be made in accordance with the provisions of the tax law and administrative regulations if the financial and accounting treatment methods of the enterprise are inconsistent with the provisions of the tax law and administrative regulations and the tax amount should be adjusted accordingly. For example, debt interest income is treated as current income in accounting, and tax adjustment is needed when calculating and paying enterprise income tax according to tax law. Special tax adjustment refers to the tax adjustment made by tax authorities in order to implement anti-tax avoidance for taxpayers' specific tax matters. Including tax adjustment for tax avoidance situations such as taxpayer transfer pricing, capital weakening and tax avoidance in tax havens. In order to prevent and stop enterprises from using various tax avoidance methods to evade enterprise income tax, the new Individual Tax Law has added the content of special tax adjustment in Chapter VI, which embodies the principle of "strict tax collection and management". First, for business dealings between related parties, revenue and expenses should be recognized according to the principle of independent transaction. The principle of independent transaction, that is, the principle of open transaction, refers to the principle that completely independent and unrelated enterprises or individuals handle their income and expense distribution according to the pricing standards or prices adopted under market conditions. It has been accepted and adopted by most countries in the world, and has become the guiding principle for tax authorities to handle the distribution of income and expenses among affiliated enterprises. The second is to prevent tax avoidance in tax havens. Enterprises established in countries (regions) where the actual tax rate is obviously lower than 25% under the control of resident enterprises or resident enterprises and China residents shall be included in the current income of resident enterprises, except for not distributing or distributing less profits due to reasonable business needs. Third, the interest expenses incurred when the enterprise accepts the creditor's rights investment and equity investment of related parties exceeding the prescribed standards shall not be deducted before tax. Fourth, when an enterprise reduces its taxable income or income by implementing other arrangements that have no reasonable commercial purpose, the tax authorities have the right to make adjustments in a reasonable way.
Six, the introduction of tax credits, tax incentives.
In order to overcome the adverse effects of double taxation on multinational enterprises, tax credits and tax incentives are widely adopted internationally to avoid double taxation. Tax credit is the income of the taxpayer in the country of residence, and the tax paid in the country of income is allowed to be deducted from the tax payable in that country. Article 23 of the new tax law stipulates that the taxable income obtained by resident enterprises from outside China, and the taxable income obtained by non-resident enterprises from institutions and places in China that occur outside China but are actually related to the institutions and places can be deducted from their current taxable amount, and the credit limit is the taxable amount calculated according to the provisions of the new tax law; In the next five years, the part exceeding the credit line can be offset by the balance of the annual credit line after deducting the tax payable in the current year. Article 24 stipulates that dividends, bonuses and other equity investment income obtained by resident enterprises from foreign enterprises directly or indirectly controlled by them, as well as the income burden of the income tax actually paid by foreign enterprises abroad, can be used as the deduction of overseas income tax of resident enterprises, and the credit limit stipulated in Article 23 of the new tax law.
The preferential tax system means that the government of the country of residence, at the request of the country of origin, takes the tax actually paid by its residents abroad for enjoying the preferential tax treatment given by the country of origin as the tax paid and gives a credit in the tax payable of the country of residence. The main characteristics of tax preference system are as follows: it is the product of the will of both contracting parties and can only be realized through bilateral or multilateral arrangements; Its purpose is to make the preferential tax policies and measures for the use of foreign capital in the country of origin truly effective. At present, among 79 countries or regions that have signed tax treaties with China, 15 countries have included preferential tax clauses in their tax treaties. The new "Tax Law" has introduced a preferential tax system. Article 58 stipulates that if the relevant tax agreements concluded between People's Republic of China (PRC) and foreign governments have different provisions from this Law, the provisions of the agreements shall apply, that is, if the tax agreements concluded between foreign governments and our government contain preferential tax clauses, the provisions of the tax agreements shall prevail.