What to do if you receive this invoice!
It is common for some companies to obtain labor remuneration invoices provided by individuals, but they do not comply with the regulations when processing, resulting in tax compliance risks! The following is an example of sorting out some tax knowledge points, learn with everyone!
【Case】Shanghai Kate Garment Co., Ltd. hired Zhang to provide product design services for him, and in September 2021, he received an invoice for labor fees issued by the Huangshi Municipal Taxation Bureau of Hubei Province, with an invoice amount of 50,000 yuan, of which 495 yuan was value-added tax. (Pictured below)
Concern 1: How to calculate withholding and payment of personal income tax
Where a natural person obtains income from labor remuneration and applies for invoicing on behalf of others, many provinces and cities no longer levy personal income tax in the invoicing process. The invoicing unit (including the tax authority and the unit entrusted by the tax authority to issue the invoice on behalf of the taxpayer) uniformly indicates in the remarks column of the invoice that "individual income tax shall be withheld and prepaid by the payer in accordance with the law" and other similar words. For example, this Hubei invoice "individual income tax must be withheld and prepaid or self-declared according to law", which obviously does not exempt the payment enterprise from the withholding and payment obligation. According to Article 8 of the Announcement of the State Administration of Taxation on Issuing the Administrative Measures for the Declaration of Individual Income Tax Withholding declarations < (trial implementation) > (SAT Announcement [2018] No. 61), the withholding agent withholds and withholds tax on the income from the payment of labor remuneration to resident individuals.
There are two options for how to calculate withholding and withholding personal income tax: KATE Finance has two options for calculating personal income tax that needs to be withheld:
(1) The invoice amount to be paid is 50,000 yuan as income and needs to be withheld and paid personal income tax
(50000-50000 * 20%) * 30% - 2000 = 10000 yuan
Tax income to be paid = 50,000-10,000 = 40,000 yuan
(2) According to the vat-excluding income of 49,505 yuan (50,000-495), the individual income tax needs to be withheld and paid
(49505-49505 *20%)*30%-2000=9,881.20 yuan
Tax income to be paid = 50,000-9,881.20 = 40,118.8 yuan
According to the Notice of the Ministry of Finance and the State Administration of Taxation on Issues Concerning the Convergence of Preferential Policies after the Amendment of the Individual Income Tax Law (Cai Shui [2018] No. 164), the commission income of insurance marketers and securities brokers is income from labor remuneration, and the balance after deducting 20% of the expenses excluding VAT is the amount of income. According to this policy understanding, the correct calculation method should be the second, with the balance of the income excluding VAT after deducting 20% of the expenses as the amount of income, which is 118.80 yuan more to Zhang Than the first method.
Concern 2: The invoicing location is incorrect
The Notice of the Ministry of Finance and the State Administration of Taxation on Comprehensively Promoting the Pilot Project of Changing Business Tax to Value-Added Tax (Cai Shui [2016] No. 36) stipulates that non-fixed business owners shall declare and pay taxes to the competent tax authority of the place where the taxable act occurred; if they do not declare and pay taxes, the competent tax authority of the place of their institution or place of residence shall make up the tax payment. Based on the bill information, the tax authorities can compare whether they have applied for issuance in the tax jurisdiction required by the regulations. For example, in this case, Kate Company is in Shanghai, and there is no need for business in Hubei, and according to the identity card number of Zhang Mou in the invoice, the first six digits of the 310109 correspond to Shanghai Hongkou District. If you cannot provide proof of residence in Huangshi City, Hubei Province, you will be recognized by the tax as a non-compliant invoice and cannot be used as a pre-tax deduction certificate for enterprise income tax.
【Friendly Reminder】For enterprises to pay labor remuneration to individuals, they need to obtain an invoice issued by the tax authority where the vat payment place stipulated in the tax law is located, and withhold and pay individual income tax in accordance with the law, and the individual income tax should be calculated according to income excluding VALUE-added tax.
