1. Introduction to audit cases
Name of administrative counterpart: Shaoxing *** Business Information Consulting Co., Ltd
Administrative penalty decision document number: Shao Shui Ji Zhi [2022] No. 27
Reason for punishment: In February 2021, Shaoxing *** Business Information Consulting Co., Ltd. issued 60,000.00 yuan of employee wages to Wu Moumou in 2021, and issued employee welfare pork, equivalent to 3,333.33 yuan, without withholding and paying individual income tax. In February 2021, Shen was paid 57,600.00 yuan in 2021 employee wages and employee welfare pork, equivalent to 3,333.33 yuan in yuan, without withholding and paying individual income tax. In February 2021, 36,000.00 yuan of employee wages in 2021 were paid to Wang, and employee welfare pork was issued, equivalent to 3,333.33 yuan in yuan, and individual income tax was not withheld and paid.
Penalty basis: In accordance with Article 63, Paragraph 1 and Article 69 of the Law of the People's Republic of China on the Administration of Tax Collection
Penalty result: A fine of 50% of the tax was imposed on the failure to withhold and pay individual income tax in accordance with the regulations, and a fine of 2,904.70 yuan.
Penalty authority: Inspection Bureau of Shaoxing Municipal Taxation Bureau of the State Administration of Taxation
2. Brief comments on audit cases
Although the applicable taxable income items are not clearly stated, it can be judged from the context that individual income tax should be withheld and paid according to the "income from wages and salaries".
(1) The scope of taxation of income from wages and salaries
According to Article 6 of the Regulations for the Implementation of the Individual Income Tax Law, income from wages and salaries refers to the wages, salaries, bonuses, year-end salary increases, labor dividends, allowances, subsidies and other income related to the position or employment obtained by an individual as a result of his or her position or employment.
Therefore, all kinds of materials and other materials issued by employee benefits fall within the scope of taxation of "income from wages and salaries" stipulated above.
(2) Withholding and prepayment of wages and salaries and full declaration of all employees
According to the Law on the Administration of Tax Collection, the units and individuals that are required by laws and administrative regulations to withhold and remit, collect and remit taxes are withholding agents.
Article 9 of the Individual Income Tax Law stipulates that the income tax shall be the taxpayer and the entity or individual paying the income shall be the withholding agent.
According to the announcement of the State Administration of Taxation on the issuance of the Administrative Measures for the Withholding and Declaration of Individual Income Tax in < (Trial) > (Announcement No. 61 [2018] of the State Administration of Taxation, hereinafter referred to as Announcement No. 61), withholding agents are required to declare the "income from wages and salaries" in full.
When a withholding agent pays wages and salaries to an individual, it shall calculate the withholding tax according to the cumulative withholding method and file a full withholding declaration for all employees on a monthly basis. The specific calculation formula is as follows:
The amount of tax to be withheld and paid in the current period = (cumulative amount of taxable income withheld and withheld× withholding rate - quick deduction) - cumulative amount of tax reduction and exemption - cumulative amount of withheld and withheld tax
Cumulative withholding and prepayment of taxable income = cumulative income - cumulative tax-exempt income - cumulative deduction of expenses - cumulative special deduction - cumulative special additional deduction - cumulative other deductions determined in accordance with law
Among them: the cumulative deduction of expenses shall be calculated according to 5,000 yuan/month multiplied by the number of months of employment of the taxpayer in the unit as of this month in the current year.
It can be seen from the penalty amount in the audit decision that the enterprise did not fulfill its withholding and payment obligations in February 2021, and failed to declare and pay individual income tax of 5,809.48 yuan (2,904.74×2) in full for all employees.
(3) The basis for punishment
Paragraph 1 of Article 63 of the Law of the People's Republic of China on the Administration of Tax Collection stipulates that a taxpayer who forges, alters, conceals, or destroys account books or accounting vouchers without authorization, or lists more expenditures or omits or understates income in the account books, or refuses to declare or makes false tax declarations after being notified by the tax authorities, and fails to pay or underpays the tax payable, shall be guilty of tax evasion. If a taxpayer evades taxes, the taxation authorities shall recover the taxes not paid or underpaid and the overdue fines, and impose a fine of not less than 50 percent but not more than five times the amount of taxes not paid or underpaid; if a crime is constituted, criminal responsibility shall be investigated according to law.
Article 69 of the Law of the People's Republic of China on the Administration of Tax Collection stipulates that if a withholding agent fails to withhold or fails to collect the tax receivable, the tax authorities shall recover the tax from the taxpayer and impose a fine of not less than 50% but not more than three times the amount of the tax that should be withheld or receivable.
Therefore, in this case, the final penalty decision of the tax bureau was actually imposed in accordance with the minimum penalty ratio of 50% stipulated in the tax law.
3. Extension of audit cases - Do employees have to pay individual income tax for benefits?
Article 4 of the Individual Income Tax Law stipulates that the tax-exempt items include "welfare expenses, pensions and relief funds".
Therefore, in practice, some people often mistakenly believe that as long as the "welfare expenses" are included in the accounting of enterprises, they can be exempted from individual income tax.
In fact, Article 11 of the Regulations for the Implementation of the Individual Income Tax Law stipulates that the "welfare expenses" mentioned in Item 4, Paragraph 1, Article 4 of the Individual Income Tax Law refer to the living allowances paid to individuals from the welfare expenses or trade union funds retained by enterprises, public institutions, state organs and social organizations in accordance with the relevant provisions of the state;
As for the living allowance paid to individuals from welfare fees or trade union funds, it is difficult to define them in practice due to the lack of a clear scope, so the Notice of the State Administration of Taxation on Issues Concerning the Determination of the Scope of Living Allowance (Guo Shui Fa [1998] No. 155) stipulates that:
1. The above-mentioned subsistence allowance refers to the temporary subsistence allowance paid to the taxpayer or his family by the employer from the welfare fee or trade union funds retained by the state in accordance with the provisions of the state due to certain difficulties caused to the normal life of the taxpayer or his family due to some specific events or reasons.
2. The following income does not belong to the scope of tax-exempt welfare expenses and shall be incorporated into the taxpayer's wages and salaries for individual income tax calculation: (1) various subsidies and subsidies paid to individuals from welfare expenses and trade union funds that exceed the proportion or base amount prescribed by the state; (2) subsidies and subsidies paid to employees of units from welfare expenses and trade union funds; (3) expenses purchased by units for individuals such as automobiles, housing, computers, etc., which are not in the nature of temporary subsidies for living difficulties.
3. The above provisions shall be implemented from November 1, 1998.
Special note: Although the Individual Income Tax Law has been revised, Guo Shui Fa [1998] No. 155 is still in effect. As the financial personnel of the enterprise, it should be paid special attention to the fact that although the subsidies and subsidies issued to the employees of the enterprise from the welfare fees and trade union funds are in line with the "Enterprise Income Tax Law" and its relevant provisions, in the absence of unified national regulations, it still belongs to the "income from wages and salaries" of individual income tax, and needs to be combined with the income from wages and salaries of the current month to calculate and levy individual income tax. The most typical case is the "moon cake tax" and "zongzi tax" that have been hyped up in the media. The "pork" in this case is similar to "moon cakes" and "zongzi", which also need to be incorporated into the actual salary of the month and calculated and withheld according to the "income from wages and salaries".
However, according to the relevant officials of the State Administration of Taxation many online interviews and answers to questions from netizens or quarterly policy interpretations, they all clearly answered that for the kind of subsidies or subsidies that everyone has a share, but there is no specific quantification of individual subsidies, individual income tax will not be levied for the time being, such as factories providing free working meals to workers.
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