Fiscal and tax treatment of fees and commission expenses
In the daily production and operation of enterprises, handling fees, commissions and other expenses are indispensable, and the state has different policies and regulations for different enterprises
PART1 General Provisions
Except for special industries, the handling fees and commissions incurred by enterprises related to production and operation shall be deducted according to 5% of the amount of income confirmed in the service agreement or contract signed with intermediary service institutions or individuals with legal business qualifications (excluding the parties to the transaction and their employees, agents and representatives, etc.), and the part not exceeding the limit shall be allowed to be deducted; The excess amount shall not be deducted.
Policy basis: (CS [2009] No. 29)
PART2 Special Industry and Business Regulations
01 Agency service company - 100%
Enterprises engaged in agency services whose main business income is handling fees and commissions (such as securities, futures, insurance agents, etc.) are allowed to deduct the actual operating costs (including handling fees and commission expenses) incurred in order to obtain such income.
Policy basis: (Announcement No. 15 [2012] of the State Administration of Taxation)
02 Insurance companies - 18%
The portion of handling fees and commissions incurred by an insurance enterprise in connection with its business activities shall not exceed 18% (inclusive) of the balance of the total premium income of the current year after deducting surrender premiums, etc., which shall be allowed to be deducted when calculating the taxable income; The excess part is allowed to be carried forward to future years.
Policy basis: (Announcement No. 72 [2019] of the Ministry of Finance and the State Administration of Taxation)
03 Real Estate Development Enterprises - 10%
If an enterprise entrusts an overseas institution to sell the developed products, the part of the sales expenses (including commissions or handling fees) paid by the overseas institution shall not exceed 10% of the entrusted sales revenue, and the deduction shall be allowed according to the facts.
Policy basis: "(Guo Shui Fa [2009] No. 31)
04 Telecom companies - 5%
If a telecommunications enterprise needs to pay handling fees and commissions to brokers and agents in the process of developing customers and expanding its business (such as entrusting the sale of telephone access cards, telephone recharge cards, etc.), the actual relevant handling fees and commissions incurred shall not exceed 5% of the total income of the enterprise in the current year, and shall be allowed to be deducted according to the facts before the enterprise income tax.
The handling fees and commission expenses of telecommunications enterprises mentioned in Article 4 of the Announcement No. 15 of 2012 of the State Administration of Taxation are limited to the handling fees and commission expenses incurred by telecommunications enterprises in the process of developing customers and expanding business due to the entrusted sales of telephone access cards and telephone recharge cards.
Policy basis: (Announcement No. 15 [2012] of the State Administration of Taxation)
(Announcement No. 59 [2013] of the State Administration of Taxation)
PART3 Error-prone matters
1. Only the part of the insurance company that exceeds the deduction limit is allowed to be carried forward to the next year.
2. Enterprises shall sign agency agreements or contracts with intermediary service enterprises or individuals with legal business qualifications, and pay handling fees and commissions in accordance with relevant national regulations.
3. Except for entrusting an individual agent, the handling fees and commissions paid by the enterprise in cash and other non-transfer methods shall not be deducted before tax.
4. Enterprises shall not include handling fees and commission expenses in rebates, business commissions, rebates, entry fees and other expenses. The handling fees and commissions paid by the enterprise shall not be directly offset against the service agreement or contract amount, and shall be truthfully recorded in the accounts.
5. The handling fees and commission expenses that have been included in fixed assets, intangible assets and other related assets shall be deducted in installments through depreciation, amortization, etc., and shall not be directly deducted in the current period.
PART4 申报表填报范例
01 General industry
An enterprise (non-insurance company) signs an agency contract with an intermediary service agency with legal business qualifications, and agrees to pay a commission of 6% of sales. In 2023, the intermediary will achieve sales of 1 million yuan, and a company will pay a commission of 60,000 yuan in non-cash form.
1. Line 6 of the "Period Expense Schedule" (A104000): fill in the actual commission expenditure of 60,000 yuan
2. Line 23 of the "Tax Adjustment Item Schedule" (A105000) "(11) Commission and Handling Fee Expenses":
The first column "Account Amount" fills in the amount of commission and handling fee included in the current profit and loss in accounting of 60,000 yuan, the second column "Tax Amount" fills in the amount of commission and handling fee expenses allowed to be deducted before tax in accordance with tax regulations 1,000,000*5%=50,000 yuan, and the third column "Increase Amount" fills in the amount in columns 1-2
02 Insurance industry
In 2023, the insurance company will obtain a total premium income of 80 million yuan, including 10 million yuan in surrender money, and a total of 15 million yuan in commission expenses in the current year. It is assumed that there is no carry-forward amount of fees and commission expenses in the previous year.
1. Line 24 of the Detailed Statement of Expenditure of Financial Enterprises (A102020): fill in the actual commission expenditure of 15,000,000 yuan
2. Cross-year Tax Adjustment Schedule for Advertising Expenses and Business Promotion Expenses (A105060):
Line 1 "1. Expenditure for the current year": Fill in the amount of expenditure of 15,000,000 yuan included in the profit or loss of the current year.
Line 4 "3. The base for calculating the deduction limit in the current year": fill in the balance of all premium income of the insurance enterprise in the current year after deducting the surrender payment, etc. 80000000-10000000=70000000 yuan.
The rest of the lines are filled in according to the relationship between the lines.
3. Line 23 of the "Detailed Table of Tax Adjustment Items" (A105000) "(11) Commission and Handling Fee Expenses" shall be filled in according to the results of the "Detailed Statement of Cross-year Tax Adjustment of Advertising Expenses and Business Promotion Expenses" (A105060):
Column 1 "Account Amount" Fill in the form A105060 1st row, column 2, 15,000,000 yuan.
Due to exceeding the deduction limit, the second column of "tax amount" is filled in with a limit of 12,600,000 yuan, and the third column of "increased amount" is filled in the form of 2,400,000 yuan.
Corporate income tax treatment and filing for corporate partners
In a partnership, each partner is the taxpayer. If the partners of the partnership are natural persons, they shall pay individual income tax; Partners are legal persons and other organizations and are subject to corporate income tax.
So, how to deal with and declare the corporate income tax of corporate partners? Let's take a look~
1. How to calculate the taxable income of the partners of the legal person
The income from production and operation and other income of a partnership enterprise shall be subject to the principle of "first dividing and then taxing".
(1) Calculate at the partnership level first
The calculation of the specific taxable income shall be carried out in accordance with the relevant provisions of the "Cai Shui [2000] No. 91) and the "Cai Shui [2008] No. 65).
(2) Calculate the level of legal person partners
The partners of a partnership determine their taxable income according to the following principles:
1. The partners of the partnership shall determine the taxable income according to the distribution ratio agreed in the partnership agreement with the production and operation income and other income of the partnership enterprise.
2. If the partnership agreement is not stipulated or the agreement is not clear, the taxable income shall be determined according to the distribution ratio determined by the partners through consultation with all the income from production and operation and other income.
3. If the negotiation fails, the taxable income shall be determined according to the proportion of the partner's paid-in capital contribution based on all production and operation income and other income.
4. If the proportion of capital contribution cannot be determined, the taxable income of each partner shall be calculated on an average basis according to the number of partners based on all production and operation income and other income.
2. How to declare the taxable income of the partners of the legal person
In order to adjust the tax rate difference in the income attributable to the legal person partners from the partnership, line 41 of the attached table "Detailed Table of Tax Adjustment Items" (A105000) of the annual tax return of the enterprise income tax "(5) The taxable income payable by the partners of the partnership legal person" is added.
The instructions for filling in the form are as follows:
The first column "Amount in the account" shall fill in the investment income of the partnership legal person partners confirmed in the accounting of the partnership in the current year.
The second column of "tax amount" shall fill in the taxable income of the legal person partners who are distributed from the partnership enterprise calculated by the taxpayer in accordance with the principle of "first divide and then tax" and Article 4 of the document (CS [2008] No. 159).
If column 1 ≤ column 2, column 3 "Increase amount" fill in column 2-1.
If column 1 > column 2, column 4 "Reduction amount" is filled in with the absolute value of the amount in column 2-1.
3. Other precautions
(1) The income from the production and operation of the partnership and other income, including the income distributed by the partnership to all partners and the income (profits) retained by the enterprise in the current year.
(2) The partnership agreement shall not stipulate that all profits shall be distributed to some of the partners.
(3) When calculating the payment of enterprise income tax, the partners of a legal person shall not use the losses of the partnership to offset their profits.
Fourth, the declaration form to fill in the example
On October 1, 2020, A limited liability company and several natural persons established an investment partnership (limited partnership) A, with a total paid-in capital of 100 million yuan by the partners, and 70% of the capital contribution of a limited liability company.
In 2023, the partnership will realize an income of 10 million yuan, and since the long-term equity investment is accounted for by the cost method, the investment income of the legal person partner is not recognized in the accounting. According to the partnership agreement, the legal person partners should share back 7 million yuan, so the "tax amount" in column 2 of line 41 of the "Tax Adjustment Item Schedule" (A105000) should be filled in 7 million.
The partnership announced the distribution of 5 million yuan of retained profits in the previous year, and the legal person partners returned 3.5 million yuan, and the accounting was included in the investment income of the current year. At the same time, the first column of line 41 of the "Tax Adjustment Item Schedule" (A105000) "Account Amount" was filled in 3.5 million.
The following figure shows the filling in the "Tax Adjustment Item Schedule" (A105000) of Company A, a legal person partner:
Policy basis
1. 《《 (CS [2008] No. 159)
2. 《《Cai Shui [2000] No. 91)
3. 《《 (CS [2008] No. 65)
Source: Xiamen Tax. Header image source: Unsplash. The content of this article is for general information purposes only and is not intended as formal auditor, accounting, tax or other advice, and we cannot guarantee that such information will remain accurate in the future. No person should act on the basis of the information contained herein without having due regard to the relevant circumstances and obtaining appropriate professional advice. The articles reproduced in this issue are for academic exchange purposes only. The original copyright of the article or material belongs to the original author or original copyright owner, and we respect copyright protection. If you have any questions, please contact us, thank you!