What is the difference between tax exempt income and non taxable income?

Non-taxable income is different from tax-exempt income, and in terms of its root and nature, non-taxable income does not belong to the economic income brought by profit-making activities, but is income that is specialized in specific purposes, and should not theoretically be included in the scope of taxation. Tax-free.

Income is a component of the total taxable income of the taxpayer, and it is only a tax preference granted by the state in order to achieve certain economic and social goals in a specific period of time or for the economic benefits obtained in a specific project, and the scope of income may be restored in a certain period. To put it simply: non-taxable income is income that does not fall within the scope of corporate income tax at all, and it is not taxed now and will not be taxed in the future.

Tax-exempt income is within the scope of corporate income tax, but according to the current policy, it is exempt from taxation and may be taxed in the future.

Non-taxable income refers to income that is not part of the economic benefits brought by the profit-making activities of the enterprise in nature and root, and is not subject to tax liability and is not a component of the taxable income. The non-taxable income mentioned in the Enterprise Income Tax Law of the People's Republic of China includes financial appropriations, administrative fees collected in accordance with the law and included in financial management, etc.

Tax-exempt income refers to the taxable income of an enterprise that is exempt from enterprise income tax in accordance with the provisions of the tax law. The tax-exempt income referred to in the Enterprise Income Tax Law of the People's Republic of China includes interest income from treasury bonds, dividends and bonus income between qualified resident enterprises, dividends and bonus income obtained by non-resident enterprises that have established institutions or venues within the territory of China from resident enterprises, and income from qualified non-profit public welfare organizations.

Non-taxable income belongs to the income of non-taxable items specified by the state taxation department, and generally does not need to go through application procedures; Tax-exempt income is a preferential tax policy given by the state in order to encourage a certain field and industry, which usually requires enterprises to go through the reduction and exemption procedures at the tax bureau in advance. You can enjoy it only after approval.

As a result, neither is subject to turnover tax.

Legal Analysis: Non-taxable income and tax-exempt income belong to different concepts, non-taxable income is not a tax preference, while tax-exempt income is a tax preference. Non-taxable income is due to the fact that, by its origin, it is not an economic benefit derived from a for-profit activity.

Tax-exempt income is an important part of taxpayers' taxable income, and it is possible to restore the scope of taxable income in a certain period.

Legal basis: Article 31 of the Administrative Measures for Tax Reduction and Exemption (for Trial Implementation) The State Taxation Bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan may formulate specific implementation plans in accordance with these Measures. Appendix: Conditions for the examination and approval of enterprise income tax reduction and exemption.

1. Preferential enterprise income tax for software development enterprises and integrated circuit design (1) Software development enterprises must meet the following conditions at the same time: 1. Obtain the software enterprise certification issued by the provincial information industry authority.

Legal analysis: 1. Non-taxable income refers to the special income obtained by taxpayers, which is deducted from the total income when calculating the taxable income, but the expenses and costs incurred in obtaining non-taxable income shall not be deducted before the enterprise income tax 2. Tax-exempt income belongs to the preferential tax policy and belongs to the scope of enterprise income tax but is exempted from enterprise income tax in accordance with the regulations.

Legal basis: Individual Income Tax Law of the People's Republic of China Article 4 The following personal income is exempt from individual income tax: (1) Bonuses in science, education, technology, culture, health, sports, environmental protection and other aspects issued by provincial-level people's **, *** ministries and commissions, units at or above the army level of the Chinese People's Liberation Army, as well as foreign organizations and international organizations; (2) Interest on treasury bonds and financial bonds issued by the state; (3) Subsidies and allowances issued in accordance with uniform national provisions; (4) Welfare expenses, pensions, and relief funds; (5) Insurance indemnity; (6) Transfer, demobilization and retirement allowances for servicemen; (7) Settling-in allowances, retirement allowances, basic pensions or retirement allowances, retirement allowances, and retirement allowances paid to cadres and employees in accordance with the uniform provisions of the State; (8) The income of diplomatic representatives, consuls** and other personnel of embassies and consulates in China who are exempt from tax in accordance with relevant laws and regulations; (9) Income exempted from tax as stipulated in international conventions and agreements to which China is a party (10) Other tax-exempt income stipulated in ***.

The tax exemption provisions in item 10 of the preceding paragraph shall be reported to the Standing Committee of the National People's Congress for the record.

The difference between tax-exempt income and non-taxable income is that tax-exempt income refers to taxable income but is exempted from taxation, which is a tax preference, while non-taxable income means that the income does not fall within the scope of taxation and does not need to be taxed in the first place. Moreover, the scope of the two is also different, for example, tax-exempt income includes interest income from treasury bonds and equity investment income, while non-taxable income includes fiscal appropriations, business fees, **sexuality, etc.

[Legal basis].Article 7 of the Enterprise Income Tax Law of the People's Republic of China.

The following income in the total income is non-taxable income:

1) Financial allocation;

2) Administrative fees and charges collected in accordance with the law and included in financial management;

3) Other non-taxable income as specified in ***.

Article 26.

The following income of a business is tax-exempt:

1) Interest income from treasury bonds;

2) Equity investment income such as dividends and bonuses between qualified resident enterprises;

3) A non-resident enterprise that has established an institution or place in China obtains dividends, bonuses and other equity investment income from the resident enterprise that is actually connected with the institution or place;

4) Income from eligible non-profit organizations.

Non-taxable income"with"Tax-exempt income"The distinction is as follows:

1. Income from the enterprise"Total revenue"Including non-tax and tax exemption, the non-tax and tax-exempt part of the income should be deducted when calculating the tax payable of the enterprise income tax.

The formula is: taxable income = total annual income - non-taxable income - tax-exempt income - various deductions - allowable annual loss.

2. In the total income of the enterprise, part of the income is not included in the scope of taxation, which is not taxable income. Some parts should be included in the scope of taxation, but they can be exempted from taxation during the period of preferential policies granted by the state, and they are income exempted from tax. However, the end of the policy may resume taxation.

3. The pre-tax treatment of expenses, depreciation and amortization corresponding to the two in the income of the enterprise is different. The non-taxable income cannot be deducted before tax, while the expenses, depreciation and amortization corresponding to the tax-exempt part can generally be deducted before tax.

The difference between zero tax rate and tax exemption and no tax.

1. The most typical zero tax rate is the export products that are subject to 0% of the value-added tax. The VAT levied on the sale and export of these products or services by taxpayers is 0%, and the VAT paid in the previous link can be refunded. However, only general taxpayer enterprises can fully enjoy the benefits of zero tax rate, that is, they can enjoy the benefits of zero value-added tax and input tax deduction and refund.

However, if the taxpayer uses simple tax calculation, the sale of goods or services and intangible assets can only enjoy 0% value-added tax, and cannot be credited and refunded.

2. Zero tax rate and tax exemption belong to the scope of tax payment, and there is no need to pay the output tax of VAT in this link, but zero tax rate is not equal to tax exemption. Tax exemption is a tax preference that requires approval or filing, and a zero tax rate does not. The zero tax rate for exports is a legal and compliant tax rate, and the 0% tax rate can be selected when issuing ordinary VAT invoices.

General taxpayer enterprises can refund the VAT paid in the previous links when selling zero-rated goods, while the VAT paid in the previous links will not be refunded for the export of tax-exempt goods.

For the non-tax, tax-exempt and zero-rated invoices in the collection process, there are also non-taxable invoices, tax-exempt invoices and zero-rated invoices when invoicing.

Non-taxable invoices. It is stipulated in the Classification and Coding of Goods and Services Tax (Trial)."Non-taxable items that have not been sold", which is an invoice issued when the taxpayer receives the payment and there is no sale. Specifically, there are only the following three situations:

Zero-rated invoice means that taxable products or taxable services are subject to zero-rate, and taxpayers select 0% in the tax rate column when opening a VAT invoice

Tax-exempt invoices: When the taxable products sold or taxable services provided by the taxpayer can enjoy the tax exemption policy, the invoice can be issued at the tax rate"Tax-free"or"** symbol. However, in this case, a special ticket cannot be issued.

What is the difference between tax-exempt income and non-taxable income?

The difference between non-taxable income and tax-exempt income is as follows:

1. Tax-exempt income is a preferential policy of the state, and it may be an encouragement to encourage certain business activities that should be taxed without paying tax; Non-taxable income is an activity that is not taxable in itself;

2. Non-taxable income refers to the income that does not belong to the economic benefits brought by the profit-making activities of the enterprise in nature and root, does not bear tax liability and is not a component of the taxable income; Tax-exempt income, which itself constitutes taxable income but is exempted, is a preferential tax item.

What is non-taxable income?

1. Financial allocation;

2. Administrative fees and charges collected in accordance with the law and included in financial management;

3. The financial funds obtained by the enterprise shall be specified for special purposes by the competent financial and taxation departments and approved by the enterprise.

Legal basis: Article 26 of the Enterprise Income Tax Law of the People's Republic of China.

The following income of a business is tax-exempt:

1) Interest income from treasury bonds;

2) Equity investment income such as dividends and bonuses between qualified resident enterprises;

3) A non-resident enterprise that has established an institution or place in China obtains dividends, bonuses and other equity investment income from the resident enterprise that is actually connected with the institution or place;

4) Income from eligible non-profit organizations.

Legal analysis: non-taxable income refers to economic benefits that do not belong to for-profit activities and do not need to be taxed; Tax-exempt income means that the state encourages and supports certain economic activities, and allows some economic interests that should be taxed not to be taxed. That is, tax-exempt income is a kind of preferential tax treatment of enterprise income tax, and non-taxable income does not belong to it, but only the income that is not taxed by the state.

Non-taxable income should be permanently excluded from the scope of taxation, such as budget allocation, administrative fees, and income. Tax-exempt income may be reinstated in the scope of taxation in a specific period, such as interest income from treasury bonds and dividends and bonus income between resident enterprises under certain conditions.

Legal basis: Enterprise Income Tax Law of the People's Republic of China

Article 7 The following income in the total income is non-taxable income:

1) Financial allocation;

2) Administrative fees and charges collected in accordance with the law and included in financial management;

3) Other non-taxable income as specified in ***.

Article 25 The State shall give preferential treatment to enterprise income tax to industries and projects that are to be supported and encouraged to develop.

Article 26 The following income of an enterprise shall be tax-exempt:

1) Interest income from treasury bonds;

2) Equity investment income such as dividends and bonuses between qualified resident enterprises;

3) A non-resident enterprise that has established an institution or place in China obtains dividends, bonuses and other equity investment income from the resident enterprise that is actually connected with the institution or place;

4) Income from eligible non-profit organizations.