Is the policy subsidy received for non formal business subject to enterprise income tax?

The policy subsidies received without formal business need to pay enterprise income tax in accordance with the law. Those who meet the conditions for exemption can be exempted from enterprise income tax.

In accordance with the relevant provisions of the "Enterprise Income Tax Law of the People's Republic of China" and the "Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China" (Order No. 512, hereinafter referred to as the Implementation Regulations), with the approval of the People's Republic of China, the enterprise income tax treatment of the special purpose financial funds obtained by the enterprise is hereby notified as follows:

1. The financial funds that should be included in the total income obtained by the enterprise from the people's financial departments and other departments at or above the county level can be regarded as non-taxable income and deducted from the total income when calculating the taxable income if the following conditions are met at the same time: (1) the enterprise can provide the fund allocation documents for the special purpose of the specified funds; (B) the financial sector or other appropriation of funds of the first department has special fund management measures or specific management requirements for the funds; (3) The enterprise shall separately account for the funds and the expenditures incurred with the funds.

2. According to the provisions of Article 28 of the Implementing Regulations, the expenses arising from the above-mentioned non-taxable income used for expenditure shall not be deducted in the calculation of taxable income; The depreciation and amortization of assets formed by expenditure shall not be deducted in the calculation of taxable income.

3. After the enterprise treats the financial funds that meet the conditions specified in Article 1 of this Circular as non-taxable income, the part of the financial funds that have not incurred expenditure within 5 years (60 months) and have not been returned to the financial department or other ** departments that have allocated funds shall be included in the total taxable income in the sixth year of obtaining the funds; Expenses incurred by fiscal funds included in the total taxable income are allowed to be deducted in the calculation of taxable income.

Included in other income, included in the total profit to pay enterprise income tax.

Fiscal subsidy income refers to the gratuitous subsidy expenditure provided by the first department to enterprises or residents through financial allocation for a specific need. The "Enterprise Income Tax Seepage Law" divides the total income into taxable income and non-taxable income, and the fiscal subsidy income may be non-taxable income or taxable income according to different circumstances, and not all fiscal subsidy income is non-taxable income.

The financial funds that should be included in the total income obtained from the people's financial departments and other departments at or above the county level can be regarded as non-taxable income and deducted from the total income when calculating the taxable income if the following conditions are met at the same time:

1) The enterprise can provide the fund allocation document, and the document stipulates the special purpose of the fund;

(B) the financial sector or other appropriation of funds of the first department has special fund management measures or specific management requirements for the funds;

(3) The enterprise shall separately account for the funds and the expenditures incurred with the funds.

At the same time, it is stipulated that, according to Article 28 of the Implementing Regulations, the expenses arising from the above-mentioned non-taxable income used for expenditure shall not be deducted in the calculation of taxable income; The depreciation and amortization of assets formed by expenditure shall not be deducted in the calculation of taxable income. If the company's subsidy meets the conditions, it will not pay income tax, and a separate account will be set up to account for the income and expenditure of the subsidy. If the conditions are not met, it will be included in the non-operating income and the corporate income tax will be calculated.

**The subsidy is not subject to pure corporate income tax if the following conditions are met:

1. It is a financial allocation;

2. It belongs to the administrative and institutional collection and collection of expenses collected and included in the financial management in accordance with the law;

3. Other non-taxable income that belongs to the provisions of ***.

Enterprise income tax is a kind of income tax levied on the production and operation income and other income of enterprises and other organizations that obtain income within the territory of China.

The notice of the Ministry of Finance and the State Administration of Taxation on the treatment of the tax of enterprises with special purpose fiscal funds (Cai Shui [2011] No. 70) stipulates that the financial funds that should be included in the total income obtained by enterprises from the financial departments and other departments of the people at or above the county level can be regarded as non-taxable income and deducted from the total income when calculating the taxable income if the following conditions are met at the same time:

1. The enterprise can provide the fund allocation documents for the specific purpose of the specified funds.

2. The financial department or other first-class departments that allocate funds have special fund management methods or specific management requirements for the funds.

3. The enterprise shall separately account for the funds and the expenditures incurred with the funds.

This notice shall come into force on January 1, 2011.

If the ** subsidy obtained by the enterprise meets the above requirements, it can apply for treatment as non-taxable income.