Issues Related To Personal Income Tax On Enterprise Annuity

The Ministry of Finance and the State Administration of Taxation on the basic old-age insurance premiums, basic medical insurance premiums, unemployment insurance premiums, housing provident fund policies on personal income tax (tax [2006]10 No. 1) stipulates that the basic old-age insurance premiums, basic medical insurance premiums and unemployment insurance premiums payable by enterprises and institutions in accordance with the payment ratio or method stipulated by the state or province (autonomous region or municipality directly under the central government) shall be exempted from personal income tax, and the basic old-age insurance premiums, basic medical insurance premiums and unemployment insurance premiums paid by individuals in accordance with the proportion of contributions paid by the state or provinces (autonomous regions and municipalities directly under the central government) shall be deducted from the income of < a href= "http://www.91se91.com/news/index_c.asp" > personal taxable < /a >. < p > basis

< /p >

< p > the first provision of the Ministry of Finance and the State Administration of Taxation on the issue of personal income tax (tax [2005]94 No. 1) deals with the handling of personal income tax and enterprise income tax after the surrender of supplementary pension insurance for individuals.

The unit should purchase commercial supplementary pension insurance for workers and staff members. When handling insurance procedures, it should be a "personal income tax" income tax item, pay personal income tax according to the tax law, refund personal income for various reasons, and personal income tax paid by individuals who have not obtained real income should be returned.

< /p >

< p > third stipulates that personal income tax shall be exempted from the basic old-age insurance, basic medical insurance, unemployment insurance and housing accumulation funds that are actually collected by individuals.

< /p >

< p > "the reply of the State Administration of Taxation on the issue of payment of personal income tax paid by employees by the State Administration of Taxation" ([2005]318) stipulates that the payment of insurance premiums other than tax exemption for employees should be paid by the enterprise to the insurance company (that is, the insurance account falls to the insured's account) and incorporated into the wage income of the employee during the current period. The personal income tax is calculated according to the item "wages and salaries", and the tax is withheld by the enterprise.

< /p >

< p > according to the above regulations, the annuity paid by an enterprise for individuals should be dealt with in accordance with the above provisions before the issuance of the [2009]694 document of the state tax letter.

< /p >

< p > for the payment of annuity, we should consider not only adjusting a href= "http://www.91se91.com/news/index_c.asp" > income distribution < /a >, but also reflecting the principle of giving proper encouragement and support to the development of enterprise annuity.

< /p >

< p > because the enterprises implementing annuities are, after all, a better business, rather than the principle of universally applicable statutory insurance. The state tax Letter No. [2009]694 documents taxes on personal payment and enterprise payment into personal accounts according to law, preventing the income gap from being too large. At the same time, enterprises pay separately as a monthly salary and salary to calculate personal income tax (which is equivalent to reducing the applicable tax rate of annuity).

This method reduces the applicable tax rate of enterprise payment. In fact, it is a more preferential calculation method. The purpose is to encourage and support the development of enterprise annuity.

< /p >

< p > > according to the fifth provision of < a href= "http://www.91se91.com/news/index_c.asp" > "state tax letter" /a > [2009]694 ", the tax authorities will no longer refund the tax when the enterprise has paid the personal income tax according to the provisions of the enterprise before the notice is issued. If the enterprise fails to deduct part of the personal income tax paid by the enterprise, the tax authorities shall order the enterprise to calculate the withholding tax according to the following methods: the tax paid amount of the enterprise which is not withheld from each year is the taxable income, and the applicable tax rate of the monthly average wage of each worker shall be the applicable tax rate of the enterprise to which it belongs, and the tax withheld for each year shall be aggregated.

This provision also reflects a preferential treatment for enterprises which have not been paid in the past, that is, enterprises do not need to calculate commercial insurance for their previously unpaid parts, but they can apply lower taxes according to the new policy.

< /p >

The State Administration of Taxation has also considered the situation of individuals who did not actually get the problem described in < p >.

Each country's choice of the annuity personal income tax collection is compatible with the actual tax collection and management capacity of its own tax system and tax authorities, depending on the reality of all countries.

At present, the countries that collect personal income tax on the enterprise annuity in the collection link are basically those countries that have been carrying out comprehensive tax system or comprehensive and classified tax system for many years. They collect taxes on personal pensions. The tax authorities not only have complete personal income information and sound collection and management mechanism, but also have a unified information management platform.

The current personal income tax system in China is a sub tax system, and it is exempt from tax payment for retirement wages or pensions, and does not have the basic conditions to detract from enterprise annuity to personal retirement.

At the same time, if the personal income tax is collected in the annuity payment link, the tax authorities must monitor the operation of the annuity at any time after the establishment of an annuity, and keep personal information for decades.

At present, the tax authorities do not have the ability to collect and manage this aspect.

< /p >