There Are Numerous Tax Disputes Arising From Tax Deduction Before Tax And Enterprise.

Whenever referring to the pre tax deduction of trade union funds, the answer is generally heard: the expenditure of trade unions for members and other staff members to carry out activities such as education, style, publicity and other activities is organized by the trade union workers.

The expenses, etc., can be included in the trade union funds, which is not allowed to exceed 2% of the gross salary.

At first glance, this answer is very accurate, but please think carefully, is this answer really correct? The above answer is wrong.

In subsequent management and tax inspection, there is no need for tax enterprises to dispute whether an expenditure can be deducted from trade union funds.

Why? And let me slowly come.

The trade union funds have the most common points with the staff and workers' welfare expenses and the staff education funds. They are all attached to the total wages and salaries of employees. Therefore, they are also called "three additional charges" or "three charges".

The tax law for pre tax deduction is based on:

Regulations on the implementation of the enterprise income tax law of the People's Republic of China

The thirty-fourth item: the reasonable wage and salary expenses that the enterprise produces will be deducted.

The wages and salaries mentioned in the preceding paragraph refer to the remuneration paid by the enterprise to all employees in the form of cash or non cash in every tax year, including basic wages, bonuses, allowances, allowances, year-end pay increases, overtime wages, and other expenditures related to the employee's employment or employment.

The fortieth item: the employee welfare expense that the enterprise produces is not more than 14% of the total salary and salary, and it is allowed to be deducted.

Forty-first: the trade union funds allocated by enterprises shall not be more than 2% of the total wages and salaries.

Forty-second: except for other provisions provided by the Department of Finance and taxation of the State Council, the expenses of staff education expenses that the enterprise has generated will not exceed 2.5% of the total salary and salaries.

After we have seen the deduction of the "three fee" in the tax law, we may focus on the limitation ratio of pre tax deduction: 14% of the worker's welfare cost, 2% of the trade union's funds and 2.5% of the staff's education expenses.

But if we look at it carefully, we will find that there is a distinct difference between the trade union funds and the staff welfare expenses and the deductions of staff education funds.

For employees' welfare expenses and staff education funds, they are deducted according to the amount of "expenditure" in proportion, and for trade union funds, they are stipulated to be deducted within the proportion according to the amount appropriated.

The National Federation of trade unions decided to start the special receipts for trade union funds from the Ministry of Finance uniformly printed and overprinted by the Ministry of finance from July 1, 2010, while abolishing the special receipts for payment of trade union funds.

Therefore, the notice of the State Administration of Taxation on the issue of pre tax deduction of enterprise income tax on trade union funds (state)

Notice No. twenty-fourth of 2010) stipulates that since July 1, 2010, the funds allocated by the staff and Workers Union paid by enterprises shall not exceed 2% of the total wage and salaries, and shall be deducted before the enterprise income tax according to the "special receipt for trade union income" issued by the trade union organization.

The notice of the State Administration of Taxation on the collection of trade union funds by enterprises and the deduction of credentials before enterprises' income tax (the thirtieth announcement of the State Administration of Taxation on 2011) stipulates that since January 1, 2010, in the areas where the tax authorities collects trade union funds, the trade union funds allocated by enterprises can also be collected on the basis of legitimate and effective trade union funds and deducted according to the law.

According to the above regulations, there are two ways of payment for trade union funds, which are directly allocated to the trade union organizations, obtaining the "special receipts for trade union funds income", and collected by the entrusted local tax authorities to obtain the collection evidence of trade union funds.

Accordingly, in accordance with the existing tax law, trade union funds are not deducted from invoices but by special receipts (collection of receipts).

In practice, there are two sources of trade union funds which are used by the trade unions at the grass-roots level at the same time.

1. pay back first.

According to 2% of the total monthly wages and salaries, the trade union funds should be paid in full to the trade union organizations, and the special receipts for trade union funds should be appropriated, or the tax authorities entrusted to collect funds from the trade union should be paid to obtain the collection certificate for labor union funds, and the higher level trade union group will be allocated to the basic trade unions of the payment enterprises at the prescribed rate (usually 60%).

2. grading allocation.

After calculating the total amount of the total wages and salaries of 2% of the total monthly wages and salaries, the tax authorities will be paid to the tax authorities entrusted to collect trade union funds according to the local stipulation proportion (generally 40%), and obtain the collection funds for labor union funds. The retained part (generally 60%) is allocated to the grass-roots trade union at the same time by the enterprise, and the special receipt for the trade union funds issued by the grass-roots trade union of the unit is obtained.

According to the above chromatogram, the enterprises pay the trade union funds according to the statutory deduction ratio and obtain the corresponding credentials.

Sufficient and necessary conditions for pre tax deduction.

That is to say, the trade union funds that are allowed to be deducted before the enterprise income tax must meet the following three conditions without satisfying other conditions:

1. the amount shall not exceed 2% of the total wage and salaries.

2. pay in accordance with the regulations (pay to the higher level trade union organizations or the tax authorities that collect them, and assign them to the grass-roots trade unions of their units).

3. obtain valid and valid credentials.

At this point, we can clearly know that for enterprises, after the allocation of trade union funds that have met the above three conditions at the same time, the tax deduction before the enterprise income tax has been completed. The trade union funds appropriated have not been included in the accounting scope of the enterprise. Its ownership and use rights have been assigned to the higher level trade union organizations or the grass-roots trade unions of the enterprises that have paid the labor union funds.

As for the grass-roots trade unions of enterprises, after receiving the pfer of higher level trade union organizations or part of the union funds appropriated by the enterprises, how the grass-roots trade unions use this part of the funds, including the expenditure items, the amount and the instruments obtained, will not affect the enterprise's deduction of the trade Union's funds before tax. It should no longer adjust the trade union expenses deduction of the enterprises because of the problem that the grass-roots trade unions use this part of the Union's funds.

What needs special attention is that if the enterprise makes provision for trade union funds within the prescribed proportion, but fails to pay it in accordance with the regulations, the expenses that the enterprise directly meets with the scope of the expenses of the trade union shall not be deducted from the trade union's funds before the tax due to the conditions which are not allowed to be deducted by the "paying party" stipulated in the tax law.

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