Hot issue 2: whether the payer needs to perform the obligation of withholding individual income tax and whether the value-added tax can be levied on the difference in issuing invoices on behalf of the contractor on the construction site.
Reference 1: Article 9 of the individual income tax law of the people’s Republic of China (revised in 2018): the individual income tax takes the income as the taxpayer and the unit or individual paying the income as the withholding agent.
61 of the State Administration of Taxation in 2018) Article 4 the taxable income reported by all employees with full withholding of individual income tax includes: (I) income from wages and salaries; (II) income from labor remuneration; (III) income from remuneration; （4） Income from royalties; (5) income from interest, dividends and bonuses; (6) income from property leasing; (7) income from property transfer; (8) incidental income.
Reference 2: Supplementary Notice of the State Administration of Taxation on Relevant Issues in the investigation and handling of individual income tax evasion cases (Guo Shui Han Fa [1996] No.
36), the tax payment place of value-added tax is: (1) fixed business households shall report and pay tax to the local competent tax authorities where their offices are located or where they live.
The head office and branches are not in the same county (city) In case of, they shall report and pay tax to the competent tax authorities in their respective places; With the approval of the Ministry of Finance and the State Administration of Taxation or its authorized financial and tax authorities, the head office may report and pay tax to the competent tax authorities in the place where the head office is located..
Therefore, the payer does not need to perform the obligation of withholding individual income tax.
Reply: 1.
The invoices for subcontracted projects issued by natural persons can be used as the deduction of the difference in simple tax calculation, which is allowed in tax.
23, 2016) stipulates that when providing construction services, taxpayers issue value-added tax invoices themselves or tax authorities issue value-added tax invoices on their behalf, the county where the construction services occur shall be indicated in the remarks column of the invoice (city, district) name and project name.
(4) the deducted government funds, administrative fees or the land price paid to the government shall be the legal and valid certificate with the financial bills supervised (printed) by the financial department at or above the provincial level (including the provincial level).
In order to ensure the unification of national implementation, the recognition standard is now stipulated as follows: all units and individuals recognized by the tax authorities as having the right to decide the object and amount of income payment are withholding agents.
If the tax authorities have doubts about the signing documents, they may require them to provide the confirmation certificate of overseas notary institutions.
9.
Reply: Yes.
Reference 3: according to the notice of the Ministry of Finance and the State Administration of Taxation on comprehensively promoting the pilot of replacing business tax with value-added tax (CS [2016] No.
Reference 2: announcement of the State Administration of Taxation on Issuing the measures for the administration of withholding and declaration of individual income tax (for Trial Implementation) (Announcement No.
Hot issue 1: who is the withholding agent of individual income tax when the wages of migrant workers are paid by Party A.
(5) Other vouchers stipulated by the State Administration of taxation.
36) Regulations: Annex 2: Regulations on matters related to the pilot of replacing business tax with value-added tax (III) sales.
Due to the phenomenon of multiple payments between the units and individuals who pay the income and the people who obtain the income, it is sometimes difficult to determine the withholding agent.
Other individuals who provide construction services shall report to the local competent tax authority where the construction services occur Customs declaration and tax payment! Reference 1: item (3) of Article 4 of the announcement of the State Administration of Taxation on comprehensively promoting the pilot project of replacing business tax with value-added tax (announcement of the State Administration of Taxation No.
602) Article 3 Identification of withholding agents: in accordance with the laws and regulations of the individual income tax law, units and individuals that pay income to individuals are withholding agents.
If the simple tax calculation method is applicable to the construction services provided by the pilot taxpayer, the sales volume shall be the balance of the total price and non price expenses obtained after deducting the subcontracting payment.
9 of the president) stipulates that individual residents who obtain business income shall pay individual income tax （3） Article 12 provides that a taxpayer who obtains business income shall calculate individual income tax on an annual basis, and the taxpayer shall submit a tax return to the tax authorities and pay tax in advance within 15 days after the end of each month or quarter The final settlement and payment shall be handled before March 31 of the following year.
(3) The tax payment certificate shall be the legal and valid certificate for the tax paid.
Reference 3: Article 31 of the regulations on ensuring the payment of migrant workers’ wages: in the field of engineering construction, the system of entrusting the general contractor of construction to pay the wages of migrant workers of subcontractors shall be implemented.
2.
The above-mentioned vouchers refer to: (1) invoices shall be the legal and valid vouchers for payments to domestic units or individuals.
According to the wage payment table prepared by the subcontractor, the general construction contractor will directly pay the wages to the migrant workers’ own bank account through the special account for migrant workers’ wages, and provide the subcontractor with a wage voucher.
Reference 1: Article 2 of the new individual income tax law (Order No.
The subcontractor shall assess the workload of migrant workers on a monthly basis and prepare a payroll, which shall be submitted to the general contractor together with the project progress of the current month after being signed and confirmed by the migrant workers themselves.
Hot question 3 is about whether the place where natural persons issue invoices on behalf of the construction site is related to the construction site.
(2) for payments to overseas units or individuals, the signing documents of such units or individuals shall be the legal and valid vouchers.
Reference 2: according to Article 46 of the measures for the implementation of the pilot project of replacing business tax with value-added tax (CS [2016] No.
Reply: no matter who pays the wages of migrant workers, the withholding obligation of individual income tax on their income is the unit that has the right to decide the payment object and amount of income.
If the above vouchers obtained by taxpayers belong to VAT deduction vouchers, their input tax shall not be deducted from the output tax.
It belongs to business income and has paid the individual income tax of business income in the tax bureau.
