Tax reform aid subject to corporate tax
Updated: 2012-07-25 15:46
By Zheng Yangpeng (chinadaily.com.cn)
|
|||||||||||
Financial aid that companies receive as a result of the country's reforms to its value-added tax will be subject to corporate income tax, officials from the Finance Ministry confirmed to media on Tuesday.
At the beginning of this year in Shanghai, a test reform replaced what is known as a turnover tax with a value-added tax on selected services. The government said it aims to gradually replace turnover taxes with value-added taxes in all sectors of the country's economy.
A turnover tax is a tax on a business' gross revenue and a value-added tax is a tax levied on the difference between a commodity's price before the application of other taxes and the cost of producing it.
The policy change is expected to reduce companies' tax burdens, especially those falling on the service sector.
In Shanghai, though, the reform has actually caused some companies to pay higher taxes. To provide financial aid to businesses that find themselves in that situation, the Finance Ministry has established a special fund.
On Tuesday, the Finance Ministry issued a document specifying what audit methods should be followed by those involved in the reform. The document had raised questions about whether financial aid going to corporations will be placed in the category of taxable income.
Responding to a media inquiry, officials confirmed that the special financial aid should be considered taxable income.
Related Stories
Slowing economy sharply weakens tax revenue growth 2012-07-25 09:38
Survey shows strong support for tax relief 2012-07-18 10:00
Bigger share of taxes proposed for local govts 2012-06-28 10:51
Provinces, cities to start tax reform soon 2012-06-11 17:23
Beijing set for tax reform test 2012-05-29 14:39
Today's Top News
President Xi confident in recovery from quake
H7N9 update: 104 cases, 21 deaths
Telecom workers restore links
Coal mine blast kills 18 in Jilin
Intl scholarship puts China on the map
More bird flu patients discharged
Gold loses sheen, but still a safe bet
US 'turns blind eye to human rights'
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
All-out efforts to save lives |
Liaoning: China's oceangoing giant |
Poultry industry under pressure |
'Spring' in the air for NGOs? |
Boy set to drive Chinese golf |
Latest technology gets people talking |