The State Administration of Taxation's Remarks on the Administration of Enterprise Annuity Taxes

Recently, the State Administration of Taxation issued the "Notice on Issues Concerning the Collection and Management of Individual Income Taxes on Enterprise Annuities" (Guo Shui Han [2009] No. 694, hereinafter referred to as the "Notice"), which clarifies the issues related to the management of personal income tax on enterprise annuities. The reporter interviewed the head of the Income Tax Department of the State Administration of Taxation on relevant issues.

Q: Why do you want to issue the Notice?

A: According to the Individual Income Tax Law and its implementation regulations and related regulations, in addition to the basic old-age insurance premiums, basic medical insurance premiums, unemployment insurance premiums and housing accumulation funds that are actually paid (including units and individuals) in accordance with relevant state regulations, other supplementary insurance Personal income tax is levied on both commercial insurance and over-standard basic insurance. Enterprise annuity is a major form of supplementary pension insurance, and its taxation is clear in the individual income tax policy. However, due to the late start of China's enterprise annuity system, the operation of enterprise annuity is complicated, and the differences between regions and enterprises are large. The problems of personal income tax collection and management have not been effectively solved, and enterprises and grassroots tax authorities often reflect. On the basis of in-depth research, we have studied and formulated the Notice, which is mainly to further clarify the relevant provisions on the collection and management of personal income tax for enterprise annuities.

Q: What is the main content of the Notice?

A: Enterprise annuity refers to the supplementary pension insurance that enterprises and their employees voluntarily establish on the basis of participating in basic endowment insurance according to law. It is mainly composed of three parts: individual payment, enterprise payment and annuity investment income. The "Notice" focuses on the personal income tax collection and management of individual contributions and corporate contributions.

First of all, the "Notice" once again reiterated the policy provisions for individual payment of enterprise annuities, and clarified the tax treatment methods for corporate contributions. That is, the individual payment may not be deducted before the individual's monthly salary and salary income tax. The part of the enterprise's contribution to the personal account (hereinafter referred to as the enterprise payment) is separated from the individual's monthly salary and salary, and is regarded as one month's salary and salary without deducting any expenses. Calculate the tax payable. For example: Assume that in an enterprise employee's annuity account, the individual pays 100 yuan per month and the enterprise pays 400 yuan. The 100 yuan personal contribution cannot be deducted before the payroll income tax, which is the payment of the individual after-tax wages; the enterprise pays into its personal account. 400 yuan is not included in the current month's salary, salary, and the tax deductible shall be calculated directly at the applicable tax rate of 400 yuan corresponding to personal income tax and salary income tax rate table.

Secondly, the personal income tax collection link of the enterprise payment is the enterprise payment link, that is, when the enterprise payment is included in the personal account, the enterprise as the withholding agent legally withholds the tax.

Third, the part of the enterprise that has been credited to the personal account due to the conditions of the annuity setting cannot be attributed to the individual. The Notice stipulates that the personal income tax that has been withheld should be refunded and the individual needs to provide the tax refund. Relevant information.

Fourth, the Notice clarifies the scope of application of the document. That is to say, the enterprise annuity referred to in the Notice refers to the supplementary pension insurance voluntarily established by the enterprise and its employees in accordance with the provisions of the “Measures for the Trial of Enterprise Annuity” on the basis of participating in the basic endowment insurance according to law. For the supplementary pension insurance income other than the above-mentioned provisions, the individual shall be fully incorporated into the monthly salary and salary income to collect personal income tax according to law.

In addition, the "Notice" also puts forward the requirements for the collection and management of enterprises that establish the enterprise annuity system, and has made provisions for the connection with the implementation of the current enterprise annuity personal income tax policy.

Question: What is the impact of the corporate tax payment method specified in the Notice on the development of the enterprise annuity system?

A: According to incomplete statistics, as of the end of 2008, 33,000 enterprises across the country have established an enterprise annuity system, covering 10.38 million workers, but the coverage of Chinese enterprise annuities is not high, and the number of employees covered only accounts for the basic pension insurance in the country. (As of the end of 2008, the national basic pension insurance participation of about 174 million people) is about 6%, and from the establishment of annuity enterprises, most of them focus on electricity, railways, finance, insurance, communications, coal, non-ferrous metals, transportation. High-income industries such as oil and gas or monopoly industries. Since China's enterprise annuity system started late, it is still in the initial stage of establishment. In order to encourage more enterprises to establish an annuity system and provide supplementary endowment insurance for employees other than basic pension insurance, tax policies should be given due consideration and encouragement. Therefore, in the process of researching and drafting the Notice, we have always adhered to the principle of both regulating the distribution of income and emphasizing the appropriate encouragement and support for the development of enterprise annuity. It should be said that the method of separately accounting for the part of the corporate account that is included in the "Notice" is a good example of the above principles. That is, the part of personal contributions and corporate contributions to be included in the personal account is taxed according to law to prevent the income distribution gap from being too large. At the same time, the enterprise payment is used as a monthly salary and salary to calculate the method of collecting personal income tax, which reduces the application of corporate payment. The tax rate is actually a more favorable calculation method, which aims to encourage and support the development of enterprise annuities. In addition, it is also convenient to separate the corporate contributions from the normal wages and salaries, and it is also convenient to apply for tax refunds for employees who withdraw from the annuity plan.

Q: The Notice clearly stipulates personal income tax on corporate payment. However, some international regulations levy a tax on the annuity collection. How do you consider this?

A: The reason why the tax is not withheld in the personal retirement pension system is mainly based on China's current personal income tax system and the tax collection authority's ability to collect and manage. From the international point of view, in the personal income tax collection and management of enterprise annuities, there are not only the countries that collect taxes in the enterprise payment link, but also the countries that are exempt from tax in the collection process, and the countries that are exempt from tax and collection in the payment link. The collection link is not uniform, each The choice of the state's personal income tax collection link for enterprise annuities is compatible with the taxation system of the country and the actual collection and management capacity of the tax authorities, depending on the actual situation of each country. According to our understanding, countries that levy personal income tax on corporate annuities in the collection process are basically countries that have implemented a comprehensive tax system or a comprehensive tax system combined with taxation for many years. They are taxed on individual pensions, and the tax authorities are not only complete. Personal income information and a sound collection and management mechanism, and has a national unified information management platform, while China's current personal income tax system is a separate tax system, and tax exemption for retirement wages or pensions, does not have the deferral of enterprise annuities to individuals The basic conditions for taxation in the retirement collection. At the same time, if personal income tax is levied in the annuity collection, the tax authorities must monitor the operation of the annuity at any time after the establishment of the annuity, and keep the personal information for decades. From now on, the tax authorities do not have this aspect. The ability to collect and manage.

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