Interpretation of the "Announcement of the State Administration of Taxation on Matters Related to Further Implementing Preferential Personal Income Tax Policies to Support the Development of Individual Industrial and Commercial Households"

According to the provisions of the "Announcement of the Ministry of Finance and the State Administration of Taxation on Further Supporting the Development of Small and Micro Enterprises and Individual Industrial and Commercial Households on Tax Policies" (2023 No. 12, hereinafter referred to as Announcement No. 12), the State Administration of Taxation issued the "State Administration of Taxation on Further Implementing Preferential Personal Income Tax Policies to Support the Development of Individual Industrial and Commercial Households"Announcement of the item> (hereinafter referred to as ). The interpretation is as follows:

1. What are the specific provisions of the policy of halving personal income tax for individual industrial and commercial households?

In order to implement the decisions and arrangements of the Party Central Committee and the State Council and further support the development of individual industrial and commercial households, the Ministry of Finance and the State Administration of Taxation jointly issued Public Notice No. 12According to the report, from January 1, 2023 to December 31, 2027, personal income tax will be halved for the annual taxable income of individual industrial and commercial households not exceeding 2 million yuan. Individual industrial and commercial households can enjoy this preferential policy in addition to other current preferential personal income tax policies.

Second, individual industrial and commercial households will receive a 50% reductionHave the preferential policies for collecting personal income tax been increased?

In order to further support the development of individual industrial and commercial households, the state has increased the preferential policies. From January 1, 2023 to December 31, 2027, the annual taxable income range for individual industrial and commercial households to be levied personal income tax will be halved, from not exceeding 1 million yuan toNo more than 2 million yuan.

Three, what is the scope of individual industrial and commercial households that are subject to the halved personal income tax policy?

Individual industrial and commercial households can enjoy the halved tax policy regardless of whether they collect personal income tax through auditing or approved collection.

Four. Individual industrial and commercial households enjoy the halved personal income tax policy.Does the personal income tax policy require filing?

Individual industrial and commercial households can enjoy the 50% tax reduction policy when prepaying and finalizing personal income tax. There is no need to register to enjoy the policy. You can enjoy it by filling in the relevant columns of the personal income tax return and tax reduction and exemption matter report form.

5. Individual industrial and commercial householdsHow do households declare to enjoy the halved personal income tax policy?

For individual industrial and commercial households that declare through the electronic tax bureau, the tax authorities will automatically provide them with the pre-filling service of this policy in the declaration form and report form. For individual industrial and commercial households that implement simple declarations with regular quotas, the tax authorities will automatically transfer the tax according to the tax payable after reduction..

6. How do individual industrial and commercial households that obtain business income from multiple places enjoy preferential policies?

According to current policy regulations, taxpayers who obtain business income from more than two places should choose to submit an annual summary declaration to the tax authority in charge of one of the places where they operate and manage. If an individual industrial and commercial household obtains business income from more than two places.For business income, it is necessary to combine the annual taxable income of individual industrial and commercial households when handling the annual summary tax return, recalculate the tax reduction and exemption, and refund the excess and make up for the shortfall. Examples are as follows:

[Example 1] Taxpayer Zhang operates both individual industrial and commercial household A and individual industrial and commercial household B, and the annual taxable income is 800,000 yuan and 1.5 million yuan respectively, thenWhen Zhang makes the annual tax return, the amount of taxable income that he can enjoy the 50% reduction in personal income tax policy is 2 million yuan.

7. How to calculate the tax reduction and exemption amount for individual industrial and commercial households under the 50% reduction in personal income tax policy?

The tax reduction amount = (the taxable income from business income does not exceed 2 million yuan)The amount of tax payable - other policies tax exemption × taxable income from business operations not exceeding 2 million yuan ÷ taxable income from business operations) × 50%.

Examples are as follows:

[Example 2] Taxpayer Li runs a self-employed business householdC. The annual taxable income is 80,000 yuan (applicable tax rate is 10%, quick calculation deduction is 1,500), and at the same time, he can enjoy the tax reduction and exemption amount of 2,000 yuan under the policy for persons with disabilities, then the tax reduction amount for Li under this policy = [(80000×10%-1500)-2000]×50%=2,250 yuan.

[Example 3] Taxpayer Wu runs a self-employed industrial and commercial household D, with an annual taxable income of 2,400,000 yuan (applicable tax rate 35%, quick calculation deduction 65,500), and can enjoy a tax reduction of 6,000 yuan under the policy for persons with disabilities, then Wu’s tax reduction under this policy = [(2000000×35%-65500)-6000×2000000÷2400000]×50%=314750 yuan.

We have embedded this calculation rule into the electronic tax bureau information system, and the tax bureau will provide taxpayers with pre-filled declaration forms and report formsService, qualified taxpayers accurately and truthfully fill in the business data, and the system can automatically calculate the tax reduction amount.

8. If individual industrial and commercial households have prepaid taxes on business income this year, can they still enjoy preferential policies?

In order to maximize the tax reduction dividends, individual industrial and commercial households have already paid taxes in the first few months of this year.Those who prepay taxes on business income can also enjoy tax benefits. The specific method is that if the tax that should be reduced according to Announcement No. 12 has been paid before the announcement, you can apply for a tax refund; the tax in subsequent months can also be automatically deducted. If the deduction is not completed in the current year, a tax refund will be applied for in the final settlement; if the cancellation has been processed before the date of announcement No. 12, it will no longer be retroactively enjoyed.