This article’s view: Welfare is a must for life, while labor insurance premiums are a must for work. The value-added tax input tax purchased from welfare expenses cannot be deducted, and it is deducted within 14% of the total salary before the enterprise income. The value-added tax input tax purchased from labor insurance premiums can be deducted, and it can be deducted entirely before the enterprise income tax. As long as it is a reasonable expenditure, there is no problem of upper limit.
1. Related Value-added Tax processing
The value-added tax special invoice obtained by enterprises when purchasing labor protection supplies is allowed to deduct the input tax amount, but if the value-added tax special invoice obtained by purchasing welfare products, the input tax cannot be deducted. The reason is very simple. Labor protection supplies are a protective measure for production workers that are necessary for production, which is closely related to production and operation and should be included in the production cost or expenses of the enterprise. Welfare expenses belong to the collective welfare of the enterprise or the personal consumption of employees and have nothing to do with production and operation, so the input tax is not allowed to be deducted from the output tax.
2. The unit is related to personal income tax
Labor protection supplies are a kind of personal protective equipment equipped by production and operation units for employees in order to save employees from or alleviate accident injuries and occupational hazards during the labor process. Therefore, labor protection supplies are a kind of equipment or supplies in production, and do not belong to the employees themselves. There is no need to pay personal income tax to receive labor protection supplies.
Employee benefits are essentially a kind of feedback beyond the normal salary of the enterprise. Depending on the nature of the enterprise, the methods of welfare payment are different. Therefore, employees need to pay personal income tax when receiving welfare products or welfare fees that can be divided into individuals.
III. Processing of corporate income tax
First, related deduction amount
According to the relevant provisions of the Implementation Regulations of the Enterprise Income Tax Law, if a company incurs reasonable labor protection expenses, it is allowed to deduct. The part incurred by the company that does not exceed 14% of the total wage is allowed to be deducted according to the actual situation.
The difference between the two is the amount, the labor protection fee is deducted in full, while the welfare fee is deducted within the limit. The two have obvious different characteristics:
1. Labor insurance premiums: they are not allowed to be paid in the form of currency, and have a certain scope of payment, and generally occur in specific positions, such as production workshop workers, power maintenance work, employees engaged in species work, etc. The protective equipment referred to, including work clothes, masks, gloves, etc., are all necessary equipment to avoid or reduce occupational accident injuries.
2. Welfare fee: Whether it is currency distribution or physical distribution, it has a certain scope of expenditure, generally for all employees and everyone has a share, and the standards are consistent and there are no clear regulations on their expenses, but they are basically caused by subsidies for employees' lives.
Second, related scope and form
At present, the financial and taxation processing of Lilifei in practice includes three aspects.
1. All expenses incurred by the establishment of a welfare department in the enterprise.
2, various subsidies and non-monetary benefits issued for employees' health care, living, housing, transportation, etc.
3. One bottom clause, other work benefits include funeral expenses, pensions, settlement expenses, and visiting relatives.
The scope of labor insurance premiums is obviously much smaller. Equipment that only in order to protect employees from or reduce accident injuries to employees is allowed to be included in labor insurance premiums.
In terms of financial and taxation processing, enterprises need to conduct detailed accounting in the employee salary and employee welfare expenses, and labor expenses are generally included in the management expenses. Of course, enterprises can also include the sales expenses, production costs and employee salary and welfare expenses for employees to engage in different specific tasks.
It must be pointed out that the expenses and sick leave for retired employees and the allowance for family leave for maternity leave do not fall within the scope of employee welfare expenses. If the enterprise gives these subsidies, it cannot be deducted before corporate income tax, because it does not comply with the principle of relevance of income tax, so the employee's travel expenses can only be included in the employee welfare expenses, and other subsidies can only be part of the salary.
In tax audits, companies often make some minor mistakes subjective or objective in terms of employee welfare expenses and labor protection expenses, such as corporate canteens, which are often used as entertainment. Enterprises should calculate business entertainment expenses, but enterprises often include employee welfare expenses without distinction.
4. Interpretation of several hot issues in practice
1. The cost of uniform dressing for employees
1. It can be directly included in management expenses and deducted in full before tax, according to the relevant provisions of the State Administration of Taxation No. 34, 2011.
2. Treatment of VAT input tax for uniform dress: If the tax authorities believe that it is a welfare expense, it is obviously not deductible, but if the enterprise can prove that it is equipped with work clothes and requires employees to wear it every day, it actually constitutes a part of production and operation, then it is no problem that it can deduct it.
Second, companies distribute branded thermal underwear to employees in winter, each with a set of them.
The most reasonable reason for a set of thermal underwear is to be considered as a welfare fee. If it is only for outdoor staff, there is no problem in terms of reason.
3. The anti-heat and cooling costs issued by enterprises
1. If the currency is issued, it can only be included in the welfare fee.
2. If the materials are distributed, they can be included in the labor protection fee under certain conditions. Of course, it must be distributed to employees in the front line of production and special positions.
3. Prevention and cooling supplies with universal nature are best included in employee welfare expenses.
5. Several issues to pay attention to in corporate practice
First, welfare expenses are universal, labor insurance requires more consideration of specific positions and specific scopes.
Second, welfare is in the form of currency, while labor insurance premiums do not, they can only be in the form of materials.
Third, labor insurance can deduct input tax, but benefits cannot be deducted. If the benefits issued are self-produced or all entrusted to process, they must be treated as sales.
Fourth, in practice, welfare expenses and labor protection expenses should be reasonably distinguished according to their nature, and there is no need for artificial confusion to bring tax risks to enterprises.
This class will continue to talk about financial and tax management in corporate practice. Thank you for your long-term support and attention!
