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NOTICE OF THE MINISTRY OF FINANCE AND STATE ADMINISTRATION OF TAXATION ON THE RELEVANT POLICIES OF INDIVIDUAL INCOME TAX CONCERNING GRANTING AWARDS TO SALES STAFF OF ENTERPRISES IN THE FORM OF FREE TOUR |
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(No.11 [2004] of the Ministry of Finance, State Administration of Taxation promulgated on January 20, 2004 and shall come into force as of the same day)
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SUBJECT : INDIVIDUAL INCOME TAX; FREE TOUR |
ISSUING DEPARTMENT : THE MINISTRY OF FINANCE OF THE PEOPLE'S REPUBLIC OF CHINA, STATE ADMINISTRATION OF TAXATION |
ISSUE DATE : 01/20/2004 |
IMPLEMENT DATE : 01/20/2004 |
LENGTH : 314 words |
TEXT : |
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Recently, we have heard from the finance departments of some regions that there are widespread phenomena that some enterprises and entities have granted awards to their employees who have outstanding achievements in marketing in the form of organizing domestic and overseas training classes, proseminars, and work visit free of charge, and they ask the state to further clarify the policy issue of how to levy individual income tax on these kinds of awards. We hereby nail down the relevant individual income tax policy concerning the granting of awards for outstanding achievements of an individual in marketing by an enterprise or entity in the form of free training classes, proseminars, or work visiting, upon deliberation:
According to the relevant provisions of the existing individual income tax laws and regulations of our country, the awards (including in-kind, and securities, etc.) for an individual's outstanding achievements in marketing, which are granted by enterprises and entities through organizing tourism activities in the name of training classes, proseminars or work visit by exempting him/her from paying travel expenses or touring expenses, shall be reckoned in the taxable income of the sales staff member in full amount on the basis of the expenses occurred, and individual income tax shall be collected in accordance with the law and be withheld by the enterprises and entities that provide the foregoing expenditures. The awards enjoyed by the employees of an enterprise shall be incorporated into the wages and salaries of the current term, and individual income tax shall be collected on the basis of the item of "income from wages and salaries". The awards enjoyed by other persons shall be regarded as the labor income of the current term, and individual income tax shall be collected on the basis of the item of "income from labor remunerations".
The above prescriptions shall be implemented as of the date of the promulgation of this Notice.
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