About personal tax: Interpretation of the 2023 personal income tax comprehensive income settlement and payment documents

Author | Zhiheng (Haikou) Law Firm, Lawyer Deng Chuanlong

On January 31, 2024, the State Administration of Taxation issued the "Announcement on Handling the Settlement and Payment of the Comprehensive Income of Individual Income Tax for 2023" (Announcement No. 2 of 2024 of the State Administration of Taxation), which means that from March 1, 2024 to June 30, 2024, we will usher in the annual settlement of the comprehensive income of individual income tax for 2023.

Recently, tax authorities in various places have also issued documents to push the policy interpretation and operation guidance of the 2023 personal tax settlement, and to compile tax guidelines by category. This article aims to assist taxpayers in solving the difficult problems that may be encountered when handling the 2023 tax settlement and payment by means of popular interpretation of policy caliber and professional terminology.

First, who does not need to handle foreign exchange settlement and payment?

Taxpayers who have paid personal income tax in advance according to law in 2023 and meet any of the following circumstances do not need to handle foreign exchange:

(1) Tax is payable but the comprehensive income does not exceed 120,000 yuan in the whole year;

(B) the amount of tax to be paid does not exceed 400 yuan;

(3) The amount of tax paid in advance is consistent with the amount of tax payable in the final calculation;

(4) Those who meet the conditions for tax refund but do not apply for tax refund.

Second, the time when the final settlement can be handled

The processing time for the fiscal year 2023 is from March 1 to June 30, 2024. Among them, taxpayers who have no domicile in China who leave the country before March 1 can handle it before departure. From March 1 to March 20, taxpayers can make an appointment for any day of the above time period through the personal tax APP after February 21. From March 21 to June 30, taxpayers do not need to make an appointment and can handle it at any time.

III. Calculation formula and determination of various amounts

Refundable or supplementary tax amount = [ (comprehensive income income - 60,000 yuan - "three insurances and one fund" and other special project deductions - additional deductions for special projects such as children's education - other deductions determined by law - eligible public welfare donations) × Applicable tax rate - quick deduction] - Prepaid tax amount

(I) Amount of comprehensive income

The final calculation involves four comprehensive incomes such as wages and salaries, labor remuneration, royalties, and royalties obtained by taxpayers from January 1 to December 31, 2023. The author of this article reminds: The final calculation does not involve taxpayers' classified income such as property lease and income that is not included in the comprehensive income according to regulations.

Among them, wage and salary income refers to the wage and salary income obtained by an individual due to his or her position or employment. It includes wages, salaries, bonuses, year-end salary increases, labor dividends, allowances, subsidies and other income related to his or her position or employment.

Labor remuneration income refers to the income obtained by individuals engaged in design, decoration, installation, drafting, laboratory testing, medical treatment, law, accounting, consulting, lectures, translation, manuscript review, calligraphy and painting, engraving, film and television, audio recording, video recording, performances, performances, advertising, exhibitions, technical services, introduction services, brokerage services, agency services, and other labor services.

Remuneration income refers to the income obtained from the publication and publication of personal works in the form of books, newspapers, etc.

Royalty income refers to the income obtained by individuals from the use of patents, trademarks, copyrights, non-patented technologies, and other licenses.

(2) Deductions for special projects

Including: qualified basic pension insurance, basic medical insurance, unemployment insurance and other social insurance premiums and housing provident fund.

The three insurances and one fund actually borne by taxpayers can be deducted according to the facts.

Additional deductions for special projects

Including: eligible children's education, further education, critical illness medical treatment, housing loan interest, housing rent, support for the elderly, infant care under the age of 3.

1. Children's education. Each child can be deducted according to the standard of 2,000 yuan/month. The number of months deducted in the tax year includes the month from the month when the child reaches the age of 3 to the month before education, the month of actual education, and the months of winter and summer vacations. It should be noted that the husband and wife can negotiate to determine the deduction ratio for each child, that is, it can be deducted by one person at 100%, or it can be deducted by the husband and wife at 50% respectively.

In addition, if a taxpayer has multiple children, the deductible amount for children's education expenses is the sum of the deductions for all eligible children according to the above standards.

2. Further education. Including academic (degree) further education and vocational qualification further education. Among them, academic (degree) further education is deducted according to the standard of 400 yuan/month, and the deductible months include the months of education and winter and summer vacations, but the deduction period for the same academic (degree) education cannot exceed 48 months. Vocational qualification further education is deducted according to the fixed standard of 3,6

00yuan.

3. Serious illness medical treatment. The deductible amount of a taxpayer's family member (including himself, his spouse, and minor children) for serious illness medical treatment is the self-paid part within the scope of the medical insurance catalog within the tax year, which does not exceed 15,000 yuan, and is not deducted; the part exceeding 15,000 yuan but not exceeding 80,0

00yuan can be deducted.

In addition, if there are many serious medical expenses among family members, the deductible amount for serious medical expenses shall be the sum of the deductions according to the above standards.

4. Housing loan interest. Deducted according to the fixed standard of 1,000 yuan/month, and the number of months deducted in the tax year is the actual loan month. It should be noted that: the housing loan interest is determined by both husband and wife through negotiation and deducted by one of them according to the standard of 1,000 yuan/month. If both husband and wife purchased a house before marriage and both met the deduction conditions, the husband and wife negotiated that one of them should deduct according to the standard of 1,000 yuan/month, or each should deduct according to the standard of 5

00yuan/month.

5. Housing rent. According to the standard deduction of the quota (1,500 yuan for municipalities directly under the Central Government, provincial capital cities, cities under separate state planning and other cities determined by the State Council, 1,100 yuan for cities with household registration approval exceeding 1 million yuan in municipal areas, and 800 yuan for cities with household registration population not exceeding 1 million yuan in municipal areas)/month, the number of months deducted in the tax year is the actual rental month.

6. Support for the elderly. The object of support is the elderly who have reached the age of 60, and the number of deduction months is from the month when they reach the age of 60 in the tax year to December. If the taxpayer is an only child, it will be deducted according to the standard standard of 3,000 yuan/month. If the taxpayer is a non-only child, it will be designated by the dependant, or shared equally or agreed upon by the dependant, but the deduction standard shall not exceed 1,5

00yuan/month.

7. Care for infants and young children under the age of 3. Each infant and young child can be deducted according to the standard of 2,000 yuan/month, and the number of deductions is from the month when the infant is born to the month before it reaches the age of 3. It should be noted that both husband and wife can negotiate to determine the deduction ratio for each infant and young child, that is, it can be deducted by one person at 100%, or by both husband and wife at 50%.

In addition, if the taxpayer has multiple infants and children, the deductible amount for infant care expenses under the age of 3 is the sum of the deductions for all eligible infants and children according to the above standards.

(4) Deduction of donations for public welfare and charitable causes

According to the "Individual Income Tax Law of the People's Republic of China", individuals who donate their income to public welfare and charitable causes such as education, poverty alleviation, and poverty relief can deduct from their taxable income if the donation amount does not exceed 30% of the taxable income declared by the taxpayer; if the State Council stipulates that the full amount of pre-tax deduction for donations to public welfare and charitable causes shall be deducted from its provisions.

(5) Other deductions determined by law

Including: annuities, commercial health insurance, tax-deferred pension insurance, tax deductions allowed, personal pensions, etc.

IV. Treatment of one-time bonuses throughout the year

(I) Income determination

The annual one-time bonus refers to the one-time bonus paid to employees by withholding agents such as administrative organs, enterprises and institutions according to their annual economic benefits and comprehensive assessment of employees' annual work performance. Including year-end salary increases, annual salary and performance salary redeemed by units that implement the annual salary system and performance salary measures according to the assessment situation.

The author of this paper reminds: When the filing of returns of individual income tax is carried out, the annual one-time bonus obtained by the taxpayer does not belong to the income range of wages and salaries.

(2) Treatment principles

The "Notice of the Ministry of Finance and the State Administration of Taxation on the Convergence of Preferential Policies after the Amendment of the Individual Income Tax Law" (Cai Shui [2018] No. 164) stipulates that if a resident individual receives a one-time bonus for the whole year, he can choose to calculate the tax separately before December 31, 2021, or he can choose to combine it into the comprehensive income of the current year to calculate the tax.

Subsequently, the "Announcement of the Ministry of Finance and the State Administration of Taxation on the Continuation of the Implementation of the Annual One-time Bonus and Other Personal Income Tax Preferential Policies" (Announcement No. 42 of the Ministry of Finance and the State Administration of Taxation, 2021) extended the implementation period of the annual one-time bonus preferential tax policy stipulated in Cai Shui [2018] No. 1

64to December 31, 2023.

The "Announcement of the Ministry of Finance and the State Administration of Taxation on Continuing the Implementation of the Individual Income Tax Policy for Annual One-time Bonuses" (Announcement No. 30, 2023 of the Ministry of Finance and the State Administration of Taxation) stipulates that "if a resident individual obtains a one-time bonus for the whole year, in accordance with the" Notice of the State Administration of Taxation on Adjusting the Method of Calculating and Collecting Individual Income Tax for Individuals Obtaining Annual One-time Bonuses " (No. 9, 2005), it shall not be included in the comprehensive income of the current year, and the annual one-time bonus income shall be divided by the amount obtained in 12 months. According to the comprehensive income tax rate table converted on a monthly basis attached to this announcement, the applicable tax

The calculation formula is: tax payable = one-time bonus income for the whole year × applicable tax rate - quick deduction. Individual residents who obtain one-time bonuses for the whole year can also choose to be combined into the comprehensive income for calculation and taxation. This announcement will be implemented until December 31, 2027. "It can be seen that the one-time bonus for the whole year obtained by taxpayers in 2023 can be taxed separately or combined into the comprehensive income for taxation.

The author of this article prompts: 1. The taxpayer can calculate according to the specific amount of the one-time bonus obtained, and then decide to choose to tax separately or combine it into the comprehensive income tax, in order to achieve the purpose of reducing the tax burden. 2. If the taxpayer chooses the separate tax method for withholding and prepayment when obtaining the one-time bonus for the whole year, it can still be combined into the comprehensive income tax when the final settlement is completed. That is, when the resident individual handles the annual final settlement through the mobile personal income tax APP, the annual one-time bonus for the separate tax calculation of the withholding and prepayment link can be combined into the comprehensive income for the current year.

Lawyer Profile

Lawyer Deng Chuanlong

Zhiheng (Haikou) Law Firm Equity Senior Partner

Member of the Disciplinary Special Committee of Hainan Lawyers Association

Member of Foreign-related and Overseas Chinese Professional Committee of Hainan Lawyers Association

Outstanding talents of foreign lawyers in Hainan Province

Mediator of Haikou International Commercial Mediation Center

Member of the Legal Service Group of the 3rd China International Consumer Goods Expo

Professional direction:

Compliance and anti-corruption, corporate governance

Litigation, arbitration, taxation

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