■ Question> Purchase Guide> Taxes to be withheld and paid on behalf of the purchase of brokering services>
The brokerage party accepts the commission of the commissioning party and provides brokerage services in the name of the brokerage party on behalf of the purchase of font software use license, the taxes to be withheld and paid include: value-added tax and enterprise income tax.
I. Withholding and payment of value-added tax
From March 1, 2020 to December 31, 2020: VAT tax to be withheld and paid = Settlement price ÷ (1+1%) × 1%
On or after January 1, 2021: VAT amount withheld and paid = Settlement price ÷ (1+3%) × 3%
The legal and regulatory bases are as follows.
According to Article 6 of the Implementation Measures for the Pilot Scheme for Business Tax Reform and Value-Added Tax, if a taxable act occurs in the territory of the People's Republic of China by an entity or individual outside the territory of the People's Republic of China (hereinafter referred to as outside the territory) and does not have an operation in the territory, the purchaser shall be the VAT withholding agent. Article 20 stipulates that where a taxable act occurs in the territory of an entity or individual outside the People's Republic of China and there is no business establishment in the territory, the withholding agent shall calculate the amount of tax to be withheld in accordance with the following formula: amount of tax to be withheld = price paid by the purchaser ÷ (1 + tax rate) x tax rate.
According to Article 18 of the Provisional Regulations of the People's Republic of China on Value-added Tax, if an entity or individual outside the People's Republic of China sells labor services within the territory of the People's Republic of China and does not have an operating agency within the territory, the agent within the territory of the entity shall be the withholding agent; if there is no agent within the territory, the purchaser shall be the withholding agent; Article 12 stipulates that the VAT levy rate for small-scale taxpayers shall be 3%, except as otherwise provided by the State Council.
According to the Announcement on VAT Policies for Supporting Individual Businessmen to Resume Work and Business (Announcement No. 13 of 2020 by the Ministry of Finance General Administration of Taxation), in order to support the majority of individual businessmen to speed up the resumption of work and business while doing a good job in the prevention and control of the new crown pneumonia epidemic, the relevant VAT policies are announced as follows: from March 1 to May 31, 2020, for small-scale VAT payers in Hubei Province, the 3% levy rate shall apply From March 1 to May 31, 2020, for small-scale VAT payers in Hubei Province, the taxable sales income subject to the 3% levy rate will be exempted from VAT; and the prepayment of VAT items subject to the 3% prepayment rate will be suspended. For small-scale VAT payers in provinces, autonomous regions and municipalities directly under the Central Government other than Hubei Province, VAT is levied at a reduced rate of 1% on the taxable sales income subject to the 3% levy rate, and VAT is levied at a reduced rate of 1% on the prepayment of VAT items subject to the 3% prepayment rate.
According to the Announcement on the Extension of the Implementation Period of the VAT Reduction and Exemption Policy for Small-scale Taxpayers (Announcement of the Ministry of Finance Announcement of the State Administration of Taxation No. 24 of 2020), in order to further support the majority of individual industrial and commercial households and small and micro enterprises to resume work and resume business in a comprehensive manner, the relevant taxation policies are announced as follows The implementation period of the tax preferential policies stipulated in the Announcement of the Ministry of Finance and the State Administration of Taxation on the VAT Policy on Supporting the Resumption of Work and Resumption of Business by Individual Enterprises (No. 13 of 2020) is extended to December 31, 2020.
II. Withholding and Payment of Enterprise Income Tax
Withholding enterprise income tax = Settlement price × 10%
The legal and regulatory basis is as follows.
According to Article 3(3) of the Enterprise Income Tax Law of the People's Republic of China, if a non-resident enterprise has not established an institution or place in China, or if it has established an institution or place but the income it obtains is not physically connected with its established institution or place, it shall pay enterprise income tax on its income derived from the territory of China; Article 4(2) provides that if a non-resident enterprise obtains the income specified in Article 3(3) of this Law Article 19(1) stipulates that a non-resident enterprise shall calculate its taxable income in accordance with the following methods: (1) Dividends, dividends and other equity investment income and income from interest, rent and royalties shall be taxable as the full amount of income; Article 27(5) stipulates that the following income of an enterprise shall be exempted or Reduced enterprise income tax: (5) the income specified in paragraph 3 of Article 3 of this Law.
According to Article 91 of the Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China, non-resident enterprises shall be subject to a reduced enterprise income tax rate of 10% on the income specified in Article 27(5) of the Enterprise Income Tax Law.
According to Article 7 of the Announcement of the State Administration of Taxation on Issues Relating to Source Withholding of Income Tax for Non-Resident Enterprises (State Administration of Taxation Announcement No. 37 of 2017), the withholding obligor shall declare and settle the withholding tax to the competent tax authority in the location of the withholding obligor within 7 days from the date of occurrence of the withholding obligation.