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Q:
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What is "business income"?
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A:
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Business income is defined as:
1.
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The income obtained by individual industrial and commercial households from production and business activities, and the income obtained by investors in sole proprietorships and individual partners in partnership enterprises from production and business activities of sole proprietorships and partnership enterprises registered in the territory.
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2.
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Income derived by individuals from the provision of schooling, medical care, consulting and other paid services in accordance with the law.
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Income derived by individuals from the contracting, leasing, subcontracting and subletting of enterprises and institutions.
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4.
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Income derived from other production and business activities undertaken by individuals.
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Q:
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What is "remuneration for services"?
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A:
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The income from remuneration for labour services refers to the income derived by individuals from labour services, including design, decoration, installation, drawing, testing, inspection, medical, legal, accounting, consulting, lecturing, translation, manuscript review, calligraphy, painting, sculpture, film and television, audio and video recording, acting, performing, advertising, exhibition, technical services, referral services, brokerage services, agency services and other labour services.
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Q:
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How is the income received by flexible workers from the platform differentiated?
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A:
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Income derived from services such as design, consulting, lecturing, recording, videotaping, acting, performing, advertising, etc. performed by flexible workers on the platform is taxable as "income from remuneration for services".
If a flexible worker is registered as a self-employed person, or is not registered but engages in activities of a production or business nature on the platform, the income earned is taxable as "business income".
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Q:
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What is the distinction between online and offline income for part-time teachers working in education and training?
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A:
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Income earned from teaching students in offline classrooms is taxed as remuneration for services, while income earned from teaching students live on online platforms is taxed as business income.
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Q:
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How are these two types of income taxed?
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A:
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As income from remuneration for services, it is directly incorporated into the consolidated income after deduction of 20% of expenses from the total income and is subject to an excess progressive tax rate of 3% to 45%. Deductions for various expenses are expressly provided for by law or certified by the taxpayer, and there is no possibility of an approved levy.
For business income, the "taxable income is the total income less costs, expenses and losses for each tax year" and an excess progressive tax rate of between 5 and 35 per cent applies. If the taxpayer is unable to accurately account for the operating costs and expenses associated with the business, the "approved taxable income rate" or "approved levy rate" can be used to calculate the amount of income tax payable.
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FAQ
