国税发[1998]101号
颁布日期：19980626 推行日期：19980626 颁布单位：国家税务总局
GuoShuiFa [1998] No.101
June 26, 1998
The state and local taxation1 bureaus of various provinces, autonomous2 regions, municipalities directly under the Central Government and municipalities separately listed on the State plan:
It's reported that some enterprises with foreign investment and foreign enterprises which have set up the institutions and branches in China have paid directly or indirectly3 to the insurance institutions abroad the premiums5 of unemployment, pension, saving, insurance of life accident injury, medical and other items for the employees working in China as the welfare or bounty6 policy, according to the requirements of social security policy in the relative countries or regions. The following states definitely the principles about the tax imposed on the premium4 abroad:
I. Taxation on the business income tax
According to the Rules for the Implementation7 of the Law of the Income Tax of the People's Republic of China on the Enterprises with Foreign Investment and Foreign Enterprises , both the 10th Subparagraph of Article 19 and Paragraph 2 of Article 24 prescribe that the various commercial life insurance premium and social security premium abroad paid or afforded by the enterprises for the employees working in China should not be deducted8 in the business income tax unless it is paid as the salary and stipend9 of employees, which is stipulated10 in Paragraph 1 of Article 24.
II. Taxation on the inpidual income tax
1. The various insurance premiums abroad paid by the enterprises for the employees working in China and deducted from the business income tax in name of the salary and stipend of the employees should be reckoned in the salary and stipend of the employees, which is applied11 to the Law of the People's Republic of China on Inpidual Income Tax and the relative provisions of international taxation on the application for inpidual income tax.
2. The various insurance premiums abroad paid by the enterprises for the employee working in China not deducted from the income tax of enterprises should be reckoned in the salary and stipend of the employees in principle, which is applicable to the Law of the People's Republic of China on Inpidual Income Tax and the related provisions of international taxation on the application for inpidual income tax. But the premium of the social security in accordance with the state law can be reckon out of the income tax of the employee after verified by the related local taxation institution.
3. The varied12 insurance premium abroad paid inpidually by the employee working in China should not be deducted from the his inpidual income tax.
III. The Circular shall enter into force as of the date of promulgation13. The previous stipulations adverse14 to it suspend.
