Computer Software Sales Related Tax Policies

First, the relevant provisions of the software company:

According to the "Notice of the Beijing Municipal Local Taxation Bureau on Explaining Certain Business Policies for Enterprise Income Tax Issues" (Jingdi Tax Level [2002] No. 526), ​​the document states that:
(1) Software companies do not have park restrictions. Whether they enter the park or not, as long as they pass the software company certification, they can enjoy income tax incentives.
(2) Software development and production enterprises refer to enterprises that are developed by the enterprise themselves, have a development process, and carry out production. A pure software production and sales enterprise cannot enjoy preferential policies for corporate income tax.
(3) The certification of the software company shall comply with the provisions of Document No. [2005] No. 350 of the Beijing Local Taxation Document, and comply with the relevant provisions of the “Regulations on the Management of Attracting Senior Talents in Beijing” and the “Measures on the Implementation of the Regulations on the Attraction of Senior Talents in Beijing”. The government approves and the funds come from the municipal finance. It is used for all kinds of senior talents, and special incentives issued after approval by various related departments are exempted from personal income tax. ”
(4) Certification of software products According to Article 3 of the Circular on Issuing the "Measures for the Certification and Administration of Software Development, Production, and Software Products in Beijing Municipality (Trial)" (Jing Ke Xin Fa [1999] No. 352):
1. Computer software products refer to the software that is developed by the company and used to sell to meet certain user needs.
2. The software product is in the form of a storage medium (including a floppy disk, a hard disk, an optical disk, etc.) in which the computer program and related documents are recorded.

Second, the tax benefits that software companies can enjoy are:

(I) Corporate Income Tax:
Http://qiye. Tax861. Gov. Cn/zcfd/zcfd_20080428131. Htm
(b) Business Tax:
According to the document issued by the State Administration of Taxation of the Ministry of Transport and Finance on the implementation of the "Decision of the Central Committee of the Communist Party of China on Strengthening Technology Innovation and Development of High Technologies to Achieve Industrialization", the following taxation documents stipulate:
For units and individuals (including foreign-invested enterprises, foreign-invested research and development centers, foreign companies, and foreign individuals), the income derived from technology transfer, technology development, and related technical consulting and technical service businesses is exempt from business tax.
1. Technology transfer refers to the act of transferring the ownership or right of use of patents and non-patent technologies owned by the transferor to others.
2. Technology development refers to the behavior of developers accepting commissioned by others to conduct research and development on new technologies, new products, new processes or new materials and their systems. 
3. Technical consultation refers to the provision of feasibility studies, technical forecasts, special technical surveys, and analysis and evaluation reports for specific technical projects. 
4. Technical consulting and technical service businesses related to technology transfer and technology development mean that the transferor (or the consignee), in accordance with the provisions of the technology transfer or development contract, assists the transferee (or the entrusting party) in mastering the transfer (or entrustment). (Development) technology, while providing technical consulting, technical service business. And the price of this part of technical consultation, service and technology transfer (or development) is on the same invoice.
5. According to the "Notice of the State Administration of Taxation on China's Domestic Enterprises Paying Software Fees for Payment of Software Fees to Foreign Enterprises" (Guo Shui Fa [2000] No. 179), the following documents stipulate:
Foreign enterprises rent goods such as postal and telecommunications equipment and computers from domestic enterprises in China, and also include software related to the use of these goods. If the software is charged separately, it shall be deemed as rental income for renting the above goods, according to the State Administration of Taxation on foreign enterprises. Whether the interest or rental income received in China is levied on the issue of business tax (Guo Shui Fa [1997] No. 035) does not impose a business tax.
6. Units and individuals that reduce or exempt value-added tax, consumption tax, and business tax shall enjoy the exemption from urban maintenance and construction tax and education surcharges at the same time.
(3) Individual income tax:
According to the document of Beijing Finance and Tax [2002] No. 448, bonuses for individuals receiving the "Beijing Software Enterprise Senior Talent Special Award Fund" are exempted from personal income tax in accordance with the fourth paragraph of Article IV of the "Law of the People's Republic of China on Individual Income Tax."
However, it must be a special incentive fund that meets the following conditions in accordance with the “Interim Measures for the Management of Senior Talents in Beijing Software Enterprises Special Awards” (Jingke Zhengfa [2001] No. 165).
Article 1 This measure applies to senior management personnel and technical personnel in software companies certified by the Beijing Municipal Science and Technology Commission (hereinafter referred to as the Municipal Science and Technology Commission).
Article 2 The term "senior management personnel" as mentioned in the present Measures refers to those who have a bachelor degree or above, and have held positions in a business department manager or above. The annual salary is more than 100,000 yuan (including 100,000 yuan), and the continuous service time is more than one year (including one year). Senior management personnel refer to those who have bachelor degree or above or senior professional titles, annual salary of more than 100,000 yuan (including 100,000 yuan), and more than one year of continuous service (including one year).
Article 3 The Municipal Science and Technology Commission shall, in line with the Municipal Finance Bureau, make corresponding adjustments to the standards for the identification of senior management personnel and senior technical personnel according to the development status of talents in the software industry in this Municipality.
Article 4 Special awards shall be used for senior management personnel and technical personnel to purchase real estate for the first time in this Municipality, purchase cars, invest in cash to invest in the establishment of high-tech enterprises in this Municipality, or increase investment in this enterprise.
Article 5 The maximum special award standard is that senior management personnel and technical personnel have paid 80% of the personal income tax income for the previous year. They can be rewarded in the same year, and can also be rewarded for a cumulative number of years. Senior executives and technicians will stop giving special awards when they leave the city's software companies.

Software and equipment are separately accounted for revenue and costs.