Font Size: a A A

Research Enterprise Annuity Income Tax System

Posted on:2009-05-02Degree:MasterType:Thesis
Country:ChinaCandidate:X Z JiangFull Text:PDF
GTID:2199360245982100Subject:Economic Law
Abstract/Summary:PDF Full Text Request
Underdevelopment of the tax system hinders the development of enterprise annuity. Enterprise annuity plans are operated through trusts. They contain a trust between trustors and trustee, and several Principal-agent relationships between trustee and other management agencies. A complete running of enterprise annuity plan concludes four links: establishment, contribution, investment, and withdrawal. Our research on income taxation of enterprise annuity will develop according to the processes.Management agencies of enterprise annuity are the entities that provide certain professional service for enterprise annuity. Management agencies include the trustee, the administrator, the investment manager and the custody Bank. The trustee may be a legal entity or a council. The council of enterprise annuity trust is not a civil subject, and can't run into profit-making activities. Thus it isn't a subject in taxation law. The salaries of directors can be deducted from the taxable income of the enterprise as the welfare fee while other costs should be paid from the taxed income. Costs directly happen during the operation of enterprise annuity funds. The fees charged by management agencies should be concluded in their taxable income, while the direct costs happen during the operation of enterprise annuity funds shouldn't be deducted.Taxes do not happen in every link of the process. During the link of establishment there isn't any tax duties as no properties are transferred. In the link of contribution, trustors transfer properties to trustee. Contributions can be deducted within certain proportions. For the employers the maximal is 4% of total salary. According to the theory of taxation of trust, employees bear the tax obligation for part contributed by the employer. But it is a general orders that taxation duty be deferred until the pensions are released. The taxation on profits gain by the fund during the process of investments is also deferred until the pensions are delivered to the employee in their retirement.Preferential policies of income tax are the most important characteristics of taxation system of enterprise annuity trust. We should adopt the EET mode, so that to defer the tax duties to the link of withdrawal. Income tax preferential policies of enterprise annuity trust conclude tax deferral and contribution deduction, as well as proportional tax exemption. We should increase the extend of Income tax preferential policies of enterprise annuity trust.
Keywords/Search Tags:Enterprise annuity, Income tax, Tax law, Preferential policies of taxation
PDF Full Text Request
Related items