The following income in Article 7 of the Enterprise Income Tax Law of People's Republic of China (PRC) is non-taxable income:
(1) financial allocation;
(2) Administrative fees and government funds collected according to law and incorporated into financial management;
(3) Other non-taxable income as stipulated by the State Council.
Extended data:
In practical work, the forms of government subsidies mainly include financial allocation, financial discount, tax rebate and free allocation of non-monetary assets. No matter what form of government subsidy an enterprise receives, the government subsidy standard stipulates that accounting treatment should be divided into asset-related government subsidies and income-related government subsidies.
Government subsidies are revenue-related government subsidies, because according to the principles and concepts of government subsidies under market economy conditions, government subsidies are mainly a kind of compensation for the price of specific products of enterprises that are lower than the cost due to non-market factors.
Government subsidies related to assets are ultimately related to income, but they are temporarily treated as deferred revenue. When the related assets are formed and put into use, depreciated or amortized, they are transferred from deferred revenue to current profits and losses.
Baidu Encyclopedia-People's Republic of China (PRC) Enterprise Income Tax Law