enterprises will make use of preferential tax policies to find reasonable and legal ways to save taxes in the course of operation. How can individual income tax be saved reasonably? 1. Using the provident fund to avoid tax According to the relevant provisions of the Individual Income Tax Law, the monthly provident fund paid by working-class individuals is deducted from the pre-tax, which means that paying the housing provident fund according to the standard is tax-free. At the same time, employees can pay supplementary provident fund, so there is still some room for ordinary employees to increase the payment of provident fund. 2. Tax Avoidance through Pre-tax Decline of Donation According to the regulations on the implementation of individual income tax in China: individuals donate their income to education and other social welfare undertakings and areas suffering from serious natural disasters and poverty-stricken areas through social organizations and state organs in China, and the amount that does not exceed 3% of the taxable income declared by taxpayers can be deducted from their taxable income. That is to say, when individuals donate, they must comply with the laws and regulations in the way of donation, the investment of donations and the amount of donations, so that this part of donations can be exempted from personal income tax. The calculation formula is: donation limit = taxable income *3%, allowable deduction of donation amount = actual donation amount (3) Wealth management Many wealth management products have relatively high income, which can not only avoid taxes but also reasonably diversify assets, and at the same time increase the stability and risk resistance of income. 4. Personal income tax will not be levied temporarily according to the current tax regulations by using the difference income obtained by temporarily exempting individual investors or funds. 5. Using Preferential Tax Policies At present, there are preferential tax policies issued by local governments with the strong support of the state in the western development areas, ethnic minority areas and revolutionary base areas in China, which are used to promote local economic development. When an enterprise registers in a park with preferential tax policies, it can not only save taxes reasonably and legally, but also enjoy the financial subsidy policy of the local government. 6. Use invoices to avoid tax by using communication fees, transportation fees, travel expenses and meal fee. According to China's tax law, everything that happens according to the essence of economic business and is reimbursed by legal invoices belongs to the normal operating expenses of enterprises and does not need to pay personal income tax. 7. Using Year-end Bonuses According to the preferential policies stipulated in Document No.9 of the State Administration of Taxation [25], taxpayers can sacrifice part of the semi-annual bonus, quarterly bonus, overtime bonus and attendance bonus as the price, and ask the unit to issue year-end bonuses. Note that this method can only be used once in a tax year. 8. Tax avoidance can be realized by increasing the expenditure of employees' kung fu, such as providing dormitory, free transportation and free meals for employees, and the enterprise pays these expenses for employees. Enterprises can use these expenses as expenses to reduce the taxable income of enterprise income tax, and reduce some taxes borne by individuals without the actual salary level of individuals falling.