Hi, everyone, today’s topic comes from a question from Sister Wan Wan from Yangzhou, Jiangsu Province in “Qianying Yashe-Chajiu Xuan (Financial and Taxation Hotspot Group)”. She said that their company provides lighting design services, which requires payment

What about cultural undertaking construction expenses? Let’s talk about cultural undertaking construction expenses together with questions.

I remember that as early as 2020, the National Taxation and Finance Ministry issued Regulation No. 25 of 2020, which exempted cultural undertaking construction fees from January 1, 2020 to December 31, 2020. Later, due to the expansion of the epidemic, in 2021

The Ministry of Finance and the State Administration of Taxation announced in Announcement No. 7 of 2021 that some preferential tax policies in response to the epidemic will continue to be implemented, and the implementation period for cultural undertakings construction fees will be extended to December 31, 2021. By 22 years, cultural undertakings construction fees will be exempted or not.

Ah? So what is cultural undertaking construction fee? In fact, not all enterprises are involved.

To put it simply, this fee is a government fund levied on the advertising and entertainment industry since 1997, and is collected by the tax authorities.

Let’s talk about what businesses involve cultural undertaking construction fees.

First of all, let me remind you that cultural undertaking construction fees may be involved whether you are a small-scale taxpayer or a general taxpayer. It depends on the scope of your collection and not on whether you are a small and micro enterprise. This is related to the judgment of exempting cultural undertaking construction fees.

It’s different, we’ll talk about it later.

First of all, according to the advertising media units and outdoor advertising business units that "provide advertising services" stipulated in Finance and Taxation No. 25 of 2016; the units and individuals that "provide entertainment services" stipulated in No. 60.

So the scope of taxation for the advertising service industry here does not include natural persons, but the entertainment service industry does include natural persons.

This is the reason why the two announcements were written separately.

The scope of payment of cultural undertaking construction fees is actually very clear. He based his judgment on the scope of advertising services and entertainment services in the "Sales Services, Intangible Assets, and Real Estate Notes" No. 36 of 2016 of the Ministry of Finance and Taxation.

Take a look at the pictures for the scope involved, I won’t go into details here.

It is estimated that after reading this scope, everyone’s mind must be in confusion. In order to avoid some confusion, I have listed some situations where cultural undertaking construction fees are not required to be paid, including but not limited to the following, for reference only: advertising production, if

The actual form of marketing and promotion services is exhibition services, providing conference services; advertising design that is separately accounted for (except for advertising design and advertising services that are mixed and advertising design is not accounted for separately); providing tourism services; advertising creative planning; and separately accounted for

Advertising installations (except for advertising installations and advertising services that are sold together and advertising installations are not accounted for separately); celebrity endorsements (online live broadcasts belong to the provision of radio, film and television services, if it is a live broadcast to bring goods, then it is not taxed; if it is a live broadcast of advertising entertainment, then it is not taxed)

need to be collected); performing in rural areas or store celebrations; advertising consultation; text printing and pictures of advertising products; advertising planning.

After talking about the scope, let’s see what discounts are available. According to Article 7 of Finance and Taxation No. 25, 2016, among small-scale VAT taxpayers, enterprises with monthly sales of no more than 20,000 yuan (tax payment of 60,000 yuan on a quarterly basis) and

Taxable services provided by non-enterprise entities are exempt from cultural undertaking construction fees; and Finance and Taxation No. 60 of 2016 stipulates that payers who have not reached the value-added tax threshold are exempt from cultural undertaking construction fees.

The exemption here must be for small-scale taxpayers, and general taxpayers are not exempt.

There is also a provision that stipulates that from July 1, 2019 to December 31, 2024, cultural undertaking construction fees will be halved for centrally-affiliated enterprises and institutions according to Finance and Taxation Regulation No. 46 of 2019, and the provinces (autonomous regions and municipalities) are authorized to

This fee will be reduced by 50% for local enterprises, institutions and individuals.

At this point, the above-mentioned regulations are currently implemented, and the document on cultural undertaking construction fees in 2022 has not yet been released.

After talking about discounts, let’s talk about how to calculate the amount of cultural undertaking fees payable.

In fact, the formula is very simple, that is, the billed sales are multiplied by 3%. What we should pay attention to here is the caliber of sales: first, the billed sales are all the tax-included prices and extra-price expenses obtained, not accounting.

The income data above is calculated differently from the sales volume in the VAT return. The sales volume here is the tax-included price.

Second, if the unit providing advertising services obtains a legal deduction certificate, the difference can be levied, that is, the balance after deducting the "tax-included" advertising publishing fees paid to other advertising companies or advertising publishers.

Another thing to remember here is that the entertainment industry cannot collect differential taxes.

Let’s take an example to deepen our understanding: Company A is a general taxpayer. It completed a 1 million advertising business in August last year and issued a special invoice for value-added tax, which was paid to the advertising publisher Company B that month.

The publishing fee is 300,000, and the invoice given is a special invoice. The publishing fee paid to Company C is a general invoice of 50,000. How does Company A calculate the value-added tax and cultural undertaking construction fees? Analysis and answer process: The value-added tax issued by Company A

The invoice involves advertising business, and the value-added tax rate is 6%. Then the output tax amount of the value-added tax should be 1 million divided by 1.06 times 6%, which equals 56,603.77 yuan.