Government subsidy income is not considered operating income.

Government subsidies refer to monetary or non-monetary assets obtained free of charge by enterprises of the government, but do not include capital invested by the government as the owner of the enterprise.

Main government subsidies in China: financial benefit discounts, R&D subsidies and policy subsidies.

Financial funds obtained from financial departments and other departments at or above the county level. These funds should be included in the total income and meet the following conditions. They can be regarded as non-taxable income and deducted from the total income when calculating taxable income: (

1) The enterprise can provide a fund allocation document that specifies the special purpose of the fund; (2) the financial department or other government departments have special fund management measures or specific management requirements for the fund when allocating funds; (3) the enterprise should calculate the fund and the amount of the fund separately

expenses incurred.

At the same time, according to Article 28 of the "Executive Regulations", the expenses of the above-mentioned non-taxable income shall not be deducted in the calculation of taxable income; the depreciation and amortization of assets for expenditure shall not be deducted in the calculation of taxable income.

According to Article 1 of the Notice of the Ministry of Finance and the State Administration of Taxation on Enterprise Subsidy Income Tax: “Unless the State Council, the Ministry of Finance and the State Administration of Taxation stipulate that income from state fiscal subsidies and other subsidies shall not be included in profits and losses, the income from subsidies actually received shall not be included in the profits and losses.

"Therefore, if the government subsidies received by the enterprise do not include the profits and losses of the Ministry of Finance, the Ministry of Finance and the State Taxation Administration as prescribed by the State Council, they will not be included in the taxable income; however, if they do not

If included in the above profits and losses, they shall be included in taxable income.

For the treatment of corporate income tax, the state fiscal subsidies and other subsidy income received by the enterprise shall be included in the annual tax income of the subsidy income actually received, but shall not be included in the profits and losses as stipulated by the State Council, the Ministry of Finance and the National Tax Administration.

For income-related government subsidies, Accounting Standards for Business Enterprises No. 16 - Accounting Standards for Government Subsidies stipulates that those used to compensate future business-related expenses or losses should be recognized as deferred income earned and included in current profits and losses (

Non-operating income) during the period when relevant expenses are recognized; if it is used to compensate for related expenses or losses incurred by the enterprise, it should be directly included in the current profits and losses (non-operating income).

Regarding the treatment of corporate income tax, the Notice of the Ministry of Finance and the Taxation of Corporate Subsidy Income of the State Administration of Taxation clearly state that state fiscal subsidies and other subsidy revenue shall be included in the actual receipts unless the State Council and the State Administration of Taxation stipulate that the enterprise has not been included in the profits and losses of the enterprise.

Annual taxable income on subsidy income.