Recently, the Ministry of Finance and the State Administration of Taxation jointly issued a notice to adjust some of the original tax items based on 'other income' before the revision of the individual tax law in 2018, and to clarify whether the income such as online red packets need to pay individual income tax. So, what is the tax standard for online red envelopes? When will it be implemented?
According to the announcement, Internet red packets are included in the scope of gifts, and 20% of the personal income tax is calculated and paid according to the item of 'incidental income'. This adjustment is only limited to the network red packets with the nature of winning prizes issued by enterprises to individuals, and does not include the network red packets given to each other by relatives and friends.
According to the announcement, in business publicity, advertising and other activities, enterprises give gifts (including online red envelopes) to individuals outside their own units at random, and in annual meetings, symposiums, celebrations and other activities, they give gifts to individuals outside their own units. Individual income from gifts obtained by individuals is calculated and paid individual income tax according to the 'contingent income' item. Except for the consumption coupons, coupons, coupons, coupons and other gifts presented by enterprises with the nature of price discount or allowance.
The regulation also listed several exceptions: the network red packets with sales discount or discount nature are not subject to individual income tax. In addition, the network red packets that need to pay tax only include the network red packets issued by enterprises to individuals, not including the network red packets given by relatives and friends to each other.