Wages, salaries and social security of temporary workers

Article 1 of the Announcement of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on Several Tax Treatment Issues of Taxable Income of Enterprise Income Tax (State Taxation Administration of The People's Republic of China AnnouncementNo. 12) stipulates that the actual expenses incurred by enterprises in hiring seasonal workers, temporary workers, interns, re-hiring retirees and accepting external labor dispatch shall be divided into wages and salaries and employee welfare expenses. Among them, wages and salaries are allowed to be included in the total wages and salaries of enterprises as the basis for calculating and deducting other related expenses. Article 9 stipulates that the provisions of this announcement shall apply to the treatment of taxable income of enterprises in 20 1 1 and subsequent years. According to the above regulations, in 20 1 1 and the following years, seasonal workers, temporary workers, interns, retired employees and employees dispatched by foreign labor services also belong to the category of employees hired or employed by enterprises. The wages paid by the enterprise to the above-mentioned personnel shall be implemented in accordance with Article 1 of the Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Deduction of Wages and Salaries and Employee Welfare Expenses (No.3 [2009] of the State Administration of Taxation).

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