PPE

can the input tax of work clothes purchased by enterprises be deducted?

A: Article 27 of the notice of the Ministry of Finance and the State Administration of Taxation on comprehensively promoting the pilot project of replacing business tax with value added tax (CS [2016] No. 36): Measures for the implementation of the pilot project of replacing business tax with value added tax stipulates that the input tax of the following items shall not be deducted from the output tax:

(1) used for tax items of simple tax calculation method Purchase of goods, processing and repair services, services, intangible assets and real estate that are exempt from VAT, collective welfare or personal consumption. The fixed assets, intangible assets and real estate involved only refer to the fixed assets, intangible assets (excluding other equity intangible assets) and real estate specially used for the above projects

the consumption of social intercourse of taxpayers belongs to personal consumption< According to the above regulations, whether input tax can be deducted for uniform work clothes purchased for employees should be handled according to the following situations: (1) input tax is generated by “work clothes expenses incurred by enterprises according to the nature and characteristics of their work, which are uniformly made by enterprises and require employees to wear uniform work clothes”, and input tax can be deducted according to regulations (2) the input tax generated by the work clothes within the scope of labor insurance can be deducted according to the regulations (3) the input tax generated by the clothing which belongs to the nature of employee welfare cannot be deducted

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