How to avoid tax reasonably in foreign catering industry?

1. Provide accommodation for employees.

According to the tax regulations, only 10% of the total income is charged as the taxable value for the housing provided by the employer free of charge or below the value. If the employer provides hotels, guest houses or dormitories as apartments, but no more than two, it shall be calculated as 8%. If it is a one-bedroom apartment, it is calculated at 4%.

If the market rent is higher than 10% of the salary, employees can negotiate with the employer when they are hired, and the employer will pay the apartment rent and the salary will be reduced appropriately. For employers, the salary burden remains unchanged, but employees can reduce the burden of salaries tax.

Therefore, if employees are provided with accommodation rent, some taxes can be reduced or exempted.

2. Resale stock subscription rights

According to the Inland Revenue Ordinance, any person who obtains the company's share subscription right in his position or employment and gains benefits when exercising, trading or transferring this right shall pay salaries tax. The calculation method of profit is to subtract the cost of subscription right from the market value of the stock at the time of exercise and the subscription price at the time of exercise, or subtract the cost of subscription right from the remuneration obtained at the time of transfer.

If the hotel gives shares to employees in order to motivate them, employees can transfer their rights to their relatives and friends at a low price before exercising their rights, and then this person can exercise their rights to help reduce taxes.

3. Provide employee benefits and facilities

Employee benefits provided by employers will not be regarded as taxable income unless they can be converted into cash value. According to the tax regulations, only some benefits that can be converted into cash, such as the above-mentioned housing allowance, travel allowance, stock subscription right and gift certificate, can be exempted from tax.

Therefore, as an enterprise, it can provide services for employees as much as possible, that is, improve employee welfare facilities, and will not let employees pay more taxes because of a substantial salary increase. General tax-free benefits are:

● Provide free meals for employees, but not resell meal coupons;

● Provide vehicles for employees and employees to use, but never rent them to others;

● Arrange and provide free medical benefits for employees;

● Employees can use the furniture and living equipment owned by the enterprise;

● Employees can use helpers hired by enterprises;

● Employees can use the public welfare facilities provided to employees by contracts concluded by enterprises, such as water, electricity, gas and telephone.

● Establish employee children's education fund to provide scholarships for employees' children.

4. Deductible expenses and depreciation

Wages can be converted into related consumption expenses, but there must be reasonable records and invoices.

As a limited company is an independent legal entity, taxpayers who pay salaries tax can transfer their income to the limited company, and the company will pay taxes after deducting reasonable expenses. However, it should be noted that the cost of establishing and maintaining a limited company is not low, and taxpayers should carefully weigh it.

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