According to the provisions of the Provisional Regulations of the Business Tax, any entity or individual who provides services, transfers intangible assets, or sells real estate within the People's Republic of China is obligated to pay business tax. Among these taxpayers, individuals refer to self-employed businesses and other individuals engaged in business activities. Therefore, after an individual provides taxable services and receives labor remuneration, they must pay business tax. Due to the characteristics of individual labor remuneration such as small amounts, strong concealment, and difficulty in taxation administration, there are some loopholes in the current tax policies and administration measures, leading to a relatively prominent issue of unpaid business tax on individual labor remuneration.
I. Problems in the Administration of Business Tax on Individual Labor Remuneration
1.εδΈη administration methods, lack of clearly defined withholding agents, resulting in collection loopholes. In the current tax administration system, enterprises and institutions are not required to withhold business tax when paying individual labor remuneration. Instead, a self-reporting collection method is adopted for taxing individuals providing taxable services. Individuals, after receiving labor remuneration, are required to report their income to the tax authorities themselves, issue invoices, and pay taxes according to the rate. Due to reasons such as the poor voluntary compliance of taxpayers with legal tax obligations, this has resulted in a relatively serious phenomenon of tax leakage.