The accumulation of educational institutions can only be used to increase educational investment and improve school conditions, but not for distribution and off-campus investment, which has caused disputes between individual school operators and tax authorities on whether to pay personal income tax. On this issue, after study, the reply is as follows:
According to the Individual Income Tax Law of People's Republic of China (PRC) and its implementing regulations, individual income tax is levied according to the taxable items of "individual industrial and commercial households' income from production and operation" on the income obtained by individuals with the approval of relevant government departments. Accordingly, individual income tax should be levied on the part of the income obtained by individual school operators for personal consumption.
According to the above policies and regulations, those who do academic education are exempt from business tax, and personal consumption is subject to personal income tax; If it is a non-academic education, it is necessary to pay business tax and personal income tax according to regulations.