Employee benefits are for individual employees, and collective benefits are for all employees of the whole enterprise. For example, enterprises build their own canteens, which belong to collective welfare; Enterprises send eggs to employees to take home, which belongs to employee welfare.

In terms of enterprise income tax, employee welfare funds and collective welfare funds belong to the category of employee welfare funds and are deducted within the limits stipulated by the tax law. But it's different to think of it as sales.

Article 2 of State Taxation Administration of The People's Republic of China's Notice on Handling Income Tax on Assets Disposed by Enterprises (Guo [2008] No.828) stipulates that under the following circumstances, if an enterprise transfers assets to others, and the ownership of the assets changes, it does not belong to the internal disposal of assets, and the income shall be determined as sales in accordance with the regulations. Such as employee rewards or benefits. Therefore, if an enterprise uses its own or purchased goods for the welfare of its employees, it should be recognized as sales.

Article 1 of Guo Shui Fa [2008] No.828 stipulates that assets disposed by an enterprise under the following circumstances can be regarded as internal disposal assets, except for the transfer of assets abroad, and not as sales confirmation income, because the ownership of assets has not changed in form and substance, and the related assets are continuously calculated in tax basis. Enterprises use their own or purchased goods for collective welfare, and because their ownership has not changed, they are not regarded as sales.

In terms of value-added tax, employee benefits and collective benefits are consistent with sales policies. Article 4 of the Detailed Rules for the Implementation of the Provisional Regulations on Value-added Tax stipulates that the following acts of units or individual industrial and commercial households are regarded as selling goods: using the goods produced or commissioned by the units for collective welfare or personal consumption. Therefore, the use of self-produced goods by enterprises for employee welfare and collective welfare should be regarded as sales; If an enterprise uses purchased goods for employee welfare and collective welfare, it will not be regarded as sales, and the input tax will be transferred out.