Legal aid of the case handling subsidies should be taxed?

Text / Guangdong Province the Legal Aid Department Peng Lihong

Before the implementation of the State Council "in Legal Aid Ordinance", our province made no unified regulations on legal aid case subsidies, according to the actual situation around to determine how much whether to give the subsidies and subsidies amount. In practice, there is the judicial administrative organ making the subsidy standards, some by the legal aid agencies to make subsidies standards, but also in some places because of financial difficulties, and think that lawyers should undertake the duty of legal aid, without paying the subsidies, so in a certain period of time in some places, the legal aid institutions not to handle legal aid lawyers to pay the subsidy. After years of exploration and practice, especially in 2003 "Legal Aid Ordinance" promulgated, basic knowledge of United, legal aid is the responsibility of the government, legal aid agencies to pay the subsidy to the lawyer who undertakes the legal aid and social organizations, is one of the specific performance of the government to fulfill the responsibility of legal aid, but also the government should do obligations. But in practice, the understanding of legal aid case subsidies still exist some doubt or dispute, the country has different characteristics in the process of implementation of the provisions, some problems have appeared in the main city, the staff of the grass-roots legal aid agencies to give answers in theory, policy and legislation level. The person not mature opinions according to the "Interim Measures" Guangdong Province to pay for legal aid matters subsidies in the implementation of some phenomenon or problem, in order to attract.

A, Guangdong Province payment of legal aid case subsidy situation

In 2005, Guangdong Provincial Department of Guangdong provincial finance department according to the provisions of the Legal Aid Ordinance "and" the twenty-fourth issued the "Guangdong Province to pay for legal aid matters subsidies Interim Measures" (hereinafter referred to as the "Guangdong" subsidies "case"), implemented since January 1, 2006. "Guangdong case subsidies" considering the category of cases (civil, administrative, criminal), providing legal aid mode (litigation, arbitration, labor dispute arbitration, non litigation, drafting, issue legal opinion book, consulting), handle the matters of legal aid in different stages, the cross region (province, city, whether the County), and other factors, to distinguish the three area, suitable for different standard. In accordance with the provisions of the "Guangdong subsidies", "the municipal judicial administrative department and financial department may be formulated subsidies standards according to local economic development level, and report to the Provincial Justice Department, the provincial financial department for the record". Practice the following situations in execution:

1, the actual payment of the handling of the subsidy standards higher than the "Guangdong case subsidy measures", mainly in Shenzhen, Dongguan and other economically developed, the legal aid funds are sufficient place. These places in Guangdong "the subsidy measures" before the implementation was the implementation of a specification, the relatively high amount of the subsidy standards, such as the "Guangdong case subsidies" implementation, it will reduce the original handling subsidies, is not conducive to encouraging social practice as a lawyer to handle the legal aid case.

2, according to the provisions of the "Guangdong subsidies" truthfully provide, such as Guangzhou, Foshan etc.. These places the original case subsidy standard is not high, but the government financial ability, "Guangdong case subsidy measures" after the introduction, not only provides a clear standard for legal aid workers receive the subsidies, it provides the basis for the local government to increase the legal aid funds.

3, according to the provisions of the "Guangdong subsidies" shall be formulated separately for the local case subsidy standards, such as Qingyuan City, formulated the "Qingyuan City, Guangdong Province implement 'for legal aid matters handling subsidies Interim Measures' Implementation Opinions", the provisions of the implementation opinions do case subsidy standard than "Guangdong case subsidy measures". The standard is low, but the area before the implementation of the case than the subsidy standards must be high.

4, individual place neither in accordance with the provisions of the "Guangdong subsidies" execution, nor by the local judicial administrative departments and financial departments jointly formulated standards of subsidies, but subsidies granted case, the actual payment of the subsidy a certain arbitrariness.

Visible, "is still the positive significance of Guangdong case subsidy measures" the obvious. In 2007 the province's legal aid agencies to pay the subsidy 20615300 yuan, occupy in those days the financial appropriation of funds business 75.27%.

Two, the nature of legal aid case subsidies

In the formulation of "Guangdong case when subsidies", my province of legal aid case understanding nature of subsidies is unified, think of legal aid case subsidy is legal aid personnel handling expenses subsidies, not including legal fees.

(a) "Legal Aid Ordinance" basis

"Legal Aid Ordinance" twenty-fourth paragraph third, "legal aid case subsidy standards by the judicial administration department of the province, autonomous region, or municipality directly under the central government in conjunction with the financial department at the same level, according to the local economic development level, the legal aid institutions approved reference for all kinds of legal aid cases, average cost and other factors, and can be adjusted according to needs". Thus, the present legal aid for the subsidy standard is mainly refer to average cost of handling the case, and is a reference to the legal aid institutions handling cost.

(two) "Guangdong case subsidies" defines the nature of the subsidy

In the formulation of "subsidies" Guangdong case handling process, the average cost of our survey of the legal aid institutions in over 21 cities of the province for all kinds of legal aid cases, and in the case of Guangdong "subsidies" clearly defined "the provisions of the subsidy standards has been included to undertake legal aid matters required traffic fee, difference travelling expenses, communication expenses, photocopy fee, lunch and other expenses." In order to determine the nature of the subsidy is handling expenses subsidies.

(three) comparison of legal aid case subsidies and market legal service fee handling expenses

Some people think that Guangdong economy more developed, subsidy standard is higher, legal aid case subsidy is also included to lawyers service charge? Through the comparison of the legal aid case subsidies and market legal service fee, we will be able to see the legal aid case subsidy not only include the services of a lawyer fees, still far below the legal service market in handling expenses.

Guangdong Provincial Price Bureau, Guangdong Provincial Department of justice respectively in 2003, 2006 enacted the law service fees, lawyer service government guidance prices in 2006 than in 2003, the standard standard slightly higher, the overall difference. From the guidance of lawyer service government price can not directly see the legal service market of cost, the expenditure size, determined by the characteristics of this is China's lawyer system and lawyer industry services. But from the deduction before tax cost of the basic law that society lawyer handling costs and expenses. According to the notice of the State Administration of Taxation "on the tax related business income levy personal income law firm practitioners" (Guoshuifa No. [2000]149) regulations, proprietorship and partnership property lawyer who funded the establishment of the law firm's annual business income, from January 1, 2000 onwards, to cease the levying enterprise income tax, as the investment law of personal business income, in accordance with the relevant regulations, according to "individual industrial and commercial households, income taxable items of" the collection of personal income tax. The lawyer before capital levy personal income tax, should be the law firm lawyers handling cases the burden of cost, expenses (such as transportation, information costs, communication costs and hire staff costs) and loss to deduct. But the contribution of lawyers cost also includes the pay sales taxes, rent, utilities and other taxes and fees, so the investment cost accounting law is higher than the cost of general counsel. As for the law firms employ salaried lawyers, only to receive a fixed payment, not the burden of the cost, salaried lawyers handling cost burden by the law firm. Therefore, analysis of law firm lawyers handling cases divided into cost, may be more to its undertakes legal aid of the case handling fee is close to. Document [2000]149, the provisions of article fifth, "as a lawyer and lawyer firm employee according to the specified proportion of revenue sharing, law firm lawyers handling cases without the burden of costs (such as transportation, information costs, communication costs and hire staff costs), lawyers monthly into income deduction according to the provisions of this article section second of the handling of cases after the expense, to balance and the law firm wages combined, according to 'wages, salary income' taxable items assessed personal income tax. Lawyers handling cases expenses deduction standard from its revenue, by the Provincial Local Taxation Bureau and other relevant factors into the ratio between local lawyer to handle the case according to the expenditure in general, lawyers and law firms in the month income, lawyers within 30% of the proportional income of determination." Visible, according to national policies and regulations, into a lawyer handling costs can be divided into 30% of income in the following (Guangdong by 30%). For example, a lawyer to undertake a civil case, law firm income 10000 yuan lawyer fees, the divided into lawyers and law firms agreed by 6.5 ∶ 3.5 percentage, the lawyer is divided into income for 6500 yuan, calculated according to the 30% cases the cost 1950 yuan (6500 x 30%=1950) in pre tax deduction. Some people might think the actual cost of a lawyer to handle the case does not need so much, but we think, the legal services industry is one of the world recognized high income industry, for the lawyer's fee assessment should consider not only the management complexity with cases and non predictability, but also consider the lawyer's normal level of consumption. For example, the cost of a lawyer to handle the case of transportation, not only to take the bus consumption as the basis, may want to consider taking a taxi or self driving situation to consider the transport expenses. In this way, we can easily understand why the current policy can be divided into the lawyer the into revenue in the 30% as the expenses deducted before tax.

Now with a divided into law as an example, according to the Guangdong Province in 2006 lawyer service government guidance prices, according to lawyers and law firms agreed 6.5 ∶ 3.5 percentage, calculated for different types of cases of income deducted handling expenses (deduct income according to the divided into 30%), compare the differences between the management compensation cases the allowance of case handling expenses and legal aid of the case (see "legal services lawyers and legal aid case allowance list").

In the table, we can see, at present the subsidies of the legal aid institutions in our province (and is a region with the highest standards) far below the government mandated social lawyers handling cases can be deducted before tax handling expenses. In the table, the hypothesis in "law firm the actual charges" a take in the middle of the government guidance price, not the price. In actual operation, law firms are charged the government guided prices of high-end prices, few will charge a lower price, and law firms but also in the government guidance price standard floating up and down 20%. In addition, some attorney firms and lawyers into the ratio is more than 65%. If these factors are taken into account, the subsidies of legal aid institutions and society lawyer handling expenses between the gap will be greater. But under normal circumstances, the same lawyer whether paid or handling cases, legal aid cases, for the same type of cases the same party cost should be the same for different parties, similar cases cost is similar (except for a compensation case the parties have special requirements). In the above table, I just in the county (city, district) for the expenses paid cases and legal aid cases range, not the "Guangdong case subsidies" stipulated in the provincial, city, county, the subsidy standards and legal service fees are compared, this is because Guangdong Province Price Bureau, Guangdong Provincial Department jointly issued the "legal services management approach" of lawyers service fees are not included in the case handling fees (such as the file consulting fees, handling different travel, cross-border communication fees), the case handling fees by the client to be paid to the law firm; legal aid cases subsidies are included travel and other expenses. So for cases for local scope and legal aid of the case handling expenses, more accurate. At present, although most people recognized the legal aid case subsidies still belongs to the expenses subsidies case, but in contrast to see numbers in the above table, we will be on the legal aid case the nature of the subsidies have more emotional understanding, and expressed sincere admiration and appreciation for all the work for the legal aid contributions lawyer.

Of course, analysis of the nature of legal aid case subsidies, is made based on the existing provisions, all the existing economic development level and the actual operation on the analysis foundation, once changed, the nature and connotation of legal aid case subsidies may change. But at least in the present situation and believe that in the future a period of time, the nature of legal aid case subsidy would remain in legal aid case expenses subsidy level.

Three, whether legal aid case as subsidies for tax and legal service

Specific operation process of issuing the subsidies in the legal aid institutions, our province has two ways, one is related to the amount of subsidy is determined by the legal aid agencies, by the judicial department (bureau) of lawyers to the financial sector or aid agencies legal direct sign, another approach is to determine the amount of subsidy legal aid institutions later, by a law firm invoices issued business bureau of justice, to the financial sector or aid agencies, legal claim handling subsidies, Guangzhou, Shenzhen, Dongguan city has taken the second approach. According to the legal aid institutions, mainly put forward the financial, tax or the supervisory audit department law firm for the subsidies issue invoice. While this approach is not necessarily in the country has a universal significance, but the three city in our province is the largest amount of cases, legal aid in earlier, legal aid funds is sufficient, the work of city, this situation should cause us to think.

The law firm of legal aid case subsidy invoice, means that the law firms to pay taxes in accordance with the subsidies paid legal services (including the payment of business tax, surcharge for education, city maintenance and construction tax, personal income tax), because it is not defined for undertakes legal aid of the case for legal aid case subsidy can be exempt from tax. In my opinion, the lawyer for legal aid case subsidies should not be law firm invoices, or in the present to receive subsidies for legal aid lawyers should not tax.

(a) from the invoice issued by the law firm, which is the embodiment of the legal service fee, and the legal aid case nature of subsidies is not consistent. Paid services, in addition to considering the necessary law firm cost and expenses, more is to consider the services of a lawyer to provide legal services is income, because the content of the lawyer occupation, the main source of income is also a lawyer, and because the lawyer service income is far higher than many other industry revenue, lawyer can become one of the countries with high income groups. But from the above discussion that, legal aid case nature of subsidies is handling expenses subsidies, not including lawyer's labor income. So, ask lawyers handling subsidies issued invoices paid legal services on legal aid and paid according to legal service, the contradiction of invoice and legal aid case nature of subsidies do not match.

(two) from the invoice use point of view, law firm invoices should be the target client (client), rather than the government legal aid institutions. Because the invoice is the law firm accepts a commission for legal affairs, to charge the client service and client to pay legal bills issued, and in accordance with the "provisions of the Legal Aid Ordinance", the parties are free legal service, a lawyer to handle the legal aid case can not charge the parties concerned belongings, no more not invoice. Will be applied to the paid service the invoice for the government legal aid agencies, improper using invoice.

(three) from the legal aid case subsidy amount of view, subsidies for legal aid lawyers far less than the prescribed proportion for case handling expenses paid. Since the current policy can be deducted before tax lawyers into income 30% handling expenses, for the same nature, legal aid lawyers to pay expenses and lower than the legal service expenses standard handling the legal aid case subsidies should be free.

(four) the legal aid case subsidy equal to legal service tax, is actually a tax on government administrative behavior. In China, the 1996 "lawyer law" provisions of lawyer bearing legal aid duty, such as the refusal to perform the obligations of legal aid will be subject to administrative punishment. The lawyer for legal aid cases are assigned by the legal aid agencies established by the government. Lawyer legal aid cases on behalf of the government to fulfill the legal aid duty, its behavior is not individual behavior, more non paid legal services. Although some lawyers registered as a legal aid volunteer, but lawyers provide legal assistance to the voluntary nature is not pure, also is not universal. In the "before the implementation of Legal Aid Ordinance", there is no law lawyer has the right to receive the subsidy in handling legal aid cases. Even now, how much of a lawyer legal aid case subsidy has no right to speak, entirely by the relevant government departments to develop the subsidy standard. The lawyer is not for legal service charges, according to the legal aid cases cost effective work time or by parts, according to the proportion of the amount to the legal aid agencies to apply for the subsidies. So, now our country legal aid is not that the government is buying legal service to the society, because there was no the agreement between seller and buyer, more there is no market price standard. The present legal aid from all respects should be a kind of government behavior, from this perspective, a tax on a lawyer to handle the legal aid cases receiving legal aid case subsidies in accordance with legal service, is tantamount to tax to the government's administrative act.

In view of the problems existing in reality, I suggested by the State Administration of Taxation, the Ministry of Finance and the Ministry of Justice jointly issued a document, the provisions of legal aid case subsidy shall be exempt from all taxes. Even if the other relevant departments in the practical work that need a lawyer to invoice, but is to reflect the legal aid institutions in accordance with the principle of earmarking paying the subsidies, and should not become the basis for tax. If the legal aid system has made great development, legal aid case subsidies gradually increased to include service charge of content, and then consider whether tax issues; but even if the tax payment, but also refer to the fees paid services deducted a certain proportion of handling expenses.

Four, the legal aid institution staff can receive the subsidy

Staff legal aid agencies can receive the subsidies, is a controversial practice, local practices are inconsistent. "Legal Aid Ordinance" is not whether the legal aid institutions staff receive the subsidy provisions. Although the "Guangdong case subsidy measures" provisions of the legal aid institution staff can receive subsidies and social organizations, lawyers, grassroots legal service workers, but in practice there are still controversial in the implementation, some places do not agree with the staff legal aid institutions for handling the case that subsidies, legal aid case expenses can be accountable. Analysis of the reasons, nothing more than the following points: one is that civil servants or in accordance with the civil service management personnel can only receive the financial wages, can not receive wages and subsidies; two is that the staff legal aid agencies to handle the legal aid case is the job, should not receive subsidies, or other staff unfair; three is agreed legal aid case handling fee subsidy is nature, but think the staff legal aid institutions may still use government resources (such as bus) for handling the case, thereby reducing the cost, resulting in most cases subsidies to all individuals.

This dispute the reality on the one hand, the legal aid understanding of the nature of subsidies is not clear due to, on the other hand, based on the work of justice, equality and welfare. In my opinion, the staff legal aid institution to obtain the subsidy does not exist legal obstacles, it is possible in practice.

1, legal aid case subsidy expenditure subsidy case, which has detailed in front. Legal aid cases and paid cases to handle a case of expenditure, is a one-time payment of the subsidy or accountable, but different reimbursement fee only, and not the nature of legal aid case subsidies from the expenditure changes for the welfare allowance or bonus. A one-time payment of the subsidy is the handling fees according to the average cost of packing, regardless of how many personnel handling the actual spending, the spending actually some lawyers handling costs than the payment of legal aid agencies handling subsidies. Staff legal aid agencies handling cost reimbursement, actually still affirmed the need for legal aid cases is the fundamental premise of cost, and control administrative costs in China are not strictly, the actual cost reimbursement system staff may be legal aid institutions do case spending is higher than the payment handling subsidies according to standard conditions (especially need to cross area when handling cases). From this perspective, do not need to worry too much about the legal aid institutions may handling from subsidies "make money", even some savings, save money on food and expenses may be more based on the saved.

2, the legal aid institution staff once receive the subsidies, is no longer the case handling expenses reimbursement, public resources can't occupy the legal aid agencies to handle cases. It can regulate and supervise the system, once found the staff legal aid agencies to use public resources for the case, it may require the payment of the actual cost. This ensures that the legal aid case subsidy for the expenses without change. Of course, as a major and complicated cases, the cost is significantly more than the subsidy standard, contractor personnel still at "provisions of Guangdong case subsidies" to the legal aid institutions for increasing subsidy standard.

3, social organizations and grassroots legal service workers for legal aid cases can receive the subsidies, but also for the legal aid institutions staff can provide reference and support for handling subsidies. Social organizations can apply for legal aid cases in our country at present stage is mainly women's federations, trade unions, associations and other social organizations staff, these social organization personnel though not the legal aid agency staff, but these social organizations also won the support of national financial, personnel according to the civil servant management, receive financial wages, even some with lawyer qualification or legal occupation qualification social organizations working in the legal aid institutions, and society lawyer completely different. "The second paragraph of article twenty-fourth Legal Aid Ordinance" clearly stipulates the legal aid institution shall issue the subsidy to the social organizations. As for the legal service workers at the basic level, similar to the legal aid institution staff more. In many places of our country, the judicial and legal services is a centaur two brands, some grassroots legal service workers itself is justice for civil servants, enjoy all the benefits of civil servants, in handling legal aid cases, legal aid agencies should also according to eleventh according to the Ministry of justice in 2004 "lawyers and grassroots legal service workers carry out legal aid work interim management measures" provisions to pay the subsidy to the grassroots legal service workers. The social organizations and grassroots legal service workers can receive the subsidies, instructions are not receiving financial wage workers cannot receive the subsidies, explained the nature of legal aid of the case handling subsidies is the handling fee subsidies, rather than the benefits, not the bonus, or social organizations and grassroots legal service workers to receive the subsidy is not legitimate reasons and correct interpretation.

4, "Legal Aid Ordinance" does not prohibit the legal aid institution staff receive the subsidies, but the Justice Department "lawyers and grassroots legal service workers to carry out" Interim Measures for the administration of legal aid work of the provisions of article seventeenth, "the legal aid institution arrangements for the institutions of staff, appointed social organization personnel undertakes legal aid of the case management, execution with reference to the present measures." The provisions for the legal aid institutions staff receive the subsidies to remove the institutional barriers.

5, the legal aid institutions can receive the subsidies to attract, retain, is especially effective grassroots legal professionals in underdeveloped areas. In our province, the lawyer mainly concentrated in the economically developed Pearl River Delta area, lack of legal professionals to some remote, poverty-stricken areas, some county (District) only one firm, some number of County Bar insufficient 10 people, although there are personnel have to obtain legal occupation qualification, but some people are more willing to choose to engage in paid legal services in economically developed areas, the legal aid institutions and personnel civil servants or the subsidy system to some extent to attract and retain part of the legal professionals to continue to engage in the work of legal aid, and ensure that the basic legal aid agencies have dedicated and professional staff. Some people might question since the legal aid case subsidy for the expenses, should not or may not become a kind of incentive measures, so the legal aid case subsidies may still be beyond the range of costs, which may include service charge. In fact, we have set the subsidy standard is a reference to the average cost, not the possibility and reality of each case handling costs no difference; in addition, each person control the expenses to the abilities and attitudes are different, this can cause some grass-roots staff is willing to continue to work in the legal aid institutions. Another reason we refuted the question is, if the staff legal aid institutions are more willing to engage in legal service work, this case subsidy system and can not stop him from the legal aid institutions determination. In fact, in some places, the legal aid agencies to recruit not to lawyers, the reason is well known. I will be more willing to the subsidy system as the legal aid institutions for legal professionals especially lawyers professional skills and certainly need to work.

Five, the legal aid staff is full to receive subsidies for legal aid lawyers

The provisions of our existing system of legal aid case is assigned by lawyers, grassroots legal service, social organization of lawyers, grassroots legal service workers, social organizations, contractors, so most of the legal aid institutions is the subsidies paid to lawyers, grassroots legal service and social organization, less direct payment to the contractor I. In practice, we found that in some places the contractor unit and the contractor agreed proportion of the subsidies, which makes the contractor received directly handling subsidies less. In fact, legal aid of the case to the contractor is basically no right to speak on the distribution ratio. In view of this situation, we think should be divided to deal with different situations. If the Contractor by the unit resource for legal aid cases, the unit can deduct the consumption in unit costs; if the Contractor does not use the unit resource for legal aid cases, case subsidy shall be paid in full to the contractor, which is decided by the nature of the subsidy. Of course, we also found a more relaxed approach, that is the contractor unit given legal aid support, in addition to the contractor to obtain full subsidies, and give the convenience of work, the main or legal aid workers unit information handling subsidies are not high.

There are different ways and confusion in practice, because of our legal aid in time is not too long, theory construction, system is still in the exploration, practice this paper mentioned, perhaps in the future there will be a unified and authoritative explanation, and in the work of standardization.