Tax law issues

tax law issues

  Q: Consumption tax is included in the component taxable price when calculating the value-added tax payable on imported goods. If the component taxable price is used to calculate the tax in the calculation of the value-added tax payable on non-imported goods, will it include consumption tax? If not, then Are consumption tax and value-added tax calculated on the same basis? You must know how to choose a Family law solicitors Dublin.

  Answer: In the case of deemed sales of goods, the tax law stipulates that the sales can be verified, and the sales can be determined according to the component taxable price. If the goods subject to value-added tax are also subject to consumption tax , the taxable price of the goods shall be added to the consumption tax. The component taxable price is the same as the component taxable price of the excise tax payable. For a detailed explanation, please refer to the relevant instructions on pages 30 and 78 of the Tax Law textbook.

  Q: The medicinal wine that has been consigned to be processed is directly used for sales. The processing fee indicated on the special invoice is 80,000 yuan, and the consumption tax collected and paid by the processing unit is 18,000 yuan. When calculating the value- added tax input tax, is the consumption tax also included? , that is, the total processing fee plus consumption tax is 98,000 yuan × 17%?

  Answer: Excise tax should not be included. In the case of providing taxable labor services such as processing, repair, and replacement, the processing fee is the sales volume of the trustee, and it has been clarified in the tax law that the sales value calculated by the taxpayer refers to the taxpayer selling goods or providing taxable labor services to the buyer. The full price and extra-price fees charged, but the extra-price fees do not include: the output tax collected from the buyer, the consumption tax collected and paid by the consignment processing consumer goods subject to consumption tax, and the qualified freight forwarded. Therefore, according to the conditions given in this question, the value-added tax payable for entrusted processing is calculated as 80,000 yuan × 17%.

  Q: In “4. Calculation of tax payable on the sale of specific goods” on page 38, please explain “(3) Retail sales of duty-free goods in duty-free shops approved by the competent authority.” What tax is exempted from tax exemption, and if so, VAT, why another 4% VAT?

  A: Duty-free shops are shops that are exempt from import or export duties and are not exempt from value-added tax.

  Q: It is said in the textbook that value-added tax is not a deduction item from the taxable income of corporate income tax because it is a tax outside the price. Please explain?

  Answer: From the perspective of tax calculation principle, value-added tax is to levy tax on the added value or added value of commodities in each link of the production and circulation of commodities. Since it is difficult to calculate and grasp the added value or the added value of commodities, the current VAT adopts an indirect calculation method, that is, the tax is calculated according to the sales volume, and then the VAT paid in the previous link is deducted, and the balance is the taxpayer. VAT payable. Therefore, value-added tax is a tax paid in addition to the sale of goods or the provision of taxable services, commonly referred to as extra-price tax.

  The extra-price tax is an additional tax that is independent of the price and is not included in the price of the commodity. Therefore, when calculating the taxable income of corporate income tax, the value-added tax cannot be deducted from the total income .

  Q: In the Corporate Income Tax Law, donations for public welfare and relief purposes are allowed to be deducted within 3% of the annual taxable income. Donations in the following four cases can be fully deducted. Is the amount deducted in full subject to the 3% limit? Is it possible to exceed 3%?

  Answer: The public welfare and relief donations referred to in the Enterprise Income Tax Law refer to the donations made by taxpayers to public welfare undertakings such as education and civil affairs, as well as areas suffering from natural disasters and poverty-stricken areas through non- profit social organizations and state organs in China. For public welfare and relief donations, the Corporate Income Tax Law clearly states that within 3% of the taxable income can be deducted, and the excess will not be deducted. For donations to the Red Cross cause , elderly service institutions, rural compulsory education and public welfare youth activity venues, full deductions are allowed without the 3% limit. If the state has other provisions, such provisions shall prevail.

  Q: To recover bad debt losses recognized in previous years, when using the direct method, debit accounts receivable and credit management expenses; when using the allowance method, debit accounts receivable and credit bad debt reserves, and accrue or accrue at the end of the year. Write off the bad debt provision to reduce management expenses. Both methods increase the accounting profit of the year, and thus the income tax. Why is the recovery of bad debt losses confirmed in previous years as an item in the “Tax Law Examination Tutorial Set” that I saw? Increase taxable income on the basis of accounting profit?

  A: According to the tax law, bad debt losses incurred by an enterprise should be deducted according to the actual amount in principle, or a bad debt provision may be drawn upon approval by the tax authority. For enterprises that draw bad debt reserves, when bad debt losses occur, the bad debt reserves that have been drawn should be written off, and the excess of the bad debt reserves that have been drawn can be directly deducted in the current period. When recovering bad debts written off in previous years, the taxable income for the current period should be increased accordingly. Therefore, in this sense, the treatment of tax law and accounting is basically the same.

  However, in the “Enterprise Income Tax Annual Tax Return”, for enterprises that use the allowance method to account for bad debt reserves, they must be filled in according to two items. The second is the “tax adjustment for bad debt losses” and “tax adjustment for bad debt provision” in “Calculation of taxable income and tax payable”. This again differs from the format of the income statement in accounting. Since we haven’t seen the “tax law exam tutoring exercise set” you mentioned, we cannot explain your statement of “adding taxable income on the basis of accounting profits”.

  Q: What is the sub-insurance business, the primary insurer, the sub-insurer, and the primary insurance business? The textbook says that business tax is no longer levied on the reinsurance premium income obtained by the reinsurer, and the related exercises also say that the primary insurer of the reinsurance business is the withholding agent of the business tax. Is there a contradiction here? What are the accounting treatments when the primary insurer has sub-insurance business and withholding and paying business tax?

  Answer: Insurance refers to the activity of compensating for the economic interests of the insured by pooling funds in the form of contracts. The primary insurance business is a certain insurance business accepted by the insured (or the primary insurer) for the first time, which is roughly equivalent to the general contractor of the engineering operation contracting a certain project.What you said “The textbook says that no business tax will be levied on the reinsurance premium income obtained by the reinsurer, and the relevant exercises say that the primary insurer of the reinsurance business is the withholding agent of the business tax. The two statements are consistent. Because the primary insurer of the reinsurance business is the withholding agent of the business tax, no business tax will be levied on the reinsurance premium obtained income by the reinsurer.


By Master James

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