When a business person applies for registration as a profit-seeking enterprise, its organizational types include sole proprietorship, partnership, company, and other organizations; the tax burden varies with the type of organization, and a comparison of legal responsibilities and tax burdens is made here. As described below, investors can carefully consider their business strategies and goals and make the best choice:
(1) Legal liability:
1. Sole proprietorship and partnership:
This type of for-profit enterprise does not have independent legal personality, so the owner of a sole proprietorship or the partners of a partnership must bear unlimited liability for the debts incurred by his enterprise.
2. Company:
Companies (except for unlimited and partnership companies) and investors (shareholders) are different legal entities, and the liability of each shareholder to the company is limited to the amount of its capital contribution, that is to say, it only bears limited liability.
(2) Tax burden:
| project | Organization | |
| sole proprietorship and partnership | company | |
| income tax | Except for small-scale sole proprietorships and profit-seeking partnerships that are not required to file settlement declarations, profit-seeking enterprises shall handle income tax settlement declarations in accordance with Article 71, Item 1 of the Income Tax Law. (1) Profit-making enterprises that are not small-scale sole proprietorships or partnerships: 1. Income tax settlement declaration for profit-seeking enterprises: Since 2017, the settlement declaration should be handled from May 1 to May 31 every year (postponed in case of holidays), but there is no need to calculate and pay the settlement tax payable; but From 2014 to 2016, from May 1st to May 31st of each year, the settlement declaration should be filled out in accordance with Article 71 of the Income Tax Law, and half of the annual tax payable should be deducted from the unpaid tax. The withholding tax amount shall be calculated and the settlement tax amount payable shall be calculated, and the annual profit-seeking enterprise income tax settlement declaration shall be filed with the taxation agency at the place of registration at the time of declaration after the tax payment is made by the taxpayer. 2. Capital owners or partners calculate their profit-making income: from 2010, sole proprietors or partners of partnership organizations shall levy comprehensive income tax based on the approved profit-making business income incorporated into the total comprehensive income; but from 104 to 106 For the year, the sole proprietor or the partner of the partnership organization shall deduct half of the annual tax payable from the income of the profit-seeking enterprise as its profit-making income, which shall be included in the total comprehensive income for comprehensive income tax, and the profit-seeking enterprise shall The amount of tax paid during the stage cannot be deducted from the comprehensive income tax (or tax refund). (2) Small-scale sole proprietorship and partnership organization for profit: 1. Profit-profit enterprise income tax settlement declaration: No need to go through profit-seeking enterprise income tax settlement declaration. 2. Capital owners or partners calculate their profit-making income: The original taxation system is maintained, and the income from profit-seeking businesses should be listed as profit-making income by the sole proprietor or partner of a partnership organization, and incorporated into the total comprehensive income for comprehensive income tax. |
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| Borrowings | Loans from sole proprietors and partners of partnership organizations should be regarded as capital transactions, and interest should not be listed; in addition, the interest paid on loans from non-financial industries should not exceed the interest rate standard stipulated by the Ministry of Finance (96 to 109 The annual monthly interest rate is 1 cent and 3 percent), which can be verified and determined. | The interest paid by the company to the shareholder's loan can be verified and determined within the interest rate standard stipulated by the Ministry of Finance (from 1996 to 2010, the monthly interest rate is 1 cent and 3 percent). |
| Investment income tax exemption | None of the provisions listed on the right apply. | The profit-making enterprises organized by the company invest in other domestic profit-making enterprises, and the dividends or surplus received are not included in the income tax; from January 1, 1987 to December 31, 2016, the deductible tax amount should be calculated according to According to Article 66-3 of the Income Tax Law, it is included in the balance of the shareholder's deductible tax account, but since January 1, 2017, it is no longer necessary to calculate the shareholder's deductible tax in conjunction with the abolition of the calculation of deductions. |
| Balance of profit and loss | If the taxpayer and his/her spouse operate two or more profit-making enterprises of sole proprietorship or partnership, they shall use the blue declaration form or entrust an accountant to check and verify. Losses are deducted from the approved profit income, and the balance is used as the item for calculating the total comprehensive personal income. | A profit-seeking enterprise of a company or limited partnership that complies with the proviso of Article 39 of the Income Tax Act may deduct its losses in the previous 10 years from the net profit of the current year after being approved by the taxation agency. The requirements are as follows: 1. Accounting books and documents are complete. 2. Losses and declarations for deductions are made using blue declaration forms or certified by accountants. 3. Report as scheduled. |
| tax incentives | Additional employee (or salary increase) salary cost plus deduction tax incentives: Article 36-2 of the Small and Medium Enterprise Development Act (not applicable to small-scale profit-seeking enterprises). | 1. Investment credits apply to research and development expenditures: 2. Additional employee (or salary increase) salary plus deduction tax incentives: 3. Investment deduction for investment in new smart machines or fifth-generation mobile communication systems: 4. The undistributed surplus deduction applies to real investment with surplus: |
| Profit Enterprise Income Tax | Starting from 2017, the threshold and tax rates for profit-seeking enterprise income tax are as follows: 1. Profit-seeking enterprises with an annual taxable income of less than 120,000 yuan are exempt from income tax for profit-seeking enterprises. 2. If the annual taxable income of a profit-making enterprise exceeds 120,000 yuan, 20% of the total taxable income will be levied (the tax rate from 1999 to 2010 is 17%). However, the tax payable shall not exceed half of the part of the profit-seeking enterprise's taxable income exceeding 120,000 yuan. In order to alleviate the burden of a one-time increase in tax rates for profit-seeking enterprises whose taxable income is below a certain amount, if the annual taxable income of a profit-seeking enterprise in 2017 and 2018 exceeds 120,000 yuan but does not exceed 500,000 yuan, all taxable income The amount shall be levied according to the following prescribed tax rates, but the tax payable shall not exceed half of the part of the profit-seeking enterprise's taxable income exceeding 120,000 yuan: (1) The tax rate for 107 years is 18%. (2) The tax rate for 108 years is 19%. | |
According to the current tax law, the expense or loss must be reported to the tax collection agency before or after the event, mainly including commodity inventory loss, disaster loss, fixed asset scrapping, commodity scrapping, etc. If a profit-seeking enterprise fails to complete the reporting procedures due to temporary negligence, the reported expenses or losses may not be recognized. An example is given as follows:
There is a small-scale beverage company with an annual turnover of hundreds of millions of yuan. Due to the distribution of its beverages by downstream companies, occasionally some beverages are not sold beyond the shelf life and are returned on the grounds of deterioration. , the cumulative amount of the year was as high as more than 4 million yuan, because the spoiled beverage was only recorded in the account, but not in accordance with the provisions of Article 101. Within 30 days after the occurrence, the inspection list shall be submitted to the competent taxation agency for inspection and supervision. When the National Taxation Bureau inspects the declaration of income tax settlement of the current year's profit-seeking enterprises, the company failed to submit the accountant's audit report or annual report on the scrapping of the goods listed by the company. Income tax inspection and visa report, and failed to report to the National Taxation Bureau within 30 days after the fact happened, more than 700,000 yuan of income tax for profit-seeking enterprises were all excluded. In this case, the company not only failed to sell the spoiled beverages, which resulted in a decrease in revenue, but also failed to recognize the losses, which can be described as worse.
In view of this, we hereby list the expenses or loss reporting matters stipulated by the relevant tax laws in detail in the attached table, for reference by profit-making enterprises, and for the purpose of tax saving.
| project | Legal basis | Regulations | Filing deadline |
| commodity loss | Check Code 101 | If the inventory adopts the perpetual inventory system or the retail price method is approved, the shortage of inventory must be submitted to the competent auditing agency for investigation and confirmation within 30 days after the fact occurs; The income tax inspection visa report is exempt from filing. | Subsequent reporting shall be reported within 30 days after the fact occurs. |
| Disaster loss | 1. Article 10-1 of the Enforcement Regulations of the Income Tax Act 2. Article 102 of the Verification Guidelines | 1. For earthquakes, winds, floods, fires, droughts, insect disasters, wars and other force majeure disasters and losses, except for ship disasters and air disasters, which actually occurred overseas and are difficult to investigate, they should be issued by the competent government office or maritime reports and insurance companies. In addition to the processing of proof, the inspection list and supporting documents shall be submitted to the competent tax collection agency to send personnel for investigation within 30 days from the day after the fact occurs. | Subsequent reporting shall be made within 30 days from the day after the fact occurs. |
| 2. If it has not been reported to the tax collection agency for investigation according to the above regulations, but it can produce definite evidence to prove that the loss is true, it should still be verified and confirmed. | |||
| Fixed asset retirement | 1. Article 57 of the Income Tax Law 2. Paragraph 10 of Article 95 of the Verification Guidelines | If a fixed asset is destroyed or abandoned due to a specific accident that does not reach the service life specified in the table of useful life of fixed assets, it may be approved by an accountant's audit report or annual income tax audit report with relevant materials attached, or submitted to the supervisory authority of the industry. In addition to the verification and confirmation of the destruction and the issuance of certification documents containing the name, quantity, and amount of the destroyed fixed assets, it shall be reported to the taxation agency for approval in advance, and the unreduced balance shall be listed as the loss of the year. However, if there is income from the sale of waste materials, the sale shall be regarded as income. | Report in advance. |
| Commodity scrap | Article 101-1 of the Audit Guidelines | 1. Commodities or raw materials, materials, work in progress, etc. are scrapped due to expiration, deterioration, damage, or sluggishness and cannot be sold, processed and manufactured, except for the audit report of the accountant or the annual income tax audit report, and attach relevant documents. In case of data verification and determination of scrap loss, a checklist should be submitted to the competent taxation agency to send personnel to investigate and supervise the destruction within 30 days after the fact, or the competent authority has supervised the destruction and obtained supporting documents for verification and determination. 2. Fresh agricultural and fish commodities or raw materials, materials, and finished products cannot survive for a long time after expiration or deterioration due to product characteristics or relevant health laws and regulations. They can check the visa report according to the accountant or the annual income tax audit report, and attach relevant documents. Data verification determined its scrap loss. 3. For commodities or raw materials, materials, work in progress, etc. that are discarded according to the above regulations, if there is income from the sale of waste products, it should be listed as a deduction for other income or loss of commodity scrapping. | Reporting shall be made within 30 days after the occurrence of the fact. |
Inventory valuation methods are regulated by the profit-seeking enterprise income tax review standards, including the individual identification method, first-in first-out method, weighted average method, moving average method, or other methods approved by the competent authority. Different inventory valuation methods affect the enterprise's The profit and loss are quite large. Here is a simple example and a list of different results produced by the three commonly used inventory valuation methods for reference:
xx company’s purchase and sales data details, the inventory at the end of the period is 1,800 (the total purchase quantity is 6,700-the total sales quantity is 4,900):
| Purchase date | Purchase quantity | unit price | the amount | sale date | Sales quantity |
| 01/01 Beginning Inventory 03/01 06/03 08/04 11/02 | 1,000 1,500 1,000 1,200 2,000 | 80 85 90 95 100 | 80,000 127,500 90,000 114,000 200,000 | 02/05 04/15 07/07 08/10 12/12 | 600 700 900 1,500 1,200 |
| total | 6,700 | 611,500 | 4,900 |
(1) First-in first-out method: the cost of inventory at the end of the period is 100 yuan × 1,800 = 180,000 yuan, and the cost of goods sold is 431,500 yuan
(2) Weighted average method:
611,500 yuan ÷ 6,700=91.27 yuan………weighted average unit price
The ending inventory cost is 91.27 yuan × 1,800 = 164,286 yuan, and the cost of goods sold is 447,214 yuan.
(3) Moving average method:
| purchase | sales | stock | |||||||
| 01/01 | 1,000 | 80 | 80,000 | 1,000 | 80 | 80,000 | |||
| 02/05 | 600 | 80 | 48,000 | 400 | 80 | 32,000 | |||
| 03/01 | 1,500 | 85 | 127,500 | 1,900 | 83.95 | 159,500 | |||
| 04/15 | 700 | 83.95 | 58,765 | 1,200 | 83.95 | 100,735 | |||
| 06/03 | 1,000 | 90 | 90,000 | 2,200 | 86.70 | 190,735 | |||
| 07/07 | 900 | 86.70 | 78,030 | 1,300 | 86.70 | 112,705 | |||
| 08/04 | 1,200 | 95 | 114,000 | 2,500 | 90.68 | 226,705 | |||
| 08/10 | 1,500 | 90.68 | 136,020 | 1,000 | 90.68 | 90,685 | |||
| 11/02 | 2,000 | 100 | 200,000 | 3,000 | 96.90 | 290,685 | |||
| 12/12 | 1,200 | 96.90 | 116,280 | 1,800 | 96.89 | 174,405 | |||
| total | 174,405 | ||||||||
The ending inventory cost is 174,405 yuan, and the cost of goods sold is 437,095 yuan.
The results of the above three commonly used inventory valuation methods for the purchase and sales data in the above example are shown in the following table:
| Inventory Valuation Method | Calculated ending inventory amount | when prices rise | when prices fall |
| FIFO | 180,000 | maximum | the smallest |
| Weighted average method | 164,286 | the smallest | maximum |
| moving average method | 174,405 | second largest | second largest |
In this case, because the purchase price is gradually rising, it is not favorable to calculate the inventory cost by the first-in first-out method. On the contrary, when the price is stable or gradually declining, it is more beneficial to adopt the first-in first-out method, because the advanced goods are sold first, and the cost is relatively high, which reduces the gross profit of sales and can obtain the effect of inventory tax saving. However, profit-making enterprises should pay attention to the fact that according to the generally accepted accounting principles, profit-making enterprises should carefully select accounting principles and adopt them consistently in each period to enhance the comparability of the statements, unless it is proved that the newly adopted accounting principles are better than the original ones due to changes in the environment. Accounting principles are preferable and should not be changed easily. Based on the consideration of simplification of administration and the convenience of the people, the adoption and modification of the current deleted inventory valuation method should be reported to the taxation agency for approval in advance. However, in order to prevent profit-making enterprises from manipulating profits and losses by changing the inventory valuation method and avoiding tax burdens, the taxation agency will respond to this Intensify inspection of such cases.
example:
xx Co., Ltd. declares the profit-seeking enterprise income tax and lists the loss of bad debts. Since the actual ratio of bad debts far exceeds 1% of the balance of accounts receivable and bills receivable, the company follows Article 94, Article 3 of the Profit-Profit Enterprise Income Tax Review Standard. According to the provisions of the clause, the bad debt loss is estimated within the limit of the average ratio of the actual bad debt ratio that can be reported according to the law in the previous three years. Through the estimation of the loss, the company can greatly reduce the tax payable for the current year. However, profit-seeking enterprises should pay special attention. When bad debt losses actually occur, they should obtain legal certificates in accordance with Article 94, Paragraphs 6 to 8 of the Income Tax Review Guidelines for Profit-seeking Enterprises, so as not to lose the right to claim such losses.
When a profit-seeking enterprise presents depreciation expenses in accordance with the tax law, it may choose or change an appropriate depreciation method according to the business conditions of the enterprise to achieve tax-saving effects.
There are many depreciation methods stipulated in financial accounting theory and commercial accounting law, but according to Article 51 of the Income Tax Law, the average method, the fixed rate decline method, the total number of years method, the production quantity method, the working time method or other methods approved by the competent authority The approved depreciation method shall prevail, and shall be chosen by the profit-seeking enterprise. In addition, if a profit-making enterprise considers that it is more reasonable and objective to adopt a new depreciation method due to changes in the business environment, it may also change the depreciation method. In addition, the depreciation method used in financial accounting does not have to be consistent with the depreciation method stipulated in Article 51 of the Income Tax Law. However, an appropriate depreciation method can be used when filing income taxes. In addition to enjoying the benefits of tax savings, it can also take into account the fair expression of financial statements.
In principle, the depreciation amount of the same fixed asset in the early stage using the fixed rate decline method is higher than the average method, which can reduce the early net profit and have the benefit of delaying tax payment. Decide. How to choose the right one is summed up as follows:
(1) If a profit-seeking enterprise has the following circumstances, it is advisable to adopt the average method to provide depreciation:
(1) During the 5-year tax-free incentive period: If the rate-decreasing method is adopted, more depreciation will be provided during the tax-free period, and the reduced income will be deferred to the non-tax-free period, which will increase the tax burden during the non-tax-free period.
(2) In the period of loss or when there is a huge amount of loss in the previous 10 years that can be deducted: the use of the fixed rate reduction method will only increase the loss of the profit-making enterprise.
(3) When newly established or expected to turn losses into profits: when the business scale is small in the early stage or when the situation turns from a loss to a profit, the profits are relatively low. For example, the method of decreasing tax rates has no real benefit of reducing the tax burden.
(4) When enjoying investment tax credits for the purchase of equipment, research and development, and personnel training expenditures: Since the benefits of tax reduction have been actually enjoyed, it is not good for profit-making enterprises to use the fixed-rate reduction method.
(2) Conversely, if the profit-making enterprises do not fall under the above-mentioned conditions and the price level and tax rate remain unchanged, the fixed rate decline method is more beneficial than the average method. As mentioned above, this method can make fixed assets more depreciated than the average method in the early stage. Defer the tax payable in the early stage to the later payment, and enjoy the benefit of deferred tax payment.
If the depreciable assets purchased by a profit-making enterprise have reached the useful life, please do not keep them in the account and let them sit idle. Now I will tell you that there are two processing methods to achieve the effect of tax saving. The specific examples are detailed below for your choice.
Situation 1: List the unreduced balance as the current year's loss after disposal
Assuming that xx company purchased machinery and equipment with an amount of 10,000,000 yuan in January 1995. According to the fixed asset service life table, the service life of the machinery and equipment is 9 years. According to the law, the service life expires in December 2013. If it cannot be used any longer, the equipment will be replaced. After the disposal, the company can list its residual value of 1,000,000 yuan as the annual loss of the disposal, but if there is income from the sale of waste materials, the sale price should be regarded as income to avoid penalties for omissions.
Scenario 2: Continued depreciation
If the above-mentioned machine is still in use after the service life expires, its salvage value will be depreciated according to the original depreciation method after estimating the service life and re-estimating the salvage value.
Taking the average method as an example, the formula for continued depreciation is:
(Original residual value - re-estimated residual value) ÷ estimated usable years = depreciation extension In the above example, it is estimated to be usable for another 4 years, and the re-estimated residual value is 200,000 yuan, then the equipment can be reused every year A depreciation of 200,000 yuan is provided. (RMB 1,000,000－RMB 200,000)÷4=RMB 200,000.......Depreciation expenses will be accrued every year
This rule of analysis: due to the different profit situations of profit-seeking enterprises, choosing situation 1 in years with high profits can achieve immediate results; Use at your own discretion.
When the price index of fixed assets, depleted assets, and intangible assets of a profit-seeking enterprise in the current year increases by more than 25% compared with the year in which the asset was acquired or the year in which the assets were revalued according to regulations, the price index may apply to the competent tax collection agency. Handling asset revaluation, for profit-making enterprises approved to handle asset revaluation, such as the revaluation annual property of some of its assets
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