Can the withholding expenses of real estate development enterprises be deducted before tax?

Can the withholding expenses of real estate development enterprises be deducted before tax?

Accrued expenses refer to the expenses paid in advance by real estate enterprises from the cost but not actually paid. Article 9 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that the calculation of taxable income of enterprises is based on accrual basis and belongs to the income and expenses of the current period, regardless of whether the money is received or paid. The income and expenses that do not belong to the current period, even if the money has been received and paid in the current period, are not regarded as the income and expenses of the current period. In the settlement of land value-added tax, the tax law stipulates that the withholding expenses of real estate enterprises shall not be deducted before tax. The Notice of State Taxation Administration of The People's Republic of China on Issues Related to Land Value-added Tax Settlement Management of Real Estate Enterprises (Guo Shui Fa [2006]187) stipulates that, unless otherwise stipulated, the withholding fees of real estate development enterprises shall not be deducted. In fact,

If there is no invoice for the contracted project, it can be withheld and remitted according to 10% of the total contract amount.

Paragraph (1) of Article 32 of the Measures for the Treatment of Enterprise Income Tax on Real Estate Development and Operation in State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) (Guo Shui Fa [2009]3 1 No, hereinafter referred to as Guo Shui Fa [2009]3 1 No) clearly stipulates that if the outsourcing project fails to obtain the full invoice due to final settlement, the insufficient invoice amount can be accrued on the premise of sufficient supporting information.

Public facilities can be deducted before tax according to the construction cost accrued in the budget.

Item (2) of Article 32 of Guo Shui Fa [2009]3 1 stipulates that if public facilities are not built or completed, the construction cost can be reasonably accrued according to the budgeted cost. Such public facilities must meet the conditions that they have clearly promised to build in housing sales contracts, agreements or advertisements and models, and must be built in accordance with laws and regulations; Among them, the public supporting facilities can reasonably withhold the construction cost of supporting facilities according to the budgeted cost. In fact, some enterprises take this opportunity to collude with intermediaries to increase the budget cost of supporting facilities in order to achieve the purpose of paying less taxes. Obviously, this treatment has tax risks for enterprises and is an improper means of tax evasion.

Unpaid construction fees and property improvement fees can be withheld and remitted.

According to Item (3) of Article 32 in Guo Shui Fa [2009] No.31,the construction application fee and property improvement fee that should be paid to the government but not paid can be accrued according to the regulations. Property improvement fees refer to property management funds, public building maintenance funds or other special funds that should be borne by enterprises according to regulations.

Accrued bank loan interest can be deducted before tax.

Article 38 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that the following interest expenses incurred by an enterprise in its production and operation activities are allowed to be deducted: (1) interest expenses incurred by non-financial enterprises in borrowing from financial enterprises, interest expenses incurred by financial enterprises in various deposits and interbank lending, and interest expenses incurred by enterprises in issuing bonds upon approval; (two) the interest expenses incurred by non-financial enterprises in borrowing from non-financial enterprises shall not exceed the amount calculated according to the interest rate of similar loans of financial enterprises in the same period. According to the above provisions, the interest accrued according to the contract and accrual principle, as well as the bank loan interest actually accrued by the enterprise, are included in financial expenses and interest payable, which are actually confirmed expenses and liabilities, and are allowed to be deducted before tax according to accrual principle.

Article 21 of Guo Shui Fa [2009] No.31also makes it clear that the interest expenses of an enterprise shall be treated in accordance with the following provisions: (1) The borrowing expenses incurred by an enterprise in borrowing funds for the construction and development of products that meet the tax requirements may be collected and distributed in accordance with the provisions of the Accounting Standards for Business Enterprises, in which the borrowing expenses are financial expenses. Can be directly deducted before tax. (2) If an enterprise group or its member enterprises borrow money from a financial institution for common use by other member enterprises in the group, the borrower may reasonably share the interest expenses among the enterprises that use the loan, and the interest reasonably shared by the enterprises that use the loan is allowed to be deducted before tax.

The inter-term lease fee paid later can be deducted in advance.

Article 47 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that the lease fees paid by enterprises for renting fixed assets according to their production and business activities shall be deducted in the following ways: the lease fees incurred in renting fixed assets by operating lease shall be deducted uniformly according to the lease term. Whether or not to obtain an invoice is not set as a prerequisite for pre-tax deduction, and the lessor does not charge rent and does not need to issue an invoice, so the rental fee during the later payment period can be accrued.

Fixed assets can be temporarily depreciated according to the contract amount, without invoice and pre-tax deduction.

Article 5 of the Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Several Tax Issues Concerning the Implementation of the Enterprise Income Tax Law (Guo [2010] No.79) stipulates that after the fixed assets of an enterprise are put into use, if the project payment has not been settled and the full invoice has not been obtained, the amount stipulated in the contract can be temporarily included in the tax basis of the fixed assets for depreciation, and adjustments can be made after the invoice is obtained. However, it should be adjusted within 12 months after the fixed assets are put into use.

Land value-added tax not actually paid shall not be deducted before tax.

From the perspective of corporate finance and taxation practice, real estate enterprises generally estimate the overall project land value-added tax first, then determine the tax rate, and then calculate the accrued land value-added tax according to the current carry-over income, which is included in the current profit and loss. This part of the taxable amount will be reflected as unpaid amount in the accounting statements. The land value-added tax calculated by withholding land value-added tax from the developer's statement belongs to the principle of accounting ratio and prudence. But it is accrued in the enterprise income tax declaration.

Article 12 of Guo Shui Fa [2009] No.31stipulates that the expenses incurred by the enterprise during the period, the taxable cost of selling and developing products, business tax and surcharges, and land value-added tax are allowed to be deducted in the current period. The land value-added tax accrued by real estate development enterprises in the current period can be deducted before tax if it is paid within the limited payment period stipulated by the tax law. Accrued but not actually paid land value-added tax shall not be deducted before tax. When the enterprise income tax is settled, accounting contingencies can be handled, but the tax law does not recognize contingencies, and the enterprise income tax law only recognizes actual expenditures. The competent tax authorities should adjust the unpaid land value-added tax, that is, adjust the taxable income in the current year.

According to the above provisions, the land value-added tax paid in advance by real estate development enterprises according to the income obtained from the transfer of real estate before the project liquidation belongs to the tax incurred by real estate enterprises, and the land value-added tax paid in advance can be deducted before tax in the prepayment year. Expenses incurred by other withholding methods cannot be deducted before tax.

Generally speaking, the scope of withholding expenses is quite extensive, such as withholding bad debt losses, withholding insurance premiums, withholding rent, withholding repair expenses, withholding product sales business expenses, etc. However, unless otherwise stipulated by the state, the expenses incurred by withdrawing reserves or adopting other withholding methods shall not be deducted before tax. Therefore, unless otherwise stipulated in the above six tax laws, the withholding expenses of real estate development enterprises are not allowed to be deducted before tax. For the withholding expenses accrued by taxpayers according to the accounting system, although the industry financial accounting system allows the provision of various asset impairment reserves and risk reserves, taxpayers need to make tax adjustments when filing tax returns and pay enterprise income tax according to law to avoid unnecessary tax-related risks.

How to make the accounting entries of accrued expenses in the new accounting standards?

There are two kinds of commissions:

1. Create the following entries for cost components without warehousing and outbound links:

Debit: main business cost (or other business cost) loan: accounts payable.

2. There are two kinds of warehousing links that cost components need to go through:

(1) If the original inventory materials (or finished products) are used, the following entries should be made: Debit: main business cost (or other business costs) Credit: raw materials (or finished products, etc. ).

(2) Use newly purchased (or newly produced) materials (or finished products) that have not gone through warehousing procedures to make the following entries: first, make an estimated warehousing entry: debit: raw material loan: accounts payable and then make another warehousing entry; Debit: main business cost (or other business cost) loan: raw materials (or finished products) can be reduced when the actual cost can be determined, and then the entries are filled out according to the actual amount, or the relevant entries are filled out according to the difference.

Borrow: management expenses (manufacturing expenses) (operating expenses)

Loan: prepaid expenses

Debit: production cost/manufacturing cost/management cost

Credit: other payables-accrued expenses

When the expenses are actually paid: debit: other payables-prepaid expenses loans: bank deposits, etc.

Borrow: management expenses, manufacturing expenses and operating expenses. Loan: Prepaid expenses (or wages payable) depends on what you have accrued.