Q: My company has no profit, why did the bank deduct a sum of corporate income tax?@Ruanyin Accounting @軟銀財(cái)務(wù)
R: Each company actually has two kinds of profit results: one is calculated according to Chinese accounting standards. Usually when we mention profit, we mean this accounting profit.
Another is the taxable profit which is calculated according to the Enterprise Income Tax Law. This is used to calculate enterprise income tax.
Q: So I am a little confused. As far as I know our company has only one set of system, how can get two profits?
R: In order to save the working time, accountants do not need to set up a separate system to calculate taxable profit. Just making some adjustments on the basis of the company's accounting profit according to the Enterprise Income Tax Law and getting the result of taxable profit.
Q: What is reason to cause difference between accounting profit and taxable profit?
R: The main reason is due to the difference between accounting standards and the enterprise Income Tax law regulations on some income and expenses. Most of the difference is in the cost&expense. For example, employee welfare can be recorded as an expense of the company when the expenses meet the company's regulations (and thus reduce the company's accounting profit). However, according to the Enterprise Income Tax law, the company's annual welfare expenditure has a cap (no more than 14% of the company's total taxable salary), if it exceeds this cap, then the accounting profit and taxable profit will be different. In addition to welfare expenses, there are also common advertising and business publicity expenses, business entertainment expenses, employee education funds.
Also, there are some differences due to the company's lack of internal invoices management, for example, some expenses occurred, but did not obtain the corresponding invoice, the company recognized as an expense (and thus reduced the company's accounting profit), but according to the regulation of the enterprise income tax law, this can not reduce taxable profits.
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