In China, back tax payment and late payment penalty are situations that enterprises may encounter when carrying out tax treatment. The bookkeeping of these two types of payments is subject to certain accounting standards and tax laws. In the following, I will analyze and explain in detail the bookkeeping methods for back taxes and late fees, including the practice of accounting treatment and accounting entries, and give examples to illustrate.
Retroactive tax payments are usually due to underpayment, omission or incorrect payment of tax in previous tax returns. After discovering these problems, enterprises need to make supplementary payments in accordance with the provisions of the tax law.
1.Accounting processing
When paying the additional tax, the enterprise shall first pay the tax to the account designated by the tax authority by bank transfer or other means. Then, according to the bank receipt and the tax payment certificate issued by the tax authority and other relevant documents, the accounting processing is carried out.
2.Accounting entries
When paying back tax, the accounting entries are generally as follows:
Borrow: Taxes payable – specific taxes (e.g. VAT, corporate income tax, etc.).
Credit: Bank deposits.
It should be noted here that the tax paid should be included in the profit and loss statement of the actual payment of the current period as the tax expense of the current period.
Late fees are fees in the nature of penalties incurred by businesses for failing to pay their taxes within the time specified in the tax law. If an enterprise needs to pay a late fee at the same time when paying taxes, it also needs to carry out corresponding accounting treatment.
1.Accounting treatment
The late payment penalty is similar to the back tax payment, and the enterprise needs to pay the late payment fee to the account designated by the tax authority through bank transfer or other means. Then, according to the bank receipt and the late payment fee receipt issued by the tax authority, the accounting processing is carried out.
2.Preparation of accounting entries
When paying a late fee, the accounting entries are generally as follows:
Borrow: Non-operating expenses - late fees;Credit: Bank deposits.
It should be noted here that the late payment penalty should be included in the profit and loss statement of the current period as a non-operating expense for the current period. At the same time, the late payment penalty cannot be deducted before tax, and tax adjustment needs to be made when the enterprise income tax is settled.
Suppose that in April 2023, an enterprise found that it underpaid enterprise income tax of 100,000 yuan in 2022, and at the same time, it incurred a late fee of 20,000 yuan due to failure to pay on time. In April 2023, the company paid the tax and late payment fee to the account designated by the tax authority through bank transfer, and obtained the relevant certificates.
The accounting entries of the enterprise are as follows:
1.Retroactive payment of corporate income tax
Borrow: Tax payable - enterprise income tax of 100,000 yuan.
Credit: Bank deposit of 100,000 yuan.
2.Pay a late fee
Borrow: Non-operating expenses - late fee of 20,000 yuan.
Credit: Bank deposit of 20,000 yuan.
When the enterprise income tax final settlement in 2023 is carried out, the enterprise needs to include the late payment penalty of 20,000 yuan as an increase in tax adjustment and include it in the taxable income.
The above is a detailed analysis of the accounting treatment of back tax and late payment fees. In practice, enterprises should strictly follow the accounting standards and tax laws to ensure the authenticity, accuracy and completeness of accounting information.