In accounting, welfare expenses refer to various forms of subsidies and allowances provided by enterprises to employees, such as medical insurance, pension insurance, unemployment insurance, etc. These expenses are usually borne by the company and are included in the cost or expense account of the business. However, according to the country's tax regulations, certain types of benefit expenses can be deducted against the amount portion of the input tax (i.e. VAT), thereby reducing the company's taxable income.
Therefore, for the transfer out of the input tax of welfare expenses, it is necessary to deal with the following steps:
1. Determine which welfare expenses fall within the scope of input tax deduction
First of all, we need to clarify which welfare expenses can be used to deduct input tax. Generally speaking, only those eligible benefit items are eligible for input tax deduction. For example, medical insurance, pensions, housing provident funds and other welfare items can be deducted before corporate income tax. Some non-essential additional benefits are not eligible for input tax deduction.
2. Calculate the input tax deduction amount for welfare expenses
After determining the scope of deductible benefits, we also need to calculate the input tax credit for each item. This can be derived by multiplying the amount of each benefit item by the applicable tax rate. These amounts are then added together to get the total input tax credit. If the total deduction exceeds the deductible amount, the remaining amount needs to be transferred out.
3. Transfer the input tax on welfare expenses to the "to be resold" account
When the calculated input VAT exceeds the deductible amount, we need to subtract it from the "Welfare Expenses" account and transfer it to another account called "To be resold". This account is used specifically to record the amount of input tax that needs to be transferred out.
4. Make tax returns
After doing so, we need to submit the relevant declarations** to the tax authorities in a timely manner in accordance with the country's tax regulations in order to make tax returns. At the same time, it is also necessary to keep the relevant documents and materials for future reference for subsequent verification.
5. Pay attention to the audit results of the tax department
Finally, we need to pay close attention to the results of the tax department's audit. If an error is discovered, it needs to be adjusted and corrected accordingly. At the same time, it is also necessary to pay attention to abide by the country's tax policies and regulations to ensure that the legitimate rights and interests of enterprises are not harmed.