Accounting treatment of additional deductions

Mondo Finance Updated on 2024-01-19

Accounting treatment of additional deductions

1. Definition and meaning of additional deduction.

Additional deduction refers to the additional deduction of the actual expenses incurred before tax according to a certain proportion when calculating the taxable income, so as to reduce the tax burden of the enterprise. The additional deduction is a preferential tax policy aimed at encouraging enterprises to increase R&D investment and promote scientific and technological innovation and industrial upgrading.

2. The scope and standard of additional deductions.

According to the relevant national policies and regulations, the scope of additional deduction mainly includes the following aspects:

1.R&D expenses: The expenses incurred by enterprises in the process of developing new products, new technologies, new processes, etc., including labor costs, material costs, equipment costs, test costs, etc., can be deducted according to a certain proportion before tax.

2.Instrument and equipment purchase expenses: The purchase of instruments and equipment for research and development, including laboratory instruments, equipment, software, etc., can be deducted according to a certain proportion before tax.

3.Intellectual property expenses: Expenses incurred by enterprises in the process of obtaining and protecting intellectual property rights, including patent application fees, trademark registration fees, copyright application fees, etc., can be deducted according to a certain proportion before tax.

4.Other related expenses: Other expenses related to R&D activities paid by enterprises, such as technology transfer fees, technical service fees, etc., can also be deducted according to a certain proportion before tax.

The standard of additional deduction varies from policy to policy, and the additional deduction is generally based on the proportion of 50% to 70% of the enterprise's R&D expenses. The specific proportion is determined according to the policy regulations and the actual situation of the enterprise.

3. Accounting process for additional deductions.

1.Enterprises should classify and collect R&D expenses and other related expenses in accordance with relevant national policies and regulations, and establish corresponding accounts and records.

2.When calculating the taxable income, the enterprise should deduct the R&D expenses and other related expenses in accordance with the prescribed proportion. For specific operation methods, please refer to the Administrative Measures for Pre-tax Deduction of Enterprise Income Tax issued by the State Administration of Taxation and other relevant regulations.

3.If the enterprise enjoys the additional deduction policy, it needs to submit the corresponding application materials when the annual income tax final settlement, including the original vouchers and account records of R&D expenses and other related expenses.

4.The tax department will review and approve the application materials of the enterprise, and if it meets the policy requirements, it will give corresponding tax deductions. If the review is not approved, you will need to amend or resubmit the application within the specified time.

4. Precautions and suggestions for additional deductions.

1.Enterprises should strengthen internal management and financial management, establish a sound accounting system for R&D expenses and other related expenses, and ensure the accuracy and completeness of data.

2.Enterprises should understand and grasp the relevant national policies and regulations in a timely manner, actively apply for the deduction policy, and operate and implement it in strict accordance with the policy requirements.

3.Enterprises should strengthen communication and contact with the tax authorities, solve problems and difficulties in the implementation of policies in a timely manner, and ensure the legitimacy and compliance of policies.

4.It is recommended that enterprises should carry out sufficient budgeting and planning before applying for the deduction policy, reasonably arrange the expenditure of R&D and other related expenses, and avoid problems such as failure to pass the audit due to irregular expenses or non-compliance with policy requirements.

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