How to calculate the additional deduction

Mondo Finance Updated on 2024-02-28

As a preferential tax policy, the additional credit is intended to reduce the tax burden on enterprises, encourage investment and innovation, and support the development of specific industries.

This article will systematically introduce the calculation method of the additional credit and elaborate its application in the field of value-added tax and enterprise income tax, so as to help readers fully understand and apply this preferential tax policy.

1.Determine the additional deduction ratio:According to national policies, different industries or business types may enjoy different additional deduction ratios, such as 10% for the life service industry.

2.Calculate the deductible input VAT for the current period:The deductible input VAT for the current period refers to the part of the VAT paid by the enterprise for the purchase of goods and services in the current period that can be used for deduction.

3.Calculate the additional deduction for the current period:Accrual and deduction in the current period = deductible input tax in the current period plus credit ratio.

4.Calculate the deductible plus deductible amount for the current period:Deductible plus deductible amount for the current period = Balance of additional deductible at the end of the previous period + Additional deductible deductible for the current period - Deduction plus deductible for the current period.

5.Apply the additional credit:When calculating the tax payable of a taxpayer, the deductible plus deduction of the current period can be used to offset the tax payable.

R&D expenses that do not form intangible assets:Additional deduction = Actual R&D expenses incurred in the current period Additional deduction ratio (e.g. 75%).

R&D expenses that form intangible assets:Amortization is made on the basis of amortization of the cost of intangible assets at a specified proportion higher than the actual cost (e.g., 175%).

1.Only taxpayers who are subject to the general tax calculation method can calculate and deduct the additional deduction to offset the tax payable of their general tax items.

2.The additional deduction policy is only applicable to general taxpayers, and the sales amount involved in the calculation when determining the main business not only refers to the sales amount of the taxpayer after registering as a general taxpayer, but also the sales amount during the period of small-scale taxpayers.

3.The input VAT that is not allowed to be deducted from the output VAT shall not be subject to additional deductions.

4.For export goods and services subject to the tax refund policy and export goods and services subject to the tax policy, the corresponding input tax amount cannot be calculated and credited when calculating the additional credit, regardless of whether it is a tax refund or a taxable export goods and services.

As a preferential tax policy, the additional deduction plays an important role in reducing the tax burden of enterprises and encouraging investment and innovation. Enterprises should understand and correctly use the calculation method of additional deductions to make full use of preferential tax policies and reduce tax burden.

At the same time, enterprises need to pay attention to changes in tax laws and policies, adjust their tax strategies in a timely manner, and ensure compliance operations. Through an in-depth understanding and application of the additional credit, enterprises can better play the positive role of tax policies in promoting the development of enterprises.

Calculation and application of additional credits

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