With the end of epidemic prevention and control, the number of corporate donations has decreased, especially in kind. However, in recent years, the work of corporate poverty alleviation donations has not stopped, and the state has successively issued policies to extend the poverty alleviation donation policy to the end of 2025. Many companies donate self-produced or purchased materials to poor areas, and the accounting and tax treatment of in-kind donations is more complicated than cash donations. Today, we will explain the accounting and tax treatment of in-kind donations and the filing of returns in different forms of enterprises.
For example, the total profit of enterprise A (general taxpayer) in 2023 is 1.8 million yuan, and the following donations occur throughout the year:
Donate 10,000 pieces of self-produced goods to the people in the target poverty alleviation areas**, with a market value of 10 yuan (excluding tax) and a cost of 8 yuan (after considering the transfer of input tax).
10,000 pieces of foreign purchase funds were donated to the people in the target poverty alleviation areas**, and **113 yuan (tax included), due to the close distance between the donation time and the purchase time, the fair value is consistent with the purchase**.
10,000 pieces of self-produced goods were donated to poverty-stricken areas (non-target poverty alleviation areas) through the Red Cross, with a market value of 10 yuan (excluding tax) and a cost of 8 yuan.
10,000 pieces of purchased goods were donated to poverty-stricken areas (non-targeted poverty alleviation areas) through the Red Cross, and **113 yuan (tax included).
1. Accounting treatment of donations in kind
1) If enterprise A implements the "Accounting System for Business Enterprises", in accordance with the "Notice of the Ministry of Finance and the State Administration of Taxation on Printing and Distributing the Answers to Questions Concerning the Implementation of the Accounting System for Business Enterprises and Related Accounting Standards (III)" (Cai Hui 2003 No. 29), the enterprise will donate the finished products produced and commissioned for processing, as well as purchased commodities, raw materials, fixed assets, intangible assets and valuable assets, etc., and shall treat the book value of the donated assets and the turnover tax and other relevant taxes and fees payable as non-operating expenses.
2) If enterprise A implements the "Accounting Standards for Business Enterprises", first, according to Article 30 of the "Accounting Standards for Business Enterprises - Basic Standards", income refers to the total inflow of economic interests formed by the enterprise in its daily activities, which will lead to an increase in the owner's equity and have nothing to do with the owner's invested capital. Article 31 stipulates that income can only be recognized when the inflow of economic benefits is likely to lead to an increase in assets or a decrease in liabilities of the enterprise, and the inflow of economic benefits can be reliably measured. The gratuitous gift will not lead to an increase in the owner's equity, nor will it lead to an increase in the company's assets or a decrease in its liabilities, so accounting cannot recognize income.
Second, according to the accounting provisions of 6711 non-operating expenditure account in the appendix of the Accounting Standards for Business Enterprises - Accounting Subjects and Main Accounting Treatment: 1. This account accounts for various non-operating expenses incurred by the enterprise, including losses on the disposal of non-current assets, losses on the exchange of non-monetary assets, and losses on debt restructuringExpenditure on public welfare donations, extraordinary losses, disk losses, etc. 2. This account can be accounted for in detail according to the expenditure items.
3. The losses on the disposal of non-current assets, the exchange losses of non-monetary assets and the losses on debt restructuring recognized by enterprises shall be handled in accordance with the relevant provisions of "disposal of fixed assets", "intangible assets", "raw materials", "inventory goods" and "accounts payable". The net loss of inventory loss or damaged assets shall be debited from this account and credited to the account of "property loss and excess to be disposed of by 1582" after being approved by the management authority. 4. At the end of the period, the balance of this account should be transferred to the "current year's profit" account, and there is no balance in this account after the carryover. In order to fulfill social responsibilities and create a good social image of the enterprise, the free gift behavior of the enterprise (including public welfare donations and relief donations) is not for the purpose of obtaining operating profits, and the expenses incurred in the gift of self-produced products are generally accounted for in the "non-operating expenses" account.
II. Tax Treatment of In-Kind Donations
Donation Self-produced goods for poverty alleviation donation
Article 1 of the announcement of the Ministry of Finance, the State Administration of Taxation and the Poverty Alleviation Office on the VAT exemption policy for donations of poverty alleviation goods (Announcement No. 55 of 2019 of the Ministry of Finance and the State Administration of Taxation of the Ministry of Finance) stipulates: "From January 1, 2019 to December 31, 2022, units or individual industrial and commercial households shall donate the goods produced, commissioned for processing or purchased by themselves to units and individuals in the targeted poverty alleviation areas through public welfare social organizations, people at the county level and above** and their constituent departments and directly affiliated institutions, or directly and free of charge. VAT exempt. During the policy implementation period, if the target poverty alleviation areas achieve poverty alleviation, the above policies may continue to be applied. [Note: According to the Announcement of the Ministry of Finance, the State Administration of Taxation, the Ministry of Human Resources and Social Security, and the National Rural Revitalization Administration on Extending the Implementation Period of Some Preferential Tax Policies for Poverty Alleviation (Announcement No. 18 of 2021 of the Ministry of Finance, the State Administration of Taxation, the Ministry of Human Resources and Social Security, and the National Rural Revitalization Administration), the implementation period of this document is extended to December 31, 2025. 】
The accounting treatment is as follows (unit: yuan, the same below):
Borrow: Non-operating expenses 80,000
Credit: 80,000 items in stock
In terms of enterprise income tax, according to Article 1 of the Announcement of the Ministry of Finance and the State Administration of Taxation on the Pre-tax Deduction Policy for Income Tax on Enterprise Poverty Alleviation Donations (Announcement No. 49 of 2019 of the Ministry of Finance and the State Administration of Taxation of the Ministry of Finance), "from January 1, 2019 to December 31, 2022, enterprises shall use public welfare social organizations or people at or above the county level (including county level) and their constituent departments and directly affiliated institutions for poverty alleviation donations in targeted poverty alleviation areas. Deductions are allowed in the calculation of the taxable income of enterprise income tax. During the policy implementation period, if the target poverty alleviation areas achieve poverty alleviation, the above policies may continue to be applied. ”
[Note: According to the Announcement of the Ministry of Finance, the State Administration of Taxation, the Ministry of Human Resources and Social Security, and the National Rural Revitalization Administration on Extending the Implementation Period of Some Preferential Tax Policies for Poverty Alleviation (Announcement No. 18 of 2021 of the Ministry of Finance, the State Administration of Taxation, the Ministry of Human Resources and Social Security, and the National Rural Revitalization Administration), the implementation period of this document is extended to December 31, 2025. The enterprise's donation expenditure for poverty alleviation can be fully deducted without being restricted by proportion, but the in-kind donation still needs to be regarded as sales, and the deemed sales revenue shall be determined according to the fair value. Company A's tax adjustments are as follows:
increase the deemed sales revenue by 100,000 yuan, increase the deemed sales cost by 80,000 yuan, and increase the increased by 20,000 yuan; After deemed sales, the book value of the donation expenditure is 80,000 yuan, and the tax amount is 100,000 yuan, which is reduced by 20,000 yuan; The total tax adjustment is 0. The full amount of donation expenses is 100,000 yuan before tax.
Donation Purchased goods for epidemic prevention donations
Since the donation of the enterprise for the target area is exempt from VAT, the input tax on the purchase of poverty alleviation materials cannot be deducted, and the accounting treatment is as follows:
Borrow: 113000 items in stock
Credit: Bank deposit 113000
Borrow: Non-operating expenses 113,000
Credit: 113,000 goods in stock
In terms of enterprise income tax, the deemed sales revenue was increased by 113,000 yuan, and the deemed sales cost was increased by 113,000 yuan, and the total tax payment was adjusted to 0. The full amount of donation expenses is 113,000 yuan before tax.
Donation Self-produced goods for public welfare donations (deduction of the limit).
The accounting treatment is as follows:
Borrow: Non-operating expenses 93,000
Credit: 80,000 items in stock
Tax payable - VAT payable (output tax) 13000
In terms of enterprise income tax, the deemed sales revenue will be increased by 100,000 yuan, the deemed sales cost will be increased by 80,000 yuan, and the deemed sales cost will be increased by 20,000 yuan; After deemed sales, the book value of the donation expenditure is 93,000 yuan, the tax amount is 113,000 yuan, and the total tax is adjusted by 20,000 yuan, and the total tax adjustment is 0. The deductible donation expenses are calculated based on the fair value of the donation expenses of 113,000 yuan.
Donation Purchased goods for public welfare donations (deduction of the limit).
The accounting treatment is as follows:
Borrow: 100,000 items in stock
Tax payable - VAT payable (input tax) 13000
Credit: Bank deposit 113000
Borrow: Non-operating expenses 113,000
Credit: 10000 items in stock
Tax payable - VAT payable (output tax) 13000
In terms of enterprise income tax, the deemed sales revenue will be increased by 100,000 yuan, and the deemed sales cost will be increased by 100,000 yuan, and the total tax payment will be adjusted to 0. The deductible donation expenditure is calculated at 113,000 yuan.
The pre-tax deduction limit of the enterprise's donation expenditure = 1,800,000 12% = 216,000 (yuan), and the total tax increase of donations and donations = (113,000 + 113,000) - 216,000 = 10,000 (yuan). The 10,000 yuan can be carried forward and deducted within the next three years.
The declaration form is completed as follows:
*: Lao Li talks about finance and taxation studio.
Author: Lao Li talks about finance and taxation studio.
*Editor: Mu Lin Financial News.