Separate Business Operation And Tax Saving

A car repair company is a small-scale taxpayer, mainly engaged in all kinds of car repair business, and also sells various lubricants, oil and automobile spare parts, etc., the company's financial accounting is sound, the local tax authorities to adopt the way of audit collection management.

In 2002, the company received a total income of 920 thousand yuan for repair and sale of spare parts. The company has faithfully paid the maintenance and spare parts income of 920 thousand yuan at 6% of the levy rate to pay 50 thousand and 943 yuan in value added tax.

In fact, it is not cost-effective to operate and pay taxes.

The third provision of the Provisional Regulations on value added tax stipulates that taxpayers who sell goods or taxable services with different tax rates shall separately calculate the sales volume of goods of different tax rates or taxable services.

If the sales amount is not accounted for separately, the high applicable tax rate shall be applied.

It is reported that the income of the enterprise's 920 thousand yuan revenue is 400 thousand yuan, because the enterprise does not account for the sales and maintenance income separately. The 400 thousand yuan income of the spare parts can only be collected from the high value of 6% but not the 4% value-added tax.

If the enterprise can separate the sales of spare parts from the 400 thousand yuan, accounting for 7257 yuan.

According to this case, separate accounting is profitable when a low tax rate is used to occupy a larger share in the business operation.

For example, the beauty industry is a service industry according to the industry type, and the service tax rate is 5%.

As we all know, beauty shops provide beauty services only part of their whole business. Selling beauty products occupy a larger share of their business. If the income can be accounted for separately, the value added tax on sales of goods will be lower than the 5% tax on business tax.

In the case of large business volume, if separate accounting is difficult, it is difficult to get the approval of the tax authorities. Then it will be cost-effective to separate the two businesses and establish two institutions.

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