Major Differences Between Tax Policy And Accounting Standards

Tax policy is the principle of tax collection and the method of determining taxpayers' tax obligation stipulated in various tax laws and regulations, and accounting policy refers to the principles and methods of recognition, measurement, recording and disclosure stipulated in accounting standards and systems.

Because tax laws and regulations and accounting standards and systems belong to different fields, based on different purposes and serve different objects, there are usually different degrees of discrepancy.

The main differences between the two are reflected in each accounting element.

The assets in accounting refers to the resources that the past pactions and events are formed and owned or controlled by enterprises, which is expected to bring economic benefits to enterprises.

There is no clear definition of assets in the tax law.

According to the existing regulations, the differences between the two are mainly in the following four aspects: 1. of assets.

Accountants usually measure the value of assets at historical cost, usually according to actual expenditure or actual value as the entry value of various assets.

Although the tax law also measures asset value according to historical cost, in addition to the actual expenditure as the accounting value of assets, it sometimes emphasizes the total value as the accounting value of assets, thus forming a difference with accounting.

The old fixed assets acquired by enterprises and the fixed assets that they receive from donations are accounted for according to the actual value. In the tax law, they are required to be accounted for in full value, and obtain short-term investments and long-term investments, such as cash dividends that have been declared but not yet received or interest on bonds that have not been received yet, but in accounting, this part of the creditor's rights expenditure is not accounted for as investment value, while the tax law does not specify that the investment value should not be accounted for; the assets acquired by debt restructuring or non monetary pactions are generally accounted for by the book value of the original assets as the value of the assets pferred, and according to the requirements of the tax law, they should normally be accounted for according to the fair value or market value of the assets acquired. Such as

The depreciation and amortization of 2. assets.

Because of prudential consideration, the accountant usually emphasizes accelerated depreciation and early amortization of assets, while the tax law usually stipulates some restrictive conditions for ensuring the financial revenue.

It is decided by the enterprise independently, and there is a clear stipulation in the tax law. The accounting treatment of enterprises should be adjusted according to the provisions of the tax law. When the tax is paid, it should be adjusted according to the tax law. If there is no contract and the time limit stipulated by the law, the accounting period should not exceed ten years, and the tax law stipulates that the amortization period should not be less than ten years. The accounting fee stipulates that if the items not to be paid for expenses can not bring economic benefits to the enterprises, they should all be included in the profits and losses of the current period. The tax law stresses that the real time amortization should be made according to the prescribed time limit; the loss of property to be dealt with, the accounting must emphasize that the end of the term must be disposed of, and the tax law emphasizes that it should be reported and processed after approval, and it can not be handled without approval. For example, depreciation of fixed assets, accounting methods of depreciation, depreciation years and residual value, fixed assets range of accrued depreciation and so on.

3. impairment of assets.

The accounting regulations stipulate that assets should be calculated at the end of the year in terms of the cost and market price of various assets, such as finding impairment of assets or derogation of allowance for impairment, including preparation for bad debts, preparation for short-term investment depreciation, preparation of stock depreciation, long term investment allowance for impairment, allowance for entrusted loans, fixed assets depreciation, preparation for depreciation of construction projects, and depreciation allowance for intangible assets. The tax law only recognizes bad debt preparation, and does not recognize other allowance for depreciation. Even for bad debt preparation, there are more explicit restrictions on the method, proportion and scope of the estimate. Eight

The income handling of 4. assets.

As for investment income, there are different situations in accounting for investment related income requirements. Some are treated as claims for recovery, some are treated as recouping investment costs, others are treated as current profits and losses, and tax laws generally require treatment of current investment income, and tax is calculated according to regulations.

(two) the difference between liabilities and liabilities. Accounting liabilities refer to the existing obligations of pactions and events in the past. The obligation to fulfill this obligation is expected to cause economic benefits to flow out of the business.

According to the existing provisions, there are three main differences: 1. abandonment of creditor's rights.

The accounting stipulates that the creditor's right to voluntarily give up the creditor's right or the creditor's right that the debtor can't repay. As a debtor's enterprise, the enterprise should convert the book value into capital surplus as the increase of owner's equity, and according to the tax law, it should be treated as the extra business income and calculate the taxable tax according to the prescribed taxable income.

2. estimated liabilities.

It includes liabilities for external guarantee, acceptance of commercial acceptance, outstanding litigation and product quality assurance.

In accounting, enterprises are required to make reasonable estimates of liabilities which are likely to happen in accordance with the prescribed items and confirmation standards. The principle of actual payment is adhered to in the tax law, and liabilities that are likely to arise are not recognized.

3. borrowing costs.

Including interest on loans, exchange gains and losses and other borrowing costs.

For long term borrowing costs, although the boundaries between capitalization and cost are required in accounting and tax laws, the specific scope, time standard and amount confirmation are different.

As far as the scope is concerned, accounting is restricted to the borrowing cost of fixed assets, including the purchase of fixed assets, the purchase of intangible assets and the borrowing cost of borrowing funds. In terms of time standard, the accounting emphasizes the "capitalization or cost" of borrowing costs as a standard according to the "fixed assets reaching a predetermined usage state", while the tax law is based on the "assets delivered" as the standard to divide the cost of borrowing into capitalization or cost; in terms of the amount of capitalized expenses, the accountant stresses that the borrowing cost of the capitalized loan should be calculated according to the actual amount of borrowing and the fixed interest rate and the prescribed interest rate, and there is no explicit requirement in the tax law.

(three) the difference between owners' rights and interests is the economic interests of owners in the assets of enterprises, including paid up capital (capital stock), capital surplus, surplus surplus and undistributed profit.

The differences between owners' rights and interests are mainly the following two points: 1..

The non cash assets donation is directly accounted for as the capital surplus according to the recognized value. The former is recorded in the "cash donation" project. The latter is recorded in the project of "accepting donations for non cash assets". The foreign investment enterprise is credited to the subject of "assets to be pferred" at the end of the year, and the income tax is calculated according to the provisions and the capital accumulation is carried out. The income tax of domestic enterprises on the tax law is not very clear about whether the enterprises should accept the cash donation. Whether the enterprises accept the non cash assets donation explicitly stipulates that they do not pay taxes when accepting the donation, and when the donated assets are to be sold or cleaned up, the tax is paid according to the regulations. Accounting stipulates that domestic funded enterprises receive cash donations.

2. increase capital.

In accounting, the enterprises have to pfer the capital or equity with the capital stock, surplus surplus and undistributed profit. They only need to pfer their accounts directly according to the fixed amount, and the part of the income tax on personal income tax on the tax law also requires the enterprise to calculate the amount of personal income tax which should be withheld in accordance with the regulations and make the corresponding accounting treatment.

(four) the difference between income and income in accounting refers to the total inflow of economic interests formed by enterprises in daily activities, and the income in tax law has different meanings due to different taxes.

The difference in income is mainly reflected in two aspects: the caliber of income and the confirmation of income.

1. caliber of income.

現行會計與稅法關于收入的口徑大致存在三個層面上的差別：第一層面是一般含義上的差別，會計上的收入是指企業銷售商品、提供勞務及讓渡資產使用權等日常活動中形成的主營業務收入和其他業務收入，稅法上的收入對于流轉稅來說與會計含義基本相同，而對于所得稅來說則完全不同，如企業所得稅的應稅收入包括生產經營收入、財產轉讓收入、利息收入、租賃收入、特許權使用費收入、股息收入和其他收入等七項，屬于廣義的收入概念；第二層面是商品銷售收入或勞務服務收入上的差別，會計上的商品銷售收入或勞務服務收入都是指企業對外銷售商品或提供勞務而取得的收入，稅法上的應稅收入既包括企業對外銷售商品或提供勞務取得的收入，還包括稅法規定的視同銷售行為確認的應稅收入，如現行增值稅規定的八種視同貨物銷售行為應確認的應稅收入以及

Accounting for a large number of non monetary pactions and non cash assets to repay debts, according to the tax law should be confirmed taxable income, etc., consumption tax, business tax, income tax and other taxes also have the same sales rules; the third level is the difference in sales, accounting sales refers to the sale of goods, the availability of services to obtain the price, not including the third party or customer collected money, and taxable sales in the tax law generally includes third parts of the price and the extra cost.

2. revenue recognition.

Accounting stipulates that the confirmation of sales revenue must satisfy four conditions at the same time. The enterprise has pferred the main risks and rewards to the buyer; the enterprise has not retained the right of continuous management which is usually associated with ownership, nor has it implemented the control of the sold goods; the economic interests related to the paction can flow into the enterprise; the relevant income and cost can be reliably measured); the confirmation of the labor income should distinguish whether the results of the labor and labour services can be reliably measured and the cost of the labor service can be compensated in the same year and over the years.

The cost of accounting refers to the difference between expenses and expenses. Accounting expenses refer to the outflow of economic benefits arising from daily activities such as the sale of goods and services provided by enterprises, including the main business costs, main business taxes and additional expenses, other business expenses, operating expenses, administrative expenses and financial expenses and other items. Five.

1. operating costs.

Including main business costs and other business costs.

The difference is mainly due to the wages in the cost of production and the cost of labor, the welfare benefits of workers, the funds for trade unions and the funds for staff education, etc. the salaries and related expenses are calculated on the basis of the actual amount of accounting. The provisions of the enterprise income tax in the tax law stipulate that the salaries of the tax payer shall be deducted according to the relevant expenses of the taxable wages and the taxable wages.

2. operating expenses.

The differences are mainly advertising, publicity and commission expenses.

These items should be deducted according to the actual amount incurred in the accounting, or not be deducted in the tax law or specified.

3. management fee.

The differences are mainly business entertainment, insurance, travel expenses, conference fees, board fees and other items.

In accounting, these items are paid according to the actual amount, or the deduction is restricted in the tax law, or the relevant certificates must be deducted, otherwise they can not be deducted.

4. financial cost.

Generally, accounting is based on actual amount of payment. Tax law can only be deducted according to reasonable standards and relevant certificates.

(six) the difference between profits and profits. Accounting profits refer to the operating results of a company in a certain period, including operating profit, gross profit and net profit.

The accounting profit in tax law generally refers to the total profit, and the profit as tax is the amount of taxable income.

The difference between the total profit in accounting and the taxable income in the tax law, in addition to the differences between the above five elements, there are two differences: 1. increase the taxable income.

It refers to those items that are not included in the tax law, or can be deducted only according to the limited standard.

Taking donation expenditure as an example, accounting should be listed as non operating expenses according to the actual donation value. According to the provisions of value-added tax and enterprise income tax, it is necessary to distinguish between monetary donation and physical donation, public welfare relief and non public welfare relief donations, direct donations and indirect donations, limited donation and proportional donation, and then decide whether to pay the value-added tax and so on.

2. reduction of taxable income.

Refers to items that have been included in total profits in accounting and may be exempted from taxation or taxable according to the tax law.