How Should We Handle The Value-Added Tax Exemption Income?

There are mainly two ways to deal with the accounting treatment of value-added tax exemption income.

The first is the separation method of price and tax, and the two is the total accounting method of price and tax.

What kind of method is more reasonable? "The notice of the State Administration of Taxation on the exemption of value-added tax and business tax from small and micro enterprises" (the fifty-seventh announcement of the State Administration of Taxation on 2014) stipulates that since October 1, 2014, the value-added tax or business tax on small-scale taxpayers and business tax taxpayers, monthly sales or turnover of less than 30 thousand yuan will be exempt from value-added tax or business tax.

Policy basis: the notice of the Ministry of Finance on the accounting treatment requirements for the reduction and return of turnover tax (fiscal 1995 [6], hereinafter referred to as 6 document) second article two stipulates that for the direct exemption of value-added tax, it will debit "tax payable - the value added tax (exemption and exemption)" subject, and credited the subject of "subsidized income".

Accounting analysis: taxpayers sell duty-free items, though they cannot issue VAT invoices, but the amount of invoices issued to purchasers should be the total amount of sales and output taxes.

Where does the taxpayer's "subsidized income" come from if the tax is not collected from the purchaser?

Accounting treatment: when selling tax-free items, it debit "bank deposits" and other subjects, and credited "main business income" and "payable taxes and fees": subject to VAT (output tax); when the direct deduction is waiver, the tax payable should be levied according to the amount of sales tax, subject to value added tax (exemption and Exemption), and credits "subsidized revenue" subjects.

Tax diagnosis: the tenth provision of the Provisional Regulations on value added tax stipulates that the input tax for exemption from value-added tax shall not be deducted.

At the same time, tax exemption is only exempt from value-added tax in this link.

However, the tax deduction and payment method is a tax exemption, which is not a value-added tax in this link.

Policy basis: the state

The notice on issues related to the issuance of food sales invoices by state owned grain purchasing and selling enterprises "(State Taxation, Ming Dian [1999] 10, hereinafter referred to as" 10 ") stipulates that when the state grain purchase and sale enterprises issue special invoices for value-added tax, they shall issue special invoices for value-added tax in accordance with non tax exempt goods, and enterprises.

For the total value tax.

Accounting analysis: the purpose of value added tax exemption is not to tax.

Instead, let the tax be paid to the negative tax people, that is to say, enterprises should sell goods or provide services (services) at no tax price.

In January 26, 2007, the State Taxation Bureau of Tianjin bonded area issued a circular on the relevant issues concerning the issue of invoices issued by taxpayers of the "one machine, multi ticket system" for the purpose of issuing a tax exemption system. The taxpayers of the "one machine, multi ticket system" of the anti-counterfeiting tax system will issue the general VAT invoice of the tax-free goods temporarily at zero tax rate.

Accounting treatment: when sales of tax-free items are based on the total amount of the total value tax, the account of "bank deposit" is debited, and the main business income is credited.

Tax diagnosis: when the tax exemption policy is not yet known, the total tariff method is inoperable.

If the monthly sales of small and micro enterprises exceed 20 thousand yuan, it can not be determined in the middle of the month.

Moreover, in the respect of enterprise income tax, if the VAT exemption is not in accordance with the conditions of non tax revenue, the total accounting method of price and tax can not be accounted independently, which will make the proper policies not enjoy.