Circular of the Ministry of Finance on Printing and Distributing the Interim Provisions on Accounting Treatment for Enterprise Income Tax
Circular of the Ministry of Finance on Printing and Distributing the Interim Provisions on Accounting Treatment for Enterprise Income Tax
Circular of the Ministry of Finance on Printing and Distributing the Interim Provisions on Accounting Treatment for Enterprise Income Tax
Cai Kuai Zi [1994] No. 25
June 29, 1994
All relevant departments, commissions and institutions directly under the State Council as well as the departments (bureaus) of all provinces, autonomous regions, municipalities directly and cities specifically designated in the state planning,
The Tentative Provisions on Accounting Treatment for Enterprise Income Tax are hereby printed and distributed to you for compliance and implementation. If there is any problem in the implementation, please promptly report it to this Ministry.
Appendix:
Interim Provisions on Accounting Treatment for Enterprise Income Tax
Copy to: The taxation bureaus of all provinces, autonomous regions, municipalities directly and cities specifically designated in the state plan, the commissioner offices dispatched by the Ministry of Finance to the departments (bureaus) of finance of all provinces, autonomous regions, municipalities directly, and the commissioner offices dispatched by the Ministry of Finance to all central enterprises.
Appendix:
Interim Provisions on Accounting Treatment for Enterprise Income Tax
In consideration of the fact that difference may occur between an enterprise's pre-income tax accounting profit calculated in accordance with the accounting provisions (hereinafter referred to as "Pre-tax Accounting Profit") and such enterprise's taxable income calculated in accordance with the taxation provisions (hereinafter referred to as "Taxable Income") owing to different calculation methods or calculation time adopted, each enterprise shall, when paying the income tax, make adjustment to its Pre-tax Accounting Profit in accordance with the taxation provisions and then declare and pay the income tax on the basis of the amount as adjusted.
The provisions on accounting treatment for enterprise income tax are hereby set forth as follows:
I. Setting Accounts
Each enterprise shall, under the account of profit and loss, set the account "Income Tax 550" (for foreign-funded enterprises, the account number is 5241; for joint venture with foreign economic cooperation, the account number is 569) for calculating its income tax which may be deducted from its profit and loss of the current period in accordance with the relevant provisions. Meanwhile, the classification item "Income Tax Payable" under the account "Profit Appropriation" shall be deleted.
Each enterprise shall, under the account of liability, add the account "Deferred Tax 270" (for foreign-funded enterprises, the account number is 2301; for joint venture with foreign economic cooperation, the account number is 278) for calculating the amount of the difference between the Pre-tax Accounting Profit and the Taxable Income which is caused by the different calculation time adopted and may affect the amount of tax payable and for calculating the amount of such difference amortized in each period thereafter. The credit amount of the account "Deferred Tax" reflects the amount of the tax affected by the timing difference owing to the fact that the Pre-tax Accounting Profit exceeds the Taxable Income in current period, and also reflects the debit amount which corresponds to the tax affected by the timing difference determined and is amortized in such period; the debit amount of the account "Deferred Tax" in current period reflects the amount of the tax affected by the timing difference owing to the fact that the Pre-tax Accounting Profit is less than the Taxable Income for such period, and also reflects the credit amount which corresponds to the tax affected by the timing difference determined and is amortized in such period; the credit (or debit) balance at the end of a period reflects the amount of tax affected by the timing difference which has not been amortized.
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Cai Kuai Zi [1994] No. 25
June 29, 1994
All relevant departments, commissions and institutions directly under the State Council as well as the departments (bureaus) of all provinces, autonomous regions, municipalities directly and cities specifically designated in the state planning,
The Tentative Provisions on Accounting Treatment for Enterprise Income Tax are hereby printed and distributed to you for compliance and implementation. If there is any problem in the implementation, please promptly report it to this Ministry.
Appendix:
Interim Provisions on Accounting Treatment for Enterprise Income Tax
Copy to: The taxation bureaus of all provinces, autonomous regions, municipalities directly and cities specifically designated in the state plan, the commissioner offices dispatched by the Ministry of Finance to the departments (bureaus) of finance of all provinces, autonomous regions, municipalities directly, and the commissioner offices dispatched by the Ministry of Finance to all central enterprises.
Appendix:
Interim Provisions on Accounting Treatment for Enterprise Income Tax
In consideration of the fact that difference may occur between an enterprise's pre-income tax accounting profit calculated in accordance with the accounting provisions (hereinafter referred to as "Pre-tax Accounting Profit") and such enterprise's taxable income calculated in accordance with the taxation provisions (hereinafter referred to as "Taxable Income") owing to different calculation methods or calculation time adopted, each enterprise shall, when paying the income tax, make adjustment to its Pre-tax Accounting Profit in accordance with the taxation provisions and then declare and pay the income tax on the basis of the amount as adjusted.
The provisions on accounting treatment for enterprise income tax are hereby set forth as follows:
I. Setting Accounts
Each enterprise shall, under the account of profit and loss, set the account "Income Tax 550" (for foreign-funded enterprises, the account number is 5241; for joint venture with foreign economic cooperation, the account number is 569) for calculating its income tax which may be deducted from its profit and loss of the current period in accordance with the relevant provisions. Meanwhile, the classification item "Income Tax Payable" under the account "Profit Appropriation" shall be deleted.
Each enterprise shall, under the account of liability, add the account "Deferred Tax 270" (for foreign-funded enterprises, the account number is 2301; for joint venture with foreign economic cooperation, the account number is 278) for calculating the amount of the difference between the Pre-tax Accounting Profit and the Taxable Income which is caused by the different calculation time adopted and may affect the amount of tax payable and for calculating the amount of such difference amortized in each period thereafter. The credit amount of the account "Deferred Tax" reflects the amount of the tax affected by the timing difference owing to the fact that the Pre-tax Accounting Profit exceeds the Taxable Income in current period, and also reflects the debit amount which corresponds to the tax affected by the timing difference determined and is amortized in such period; the debit amount of the account "Deferred Tax" in current period reflects the amount of the tax affected by the timing difference owing to the fact that the Pre-tax Accounting Profit is less than the Taxable Income for such period, and also reflects the credit amount which corresponds to the tax affected by the timing difference determined and is amortized in such period; the credit (or debit) balance at the end of a period reflects the amount of tax affected by the timing difference which has not been amortized.
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