Journalism

Dalian tax planning reminds you how to use government subsidies to help enterprises

2021-11-05

In the operation of enterprises, in order to encourage or support the development of specific industries, regions or fields, the government will provide economic support to enterprises, solve the problem of financing difficulties of enterprises, and play a positive role in promoting the development of enterprises.Then, how to deal with the accounting and how to choose tax exemption and tax payment when receiving government subsidies to improve the quality of accounting information?Dalian tax planning to tell you how to skillfully use government subsidies.


1、 We should distinguish government subsidy, government investment and government purchase service, and reasonably select accounting standards


There are three kinds of economic resources that enterprises obtain from the government: government subsidies, government investment and government purchase of services.Government subsidy refers to that enterprises obtain monetary or non monetary assets from the government free of charge.Free of charge, that is, there is no need to pay consideration for goods or services to the government;Government investment refers to the direct investment in which the government invests capital into an enterprise as an investor and increases the paid in capital (share capital) of the enterprise according to relevant regulations;Government purchase of services refers to the economic resources obtained by enterprises from the government, which are closely related to the activities of selling goods or providing services, and are the consideration or part of the consideration of enterprises' goods or services.


For government subsidies, the criteria of "government subsidies" shall apply;Government investment shall be dealt with in accordance with relevant government documents;When the government purchases services, the "revenue" principle shall apply.


Example 1: the income obtained from the government due to policy relocation is not gratuitous and does not belong to the scope of government subsidies because it takes relocation as consideration. Instead, it should be treated as disposal of non current assets.


Example 2: subsidies for wind power generation, waste treatment and disposal of waste electronic products of new energy enterprises, and price subsidies for new energy vehicles. The subsidies are related to transactions with clear commercial essence and are not free cash inflow obtained by enterprises from the state. They should be regarded as a part of the normal sales price of enterprises, and the income standard should be applied;


Example 3: in tax return, the tax returned to enterprises by means of collecting first and then returning (returning) and collecting and returning immediately belongs to the government subsidy.However, direct reduction, exemption, increase of tax deduction and partial tax credit are economic resources that do not involve the direct transfer of assets. VAT export rebate is actually the return of input tax paid in advance by enterprises by the government and the return of service charge of individual income tax, which is not a government subsidy.

2、 Distinguish whether it is non taxable income and reasonably choose whether to adjust the enterprise income tax


In the enterprise income tax law, there are relevant provisions on whether the three kinds of economic resources obtained by enterprises from the government are taxed;Government investment is non tax revenue;Whether the government subsidies are non taxable income shall be handled in accordance with the provisions of the notice of the Ministry of Finance and the State Administration of Taxation on the income tax treatment of special purpose financial enterprises (CS [2011] No. 70).


That is to say, no tax on financial subsidies must have "three haves" at the same time. The first is to have documents (enterprises can provide funds allocation documents for specific purposes of funds);Second, there should be management (financial departments or other government departments that allocate funds have special fund management measures or specific management requirements for the funds);Third, there must be accounting (the enterprise shall separately calculate the funds and the expenditures incurred with the funds).


However, the expenses arising from the use of the above-mentioned non taxable income for expenditure shall not be deducted in the calculation of the taxable income;The depreciation and amortization of the assets used for expenditure shall not be deducted in the calculation of taxable income, that is, the enterprise income tax shall be increased during the final settlement.


3、 The government subsidies received will have an impact on the financial indicators such as assets or income of the enterprise, and even directly affect the performance of the enterprise in the current year,


In order to avoid the impact of government subsidies on the assets or income of enterprises and the performance of enterprises in the current year, enterprises should make the following distinctions:


(1) To distinguish whether the government subsidy is "asset related" or "income related", the judgment should be based on the receipt of the approved government documents.


The government subsidies related to assets refer to the government subsidies obtained by enterprises, used for purchasing and constructing or forming long-term assets in other ways, which will bring economic benefits to enterprises in a long period of time and have a long benefit period.Because of the formation of long-term assets, they are recognized as deferred income when they are acquired, and are included in the profits and losses by stages according to reasonable and systematic methods within the service life of relevant assets.For example, an enterprise has received the investment subsidy from Shenzhen Development and Reform Commission, and the document "contract for Shenzhen Science and technology plan project", which is a research and development project of technology research and development of face person certificate comparison system;The document "Notice of Shenzhen Science and technology innovation Commission on Issuing planned funded projects" funds for mobile terminal data encryption technology research and development project based on quantum key and security chip. 


Income related government subsidies refer to government subsidies other than those related to assets. They are mainly used to compensate the relevant costs or losses that have occurred or will occur to the enterprise. The benefit period is relatively short, and it is included in the current profit and loss or offset the relevant costs when the conditions attached to the subsidy are met.For example, subsidies for enterprises to stabilize their posts, subsidies for pre job training, and subsidies for rental fees paid by the government to compensate for the losses incurred during the period of business suspension due to the epidemic situation.


(2) The government subsidies related to income should be distinguished from the related expenses or losses used for compensation, which are "in the later period" or "occurred"


If the enterprise receives the unemployment insurance return, pre job training subsidy and vocational skill promotion subsidy, which is used to compensate the related expenses or losses of the enterprise in the future, it shall be recognized as deferred income, and shall be included in the current profit and loss during the period when the relevant expenses are recognized;If the subsidy received is used to compensate the relevant expenses or losses incurred by the enterprise, it shall be directly included in the current profit and loss.


(3) Distinguish whether it is related to the daily activities of the enterprise and see whether it has "continuity" and "contingency"


The government subsidies related to the enterprise's daily activities are continuous. The subsidy is the compensation for the cost or loss of the enterprise (such as post stabilization subsidy, industry support fund, research and development expense subsidy), or the reward for some sales behaviors of the enterprise (for example, software enterprises enjoy the tax preference of VAT collection and refund).The subsidy shall be included in other income or offset relevant costs according to the nature of economic business. 


Government subsidies unrelated to the daily activities of an enterprise are usually generated by reasons other than the regular operation of the enterprise. They are incidental and should be included in the non operating income and expenditure.For example, the government gives subsidies to enterprises due to the influence of force majeure, such as shutdown and production losses, as well as school subsidies and Talent Awards.


(4) "Total amount method" and "net amount method" should be chosen reasonably and consistent


There are two accounting methods for government subsidies: the total amount method and the net amount method.The total amount method is to recognize the full amount of government subsidies as income in one or several times. If VAT is collected and refunded immediately for general taxpayers, the total amount method can only be used for accounting treatment;The net amount method is to recognize the government subsidy as the deduction of the book value of the relevant assets or the cost of compensation.Only one method can be selected for the same or similar government subsidy business, and the method shall be applied consistently to the business, and shall not be changed at will.


Enterprises should keep good communication with government departments, timely understand the trends of the national development and Reform Commission, finance, taxation, science and technology departments, obtain the information of government subsidies, and timely apply in combination with the actual situation, which is of great benefit to the development of enterprises. At the same time, they should timely grasp the changes of financial and taxation laws and policies, and pay attention to the changes in finance and taxation laws and systems,To achieve the convergence of tax and accounting treatment and achieve a win-win situation, we should carry out the correct fiscal and tax treatment, actively respond to it, and do a good job in financial and tax planning of government subsidies.


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