How to pay the tax on the advance payment of the project, and how to calculate the tax on the advanc

Taxpayers who obtain advance receipts for the provision of construction services shall, upon receipt of the advance receipts, pay VAT in advance at the pre-levy rate on the balance of the advance receipts after deducting the subcontract payments paid.

For projects that should be prepaid in the place where the construction services occur in accordance with the current regulations, the taxpayer shall prepay the VAT at the place where the construction services occur when the taxpayer receives the advance payment. For projects that are not required to prepay VAT at the place where the construction services take place in accordance with the current regulations, the taxpayer shall prepay VAT at the place where the institution is located when receiving the advance payment.

According to Article 5 of the Announcement of the State Administration of Taxation on Issuing the Interim Measures for the Administration of VAT Collection and Collection of Construction Services Provided by Taxpayers Across Counties (Cities and Districts) (Announcement No. 17 of 2016 of the State Administration of Taxation), if the balance of all the price and off-price expenses obtained by the taxpayer after deducting the subcontract payment paid is negative, it can be carried forward to the next prepayment of tax and continue to deduct.

Taxpayers shall calculate the tax payable in advance according to the project separately and pay it in advance separately.

According to Article 24 and Article 25 of the Provisional Regulations of the People's Republic of China on Business Tax and the Detailed Rules for the Implementation of the Rules, if a taxpayer provides services in the construction or leasing industry and adopts the method of advance payment, the business tax liability shall be incurred on the day of receipt of the advance payment.

By: 502117889

It is basically agreed, but the collection should not be carried out directly through the project settlement.

Collect advance payment (not invoiced).

Borrow: Bank deposit.

Credit: Accounts received in advance.

Advance payment invoiced – phased acceptance of the project and interim measurement.

Debit: Accounts receivable.

Credit: settlement of works - owner.

At the same time, the prepayment received is transferred to the accounts receivable.

Debit: Accounts receivable in advance.

Credit: Accounts receivable.

To add that, the recognition of the income of the construction industry is now carried out in accordance with the accounting standard - construction contracts, which generally recognise current revenue, costs and gross profit according to the percentage of completion, rather than the amount and date of invoice.

When the final accounts are completed after the completion of the project, as the 502117889 on the first floor said, the two subjects of engineering construction and project settlement should be balanced.

Hello dear, according to the situation you described, how to calculate the prepayment tax of the project 1If the general tax calculation method is applied, the tax payable in advance = (all price and off-price expenses - subcontract payment paid) 1+11%) 2%2If the tax calculation method of the simplified tax calculation party is applied, the tax payable in advance = (all the price and off-price expenses - the subcontract payment paid) 1+3%) 3% If the balance of the total price and off-price expenses obtained by the taxpayer after deducting the subcontract payment paid is negative, it can be carried forward to the next prepayment of tax and continue to be deducted.

The purpose of the advance payment is to solve the working capital shortage of one party to the contract, and its role is to help the other party solve the financial difficulties, so that it is more qualified to properly perform the contract, and has the nature of support.

According to the agreed time and proportion, the deduction is a form of agreement on the payment and return of expenses in the contract, and it is also to make the use of project funds more in line with the needs of the progress of the project and meet the needs of the project.

Advance payment for works.

It is the construction of construction projects.

After the contract is concluded, the employer shall, in accordance with the contract, pay the contractor in advance before the formal commencement of construction. It is the working capital for construction preparation and the main materials and structural parts required.

The main **, which is also known as prepaid provision in China. The payment of the advance payment for the project indicates that the project has been substantially commenced.

Article 14 of the Administrative Measures for the Contracting and Valuation of Construction Projects clearly stipulates that the specific matters of prepayment of project payment shall be agreed in the contract by both parties in accordance with the provisions of the construction administrative department, combined with the project payment, construction period and contracted labor and materials.

In the construction contract (model text), the relevant advance payment for the project is stipulated as follows: "If the advance payment for the project is implemented, the two parties shall make an agreement within the special clause to determine the time and amount of the advance payment from the employer to the contractor, and deduct it one by one according to the agreed time and proportion after the commencement of construction." The prepayment time should be no later than 7 days before the agreed date of commencement.

If the employer fails to make the advance payment as agreed, and the contractor sends a notice to the employer requesting the advance payment 7 days after the agreed advance payment time, and the employer still fails to make the advance payment as required after receiving the notice, the contractor may stop the construction 7 days after the notice is issued, and the employer shall pay the contractor the loan interest on the payment due from the date of payment as agreed and bear the liability for breach of contract.

Legal Analysis:1If the general tax calculation method is applied, the full price of the tax payable and the off-price expenses - the subcontract payment paid) 1+11%) 2%.

2.If the simplified tax calculation method is applied, the tax shall be paid in advance and the price and off-price expenses - the subcontract payment paid) 1+3%) 3%.

If the balance of all the price and off-price expenses obtained by the taxpayer after deducting the subcontract payment paid is negative, it can be carried forward to the next prepayment of tax and continue to deduct.

Legal basis: Article 3 of the Enterprise Income Tax Law of the People's Republic of China Resident enterprises shall pay the enterprise income tax on their income within and outside China. If a non-resident enterprise establishes an institution or place in China, it shall pay enterprise income tax on the income obtained by the institution or place in China, as well as the income that occurs outside China but has an actual connection with the institution or place established by it.

If a non-resident enterprise has not established an institution or place in China, or if it has established an institution or place but the income obtained has no actual connection with the institution or place it has established, it shall pay enterprise income tax on its income in China.

Legal Analysis:1If the general tax calculation method is applied, the full price of the tax payable and the off-price expenses - the subcontract payment paid) 1+11%) 2%.

2.If the simplified tax calculation method is applied, the tax shall be prepaid in full of the return price and off-price expenses - subcontract payment paid) 1+3%) 3%.

If the balance of the total price and off-price expenses obtained by the taxpayer after deducting the subcontract payment paid is negative, it can be carried forward to the next prepayment of tax and continue to deduct.

Legal basis: Article 3 of the Enterprise Income Tax Law of the People's Republic of China Resident enterprises shall pay enterprise income tax on their income within and outside China. If a non-resident enterprise establishes an institution or place in China, it shall pay enterprise income tax on the income obtained by the establishment or place in China, as well as the income that occurs outside China but has an actual connection with the institution or place established by the non-resident enterprise.

If a non-resident enterprise has not established an institution or place in China, or if it has established an institution or place but the income obtained has no actual connection with the institution or place it has established, it shall pay enterprise income tax on the income obtained and returned to it in China.