Why is there corporate income tax on the amount payable that is not payable?

The reasons why the payable amount that is not required to be subject to corporate income tax are:

1. If an enterprise transfers accounts payable or is indeed unable to pay accounts payable, it shall debit this account and credit the account of "non-operating income" according to its book balance. Therefore, it affects the amount of income payable for enterprise income tax.

2. According to the provisions of the "Accounting System for Business Enterprises", accounts payable refers to the amount payable by the enterprise to the first unit for the purchase of materials, commodities and labor services. It can be seen that accounts payable are formed due to the purchase of raw materials on credit, and the procurement cost of raw materials and VAT input tax constitute accounts payable, and its procurement cost will inevitably enter the production cost with the use of production, thereby affecting the taxable income of the current period.

In practice, many enterprises have long-term accounts payable under accounts payable or other accounts payable, and some of these long-aged accounts payable may still be paid, while some may not even be able to find the contact person, and the other party may also have already made a note of the loss, resulting in the inability to pay these payments.

For example, when enterprise A was cleaning up the current accounts, it found that a sum of accounts payable was posted as company B, and the person in charge had changed several times, and the other party's company, company B, could not be contacted, but when checking the information of company B online, it was found that the company had already been cancelled. Company A was unable to pay the amount due.

So how to deal with this kind of payable in terms of corporate income tax? To put it simply, it is necessary to pay corporate income tax.

Let's first check the provisions of the "Enterprise Income Tax Law", Article 6 lists 9 forms of income, including the sale of goods, the provision of labor services, etc., and does not clearly state that the payable that cannot be paid is income, but the 9th situation is written "other income", the bottom clause, so it is impossible to say that the payable that cannot be paid does not belong to the scope of taxation of income Liangzao consumption tax according to this provision.

However, Article 22 of the Regulations for the Implementation of the Enterprise Income Tax Law further explains the ninth form of "other income" in point 6 above, which clearly includes "payables that are truly unrepayable".

Well, at this point, we should be clear that this kind of unpayable payable, that is, other income in the income tax law, is within the scope of corporate income tax.

So how to grasp the amount payable that cannot be paid? In other words, what kind of money can be considered as an unpayable payment, and is there any criterion for judging what kind of money can be determined?

In the "Practical Operation Policy Guidelines for Enterprise Income Tax" issued by the Beijing Taxation Bureau, there are relevant answers. In the document, it is stated that the enterprise, as a party, should understand the actual situation of the creditor, and then the enterprise will judge whether the payable amount cannot be paid.

Because the enterprise wants to think that these payables cannot be paid, then it needs to pay the congratulatory tax, so for the general enterprise, it will not do this determination, and would rather keep it on the account.

But the IRD doesn't do that.

Therefore, the tax bureau will also have their own identification criteria, which can also be said to be the basis. That is, if the tax authorities have conclusive evidence that:

1. The creditor is a natural person, and the creditor is missing or dead.

2. If the creditor is a legal person, the creditor is cancelled or bankrupt.

The tax authorities can determine that the debtor is indeed unable to pay, and include this part of the outstanding payment that cannot be repaid into the income and calculate and pay the enterprise income tax.

Therefore, for enterprises, knowing this standard of the tax bureau, then at least, you should follow the standard of the tax bureau, when you know that the creditor has this situation, you should recognize the long-term accounts payable as income, calculate and pay enterprise income tax.

According to Article 22 of the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China (Order No. 512 of the People's Republic of China), the other income referred to in Article 6 (9) of the Enterprise Income Tax Law refers to the other income obtained by the enterprise in addition to the income specified in Article 6 (1) to (8) of the Enterprise Income Tax Law, including the income from the excess of enterprise assets, the income from the deposit of the overdue packaging, and the payable amount that cannot be repaid. Receivables, debt restructuring income, subsidy income, liquidated damages income, exchange gains, etc.

Therefore, the amount payable by the enterprise should be incorporated into the total income and calculated and paid for enterprise income tax.

According to Article 22 of the Regulations for the Implementation of the Enterprise Income Tax Law of the People's Republic of China (Order No. 512 of the People's Republic of China), the other income referred to in Article 6 (9) of the Enterprise Income Tax Law refers to the income obtained by the enterprise in addition to the income specified in Article 6 (1) to (8) of the Enterprise Income Tax Law, including the income from the excess of enterprise assets, the income from the deposit of overdue packaging, the payable that cannot be repaid, and the receivables that have been recovered after being treated as bad debt losses. Debt restructuring income, subsidy income, liquidated damages income, foreign exchange income, etc.

Therefore, the amount payable that the enterprise is really unable to repay should be incorporated into the total income and calculated and paid into the income tax of the enterprise.

Included in non-operating income, according to Article 22 of the Regulations for the Implementation of the Enterprise Income Tax Law, the payable that cannot be repaid shall be included in other income. In principle, the enterprise, as a party to the judgment, should understand the actual situation of the creditor, and the enterprise can judge whether the amount payable is indeed unable to be repaid. At the same time, if the tax authorities have conclusive evidence to prove that the creditor has suffered asset losses, the creditor (natural person) has disappeared or died, the creditor (legal person) has been cancelled or bankrupt, and other reasons have led to the extinction of the creditor's rights, the tax authorities may determine that the debtor is indeed unable to pay.

For this part of the outstanding payment that cannot be repaid, it should be included in the total income for enterprise income tax purposes.

Accounts: Debit: Accounts Payable.

Credit: Non-operating income.

1. Income from the sale of goods;

2. Provide labor income.

3. Income from the transfer of property;

4. Dividends, bonuses and other equity investment income.

5. Interest income;

6. Rental income.

7. Royalty income.

8. Accept donation income.

9. Other income.

Reference 2: Article 22 of the "Regulations on the Implementation of the Enterprise Income Tax Law of the People's Republic of China" clearly explains the "other income" in the above provisions: the "other income" referred to in Article 6 (9) of the Enterprise Income Tax Law refers to the "other income" obtained by the enterprise in addition to the income specified in Items 1 to 8 of Article 6 of the Enterprise Income Tax Law

Including the income from the surplus of enterprise assets, the income from the deposit of overdue packaging materials such as the fiber banquet, the payables that cannot be repaid, the receivables that have been recovered after the treatment of bad debt losses, the income from debt restructuring, the income from subsidies, the income from liquidated damages, the income from foreign exchange, etc.

Reference 3: According to Article 22 of the Regulations for the Implementation of the Enterprise Income Tax Law, the amount payable that cannot be repaid shall be included in the income of the State Administration of Taxation.

At the same time, if the tax authorities have conclusive evidence that the creditor's claims are extinguished due to the disappearance or death of the creditor, the cancellation or bankruptcy of the creditor, etc., the tax authorities may determine that the debtor is indeed unable to repay, and the unpaid amount payable shall be included in the income for enterprise income tax purposes. If you have any questions about related needs, please chat privately about ingenuity and finance!

Other payables written off remain tax-related. It should be included in the corporate income tax payable as a "payable amount that is truly unpayable". Other payables that have already been certified to be no longer payable do not need to be submitted for approval in respect of these incomes.

Article 22 of the Regulations for the Implementation of the Enterprise Income Tax Law The term "other income" mentioned in Item (9) of Article 6 of the Enterprise Income Tax Law refers to the income obtained by an enterprise in addition to the income specified in Items (1) to (8) of Article 6 of the Enterprise Income Tax Law, including the income from the excess income of the enterprise's assets, the income from the deposit of the packaging materials that have not been returned within the time limit, the amount payable that cannot be repaid by the number of beams and stools, the receivables that have been recovered after the treatment of bad debt losses, the income from debt restructuring, the income from subsidies, the income from liquidated damages, the exchange income, etc.