How Do I Include Taxes on an Income Statement?

Taxes and surcharges: reflect the business tax (cancelled), consumption tax, urban maintenance and construction tax, resource tax, and education surcharge that the enterprise should bear in the main business. When filling in this indicator, it should be noted that after the new tax system is implemented, accounting requirements for VAT payable are no longer included in the main business tax and surcharges item. It is reflected separately in the VAT Schedule. Fill in according to the accumulative number of corresponding indicators in the profit statement of the enterprise accounting for the current year.

Business tax and surcharges

Business tax and surcharges reflect the consumption tax, resource tax, education surcharge, and urban maintenance and construction tax that should be borne by the main business of the enterprise.

Business tax and additional components:

1. Sales of products subject to GST;

2. Calculated for the provision of external transportation labor services

I. Accounting for business activities

I. There are nine tax items for business tax: the transportation industry, construction industry, post and telecommunications industry, and culture and sports industry apply the 3% tax rate; the financial insurance industry, service industry, the transfer of intangible assets, the sale of real estate apply the 5% tax rate, and the entertainment industry apply the 5% tax rate To 20% tax rate. However, with the promotion of business tax to VAT, transportation industry tax items, postal and telecommunications tax items, postal services, service industry items, storage and advertising industries, transfer of intangible assets tax items, transfer of trademark rights, transfer of copyrights, transfer of patent rights, Transfer of non-patented technology and suspension of implementation.

2. The urban construction tax and education surcharge are calculated and paid at 7% and 3% of the value-added tax, business tax, and consumption tax, respectively.

3. Accounting entries:

1. Withdrawal:

Borrow: Business taxes and surcharges

Taxes and surcharges are borne by various business operations, including business tax, urban maintenance and construction tax, and education surcharge.

1. Business tax and surcharges. Obtain or prepare business tax and additional details, check whether the addition is correct, and compare it with the number of statements,

1. "Enterprise Accounting System"

5402 "Main business taxes and surcharges" account use instructions are clear:

The account calculates the taxes and surcharges that should be borne by the company's daily activities. Including business tax, consumption tax, urban maintenance and construction tax, resource tax, land value added tax and education surcharge.

5405 "Other Business Expenditure" account use instructions are clear:

The account calculates the expenditures incurred by the company on sales or other businesses in addition to the main business costs, including related costs and expenses incurred in sales of materials, provision of labor services, and related taxes and surcharges.

2. New standard system

6402 "Other business costs" account use instructions are clear:

The account incurred by the accounting firm for other operating activities other than the main business activities includes the cost of sales materials, depreciation of leased fixed assets, amortization of leased intangible assets, cost of leased packaging or amortization Wait.

Relevant taxes and fees incurred in operating activities other than the main business activities are accounted for in the "Business Taxes and Supplements" account.

If a cost model is used to measure investment real estate, the depreciation or amortization amount of the investment real estate shall also be calculated through the course.

6403 "Business tax and surcharge" account use instructions are clear:

Subjects account for related taxes such as business tax, consumption tax, urban maintenance and construction tax, resource tax, and education surcharge incurred by the company's operating activities. Real estate tax, vehicle and vessel use tax, land use tax, and stamp duty are calculated in the Management Expenses account, but property tax and land use tax related to investment real estate are calculated in the undergraduate project.

According to the "Accounting Standards for Business Enterprises No. 30-Presentation of Financial Reports":

Article 26 Expenses shall be classified according to function, and shall be divided into costs incurred in operating business, management expenses, selling expenses and financial expenses.

Article 27 The income statement shall list at least items that reflect the following information:

(I. Operating income;

(2) operating costs;

(3) business taxes;

(4) management expenses;

(5) selling expenses;

(6) financial expenses;

(7) Investment income;

(8) gains and losses from changes in fair value;

(9) Asset impairment losses;

(10) Gains and losses on disposal of non-current assets;

(11) Income tax expenses;

(12) Net profit.

Financial enterprises can list income statement items according to their particularities.

The components of the income statement of the new standard have changed the main business income under the original Enterprise Accounting System minus the cost of main business and taxes on main business and additional calculation of main business profit, and separately calculate the reflection of other business profits. Under the new standard, the income statement simplifies the single-line content and uses the functional method to display expenses. Therefore, the tax and additional expenses originally reported in "Other business costs" and "main business taxes and surcharges" are combined into "business tax and Attach ".