Interpretation of the Announcement of the State Administration of Taxation on Issuing the Administrative Measures for the Pre-tax Deduction Vouchers of Enterprise Income Tax


Time:

2018-06-15

Recently, the State Administration of Taxation issued the Measures for the Administration of Pre-tax Deduction Vouchers of Enterprise Income Tax (hereinafter referred to as the Measures). The interpretation is as follows: 1. the background of promulgation In 2008, the the People's Republic of China Enterprise Income Tax Law (hereinafter referred to as the "Enterprise Income Tax Law") and its implementing regulations unified and standardized the scope and standards of pre-tax deduction, but did not make systematic provisions and specific explanations on pre-tax deduction vouchers. The collection and management practice is mainly based on the the People's Republic of China Tax Collection and Management Law and its implementation rules, the the People's Republic of China Invoice Management Measures and its implementation rules, and the tax formulated by the State Administration of Taxation

Recently, the State Administration of Taxation issued the "Measures for the Administration of Enterprise Income Tax Pre-tax Deduction Vouchers" (hereinafter referred to as the "Measures"). The interpretation is as follows:
1. Background
2008 , "the People's Republic of China Enterprise Income Tax Law" (hereinafter referred to as "Enterprise Income Tax Law") and its implementation regulations unify and standardize the scope and standard of pre-tax deduction, but do not make systematic provisions and specific explanations on pre-tax deduction vouchers, in the practice of collection and management, it is mainly based on the "the People's Republic of China Tax Collection and Management Law" and its implementation rules, the "the People's Republic of China Invoice Management Measures" and its implementation rules, and the tax regulatory documents formulated by the State Administration of Taxation. There are scattered management regulations and the understanding of the two parties. Differences and so on. In order to strengthen the management of enterprise income tax pre-tax deduction vouchers (hereinafter referred to as "pre-tax deduction vouchers"), standardize tax law enforcement, and optimize the business environment, the State Administration of Taxation formulated the "Measures."

2. Main Significance
Pre-tax deduction vouchers have many types, wide sources and many situations. Starting from unified understanding, easy judgment and convenient operation, the Measures clearly define the relevant concepts, scope of application, management principles, types, tax treatment for basic situations and tax treatment for special situations of pre-tax deduction vouchers. At the same time, the "Measures" always run through the concept of "combining decentralization and management and optimizing services", which will play a positive role in promoting the in-depth implementation of the reform spirit of "decentralization, management and service" in the tax system. First, the "Measures" clarify that collection vouchers, internal vouchers, division documents, etc. can also be used as pre-tax deduction vouchers, which will reduce the tax burden of taxpayers. Second, the "Measures" have detailed regulations on the types of pre-tax deduction vouchers, filling content, acquisition time, supplementary issuance, and replacement requirements, which are conducive to enterprises to strengthen their own financial management and internal control management, and reduce tax risks. Third, in view of the situation that enterprises fail to obtain external certificates or obtain non-compliant external certificates, the measures provide remedial measures to protect the legitimate rights and interests of taxpayers.

Main Contents of 3.
Scope of Application of (I)

The taxpayer entities applicable to the Measures are resident enterprises and non-resident enterprises stipulated in the Enterprise Income Tax Law and its implementing regulations.
Basic Principles of (II)
As pre-tax deduction vouchers are difficult to list one by one, by clarifying the management principles, it is conducive to eliminating disputes and ensuring that taxpayers and tax authorities jointly follow and standardize the handling. Pre-tax deduction vouchers should follow the principles of authenticity, legality and relevance in the management. Authenticity is the basis, if the enterprise's economic business and expenditure does not have authenticity, naturally does not involve the issue of pre-tax deduction. Legitimacy and relevance are the core, and only when the form and source of the pre-tax deduction voucher comply with laws, regulations and other relevant provisions, and are associated with the expenditure and have the power of proof, can it be used as proof of the pre-tax deduction of enterprise expenditure.
Relationship between (III) Pre-tax Deduction Voucher and Pre-tax Deduction
Pre-tax Deduction Voucher is the basis for enterprises to deduct relevant expenses when calculating the taxable income of enterprise income tax. The scope and standard of pre-tax deduction of enterprise expenses shall be implemented in accordance with the relevant provisions of the Enterprise Income Tax Law and its implementing regulations.
Relationship between (IV) Pre-tax Deduction Voucher and Related Information
Enterprises are often accompanied by contractual agreements, payment vouchers and other related information in their business activities and economic transactions, and in some cases, they are the basis for expenditure, such as the judgment document issued by the court to award the enterprise to pay liquidated damages. The above information does not belong to the pre-tax deduction voucher, but belongs to the information directly related to the business activities of the enterprise and can prove the authenticity of the pre-tax deduction voucher. The enterprise shall also perform the responsibility of custody in accordance with the relevant provisions of laws and regulations, so as to prepare for verification by relevant departments, institutions or personnel including tax authorities.
Types of (V) pre-tax deduction vouchers
According to the source of acquisition of pre-tax deduction vouchers, the Measures divide them into internal vouchers and external vouchers. Internal vouchers refer to the original accounting vouchers that an enterprise fills in for accounting expenses in accordance with national accounting laws, regulations and other relevant provisions when expenses are incurred. Such as the enterprise to pay employees wages, payroll and other accounting original documents are internal vouchers. External vouchers refer to invoices, financial bills, tax payment vouchers, division documents and receipts issued by other units and individuals obtained when an enterprise has business activities and other matters. Among them, invoices include paper invoices and electronic invoices, as well as invoices issued by tax authorities. The time for
(VI) to obtain pre-tax deduction vouchers requires
enterprises to obtain pre-tax deduction vouchers that meet the requirements when expenditures are incurred. However, considering that in some cases enterprises may need to reissue and replace pre-tax deduction vouchers that meet the requirements, the Measures stipulate that enterprises should obtain pre-tax deduction vouchers that meet the requirements before the end of the final settlement period stipulated in the current year's Enterprise Income Tax Law.
Tax treatment of (VII) external vouchers
If an enterprise obtains invoices and other external vouchers that meet the requirements within the prescribed time limit, the corresponding expenses can be deducted before tax. Should be obtained but not obtained invoices, other external vouchers or non-compliant invoices, non-compliant other external vouchers, can be handled in accordance with the following provisions:
. Tax treatment before the end of the settlement period
() can be reissued or replaced with invoices and other external vouchers that meet the requirements, the corresponding expenses can be deducted before tax. If
( 2 ) is unable to issue or replace invoices and other external vouchers that meet the requirements due to special reasons such as cancellation, revocation, revocation of business license according to law, and identification by tax authorities as abnormal accounts, the corresponding expenses can be deducted before tax after the authenticity of the expenses is confirmed by relevant information. If
( 3 ) fails to issue or replace invoices and other external documents that meet the requirements and fails to confirm the authenticity of the expenditure with relevant information, the corresponding expenditure shall not be deducted before tax in the year in which it occurs.
2. Tax Treatment after the End of the Settlement Period
() Due to some reasons (such as purchase and sale contracts, project disputes, etc.), the enterprise fails to obtain invoices and other external certificates that meet the requirements or obtain non-compliant invoices and other non-compliant external certificates within the specified time limit, and the enterprise does not voluntarily deduct before tax, after obtaining qualified invoices and other external documents in subsequent years, the corresponding expenses can be deducted in the year in which the expenses are incurred, and the period of deduction shall not exceed 5 years. Among them, if the other party cannot issue or exchange invoices and other external vouchers that meet the requirements due to special reasons such as cancellation, revocation, revocation of business license according to law, and identification by tax authorities as abnormal accounts, the corresponding expenses can also be deducted from the year in which the expenditure occurs after the enterprise confirms the authenticity of the expenditure with relevant information in the following year, and the deduction period shall not exceed 5 years.
( 2 ) After the tax authorities find that the enterprise should have obtained but failed to obtain invoices, other external vouchers or have obtained non-compliant invoices, non-compliant other external vouchers, the enterprise shall issue or replace the invoices and other external vouchers that meet the regulations within 60 days from the date of notification, or verify the authenticity of the expenditure with relevant information in accordance with Article 14 of the Measures, the corresponding expenditure can be deducted before tax in the year in which it occurs. Otherwise, the expenditure may not be deducted before tax in the year in which it occurs, nor may it be deducted in subsequent years.
(VIII) Special Provisions
1. If the State Administration of Taxation issues invoices for taxable items as otherwise stipulated, the stipulated invoices or bills shall be used as pre-tax deduction vouchers, for example, the China Railway Corporation and its affiliated transportation enterprises ( including branches ) self-printed railway bills stipulated in the Announcement of the State Administration of Taxation on Changing Business Tax to VAT Invoices and the Use of Tax Control Systems in Railway Transportation and Postal Industry (State Administration of Taxation Announcement 2013 No. 86 76 ).
2. Although the expenditure items incurred by enterprises in China are not taxable items, if invoices can be issued according to the regulations of the State Administration of Taxation, invoices can be used as pre-tax deduction vouchers, for example, the non-taxable items specified in the annex to the "Tax Classification and Coding Table for Goods and Services" to the Announcement of the State Administration of Taxation on Several Matters Concerning the Administration of Value-Added Tax Invoices (State Administration of Taxation Announcement 2017 No. 98 45 ).
4. Implementation Time "Measures" shall come into force from 2018
July 1 .