W Company Profile
W Enterprises located in urban areas, the sale of goods , and also engaged in engineering services, and sales were accounted for turnover of construction services and goods , and calculated based on the sales of goods subject to value added tax, business tax paid labor turnover is calculated based on the construction industry . In engineering services , and will undertake subcontract to third parties, the project purchased equipment containing components of the building . So also purchased equipment should be included in the project cost or deemed sale ? Differentiated treatment to the enterprise and what impact it? I will make the following specific analysis , and proposed tax planning advice on this basis .
Engineering services in the tax treatment of purchased goods - incorporated into the project cost of the tax burden
Incorporated into the project cost legal requirements
" People Business Tax Rules" Article 16 states: Except as provided in Article VII , the taxpayer provides construction services ( excluding decoration services ) , the turnover shall include works with raw materials, equipment and other materials , including price and power , but does not include the price of construction provided by the device. Here, the key is to explicitly included in the turnover of " equipment " must be " works with ."
Incorporated into the project cost tax burden
For example, the company purchased a W device and used for the project . Equipment purchase price is 1,000,000 , while its purchase to pay VAT 100 × 17% = 17 thousand. Provisional Regulations on VAT provisions , goods purchased for non- VAT taxable items , which may not deduct input tax from output tax . So, business tax caused by the device is : (100 +17) × 3% = 3.51万; If W is located in the city , then the urban construction tax and education surtax total of : 3.51 × (7% +3%) = 0.351万; the same time , business tax , urban construction tax and education surtax as a business tax and additional items deductible corporate income tax : (3.51 +0.351) × 0.25 = 0.96525 thousand. Impact of equipment worth 100 million into the project cost is the total tax burden on businesses : Increase tax 3.51 +0.351-0.96525 = 2.89575 thousand.
Engineering services in the tax treatment of purchased goods - sales of equipment deemed tax burden
Sales of equipment as legal requirements
W 's basic information , we see that the equipment can not be purchased concurrently category belong ( concurrently require sellers of goods and taxable services without direct contact and affiliation , but in this case constitutes a building purchased equipment section) , but only based on hybrid sales to deal with. " Provisional Regulations of the PRC business tax " under Article VI of the sales activity that involves both a taxable services and goods involved , mixed sales behavior. In addition to the Article VII ( taxpayers providing construction services sales practices while production of goods ; shall be accounted for turnover of taxable services and sales of goods , the taxable turnover of labor to pay sales taxes , goods sales do not pay sales tax) requirements, engaged in the manufacture , wholesale or retail goods companies, mixed sale enterprise units and inpidual industrial and commercial households , as sales of goods , do not pay sales tax ; other units and inpiduals mixed sales behavior , depending on the to provide taxable services , pay sales tax. Business Tax does not provide construction services for the same time provides for the sale of purchased equipment , and therefore does not comply with Article VI of the companies had to apply Article VII .
W business along with engineering and installation of equipment purchased , does not apply to Article VI , and the application of the provisions of Article VII of the construction industry will increase the tax burden on labor , and the facts do not match ( construction and installation labor income is likely much higher than processing equipment price ) and therefore engaged in the construction and installation services in practice with reference to Article VI of the enterprise when dealing purchased equipment , namely accounting sales and turnover.
As sales equipment tax burden
If the purchased equipment purchase price is 1,000,000 , W to 1.2 million at a price , then the W enterprises should pay VAT (105-100) × 17% = 0.85 million and corporate income tax payable (105-100) × 25 % = 12,500 . The purchase price for the 100 , 105, under the premise of selling price , the equipment was deemed sales tax caused 21,000 .
The above analysis based on selling price 1000000 , 105 selling price on the basis of the assumption , then ignored or regarded as sales tax on the cost of the provisions included in the project , two different processing methods, when it can reach an equilibrium point? Or how much time dealing two methods to spread the tax burden is consistent with it?
(X-100) × 17% + (X-100) × 25% = 2.89575 Wan
Calculated X ≈ 106.89 million, or selling price of 1,068,900 yuan , the two consistent tax treatment . When the selling price is higher than 1,068,900 , deemed sale treatment burden heavier tax burden , less than 1,068,900 , the cost of the project incorporated a heavier tax burden , of course, not considered here and spread income .
Effect of two treatments on clients tax burden
We did not consider the above to reflect the customer , after all, the price is determined by supply and demand sides together . In the deemed sales processing, customer purchased the device input tax deductible current output ; included in the cost of the project , together with its input VAT is included in the cost of construction and construction in progress transferred to fixed when assets , to be amortized over future years , and diminishing income for each fiscal year. If the selling price is 1.05 million devices , if handled according to acquire equipment , the current deductible input tax is 178,500 ; If you press incorporated in the construction costs, and equipment depreciation period of 10 years, salvage rate 5% , the annual deductible for corporate income tax is 2.493 (105 × 95% &pide; 10 × 25%), corporate income tax deduction decade of 24.93 > 17.85 . However, considering inflation and the time value of money , today's 178 500 249 300 may be more valuable than a decade the total amount . Thus, the price at a certain level , you are deemed beneficial to both buyers and sellers sell .
References:
[ 1 ] 2011 Annual Uniform CPA Examination materials nationwide tax [M]. Economic Science Press, 2011
[ 2 ] Liushu Peng , Chen Yu . Planned new tax on corporate income tax environment [J]. Shandong Business Accounting , 2009, ( 03 )
[ 3 ] high Mizar study of tax planning strategies - Taking an example Xie Zhihua construction enterprises [J] Financial Services Sector 2010 ( 12 ) .