Accounting treatment of inflow and elimination taxes
In the accounting treatment, “payable taxes” is a liability category that is primarily used to record the various taxes and fees payable by the enterprise. The subject is registered with the lender for the fees due and the borrower for the taxes paid. At the end of the period, the credit balance represents outstanding taxes, while the debit balance represents excess or undefeated taxes。
Accounting treatment of vat
When a general taxpayer buys goods, if they are deductible, the amount of vat due is recorded as a credit for “payable taxes — value added tax (vat) due”. At the same time, amounts payable or actually paid are credited to such items as accounts payable。
When selling goods or providing taxable labour, the items are debited to “receivables” on the basis of operating income and value added tax due. The value added tax (vat) indicated on the earmarked invoice is then credited to “payable tax - value added tax (vat)” and, on the basis of the realized operating income, to “primary operating income” etc。
At the end of the month, the outstanding vat due for the month was transferred from the “payable taxes — vat due” to the “unpaid vat” line. In practice, the debit is “payable taxes — value added tax (vat) transferred out of the vat)” and is credited to “payable taxes — value added tax (vat) not paid”. Overpayment of vat for the same month was recorded in reverse。
When vat is paid, the debit “payable taxes — vat due (paid)” is credited to “bank deposits”. In the case of outstanding vat due from the previous month, the debit “payable tax — no vat” is credited to “bank deposits”。
Accounting treatment of other taxes
The calculation and payment of excise and resource taxes are similar to vat. The enterprise is required to calculate the amount of excise tax, resource tax, etc., debited to “tax and surcharge” and credited to “tax and excise tax”. When actual payments are made, credits are credited to such subjects as “bank deposits” by debiting such items as “tax due — excise due”。
Treatment of corporate income tax
In the calculation of income tax payable, a credit is made to the “taxable charge — income tax payable” for such items as “income tax expenses”. When income tax is paid, the debit “payable taxes — income tax due” is credited to “bank deposits”。
Treatment of personal income taxes
An enterprise is required to calculate the personal income tax due to the employee, which is credited to the “payable tax—payable personal income tax” by debiting the subject “payable to the employee”. When personal income tax is paid, the debit “payable tax—payable personal income tax” is credited to “bank deposits”。
Through these accounting treatments, enterprises can clearly record and track the payment of taxes and charges to ensure the accuracy of financial data。
