Q1: Tax filing Xiaowei, our company incurs an advertising fee expenditure at the end of July 2021. The funds have been transferred to the advertising company, but the other party has not issued an invoice yet. So when we declare in October, can we place this expenditure before tax?
A: Can be used for tax pre-payment.
Policy basis: Announcement on Several Issues Concerning Corporate Income Tax (Announcement No. 34 of the State Administration of Taxation 2011)
The actual related costs and expenses incurred by an enterprise in the current year are not available in a timely manner due to various reasons. When the enterprise prepaid quarterly income tax, it can temporarily calculate the amount incurred on the book; but when reconciling and clearing, it should provide additional valid vouchers for the cost and expenses.
Q2: If the other party has not provided an invoice before the settlement and settlement next year, will it be possible to obtain it again in the future and cannot be paid in advance before tax?
A: Not necessarily, it depends on the year of the invoice obtained, and it is limited to 5 years.
Policy basis: Announcement on the issuance of the "Management Measures for the Management of Enterprise Income Tax Pre-Tax Deduction Vouchers " (Announcement No. 28 of the State Administration of Taxation 2018)
If an enterprise should obtain invoices or other external vouchers in previous years, and the corresponding expenditure is not deducted before tax in that year, it shall obtain invoices or other external vouchers that meet the requirements in the subsequent years or provide relevant information that can prove the authenticity of its expenditure. The corresponding expenditure may be compensated until the annual pre-tax deduction of the expenditure occurs, but the period of compensation shall not exceed 5 years.
Q3: By the way, our company also signed a contract with well-known designers in the industry in August. As an individual, does he also need to provide an invoice as a deduction certificate?
A: Not necessarily, it needs to be judged comprehensively based on the amount of the contract, the frequency of payment, etc.
Policy basis: Announcement on the issuance of the "Regulations on the Management of Enterprise Income Tax Pre-Tax Deduction Vouchers" (Announcement No. 28 of the State Administration of Taxation 2018)
The other party is an institution that does not require tax registration according to the law or an individual engaged in small and sporadic business. The expenditure is made by the tax authority or the tax deduction voucher as the pre-tax deduction voucher. The receipt voucher should state the name of the receiving unit, the personal name and ID number, expenditure items, the amount of payment, etc. related information.
The criterion for judging small and sporadic business is that the sales of an individual engaged in taxable items business shall not exceed the threshold stipulated in the relevant VAT policies.
OK, I understand, thank you.
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