Tax treatment of unfinished development products
If the development products such as houses, commercial houses and other buildings, attachments and supporting facilities developed and built by development enterprises are sold in the form of pre-sale before completion, the pre-sale income will be calculated quarterly (or monthly) according to the estimated taxable gross profit margin, and will be included in the current taxable income after deducting the relevant period expenses, business taxes and surcharges, and will be adjusted after the taxable cost of the development products is settled.
Understand the first paragraph of Article 1 of Document 3 1, and mainly understand the following six points.
(A) the understanding of unfinished products-all work in progress
1. WIP can be understood as WIP of industrial enterprises, and its cost allocation is similar to WIP.
2.3 1 Document Products under construction refer not only to commercial houses, but also to all development buildings such as commercial houses, supporting facilities, clubs and sales offices. In the past, it was misunderstood that corporate income tax was levied only on the pre-sale income of commercial housing. Document 3 1 clarifies that the scope of paying enterprise income tax on pre-sale income is all developed products.
(B) Pre-sale method-cash basis
Pre-sale mode is an important sales mode for real estate development enterprises. The main tax understanding of this article is that, regardless of whether the Pre-sale Permit is obtained or not, as long as the income is obtained before the completion, the enterprise income tax shall be paid according to the pre-sale income.
(III) Estimated taxable gross profit margin-Gross profit is not operating profit.
Document 3 1 puts forward the concept of estimated taxable gross profit margin for the first time, which corresponds to the "operating profit rate" in document 83. In accounting, operating profit = revenue-cost-tax and additional-period expenses, while gross profit = revenue-cost. Document 3 1 puts forward the concept of gross profit margin, that is, the gross profit calculated according to gross profit margin is clear, and business tax and additional and period expenses are allowed to be deducted.
(4) Deduct the period expenses, business taxes and surcharges-deduct them together with the finished products.
This paper mainly focuses on two points: First, the financial expenses of real estate development enterprises are different from those of ordinary enterprises. Before the development product is not completed, the interest of bank loan is included in its "in-process product" (unfinished development product); Second, the business tax paid by the pre-sale income of real estate development enterprises is also allowed to be deducted before tax. In fact, in practice, there is no need to distinguish between finished products and inter-product period expenses, business taxes and surcharges, both of which can be deducted in the current year, while income tax is paid annually, so there is no need to distinguish between finished products and inter-product period expenses.
(5) Current taxable income-hidden dangers.
Document 3 1 represents the gross profit of pre-sale income minus period expenses, taxes and surcharges as taxable income, which is of great significance in tax collection and management. If the tax payable for pre-sale income is regarded as prepaid tax, it lacks the necessary rigidity, and it is also clearly stated in the Tax Administration Law that the principle of prepaid tax is prohibited. If enterprises don't pay taxes in advance, it will be difficult to take effective collection and management measures. Document 3 1 indicates taxable income. First of all, the tax paid by the pre-sale income is taxable, not prepaid tax, so there will be no process of refunding more and making up less, that is, the concept of "paid-in". Secondly, it shows that if you don't pay the pre-sale income tax, it is tax evasion, and the tax authorities will punish you according to Article 63 of the Tax Administration Law, and you can take a series of measures such as tax preservation measures and tax enforcement measures. It can be said that the enterprise income tax paid by pre-sale income is expressed as "taxable income in the current period" in document 3 1. Although there are not many people, it is a hidden danger and ready to go.
(VI) Specific standards for taxable costs to be formulated.
Document 3 1 mentions the concept of "taxable cost" many times. Compared with general industrial enterprises, the cost accounting of real estate enterprises is very complicated, so the pre-tax deduction of costs has become the focus of corporate income tax. This article stipulates that although there is no concept of refunding more and making up less, the taxable income of developed products must be adjusted, that is, the feeling of "increasing without decreasing". As for the adjustment time of pre-sale income, document 3 1 defines it as "after the taxable cost is settled", that is, the adjustment is made after the development product is completed.