These financial and tax knowledge will help you avoid detours
2024-03-13
37 CommentsIn business operations, whether it is accounting for payroll or various transactions generated during operations, it is necessary to handle accounting, tax reporting, and invoicing, which are indispensable for business operations.
Therefore, do not underestimate them, as a lack of caution can lead to many troubles. Therefore, businesses should have a basic understanding of financial and tax knowledge. Below, the editor has organized a few points of financial and tax knowledge for everyone!
1. What to do after obtaining a business license
1. Engraving seals (do not miss the official seal, financial seal, legal representative seal, contract seal, and invoice seal)
2. Open a basic account (for public accounts)
3. Tax registration (both national and local taxes need to be handled)
4. Sign a tripartite agreement (tax bureau, bank, and enterprise)
5. Apply for a one-card pass
6. When the enterprise needs to issue invoices:
(1) Apply to purchase a tax control disk and ticket treasure, the cost of purchase can be fully deducted from the tax payment.(2) Purchase of Invoices
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● II. Establishment of Accounting Books
1. After the establishment of a company, regardless of whether you have started operations or not, the tax bureau and the industrial and commercial bureau consider that you have begun operations, so you must have your own accounting books and start fulfilling the "tax declaration" obligation.
2. The accounting books you set up are not your own cash flow records, but accounting books that meet the requirements, accompanied by vouchers that comply with regulations. Bookkeeping is one of the basic methods and important links of accounting work, and it is a key stage for enterprises to check accounts, reconcile accounts, close accounts, and understand financial conditions and business results at any time. Professional accountants are needed to do this. If you do not want to hire a dedicated accountant, you can also choose an accounting firm for bookkeeping services.
● III. Tax Declaration
1. The company must "declare" within the specified time limit according to the types of taxes determined by the tax bureau. However, tax reporting and tax payment are two different things; reporting taxes does not necessarily mean that tax payments must be made.
2. Even companies that have not operated and have not issued invoices must also report taxes. In this case, you can choose "zero reporting." However, long-term zero reporting will be included in "risk monitoring." Moreover, if a company does not operate for six months, the industrial and commercial bureau will also revoke your business license.
3. Enterprises that declare late will bear penalties and late fees!
● IV. Annual Corporate Income Tax Settlement
Settlement and payment refer to the act of taxpayers filing annual corporate income tax returns and settling the full year's corporate income tax payments with the competent tax authorities within a specified period after the end of the tax year.Small-scale taxpayers may experience different effects from tax-exempt policies due to varying tax payment deadlines. To ensure that small-scale taxpayers fully enjoy the policies, those who pay taxes on a fixed deadline can choose to pay taxes monthly or quarterly based on their actual business operations. However, once a choice is made, it cannot be changed within an accounting year.
In 2021, small and micro enterprises must pay attention to the three figures of 150,000, 1 million, and 3 million.
1. Value-added Tax (VAT): For monthly tax payers, if the monthly income is ≤150,000, VAT is exempted (except for special invoices); for income above 150,000, VAT (at a rate of 1%) is paid in full; for quarterly tax payers, small-scale taxpayers with a quarterly income of less than 300,000 are exempt from VAT, but not from corporate income tax.
2. Corporate Income Tax:
(1) If the annual profit is <1 million, the income tax rate is 5%.
(2) If the annual profit is between 1 million and 3 million, the income tax rate is 10%.
(3) If the annual profit is >3 million, the income tax rate is 25%.
Income tax = profit × the corresponding tax rate, where profit = income - cost of goods sold - company management and operating expenses - wages.
3. Key points for corporate tax settlement and payment:
(1) Confirmation of income.(2) Deduction of expenses.
(3) Tax adjustments. There are differences between accounting standards and tax regulations. The total profit listed in the financial statements is calculated according to accounting standards, and the taxable income is not equal to the total profit, but must be adjusted according to tax regulations.
4. The tax year for enterprises
Normal situation: From January 1 to December 31 of the Gregorian calendar.
Special situation: If a business starts or ceases operations in the middle of a tax year, resulting in an actual operating period of less than 12 months for that tax year, the actual operating period shall be considered as a tax year.
5. Time for final tax settlement
Within five months after the end of a tax year (from January 1 to May 31 of the following year).
Warm reminder: It can be seen that the two major types of taxes involved by enterprises are Value-Added Tax (VAT) and Corporate Income Tax (CIT), which account for about 75% of the total tax burden of an enterprise. China provides significant tax incentives for small businesses in both of these taxes. If our enterprise wants to grow and stabilize, it is necessary to redesign the corporate equity structure.