Tax And Accounting Treatment Of Advertising Expenses

accounting

The deduction of profits.

According to the Circular of the State Administration of Taxation on Issuing the "pre tax deduction method for enterprise income tax" (tax return No. [2000]84), since January 1, 2000, taxpayers' advertising expenses not exceeding 2% of sales (business) income in each tax year can be deducted, and the excess part can be carried forward indefinitely to the next year.

In addition, according to the Circular of the State Administration of Taxation on adjusting the pre tax deduction standard for advertising expenses in some industries ([2001]89), since January 1, 2001, enterprises in pharmaceutical, food, including health care products, beverages, daily chemicals, home appliances, communications, software development, integrated circuits, real estate development, sports culture and furniture and building materials mall will not be able to deduct the advertising expenses incurred in each tax year by 8% of sales (business) income.

However, according to the provisions of the Ministry of Finance and the State Administration of Taxation on the issue of pre tax deduction of grain liquor advertising fees (fiscal and tax [1998]45 number), since January 1, 1998, the advertising expenses for grain liquor can not be deducted before tax.

In addition, according to relevant laws, regulations or industries of the state

Therefore, as a result of

Example: a company's policy of pre tax deduction of advertising expenses is 2%. From 2003 to 2006, the advertising expenses of sales revenue, actual expenditure, advertising expenses before tax deduction, the temporary difference of generation (return), and the adjustment of tax base and cumulative taxable temporary difference are shown in the following table:

Let's assume that the business is from 2003 to 2006.

At the end of 2003, the impact of time difference on taxable time was 8000 yuan (20000 x 40%).

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Income tax 400000

Deferred income tax assets - deductible deferred income tax 80000

Loan: tax payable - income tax payable 480000

At the end of 2004, before tax

At the end of 2005, the impact of time difference on taxable time was calculated at -30000 yuan (-100000 * 30%).

Income tax 600000

Loan: tax payable 570000

Deferred income tax assets - deductible deferred income tax 30000

Secondly, accounting for the adjustment of tax rate changes:

(1) in 2005, the adjustment of tax time difference in 2003 was 20000 yuan (200000 x 40%-200000 * 30%).

Income tax 20000

Loan: deferred income tax assets - deductible deferred income tax 20000

At the end of the term, the balance of deferred income tax assets deductible deferred income tax is 60000 yuan.

(2) in 2005, the time difference of taxable time in 2004 was adjusted to 10000 yuan (40000-30000). As a result of this adjustment, the balance of deferred income tax assets - unused tax losses was adjusted to 30000 yuan.

Suppose that the time difference in the 2004 year of the current sale is 30000 yuan. Since the time difference of 2004 does not substantially affect the tax payment, it is only an auxiliary record of the "deferred income tax assets - not using tax loss" subjects.

Therefore, the "deferred income tax assets - unused tax loss" subjects were sold for 30000 yuan in the current period, with a final balance of 0..

The accounts for 2005 are as follows:

Income tax 600000

Loan: tax payable - income tax payable 600000

At the end of 2006, the impact of discrepancy on tax time was -60000 yuan (-200000 x 30%), and deferred income tax assets were sold for 60000 yuan.

Income tax 600000

Loan: tax payable - income tax payable 540000

Deferred income tax assets - deductible deferred income tax 60000