I. Incremental tax allowance
Incremental tax allowance refers to the new VAT input tax in a certain period, which is not fully deducted due to various reasons (such as the decrease of sales revenue and the increase of input tax), thus forming the tax allowance. Incremental tax allowance reflects the change of enterprise's value-added tax deduction ability, which is characterized by dynamic change with the change of enterprise's business activities and tax payment.
Second, stock tax allowance.
Inventory allowance is the accumulated VAT input tax of enterprises in previous years. This part of the tax amount may be formed due to various reasons such as the business situation in the history of the enterprise and the change of tax policy. Inventory allowance is long-term and cumulative, which represents the tax resources that have not been fully utilized in the past business activities of enterprises.
From the perspective of tax treatment, the main difference between incremental allowance and stock allowance lies in its source and nature. Incremental tax allowance is a newly generated tax allowance in current business activities, and stock tax allowance is the accumulated tax allowance in previous years. Therefore, in tax planning and compliance management, enterprises need to make rational use of these two tax credits according to their own operating conditions and tax requirements in order to maximize tax benefits.
In addition, enterprises should pay attention to abide by relevant tax laws and regulations when dealing with tax allowances to ensure the compliance of tax treatment. For example, according to the tax law, enterprises can apply for tax refund under certain conditions, but they must meet the relevant conditions and procedures. Therefore, enterprises should fully understand the provisions of the tax law in practice to ensure the legitimacy and accuracy of tax treatment.
To sum up:
Incremental tax allowance and stock tax allowance are two different concepts in the tax field, which represent the value-added tax allowance of enterprises in different periods respectively. Incremental tax allowance is the input tax amount that the enterprise has increased in the current period, and stock tax allowance is the accumulated input tax amount of the enterprise in previous years. In tax planning and compliance operation, enterprises should fully understand and make use of these two tax preferences, optimize tax structure and reduce tax risks.
Legal basis:
People's Republic of China (PRC) value-added tax law
Article 18 stipulates:
If the taxpayer's current tax payable is greater than his current output tax, his tax allowance can be carried forward to the next period to continue to be deducted; If the taxpayer's tax payable in the current period is less than or equal to its output tax in the current period, the tax payable shall be limited to its output tax in the current period, and the input tax that has not been deducted in the current period shall be carried forward to the next period to continue to be deducted.
Announcement of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Defining the Final VAT Refund Policy of Advanced Manufacturing Industry
Article 1 stipulates:
We will intensify the final VAT refund policy for advanced manufacturing industries, and extend the policy scope of full monthly refund of incremental tax credits for advanced manufacturing industries to qualified manufacturing enterprises (including individual industrial and commercial households, the same below), and return the tax credits for manufacturing enterprises at one time.
These legal provisions provide a clear legal basis and operational guide for the treatment of incremental deduction and stock deduction, and ensure that enterprises can follow the provisions of the tax law and safeguard their legitimate rights and interests when dealing with tax deduction.