A real estate leasing company signed a lease contract with a property management company in 2009, and leased some houses to tenants for 5 years with an annual rent of 2 million yuan. In 2009, a five-year rent of RMB 6,543,800,000 was collected at one time, and a lease invoice was issued. The financial personnel of the enterprise are not sure how to confirm the income and pay the relevant taxes and fees for this rent. Financial personnel believe that if the income is confirmed at one time, the company will make a profit in the current year and lose money in the next five years, which is not in line with the accrual principle. But if you don't confirm your income, you are worried about violating the tax law. Taxpayers generally collect rental income from businesses that transfer the right to use assets on schedule, such as renting houses, land or other equipment, but there are also cases where rents are collected in advance according to contracts or agreements. Financially, income is recognized by stages according to the accrual basis, while in tax treatment, some people think that business tax and enterprise income tax should also be levied according to the accrual basis, while others think that income should be recognized according to the cash basis. Then, how should the rental income received in advance be confirmed? Tax treatment of business tax Article 12 of the Provisional Regulations on Business Tax stipulates that the time when the business tax obligation occurs is the day when taxpayers provide taxable services, transfer intangible assets or sell real estate, receive business income or obtain evidence to claim business income. Unless otherwise provided by the competent departments of finance and taxation of the State Council, such provisions shall prevail. Article 24 of the Detailed Rules for the Implementation of the Provisional Regulations on Business Tax makes it clear that the day when the business income certificate is obtained as mentioned in Article 12 of the Provisional Regulations on Business Tax is the day when the payment date is determined in a written contract. Paragraph 2 of Article 25 makes it clear that if a taxpayer provides services in the construction industry or leasing industry in the form of advance payment, its tax obligation shall occur on the day when it receives the advance payment. It can be seen that the advance rent should be declared and paid business tax in one lump sum on the day of receiving the rent. As can be seen from the above provisions, the business tax on rent received in advance actually adopts the cash basis, that is, the payment date agreed in the written contract and the date of receiving the advance payment. For example, in 2009, when an enterprise charged a one-time five-year rent of 100000 yuan, it should pay a business tax of 500000 yuan (1000 yuan? 5%)。 Tax treatment of enterprise income tax Article 9 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that the calculation of taxable income of an enterprise is based on the accrual basis and belongs to the income and expenses of the current period, regardless of whether the payment is received or not. The income and expenses that do not belong to this period, even if the money has been received and paid in this period, are not regarded as the income and expenses of this period. Except as otherwise provided by this Ordinance and the competent departments of finance and taxation of the State Council. In other words, unless otherwise stipulated in the tax law, the basic principle of revenue recognition is the accrual principle. As long as it is the current income, whether the money is received or not, the income should be recognized. However, Article 19 of the Regulations for the Implementation of the Enterprise Income Tax Law makes it clear that the rental income shall be confirmed according to the date when the lessee pays the rent as agreed in the contract. Therefore, the rental income received in advance can't be fully recognized according to the accrual basis, but is closer to the cash basis. After this treatment, the income confirmed by tax and accounting will produce timing difference, and the rental income received in advance by enterprises should be treated as tax increase in the current year, included in the taxable income in the current year, and corporate income tax will be levied. On the other hand, if the contract stipulates to pay the rent for several years at the expiration of the lease, then the income should be recognized in the year of payment and enterprise income tax should be levied. The Notice of State Taxation Administration of The People's Republic of China on Several Tax Issues Concerning the Implementation of the Enterprise Income Tax Law (Guo [2010] No.79) further clarifies the recognition of rental income, that is, according to the provisions of Article 19 of the Regulations on the Implementation of the Enterprise Income Tax Law, the rental income, packaging materials or other tangible assets obtained by enterprises providing the right to use fixed assets shall be recognized on the date when the lessee pays the rent as stipulated in the transaction contract or agreement. Among them, if the lease term is stipulated in the transaction contract or agreement, and the rent is paid in advance in one lump sum, according to the principle of revenue and expenditure matching stipulated in Article 9 of the Regulations for the Implementation of the Enterprise Income Tax Law, the lessor may include the above-mentioned confirmed income in the relevant annual income by installments during the lease term. If the lessor is a non-resident enterprise with an institution in China and truthfully declares and pays enterprise income tax, it shall also be implemented in accordance with the provisions of this article. This provision is actually a substantial revision of Article 19 of the Regulations for the Implementation of the Enterprise Income Tax Law, that is, enterprises have the right to choose to confirm the rental income received in advance, that is, enterprises can receive the rental income across the lease period in advance in one lump sum, which can be confirmed according to the rental payable date agreed in the contract or agreement, or they can be included in the relevant annual income in installments according to the accrual principle during the lease period. Conditions for tax confirmation by installment The lessor must meet two conditions at the same time when choosing to confirm the rent by installment: First, the lease term is stipulated in the contract or agreement to span years. Second, the rent is paid in advance at one time. For example, according to document No.79 of Guoshuihan [2010], enterprises can pay enterprise income tax when they declare enterprise income tax in 2009 and confirm the rental income of 2 million yuan. Therefore, there is no timing difference in tax law and accounting, and the rental income100000 yuan can be confirmed by stages according to the provisions of Article 19 of the Regulations for the Implementation of the Enterprise Income Tax Law. The result of this treatment is that tax law and accounting will produce timing difference. Enterprises should increase the taxable income by 8 million yuan in 2009 and reduce the taxable income by 2 million yuan every year in the next four years. It should be reminded that when choosing to confirm the rental income according to Article 19 of the Implementation Regulations of the Enterprise Income Tax Law, although the lessor collects the enterprise income tax in full in the year when the income is received in advance, Article 47 of the Implementation Regulations of the Enterprise Income Tax Law clearly stipulates that the following amount shall be deducted from the rental fee paid by the enterprise by renting fixed assets according to the needs of production and business activities: 65,438+0. Lease fees incurred in renting fixed assets through operating lease shall be uniformly deducted according to the lease term. 2. Lease expenses incurred in leasing fixed assets by means of financial lease shall be deducted by stages for the part that constitutes the value of fixed assets leased by financial lease. In other words, the rent paid in advance by the lessee cannot be deducted at one time in the payment year, but should be deducted on average according to the lease term.