Article 1 of the Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Corporate Income Tax Policies Concerning Fiscal Funds, Administrative Fees and Government Funds (Caishui [2008] 15 1No.) stipulates: "All kinds of fiscal funds obtained by enterprises shall be included in the total income of the enterprise in the current year, except those that belong to state investment and require repayment of the principal after the use of the funds. The fiscal funds mentioned in this article refer to financial subsidies, subsidies, loan interest subsidies obtained by enterprises from the government and its relevant departments, as well as other kinds of special financial funds, including value-added tax that is directly reduced or exempted and various taxes that can be refunded immediately upon collection, refunded before collection and refunded after collection, but excluding export tax rebates obtained by enterprises according to regulations. " Why does the above only require that the directly reduced VAT be regarded as enterprise income, but not other directly reduced taxes? Let's try to illustrate with some examples. Example1:A Performing Arts Co., Ltd. held a music symphony in Vietnam, collecting performance income of 50 million yuan and corresponding expenses of 30 million yuan. According to Article 3 of the Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Certain Tax Exemption Policies for Business Tax on Personal Financial Commodity Trading (Caishui [2009]11No.), "Business tax is temporarily exempted for the construction services provided by Chinese people, domestic units or individuals in China and abroad." Assuming that the business tax directly reduced or exempted is treated as taxable income of enterprise income tax, Then the accounting treatment is as follows: Debit: 50 million loan from bank deposit: 50 million loan from main business: 30 million loan from main business cost: 30 million loan from bank deposit and other subjects: business tax and surcharge1500,000 loan: tax payable-business tax payable1500,000 loan: tax payable-business tax payable/kloc-0. Kloc-0/500,000 The taxable income of this business after the above accounting treatment: 50,000-30,000-150+150 = 20 million yuan. If the business tax directly reduced or exempted is not treated as government subsidy income, only (1) and (2) accounting entries are needed, and the taxable income is still 20 million yuan. Example 2: B Seed Wholesale & Retail Co., Ltd.100000 kg was purchased in February at a price of100000 yuan, and a special VAT invoice was obtained with an input tax of130000 yuan. In that month, 500,000 kilograms of seeds were sold wholesale, and an ordinary invoice of 600,000 yuan was issued. According to Article 1 of the Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on the Policy of Exempting Value-added Tax on Certain Agricultural Means of Production (Caishui [2001]13), "Wholesale and retail seeds, seedlings, fertilizers, pesticides and agricultural machinery are exempt from value-added tax." If the vat output tax directly reduced or exempted is not accounted for, the accounting treatment is as follows: borrowing: inventory goods1130,000 yuan loan: bank deposit1/0/30,000 yuan loan: bank deposit 600,000 yuan loan: main business income 600,000 yuan loan: main business cost 565,000 yuan loan: inventory goods 550,000 yuan loan. According to the document Caishui [2008] 15 1, the directly reduced value-added tax is treated as the income tax of the applied enterprise. Then the corresponding accounting treatment is as follows: debit: inventory goods1100,000 yuan payable tax-payable value-added tax (input tax)130,000 yuan loan: bank deposit130,000 yuan loan: bank deposit 600,000 yuan loan: main business income 53. 1 30,000 yuan loan. Taxes payable-VAT payable (output tax) 69,000 yuan Borrow: Taxes payable-VAT payable (output tax) 69,000 yuan Loan: non-operating income-government subsidy 69,000 yuan (4) Because 500,000 kilograms of seeds were tax-free, Therefore, the corresponding input tax should be transferred out: 65,000 yuan for inventory goods, 65,000 yuan for taxes payable, and 65,000 yuan for value-added tax payable (input tax transferred out) (13/2). (5) Carry-forward seed sales cost, 532,500 yuan for main business, and 532,500 yuan for inventory goods (106.5/2). Why are there two accounting treatments that cause different taxable income? The important reason is that there are still 500,000 kilograms of seeds that have not been sold, and the corresponding VAT input tax of 65,000 yuan has not been transferred to inventory goods. Let's assume that the remaining 500,000 kilograms of seeds in the next month are all sold at the price of 600,000 yuan, without accounting treatment for direct reduction of VAT. Borrowing: 600,000 yuan for bank deposit, 600,000 yuan for main business income, 565,000 yuan for main business cost, and 35,000 yuan for inventory goods. Together with the income realized in the previous year1February, the total taxable income is 70,000 yuan. It is assumed that the accounting treatment in the next month's sales reflects the direct reduction of VAT. Borrow: bank deposit of 600,000 yuan; loan: main business income of 53. 1 10,000 yuan (60/13); payable taxes-payable value-added tax (output tax) of 69,000 yuan; borrow: payable taxes-payable value-added tax (output tax). 69,000 yuan loan: non-operating income-government subsidy 69,000 yuan loan: inventory goods 65,000 yuan loan: payable taxes-payable value-added tax (input tax transferred out) 65,000 yuan (13/2) loan: main business cost 597,500 yuan loan: inventory goods 597,500 yuan (53.25+6.5) To sum up, the reason for accounting for directly reduced VAT is because VAT is different from other taxes, and the consideration of its input tax will directly affect the correct determination of taxable income of enterprise income tax.