the difference between deposit and deposit

"deposit" and "deposit" are two common terms in life, and most of us have heard of the difference in their concepts. However, in real life scenes, some taxpayers rarely care about the difference, which may lead to damage to their own rights and interests. It is worth noting that the concept of deposit is different from that of deposit, and the tax treatment is also different.

deposit is a kind of security fund

In the Dictionary of Modern Chinese Standards, the definitions of the two are as follows: deposit refers to the money paid by one party to the other party in advance to ensure the performance of the contract, which has legal effect and binds both parties; Deposit, as a part of the payment in advance, has the meaning of a promise, but it does not have the function of guaranteeing the performance of the contract in law.

The Civil Code also has provisions on deposit, and its Article 586 stipulates that the parties may agree that one party will pay the deposit to the other party as a guarantee for the creditor's rights. The deposit contract is established when the deposit is actually paid. Therefore, the deposit is a form of guarantee, while the deposit is just a way of payment. The concepts of deposit and deposit are completely different, which leads to differences in tax treatment.

the down payment belongs to the security deposit. When the down payment is delivered, both parties shall treat it as a current account, and tax declaration is not involved. In the subsequent stage, if one party breaches the contract, so that the purpose of the contract cannot be achieved, the penalty of deposit shall be applied at this time, that is, if the party paying the deposit breaches the contract, it has no right to demand the return of the deposit; If the party receiving the deposit breaches the contract, it shall double the deposit.

the party who gets the down payment fine, because there is no taxable behavior, the down payment does not constitute an out-of-price expense, so there is no need to issue a VAT invoice, which does not involve VAT. In terms of enterprise income tax, the deposit penalty paid by the defaulting party can be deducted before tax with relevant agreements and other deduction certificates.

for example, a real estate enterprise receives a deposit from customer b enterprise.

upon receipt, enterprise a should include it in other payables, and it is not necessary to prepay value-added tax as an advance payment, and it is not necessary to calculate the estimated gross profit to pay enterprise income tax.

if enterprise b breaches the contract and enterprise a deducts the deposit, it should be transferred to non-operating income to calculate and pay enterprise income tax, while the deposit loss incurred by enterprise b can be deducted before enterprise income tax with relevant documents such as deposit contract.

deposit belongs to advance payment

deposit, as a payment method, is a part of the transaction price and has no guarantee function.

for the recipient, according to the relevant provisions of value-added tax, the value-added tax is handled differently in different situations. For example, when the lessor receives the deposit of the lease contract, it is obliged to pay VAT and needs to issue a VAT invoice to the lessee. If the contract is subsequently terminated for various reasons and the deposit is refunded, the specific problems will be analyzed in detail.

for example, part of the contract is fulfilled, and part of the deposit is used as the price. In this case, the unreturned deposit is accounted for according to the income, and the value-added tax and enterprise income tax are paid according to the regulations; If the refunded deposit has been invoiced, a red-ink invoice can be issued to offset the value-added tax income. Since there is no obligation to pay income tax, it does not involve income tax treatment.

for the payer, if the deposit cannot be recovered for various reasons, the payer should deduct it as an asset loss before enterprise income tax. It is worth noting that the pre-tax deduction of asset losses must meet the relevant conditions stipulated in the Announcement of State Taxation Administration of The People's Republic of China on Issuing the Administrative Measures for Pre-tax Deduction of Enterprise Asset Losses.

In practice, deposit and deposit are two concepts that are easily confused. In tax treatment, it is often not accurate enough to judge only by words. According to the contract, the enterprise should accurately analyze the essence of the business and make a qualitative analysis before it can carry out the correct tax treatment.