Input tax refers to the value-added tax that can be deducted according to the tax law when an enterprise purchases goods or accepts services. The output tax is the value-added tax calculated according to the sales amount and the tax rate stipulated in the tax law when the enterprise sells goods or provides services.
Two, the input tax is greater than the output tax.
When the input tax amount of an enterprise is greater than the output tax amount, it means that the value-added tax amount generated by purchasing goods or receiving services exceeds the value-added tax amount generated by selling goods or providing services. This usually happens in the peak period of enterprise procurement or the off-season of sales.
3. Do you need to carry it forward at the end of the month?
There is no fixed answer to whether it is necessary to carry forward the part of the input tax that is greater than the output tax at the end of the month. This mainly depends on the enterprise's financial strategy and tax planning.
A common practice is that enterprises can choose to keep the excess input tax as the next deduction. The advantage of this is that it can reduce the tax burden of enterprises in the future, but it may also lead to the occupation of enterprise funds and the inability to use them for other business activities in time.
Another way to do this is to carry it forward. The enterprise can carry forward the surplus input tax to the next period as the prepayment tax for the next period. The advantage of this is that it can avoid capital occupation, but it may increase the tax processing workload of enterprises.
When deciding whether to carry forward, an enterprise should comprehensively consider its financial situation, tax risks, liquidity and other factors, and consult professional tax consultants or accountants.
IV. Tax Compliance and Risk Control
No matter what treatment method the enterprise chooses, it should ensure compliance with tax laws and avoid tax risks. At the same time, enterprises should also establish a sound tax management system to ensure the accuracy and compliance of tax treatment.
To sum up:
When the input tax amount of an enterprise is greater than the output tax amount, whether it needs to be carried forward at the end of the month depends on the specific situation of the enterprise and the tax strategy. Enterprises can choose to keep the surplus input tax as the next deduction, or carry it forward as the next prepayment tax. When making decisions, enterprises should comprehensively consider various factors and follow the provisions of tax laws to ensure the compliance and risk control of tax treatment.
Legal basis:
Value-added Tax Law of the People's Republic of China
Article 24 stipulates that:
Taxpayers who engage in taxable sales shall simply calculate the taxable amount according to the sales amount and the tax rate stipulated in this article, and shall not deduct the input tax. Calculation formula of tax payable: tax payable = sales volume × collection rate.
Article 25 stipulates that:
The following input tax is allowed to be deducted from the output tax:
(1) VAT indicated on the special VAT invoice obtained from the seller;
(2) Value-added tax indicated in the special payment form for customs import value-added tax obtained from the customs.