Final settlement refers to the summary settlement and settlement of income tax and certain other taxes that require prepayment of taxes after the end of the year. Income tax and other taxes are usually calculated based on the taxpayer's annual taxable income. After the end of the year, taxes are calculated based on the annual taxable income and the tax rate stipulated in the tax law. In order to ensure that taxes are paid into the treasury in a timely and balanced manner, in actual work, the tax collection method is generally adopted in which taxes are paid in advance on a monthly or quarterly basis, settled at the end of the year, and any excess is refunded or less is reimbursed. Prepayment is made monthly and quarterly. Generally, the tax payable is calculated based on the taxpayer's tax basis for this quarter (month). It is often difficult to completely match the tax basis for the annual final accounts. Therefore, after the end of the year, the tax payable must be calculated based on the taxpayer's tax basis. The final financial accounts are summarized and calculated, taxes are paid, and any excess tax paid in advance is refunded or compensated.

Extended information:

Final settlement objects

According to the provisions of the current income tax law, any financial accounting system with sound financial accounting system, clear accounts, cost information, income Enterprises that have complete vouchers and expense vouchers, standardized accounting, and can correctly calculate taxable income, and are deemed by the tax authorities as suitable for audit and collection, shall make final settlement of income tax at the end of the year. Its applicable objects specifically include: (1) Domestic-funded enterprises or organizations that implement independent economic accounting and pay corporate income tax in accordance with the law, including state-owned enterprises, collective enterprises, private enterprises, joint ventures, joint-stock enterprises and organizations with production, operating income and other income. ⑵Foreign-invested enterprises and foreign enterprises. Including Sino-foreign joint ventures, Sino-foreign contractual joint ventures and foreign-invested enterprises established in China, as well as foreign companies that have established institutions and sites in China to engage in production and operation, and foreign companies that have not established institutions or sites but have income derived from China. , enterprises and other economic organizations. ⑶Individual income tax for investors in sole proprietorships and partnerships. Including sole proprietorships and partnerships registered in accordance with the law, private enterprises of sole proprietorship and partnership nature, partnership law firms, and other sole proprietorships and individuals with unlimited liability and unlimited joint and several liability established with the approval of relevant government departments in accordance with laws and regulations. A partnership institution or organization. Regardless of whether a taxpayer makes a profit, a loss, or is in a tax reduction or exemption period during the tax year, he or she must file an annual corporate income tax return in accordance with the relevant tax laws.

Key to final settlement

Confirmation of income. The new tax law introduces the concept of fair value in revenue recognition.

Deduction of expenses. The new tax law introduces the principles of rationality and relevance in the deduction of expenses.

Tax adjustments. There are differences between accounting systems and tax law provisions. The total profits listed in the accounting statements are calculated according to the accounting system of the People's Republic of China. The taxable income is not equal to the total profits, but must be adjusted in accordance with the provisions of tax laws.

In the calculation of income, there are more than a dozen items that affect the taxable income.

In the calculation of deduction items, there are differences in accounting and tax law provisions for more than 20 items.

Enterprise tax year

Normal situation: January 1 to December 31 of the Gregorian calendar.

Special circumstances: If an enterprise opens and terminates in the middle of a tax year, so that the actual operating period of the tax year is less than 12 months, the actual operating period shall be regarded as one tax year. ?

Final settlement time

Within 5 months after the end of a tax year (January 1 to May 31 of the following year).

Objects for final settlement

There are two objects for final settlement: 1. Enterprises that implement audit and collection; 2. Enterprises that implement taxable income rates. Regardless of whether the enterprise makes profits or losses, or whether it is within the reduction or exemption period, it must make final settlement and settlement in accordance with regulations.

Note that enterprises that collect corporate income tax at a fixed amount will not make final settlements. ?

Final settlement and settlement work

Final settlement. On the basis of prepayment within 15 days after the end of each month or quarter, the tax payable, payable and refundable for the whole year shall be determined by itself.

Declaration. Fill out and submit the annual corporate income tax return and its appendices, as well as other information required by the tax authorities.

Pay.

Reference material: Final settlement-Baidu Encyclopedia