The enterprise income tax stipulates that expenses or property generated by non-tax income such as financial allocation shall not be deducted or calculated, and the corresponding depreciation and amortization shall be deducted before tax. In the value-added tax, there is no distinction between the sources of funds such as enterprise expenditure and consumption. Goods, equipment, fixed assets and services purchased by enterprises with financial allocations should be deducted from the input tax as long as they have valid deduction vouchers and are not items that cannot be deducted from the input tax.

Therefore, the input tax of financial allocation cannot be deducted.

Can the equipment purchased with financial subsidies be deducted from the input tax?

Article 10 of the Provisional Regulations on Value-added Tax in People's Republic of China (PRC) stipulates that the input tax of the following items shall not be deducted from the output tax:

(1) Goods purchased or taxable services used for non-VAT taxable items, VAT exempted items, collective welfare or personal consumption;

(2) Abnormal losses of purchased goods and related taxable services;

(3) Goods purchased or taxable services consumed by products in process and finished products with abnormal losses;

(four) consumer goods for taxpayers' own use as prescribed by the competent departments of finance and taxation of the State Council;

(five) the transportation costs of goods and the transportation costs of selling duty-free goods as stipulated in items (1) to (4) of this article.

Paragraph 2 of Article 21 of the Detailed Rules for the Implementation of the Provisional Regulations on Value-added Tax stipulates that the fixed assets mentioned in the preceding paragraph refer to machines, machinery, means of transport and other equipment, tools and appliances related to production and operation with a service life exceeding 12 months.

The company buys equipment with financial subsidies. As long as the purchased equipment meets the provisions of the Provisional Regulations on Fixed Assets and its detailed rules for implementation, and it is not used under the circumstances that Article 10 of the Provisional Regulations cannot be deducted, the input tax can be deducted.

There are the following differences between financial allocation carry-over and financial allocation balance.

1, budget execution is different.

Carry-over of financial allocation refers to the financial funds that have been implemented but not yet completed in the expenditure budget of the current year, or have not been implemented for some reason.

However, the balance of financial allocation is financial funds that have been completed or terminated due to factors such as policy changes and plan adjustments.

2, the management of funds is different.

In principle, the funds carried forward from the financial allocation should be carried forward to the next year for continued use, and the funds carried forward from the project expenditure should be carried forward to the next year for continued use according to the original purpose.

The surplus funds of financial allocation shall be used as a whole for the preparation of future annual departmental budgets, and used for related expenditures of the department in accordance with the relevant provisions of budget management.

3. Different use management.

The funds carried forward from the financial allocation cannot be modified at will, and the remaining funds from the financial allocation can be reserved as the budget of other projects of the department in the next year.

Can the financial appropriation project deduct the input tax? Bian Xiao told everyone that the input tax of financial allocation can not be deducted, but the equipment purchased with financial allocation funds can be deducted as long as it meets the requirements of fixed assets. If you still don't understand anything during the operation, please remember to contact our Q&A teacher in time.