Special Attention to the Annual Enterprise Income Tax Clearance

Monday, 29 January 2018 10:06

It is the time for the company to do the annual enterprise income tax (EIT) clearance. Shanghai Dongjin wants to remind you and your client of the below points which are easily neglected by the accountant.


  1. The sales revenue should be confirmed in the accounting book even if the payment has not been received or the invoice has not been issued.
  2. The self-made or purchased products which are used for the advertisement, hospitality business and employee’s welfare should be regarded as the sales behavior.
  3. Where a sales allowance or sales return occurs to commodities that have been sold and income derived from the sales of which has been validated, such a sales allowance or sales return should, during the current period in which it occurs, be deducted from income derived from the sales of the commodities for the current period.
  4. The commission charges should be included into the total payable taxable income and subject to the EIT.
  5. Various financial funds including governmental subsidies obtained by an enterprise shall be included in the enterprise's gross income for the current year.
  6. Not all fiscal capitals are free-of-tax income. Fiscal capitals obtained by enterprises from the financial departments and other departments of the people's governments at or above the county level that shall be calculated into total revenue and that satisfy all of the three requirements in Caishui [2011] No.70 may be deemed as free-of-tax income and shall be deducted from total revenue when taxable income is being calculated.
  7. Expenses made out of said free-of-tax income shall not be deducted from the taxable income and the depreciation and amortization of assets obtained by expending such income may not be deducted from the taxable income. Please take care of increasing when the use of such free-of-tax income.
  8. After enterprises handle the fiscal capital complying with the requirements set out in Article 1 of Caishui [2011] No.70 as free-of-tax income, the part of such capital that has not been expended and is not returned to the financial departments or other governmental departments allocating such capital within five years (sixty months) shall be calculated into the sum of taxable revenue of the sixth year of acquisition of such capital; expenditure made out of fiscal capital calculated into the sum of taxable revenue is allowed to be deducted from taxable income.


If you want to know more details or legal basis on the above points, please contact me.

Mr. Mike Chang

TEL: 0086-21-68868321 / FAX: 0086-21-68868021


Contact Us

Mr. Mike Chang



+86.21.6886 8321


+86.21.6886 8021

Connect Us