Relevant provisions on Taxation of construction and installation enterprises


The expenses specified in Item (1) of Article 13 of the enterprise income tax law shall be amortized by stages according to the expected remaining useful life of fixed assets; The expenses specified in Item (2) shall be amortized by stages according to the remaining lease term agreed in the contract.

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summary     At present, many construction and installation enterprises have tax related risks due to improper practical handling when conducting separate accounting.

Article 3 of the notice of the State Administration of Taxation on the administration of income tax collection of construction enterprises operating across regions (GSH [2010] No.

If they are amortized according to regulations, they shall be allowed to be deducted: (1) reconstruction expenses of fixed assets for which depreciation has been fully withdrawn.

If the service life of the reconstructed fixed assets is extended, the depreciation life shall be appropriately extended, except as stipulated in items (1) and (2) of Article 13 of the enterprise income tax law.

According to the regulations on the qualification management of construction enterprises, the State implements the qualification level management system for construction enterprises, which divides the qualification of construction enterprises into three sequences: general construction contracting, professional contracting and labor subcontracting: (1) general construction contracting enterprises refer to construction enterprises that contract the whole construction process or the construction of main works.

(4) Other expenses shall be regarded as long-term deferred expenses.

Article 68 of the regulations for the implementation of the enterprise income tax law stipulates that the expenditure for the reconstruction of fixed assets mentioned in items (1) and (2) of Article 13 of the enterprise income tax law refers to the expenditure incurred in changing the structure of houses or buildings and extending the service life.

(2) Professional contracting enterprises refer to construction enterprises with professional construction technical ability and mainly undertake professional construction tasks in the professional subcontracting market.

Article 4 of the notice of the State Administration of Taxation on the administration of income tax collection of construction enterprises operating across regions (GSH [2010] No.

The qualification of labor subcontracting sequence is set at 1 ~ 2 levels and divided into 13 qualification categories.

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(3) If the head office has both directly managed cross regional project departments and cross regional secondary branches, the enterprise income tax prepaid by the project department shall be deducted first, and then the tax payable by the head office and branches shall be calculated according to the provisions of Guo Shui Fa [2008] No.

Article 58 of the regulations for the implementation of the enterprise income tax law stipulates that the tax basis of fixed assets shall be determined according to the following methods: (1) the tax basis of purchased fixed assets shall be the purchase price, relevant taxes paid and other expenses directly attributable to the intended use of the assets.

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156) stipulates that the project department established across regions directly managed by the head office of the construction enterprise shall distribute the enterprise income tax to the project location by the head office on a monthly or quarterly basis according to 0.2% of the actual operating income of the project, The project department shall pay in advance to the local competent tax authority.

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(6) For the reconstructed fixed assets, in addition to the expenses specified in items (1) and (2) of Article 13 of the enterprise income tax law, the tax basis shall be increased by the reconstruction expenses incurred in the process of reconstruction.

Article 37 of the regulations for the implementation of the enterprise income tax law stipulates that reasonable borrowing costs incurred by an enterprise in its production and business activities that do not need to be capitalized are allowed to be deducted.

The qualification of construction general contracting enterprises is divided into four grades: super grade, grade 1, grade 2 and grade 3, which are divided into 12 qualification categories.

(3) Labor subcontracting enterprises refer to construction enterprises with a certain number of technical workers and project managers who undertake tasks in the construction labor subcontracting market.

(5) For fixed assets obtained through donation, investment, exchange of non monetary assets, debt restructuring, etc., the fair value of the assets and relevant taxes paid shall be taken as the tax basis.

(4) Fixed assets with inventory profit shall be taxed on the basis of the full replacement value of similar fixed assets.

Article 2 of the notice of the State Administration of Taxation on the administration of income tax collection of cross regional construction enterprises (GSH [2010] No.

(3) Major repair expenses of fixed assets.

(2) Self built fixed assets shall be taxed on the basis of expenses incurred before completion settlement.

(2) If the head office has only secondary branches, the taxes payable by the head office and branches shall be calculated in accordance with the provisions of Guo Shui Fa [2008] No.

If the total payment is not agreed in the lease contract, the fair value of the asset and the relevant expenses incurred by the lessee in the process of signing the lease contract shall be taken as the tax basis.

Article 23 of the regulations for the implementation of the enterprise income tax law stipulates that the realization of income can be recognized by stages for the following production and business operations of an enterprise: (1) if goods are sold by installment collection, the realization of income shall be recognized according to the collection date agreed in the contract.

There are 2 ~ 3 levels of professional contracting qualification, which are divided into 60 qualification categories.

Overview construction enterprises refer to enterprises engaged in construction activities such as new construction, expansion and reconstruction of civil engineering, construction engineering and pipeline equipment installation engineering.

(3) For fixed assets under finance lease, the total payment agreed in the lease contract and the relevant expenses incurred by the lessee in the process of signing the lease contract shall be taken as the tax basis.

In addition, when conducting separate accounting, it is necessary for relevant enterprises to be more “careful” in order to be detailed and accurate…

It should be specially reminded that improving financial accounting can really help relevant enterprises apply corresponding policies more accurately and in compliance.

When undertaking various engineering operations, construction enterprises basically take the project department as the basic implementation unit, and the whole process of production and operation is also carried out around the project department.

Where an enterprise borrows for the purchase and construction of fixed assets, intangible assets and inventories that can only reach the expected saleable state after more than 12 months of construction, the reasonable borrowing costs incurred during the purchase and construction of relevant assets shall be included in the cost of relevant assets as capital expenditure and deducted in accordance with the provisions of these regulations.

(2) Reconstruction expenses of leased fixed assets.

156) stipulates that the head office of a construction enterprise shall summarize and calculate the income tax payable by the enterprise and prepay it according to the following methods: (1) if the head office has only a cross regional project department, the enterprise income tax prepaid by the project department shall be deducted, Pay on the spot according to its balance.

(2) If an enterprise is entrusted to process and manufacture large machinery and equipment, ships and aircraft, or engage in construction, installation and assembly engineering business or provide other labor services for more than 12 months, the realization of income shall be recognized according to the completion progress or workload completed in the tax year.

According to Article 13 of the enterprise income tax law, when calculating the taxable income, the following expenses incurred by the enterprise shall be regarded as long-term deferred expenses.

Article 15 of the regulations for the implementation of the enterprise income tax law stipulates that the income from the provision of labor services mentioned in Item 2 of Article 6 of the enterprise income tax law refers to the income from the construction and installation, repair and repair, transportation, warehousing and leasing, finance and insurance, posts and Telecommunications, consulting and brokerage, culture and sports, scientific research, technical services, education and training, catering and accommodation, intermediary agency Income from health care, community services, tourism, entertainment, processing and other labor service activities.

The main production and operation processes of more standardized construction enterprises include seven stages: project investigation, company bidding, establishment of project department, preparation of cost plan, project implementation, project completion and dissolution of project department.

156) stipulates that the project departments directly managed by the branches at or below the second level of the construction enterprise (including the project headquarters and contract sections with the same nature as the project department, the same below) do not pay enterprise income tax locally, and their operating income The wages and total assets of employees shall be summarized to the secondary branch for unified accounting, and the secondary branch shall prepay the enterprise income tax in accordance with the measures specified in Guo Shui Fa [2008] No.

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