During the corporate income tax (“CIT”) annual filing, we may encounter some exceptional cases, which require the company to prepare tax evidence, so that the related costs can be CIT deductible.
1. During the period that the company has to obtain the re-issued fapiao or other outside tax vouchers, because the counter party, which has already been deregistered, revoked or withdrawn, was determined by the tax bureau as abnormal entity, there is no chance to obtain the re-issued fapiao or other outside tax vouchers, the company could provide the following documents to prove the authenticity, so that the costs can be CIT deductible:
– The supporting documents on why the company is unable to obtain the re-issued fapiao or other outside tax vouchers;
– The contract or agreement on related business activities;
– The payment voucher on non-cash method;
– The supporting documents on goods delivery;
– The internal notes on goods receipt and goods delivery; and
– The accounting entries in the books or other documents.
2. The company together with other entities (including related parties) or individuals received the domestic service which is subject to VAT:
– If adopting the allocated method, the company shall comply with the arm’s length principle, and use the fapiao and split sheet as the CIT deductible document.
3. Because of the rental assets of the plant or office, the company incurred the costs on water, electricity, gas, air conditioning, heating, communication line, wire TV, network and etc.
– If the landlord uses the allocated method, the company could use the outside vouchers provided by the landlord as the CIT deductible document.
Resources: The Publication Notice issued by State Taxation Administration ( No. 28) regarding the management rules for the deduction documents before corporate income tax.
If you need further assistance on the details of CIT annual filing, please contact us.