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Q：
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What is a sales discount?
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A：
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Sales discount is also known as cash discount, a discount offered by the seller to encourage buyers to make early payments.
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Q：
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What are discounted sales?
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A：
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Discount sales are also known as trade discount, the price deduction given by the seller to promote the sale of goods, usually due to promotional activities.
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Q：
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What is a sales allowance?
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A：
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Due to the quality and specifications of the goods not meeting the requirements, the seller agrees to provide a discount on the price of the goods.
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Q：
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What are the differences in invoicing between sales discounts, discounted sales, and sales allowances?
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A：
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Taxpayers who sell goods through discounts must indicate the sales amount and discount amount separately in the "Amount" column on the same invoice. Note: If the discount amount is not indicated in the "Amount" column of the same invoice, but only in the "Remarks" column of the invoice, the discount amount cannot be deducted from the sales revenue. After issuing the invoice, if there is a sales allowance, the original invoice must be returned and marked as "void" before reissuing the sales invoice or obtaining a valid proof from the other party before issuing a negative invoice.
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Q：
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What are the differences in tax treatment between sales discounts, discounted sales, and sales allowances?
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A：
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If the sale of goods involves cash discounts, the amount of sales revenue should be determined based on the amount before deducting the cash discount, and the cash discount should be deducted as a financial expense when it is actually incurred.
Taxpayers who sell goods through trade discount methods may be subject to VAT based on the discounted sales amount if the sales amount and discount amount are separately stated on the same invoice. In terms of corporate income tax, if the sale of goods involves discounted sales, the amount of sales revenue should be determined based on the amount after deducting discounts.
The VAT refunded to the purchaser due to the return of goods or discount given to the goods sold shall be deducted from the output tax of the current period in which the return or discount of the sold goods occurred; The VAT recovered due to the withdrawal or discount of purchased goods shall be deducted from the input tax of the current period in which the return or discount of purchased goods occurs. In the treatment of corporate income tax, if a company recognizes sales revenue and incurs a sales allowance on goods sold, it should offset the current period's sales revenue in the current period.
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FAQ
