Q:
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What is the minimum useful life over which a software purchased by an enterprise that meets the recognition criteria of a fixed asset or an intangible asset can be depreciated or amortized?
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A:
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According to relevant regulations, when an enterprise purchases a software, so long as it meets the recognition criteria of a fixed asset or an intangible asset, the software can be capitalized and its useful life can be reduced appropriately to a minimum period of two years.
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Q:
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When an enterprise failed to obtain valid vouchers in time for costs, expenses actually incurred during the year for various reasons, how should this issue be dealt with when filing and paying quarterly and annually enterprise income tax return respectively?
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A:
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If an enterprise failed to obtain valid vouchers in time for costs, expenses actually incurred during the year for various reasons, the enterprise can calculate and prepay quarterly income tax based on book value of the costs and expenses, but when filing annual tax return, the enterprise must provide the valid vouchers for those costs and expenses incurred.
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Q:
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When an enterprise sells its products in combination by way of “buy one get one free”, should it be considered as a deemed sale from Enterprise Income Tax perspective?
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A:
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According to Enterprise Income Tax laws, this is not considered a giveaway, the enterprise should split the total sales value to each product on a pro-rata basis based on the fair value of each product.
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Q:
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What is the pre-tax deduction standard of advertising and marketing expenses incurred by an enterprise?
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A:
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Advertising and marketing expenses are fully deductible if they meet conditions and are capped at 15% of total business revenue for the relevant year, any excess amount can be carried forward to subsequent years for deduction.
For cosmetics manufacturing or selling enterprise, medicine and beverage (excluding alcoholic beverage) manufacturing enterprises, advertising and marketing expenses incurred are full deductible as long as capped at 30% of total business revenue for the relevant year, any excess amount can be carried forward to subsequent years for deduction.
Advertising and marketing expenses incurred by tobacco enterprises are non-deductible at all when calculating income tax.
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FAQ
