Expenditures incurred during the preparation period of the enterprise that do not meet the conditions for capitalization shall be recorded in the "long-term deferred expenses---start-up expenses" account.
Start-up expenses refer to the expenses incurred by an enterprise during the period from the date when the enterprise is approved for establishment to the date of starting production and operation (including trial production and trial operation) (i.e., the preparation period). Including salary, office expenses, training fees, travel expenses, printing fees, registration fees during the preparation period, as well as exchange gains and losses and interest expenses that are not included in the purchase and construction costs of fixed assets and intangible assets.
Scope of expenditures
1. Expenses for establishment personnel
(1) Labor costs of establishment personnel: specifically including wages, bonuses and other wages of establishment personnel expenses, and various social insurances payable. Welfare expenses such as medical expenses incurred during the preparation period can be paid according to the actual situation if the preparation period is short. If the preparation period is long, employee welfare expenses can be accrued at 14% of the total salary.
(2) Travel expenses: including transportation expenses within the city and travel expenses to other places.
(3) Board of Directors Fees and Joint Committee Fees
2. Enterprise registration and notarization fees: mainly include registration fees, capital verification fees, tax registration fees, notarization fees, etc.
3. Cost of raising capital: mainly refers to the handling fees paid for financing and exchange gains and losses and interest that are not included in fixed assets and intangible assets.
4. Personnel training expenses: There are mainly the following two situations
(1) The introduction of equipment and technology needs to be digested and absorbed, and the expenses for selecting some employees to go out for further study during the preparation period.
(2) Labor costs and related expenses for hiring experts for technical guidance and training.
5. Amortization, scrapping and damage of enterprise assets
6. Other expenses
(1) Office expenses, advertising expenses, communication expenses incurred during the preparation period Entertainment expenses.
(2) Stamp duty
(3) Expenses for feasibility studies confirmed by the investor to be borne by the enterprise
(4) Others and preparation Relevant expenses, such as information investigation fees, litigation fees, document printing fees, communication fees, celebration gift fees, etc.
Expenditures not included in the scope of start-up expenses
1. Expenses incurred in acquiring various assets. Including transportation fees, installation fees, insurance premiums paid during the purchase and construction of fixed assets and intangible assets and related labor costs incurred during the purchase and construction.
2. Specify the expenses that should be borne by the investing parties. For example, the investment parties may incur travel expenses, consulting fees, entertainment expenses and other expenses incurred during investigations and negotiations for the establishment of the enterprise. Our government also stipulates that when negotiating Sino-foreign joint ventures, entertainment expenses incurred by foreign businessmen during business negotiations must not be listed as business start-up expenses and must be borne by the inviting enterprise.
3. Expenditures such as fixed assets and intangible assets purchased and constructed for employee training shall not be listed as start-up expenses.
4. The interest paid by the investor for investing capital and raising funds by itself shall not be included in the start-up expenses and shall be borne by the investor himself.
5. The handling fee paid for depositing foreign currency cash in the bank shall be borne by the investor.
Determination of the preparation period
The determination of the preparation period of an enterprise is greatly affected by tax laws in our country. For example, the "Implementation Rules of the Foreign Investment Income Tax Law" stipulates that "the preparation period of a foreign-invested enterprise is the period from the date the enterprise is approved to start production and operation (including trial production)." The above-mentioned "date of approval for preparation" specifically refers to the date after the investment agreement signed by the enterprise and the date when the contract is approved by the Chinese government. The above-mentioned "date of starting production and operation (including trial production)" specifically refers to the end of the enterprise's preparation period from the day when the enterprise's equipment begins to operate, materials are input to manufacture products, or the first commodity is sold. Other enterprises may refer to this provision.
Amortization of start-up expenses
Start-up expenses are generally amortized over five years. The new enterprise accounting system stipulates that start-up expenses be amortized in one go
Accounting treatment method for start-up expenses
The provisions on start-up expenses in the "Enterprise Accounting System" (Cai Kuai [2000] No. 25) and the relevant provisions on start-up expenses in Article 34 of the "Implementation Rules of the Interim Regulations on Enterprise Income Tax" have become invalid. The new corporate income tax law was implemented on January 1, 2008.
Article 9 of Guo Shui Han [2009] No. 98 stipulates: In the new tax law, opening (preparation) fees are not clearly listed as long-term deferred expenses, and enterprises can deduct them in one go in the year when they start operations. , or it can be handled in accordance with the new tax law's provisions on the treatment of long-term deferred expenses, but once selected, it cannot be changed.
The unamortized start-up expenses of an enterprise in the years before the implementation of the new tax law can also be handled in accordance with the above provisions.
Article 70 of the "Regulations for the Implementation of the Enterprise Income Tax Law" Article 13, Item (4) of the Enterprise Income Tax Law, other expenditures that should be regarded as long-term deferred expenses, starting from the month following the month in which the expenditure occurs , amortized in installments, the amortization period shall not be less than 3 years.