1. What is the start-up fee?
The start-up fee refers to the period from the date the enterprise is approved for establishment to the date it starts production and operation (including trial production and trial operation) (i.e. expenses incurred during the preparation period). Including personnel wages during the preparation period, office expenses, training expenses, travel expenses, printing expenses, registration fees, 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.
The preparation period refers to the period from the date the enterprise is approved for establishment to the date it starts production and operation (including trial production and trial operation).
2. Scope of establishment expenses
(1) Specific content of establishment expenses
1. Cost of establishment personnel expenses
(1) Labor costs of the organizers: specifically including wages, bonuses and other salary expenses of the organizers, as well as various social insurances that should be paid. 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.
(2) Expenditures not included in the scope of start-up expenses
1. Expenses incurred in acquiring various assets. Including the transportation fees, installation fees, insurance premiums paid for 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 shall 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.
3. 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 commencement of production and operation (including trial production)" specifically refers to the end of the enterprise's preparation period from the date 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.
(4) Start-up expenses are generally amortized over five years (the regulations before 800 years ago). The new enterprise accounting system stipulates that the start-up expenses are amortized in one go. The tax law stipulates that the expenses will be directly listed during the expenditure period. The new standards stipulate that the expenditure period Direct expenditure.
4. Accounting treatment of start-up expenses
(1) Enterprise accounting system
"Enterprise Accounting System" (Finance [2000] No. 25) deals with start-up expenses The amortization period has been significantly adjusted. The original industry accounting system stipulated that the start-up expenses incurred by an enterprise should be amortized evenly in installments within a period of no more than five years starting from the month of production and operation. Article 50 of the "Enterprise Accounting System" stipulates: "Except for the purchase and construction of fixed assets, all expenses incurred during the preparation period shall first be included in the long-term deferred expenses, and will be included in the production and operation in one lump sum starting from the month when the enterprise starts production and operation. The profit and loss of the current month. If the enterprise's long-term amortized expense item cannot benefit future accounting periods, the amortized value of the item that has not been amortized should be transferred to the current profit and loss. "It can be seen that the accounting treatment of start-up expenses. Both the setting of accounting accounts and the period of amortization have greatly changed from the original industry financial system.
(2) Accounting treatment of start-up expenses under the new standards
Starting from January 1, 2007, the new accounting standards system (hereinafter referred to as the new standards) will be implemented in my country’s listed companies , many enterprises (securities companies, insurance companies, central state-owned enterprises, Shenzhen enterprises, etc.) have also implemented the new standards. The new standards' accounting treatment of start-up expenses has undergone certain changes compared with industry accounting systems and corporate accounting systems.
From the appendix of "Accounting Standards for Business Enterprises - Application Guide" - "Accounting Accounts and Main Account Processing" ("Financial Accounting [2006] No. 18"), the accounting content of the "Administrative Expenses" accounting account As can be seen from the main accounting treatment, the accounting treatment of start-up expenses has the following characteristics:
1. The past practice of treating start-up expenses as assets has been changed. Start-up expenses are no longer "long-term deferred expenses" or "deferred assets", but are directly expensed.
2. The new balance sheet does not reflect the item of "start-up expenses", which means that the information on startup expenses will no longer be disclosed.
3. It is clearly stipulated that start-up expenses shall be accounted for in the "administrative expenses" accounting account.
4. The accounting scope of start-up expenses has been unified, that is, start-up expenses include employee salaries, office fees, training fees, travel expenses, printing fees, registration fees and borrowing costs that are not included in the cost of fixed assets. wait.
5. The accounting procedures for start-up expenses are standardized, that is, the start-up expenses are first accounted for in the "administrative expenses" account, and then included in the current profit and loss, and are no longer treated as amortization.
After the implementation of the new standards, newly established real estate development enterprises should strictly follow the provisions of the new standards to handle the accounting of start-up expenses. This not only simplifies accounting, but also reflects accounting information more accurately. As for the definition of the preparation period, a real estate enterprise should properly define the period from the date of approval to the establishment date indicated on the business license.
(3) Tax treatment of start-up expenses under the new tax law
The "Enterprise Income Tax Law of the People's Republic of China" and its Implementation Regulations (hereinafter referred to as the new tax law) have been It will be implemented in my country on January 1, 2008. The new tax law not only unified the income tax laws applicable to both domestic and foreign investors and lowered the income tax rate, but also made major changes and breakthroughs in many aspects closely related to accounting such as asset handling and pre-tax deductions.
Article 34 of the original "Implementation Rules of the Interim Regulations on Enterprise Income Tax" stipulates that the start-up expenses incurred by an enterprise during the preparation period shall be paid for no less than 5 years starting from the month following the month in which production and operation begin. Deducted in installments within the period.
The new tax law does not include any statement on pre-tax deductions for start-up expenses. Does it mean that there are no restrictions on pre-tax deductions for start-up expenses?
Article 13 of the "Enterprise Income Tax Law" stipulates: When calculating taxable income, the following expenditures incurred by the enterprise shall be treated as long-term deferred expenses and amortized in accordance with regulations ("Regulations on the Implementation of the Enterprise Income Tax Law" Article 70 clearly stipulates that the amortization period shall not be less than three years), and deductions are allowed:
(1) Expenditures for reconstruction of fixed assets that have been fully depreciated;
( 2) Expenditures for renovation of leased fixed assets;
(3) Expenses for major repairs of fixed assets;
(4) Other expenses that should be treated as long-term deferred expenses.
As can be seen from the above, the "long-term deferred expenses" do not include start-up expenses.
Article 68 of the "Enterprise Income Tax Law Implementation Regulations" is an explanation and explanation of Article 13 of the "Enterprise Income Tax Law", and there is no reference to the pre-tax deduction of start-up expenses. Expression. It can be seen that the new tax law has no restrictions on the pre-tax deduction of start-up expenses.
On April 25, 2008, the State Administration of Taxation authoritatively answered questions raised by netizens on its website regarding the implementation of the new income tax law. Miao Huipin, deputy director of the Income Tax Department, responded to a netizen’s question about “pre-tax deductions for start-up expenses”: “The new tax law no longer lists start-up expenses as long-term amortization expenses, which is consistent with the treatment of accounting standards and accounting systems, that is, Enterprises can make a one-time deduction from the current period of production and operation. "
For newly established real estate development enterprises, the tax treatment of start-up expenses should be in accordance with the spirit of the new tax law, that is, they should be included in the current profits and losses, and no tax adjustments will be made. As for the practice of including expenses (administrative expenses, sales expenses, financial expenses) incurred before commercial housing sales revenue is obtained into "long-term deferred expenses" and deducted before tax for five years, it must be abandoned starting from January 1, 2008. To protect the legitimate rights and interests of real estate enterprises.
To sum up, under the new standards, start-up expenses are accounted for under the "administrative expenses" account and directly included in the current profit and loss; while the tax treatment of start-up expenses under the new tax law is consistent with the new accounting standards. That is, the enterprise deducts the start-up expenses in one time before tax in the current period. Therefore, the accounting treatment and tax treatment of "start-up expenses" are no longer separated, and the two are coordinated. In the future, there will be no accounting and tax differences in terms of start-up expenses, and of course there will be no tax adjustments.