MOF seeks comments on CAS for SEs
The Ministry of Finance published an exposure draft of Chinese Accounting Standards for Small-sized Entities (CAS for SEs). The draft has several differences from the Accounting System for Small-sized Entities, making adjustments in recognition and measurement of accounting elements and presentation of financial statements. According to the draft: small-sized entities are not required to accrue provision for assets impairment; the determination of actual loss of assets is referred to relevant standards contained in the Enterprise Income Tax Law; the elimination of LIFO (last in first out) method for stock valuation; long-term equity investment can only be accounted using cost method; the accounting treatments for minimum depreciation term for fixed assets and consequential expenditure are consistent with the Enterprise Income Tax Law.
The proposed Vehicle and Vessel Tax Law hits a break
Criticisms on the proposal are centered on four aspects: the nature of the vehicle and vessel tax is not reflected by taxing on discharge capacity of the automobiles; whether the taxing approach is able to facilitate energy-savings and low-emission; whether the increase in taxation amount is too great; whether during the draft process of the Law comments received had been considered, particularly, those from the owners of vehicle and vessel.
Taxable income increased by inspection can be used to recover losses
The State Administration of Taxation issued a notice stipulating that taxation authorities should allow enterprises to use taxable income adjusted upward during taxation inspection to recover their losses suffered from previous years. Residual taxable income after the recovery should be subject to income tax in accordance with the Enterprise Income Tax Law.
Proceeds from assets transfer are subject to taxation
The State Administration of Taxation issued a notice stipulating that revenue generated from assets (including various types of assets, equity and creditors’ claims) transfer, reconstruction of debt, donation, payables which are not able to repay, except otherwise regulated, are subject to income tax in accordance with the Enterprise Income Tax Law, whether they are in the form of monetary or non-monetary.
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