How to deal with tax of construction enterprises
The construction enterprises generally adopt the internal contracting responsibility system for projects. What should they do in terms of centralized accounting, summary tax payment and related tax treatment?
Tax treatment of construction enterprises
For construction enterprises, in addition to the same operations as general commercial and industrial enterprises, there are also some special matters, such as:
1. Construction enterprises need to recognize revenue and cost according to the degree of completion, regardless of whether the enterprise has issued invoices.
2. If a construction enterprise has taxable matters in other places, it needs to apply for an outbound business license and pay taxes in advance at the project location.
3. For construction enterprises, if there are advance receipts, the corresponding taxes need to be prepaid.
Common accounting entries of construction enterprises
1、 Payment of social insurance premiums
When transferring out social insurance expenses:
Debit: administrative expenses - employee insurance (paid by the company)
Other receivables - employee insurance (paid by individuals)
Internal transactions - XX branch (in full amount)
Credit: bank deposit
When paying wages
Debit: wages payable (based on the amount of social insurance not deducted)
Credit: other receivables - employee insurance (personal part)
？ ？ ？ Bank deposit or cash (according to its difference)
2、 Revenue recognition
When issuing project payment invoice, the company's accounting treatment:
Debit: accounts receivable - construction unit
Advance receipts (if any)
Credit: project settlement income - each project
？ ？ ？ Taxes payable - VAT payable
When purchasing engineering materials:
Debit: engineering materials
Tax payable - VAT payable (input tax)
Credit: bank deposit
When paying taxes:
Debit: taxes payable - various taxes (output minus input)
Credit: bank deposit
3、 Fixed assets
When fixed assets increase:
Debit: fixed assets - each department
Credit: bank deposit (or accounts payable)
When depreciation is accrued:
Debit: management expense depreciation expense (for management department)
Engineering construction - project department (for production and management)
Credit: accumulated depreciation
4、 Cost carry forward
Before the end of the month, the cost accountant will include the items that should be included in the cost documents of each project department in the current month into the relevant project costs → the general ledger accountant will carry forward all the cost incurred in the current month to the corresponding items of the project settlement cost account according to the project department. That is:
Debit: project settlement cost - each project department
Credit: project construction - project carry forward
