📣 Difference between accounting and tax expenses

📣 Difference between accounting and tax expenses

📍What is the cost?

Business expenses are Money that we use to pay for goods or services to be used in business Expense management is very important to any business. because it is related to the calculation of the net profit of the company

Net Profit = Revenue - Expenses

If we assume that the company's income is constant. The cost is variable. if the cost is high The net profit will be low on the contrary. if the cost is low will make a high net profit

Most entrepreneurs tend to think that All expenses paid by the company can be deducted from income in calculating net profit for tax purposes.

📍 Accounting expenses

Refers to expenses that the company pays for goods or services that have proof of payment is correct, such as paying for goods to be sold. This expense is treated as cost of goods sold. pay for accounting services These expenses are treated as operating expenses.

📍Tax expenses is the expenditure that does not meet the prohibited expenditure conditions

Tax Expenses VS Prohibited Expenses Tax expense refers to expenses used in the calculation of net taxable profit VS prohibited expenses mean expenses incurred from the business of a juristic person and recorded as expenses in the period. transaction account time But in terms of tax, it is not considered an expense. or not considered tax expenses to calculate net profit Expenditure scope for calculating net profit for a company or juristic partnership prescribed under the Revenue Code

In this article we will discuss Top 3 types of tax expenses are as follows:

👉🏻 Expenses or expenses that the recipient does not have documents or evidence to provide or but it is not clear

billless expenditure If it is proven that the payments are actually related to the entity It can be deducted as an expense. Regardless of whether such expenses are against the rules of other laws or not, such as kickbacks, etc.

👉🏻Promotion fee

In the case of sales promotions (discounts, exchanges, giveaways), there will be 3 main tax burdens involved in the following cases:

1. Corporate income tax The power to assess revenue in the event of a sale and transfer of goods without compensation lower than the market price m. 65 bis (4)

2. VAT

– The power to assess additional income in the event that an entrepreneur submits a tax base value form under Section 88/2 (3) , (4)

– The discount that will reduce the tax base must be in the case of trade discount (Trade Discount) m. 79 (1)

– The sales tax exemption must be a ready-to-sell freebie and the value of the freebie does not exceed the value of the product sold. and distribution of gifts, souvenirs, products, for example, announcement of Vat#40 and #55

3. Withholding tax

– Sweepstakes contests must withhold 5% ThorPor.4/2528 (Article 9 (1)).

– Prize payouts for promotional purposes must be withheld at 3% T.P.4/2528 (Article 12/2).

👉🏻Certification fee

Paying for certification or service Each time, the certification fee must be approved by a director (in case of a company registration) or managing partner. (registered as a Limited Partnership) or a person assigned by such person And the certified person should be specified in the document for approval of the certification fee, and most importantly, the certification must be based on the evidence required by law as follows:

The guarantee fee can be regarded as an expense in calculating net profit is not prohibited. If it meets the criteria prescribed in the Ministerial Regulation, Section 143, as follows:

1. It is a traditional business guarantee and the person who is certified is not an employee of a company/limited partnership (Limited Partnership) unless the employee is obliged to participate in the certification.

The certified person can be a customer of the company. or is another person who ISO inspector, postal courier / Kerry, other agency staff which will divide the expenses as follows

- Customer testimonials - Selling expenses

- Administrative expenses, officers / other persons for the benefit of the business - Administrative expenses

2. It is a related expense. Directly with guaranteed expenses such as food, beverages, accommodation, etc. – Reasonable value, reasonable, can be explained

if it is a thing Must not exceed 2,000 baht per person each time that the certificate is an item must not exceed 2,000, but if the food is unlimited, the price must not be more than reasonable. In case of excess, the whole sum must be reversed.

New Year's Eve Basket Fee – This is a guaranteed fee that should not exceed 2,000 baht because if it exceeds it may be a prohibitive expense for the whole set. If the customer asks for the courtesy of New Year's labeling Buying items for customers to submit VAT or not, according to the definition of the Revenue Department, except for things that are given according to traditions, such as diaries, calendars, which must have our brand stamp as well.

If we give away 10 microwaves to customers, we have to submit sales VAT according to the market price, for example, we bought 107 baht to claim the purchase VAT and when giving away to customers, we should send sales tax more than 107, for example, the tax base remittance VAT 115 baht is the price. including profit because we have expenses

If the customer pays for VAT, we have to issue a tax invoice to the customer. But if we pay The purchase tax itself cannot be collected. We do not have to issue a sales tax invoice. Instead, record the amount in the sales tax report to remit the sales tax.

In addition, the sales tax paid by the Company on behalf of this customer in practice The Revenue Department interprets that It is an expense prohibited under Section 65 ter (6 bis) of the Revenue Code, which is regarded as “Value Added Tax Payable”, therefore the Company cannot be used as an expense in calculating net profit for corporate income tax. Because sales tax is a tax that the customer must pay. If the business pays instead may be viewed as an act of affection. Therefore, discriminate against individual Therefore, it is in the category of prohibited expenses.

3. It is a payment for the benefit of the business – it is paid for the benefit of the business. for business income

4. The amount of the certification fee and service fee can be deducted as an expense equal to the amount to be paid. but the aggregate must not exceed 0.3% of the amount of revenue or sales that must be included in the calculation of net profit before deducting any expenses in the accounting period or of the amount of funds that have been paid up to the last day of the accounting period whichever is greater However, the expenses to be deducted must not exceed 10 million baht.

Compare the value of the 0.3% guaranteed fee * income before expenses with 0.3% of the paid-up capital (real money business), whichever is greater, take that amount. but must not exceed 10 million baht, the excess is prohibited

5. The certification fee must have a director. or a person who is a partner, manager or an authorized person who approves the payment for the certification and have proof of payment and there must be a receipt or proof of the recipient for the money paid as a guarantee or a service fee except in the case where the payee is not obliged to issue a receipt under the Revenue Code.

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