Income tax savings
One of the things that you should pay attention to at the beginning of the financial year is the income tax reserve, which is created due to the difference between tax laws and accounting principles. The tax debt has a debtor nature until it is determined and is usually recorded as a tax reserve and is considered one of the debts of business units, so the change in the current year’s amount in the next year is considered as a change in the estimate.
What is withholding tax?
Withholding tax is a part of personal income tax, which is the duty of deducting and paying according to the relevant legal provisions in some sources of income tax. .
Accounting registration – income tax reserve
At the end of the financial year and after calculating the profit (loss) of the performance, if the result of the company’s operation is profit, in order to comply with the accounting standards, it is necessary to calculate the income tax reserve. When calculating the income tax reserve, that part of The company’s incomes that are exempt from tax (profits from investment deposits in banks according to Article 145 of the Civil Code) or their taxes have already been collected in a lump sum (such as profits from the sale of real estate – Articles 59 and 77 of the Civil Code) m) It is excluded from the declared profit of the company.
Also, those parts of the company’s profits that are exempted from paying taxes according to some tax laws (such as articles 132 and 138) are also excluded from the company’s declared profit. Also, those parts of the company’s expenses that do not meet the acceptable tax criteria should be excluded. (Contrary to articles 147 and 148 of the Islamic Civil Code (also calculation) that currently only after the companies are tax audited, this work is done by the tax auditor and the rest of the companies usually do not comply with this issue. ), to be added to the declared profit of the company.
After making the mentioned profit adjustments (which, of course, is mentioned in general and does not include all cases), if there is a taxable profit, by applying the relevant rates according to the tax laws, the company’s income tax reserve is calculated.
It should be noted that the income tax reserve account is only used to identify performance tax. The second point is that, despite the existing standards and procedures, the company’s performance tax is recognized in the income tax reserve account, i.e. debt. It is not considered definitive, but due to tax laws, Modi’s express tax is considered definitive.
Performance tax upon recognition:
Current year’s profit and loss (bad)
Income tax reserve
When paying the declaration tax until 31/4 of the following year, you will record the following:
Income tax reserve (bad)
bank
Now, if the final tax amount is more than the declared tax, you will record the following:
Accumulated profit and loss (bad)
bank
This post is written by Mahdi_kohsoltani