In Beijing, with the full landing of Golden Tax Phase IV and the continuous increase of tax audits, corporate finance and tax compliance has changed from a "can do but can't do" to a "necessary option for survival". However, many bosses still step into two big pits that are very easy to be ignored in their daily operation - theLoss of control over invoice managementrespond in singingIndividual income tax evasionTheIf something goes wrong, it's not just about back taxes and fines, it could directly affect the cash flow and reputation of the business.

Below we use real cases to break down these two pits and see how Beijing business owners can prevent them from happening in the first place.

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01.Invoice problems: a surface saving, but a minefield

1. AdoptionPurchase can't get the ticket, entryIt's hard to plug the hole.

Many Beijing small and medium-sized enterprises (SMEs) habitually accept the condition of "cheaper without invoice" in their procurement process. As a result, there is a lack of input invoices for a long period of time, and the VAT cannot be deducted, resulting in inflated profits and a heavy tax burden. Worse still, once the tax comparison reveals a serious lack of inputs, it will directly trigger an audit.

2. If the client does not want a ticket, can he or she not pay the tax?

Some bosses believe that the customer does not require invoicing, the income can be "God does not know". In fact, revenue recognition is not based on whether or not to invoice.Uninvoiced income is also subject to tax reporting in accordance with the law.. Accumulating large amounts of hidden income can result in not only back taxes, but also late fees and penalties being added if you are caught.

3. Selling invoices as commodities turns profit points into risk points

Some downstream customers basically do not want tickets, so they control the amount of invoicing, credit the owner's personal card with the income that is not invoiced, or sell the excess invoices to enterprises that need tickets, and collect "tax points" as a source of profit. This practice is essentially false invoicing or concealment of income, and is a high-risk offense.

4. High gross profit, lack of inputs, offsetting profits by buying invoices

Enterprises with high gross profit and lack of compliant inputs sometimes take the risk of buying VAT invoices in large quantities. By analyzing the flow of invoices and upstream and downstream associations, Golden Tax IV can easily lock the anomalies and the risk is extremely high.

Case: A Painful Lesson from a Beijing Business Enterprise

Most of the downstream customers of this enterprise do not want tickets, the upstream procurement tickets to increase the price of 17%. So the boss used the "invoicing volume to control the amount of procurement tickets" - invoicing part of the accounts, not invoicing part of the direct entry into the personal card.

The Inland Revenue Department conducted a surprise inventory and approved the inventory of approximately $6 million and demanded a VAT supplement at 17% - the $870,000The owner said that the product has no 17% profit margin at all. The boss confessed that the product is not 17% profit space at all, and selling goods is a loss. But because the tax has been filed, the tax must be paid.

enlightenmentLoss of control over invoice management can lead a company into a "sell at a loss" dead end without even realizing it.

If you have financial and tax compliance, the company's difficult write-off, tax clearance, abnormal lifting, other overseas company registration (such as U.S. company registration, the United Kingdom company registration, Singapore company registration, Vietnam company registration, Indonesia company registration, Thailand company registration, Dubai company registration, Japanese company registration, etc.), overseas structure building, cross-border e-commerce tax compliance and other needs, welcome to sweep the code to add our online customer service (WeChat: jxhqcy890 / cell phone: 16625410105), to arrange for the manager to answer questions, provide professional advice and full one-on-one service!

02.Personal income tax evasion: short-term savings are future mines

Individual income tax rate 3%-45%, wages, bonuses, commission, dividends are in the scope of collection. In order to "save tax", some bosses use non-compliant means to deal with the salary of employees, which is a huge hidden danger.

Common non-compliant practices

1. Internal funds payroll: Clients do not want tickets for income into the boss's personal card, and then take money from the internal accounts to pay salaries and bonuses, without declaring personal taxes.
2. split wages: A portion goes to the corporate account to send (e.g., up to $5,000 tax-free bracket), and the rest goes to the internal account to avoid filing.
3. Social security contributions at the minimum base: Reduce costs by not paying social security based on actual wages.
4. Letting employees find invoices for reimbursement against their paychecks: Disguised splitting of income to avoid personal taxes.

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Case 1: An educational technology company in Shanghai

The company employs more than 80 people, but only 20 of them pay social security, and two-thirds of their salaries are paid through internal accounts. Due to customer complaints about the lack of invoicing, the tax office intervened and found out that the company needed to pay back taxes + fines. Over 2 million dollarsThe

Mapping BeijingBeijing is also checking social security and personal tax matches, and internal payrolls are highly susceptible to reporting or comparison.

Case 2: An Internet company in Beijing

Executives receive dividends without tax withholding, then fired employees report it and the company is heavily fined.

Beijing ReminderDividends and equity earnings are the focus of audits, and enterprises are just as liable for failing to fulfill their withholding obligations.

If you have financial and tax compliance, the company's difficult write-off, tax clearance, abnormal lifting, other overseas company registration (such as U.S. company registration, the United Kingdom company registration, Singapore company registration, Vietnam company registration, Indonesia company registration, Thailand company registration, Dubai company registration, Japanese company registration, etc.), overseas structure building, cross-border e-commerce tax compliance and other needs, welcome to sweep the code to add our online customer service (WeChat: jxhqcy890 / cell phone: 16625410105), to arrange for the manager to answer questions, provide professional advice and full one-on-one service!

03.What can Beijing business owners do to avoid it?

• Invoice management
  • Adhere to the "should take as much as possible, should open as much as possible", not invoiced income should also be accounted for and declared in accordance with the law.
  • Eliminate buying and selling of invoices, false invoicing, and control the authenticity of the business.
  • When there is a shortage of inputs, consider adjusting your supply chain, choosing an invoicable supplier, or reducing your burden through tax incentives compliance.
• Personal Tax Compliance
  • All salaries, bonuses and dividends must be declared and withheld for personal tax purposes.
  • The social security contribution base should be matched with the actual wage to avoid "yin and yang wages".
  • Instead of inducing or assisting employees to find invoices to offset their salaries, they should rationally design their salary structure and utilize special additional deductions and other policies to reduce their burden legally.
• Establishment of accounts and internal controls
  • Regular self-inspection of invoice flow, fund flow and contract flow to ensure "three flows in one".
  • Introduce professional financial and tax consultants to do compliance checkup and risk rectification in advance.

Invoice and personal tax, which seem to be trivial matters, are the two lifelines for the financial and tax security of Beijing enterprises. The Golden Tax Phase IV and social security into the tax make the cost of violation higher and higher, relying on "save trouble" or "subterfuge" will only make the risk snowball.

If your business has similar pitfalls, it may be worthwhile to make a firstFinancial and tax compliance self-inspection, plugging the risk points in advance.

If you have financial and tax compliance, the company's difficult write-off, tax clearance, abnormal lifting, other overseas company registration (such as U.S. company registration, the United Kingdom company registration, Singapore company registration, Vietnam company registration, Indonesia company registration, Thailand company registration, Dubai company registration, Japanese company registration, etc.), overseas structure building, cross-border e-commerce tax compliance and other needs, welcome to sweep the code to add our online customer service (WeChat: jxhqcy890 / cell phone: 16625410105), to arrange for the manager to answer questions, provide professional advice and full one-on-one service!