Q: at the beginning of 2006, our company paid 10% yuan annual interest rate to the employees and paid 2 million 800 thousand yuan on the last year's fund-raising amount of 28 million yuan, and withheld the personal income tax of 560 thousand yuan in full according to the applicable tax rate of "interest, dividends and dividends" 20%.

Because our company has many retained earnings, in order to lighten the personal burden, the shareholders will discuss the personal income tax withheld from the tax payment of the enterprise.

The accounting treatment is: the financial cost 2800000 loan: cash 2800000 borrowing: profit distribution - undistributed profit 560000 loan: payable tax - should pay personal income tax 560000.

Please point out whether the above process is correct.

Xiao Li, an accountant in a company, replied: Comrade Xiao Li, your company has withheld interest in calculating the personal income tax on capital raising interest, and accounts processing needs to be adjusted accordingly.

Personal income tax is a tax levied on individual taxable income and should be borne by the tax payer who gets the income.

The personal income tax withheld by interest in your company is listed in the "profit distribution - undistributed profit" account, which is paid by the enterprise after tax.

That is to say, the tax paid by the enterprise is not paid by the employees.

Under such circumstances, taxpayers' actual income can not be calculated directly by the applicable tax rate, or the tax base will be reduced, and less tax will be paid.

The correct way is to convert taxpayers' non tax income into taxable income, that is, the amount of tax included, and then substitute the formula to calculate the amount of tax payable.

The conversion formula is: taxable income (including tax income) = tax excluding income (1 to 20%).

Your company pays $2 million 800 thousand interest to employees, the amount of taxable income and the amount of tax payable: =2800000, (1 - 20%) =3500000 (yuan); the tax payable amount is =3500000 x 20%=700000 (yuan); the tax should be =700000 560000=140000 (yuan).

In other words, the actual interest rate of your company's fundraising interest is 3 million 500 thousand yuan, that is, the actual interest rate earned by employees is 3 million 500 thousand yuan. According to the tax law, 20% of the personal income tax should be paid 700 thousand yuan, and 2 million 800 thousand yuan after tax.

Therefore, your company's practice is not "withholding in full", but instead of calculating tax payable directly by multiplying the applicable tax rate without tax revenue, resulting in less withholding personal income tax = (350-280) x 20%=14 (10000 yuan).

As a withholding agent, your company has the obligation to correctly withhold and pay personal income tax when paying interest to employees.

In this case, your company pays personal income tax, which can be processed as follows: Finance: 3500000 cash: 2800000 should pay tax - 700000 of personal income tax.

In some units, the personal income tax paid to the taxpayers is not included in the "financial expense" account. If your company is in the "profit distribution - undistributed profit" account, there are also units in the accounts payable "welfare benefits" and "non operating expenses".

But no matter which account is paid, as long as the unit bears the tax which should be borne by the individual, the actual amount paid to the individual is not taxable income, which needs to be converted into the tax income and then the personal income tax should be deducted.

At the same time, at the same time, the reply of the State Administration of Taxation on the issue of levying personal income tax on taxpayers' annual one-time bonus income without tax (National Tax Letter No. 2005] No. 715) reiterates that according to the existing provisions of enterprise income tax and personal income tax, personal income tax paid by taxpayers, sole proprietorship, partnership and individual industrial and commercial tax payers for enterprise income tax shall not be deducted before income tax.

Therefore, any personal income tax payable to the taxpayer shall be included in the profit and loss account and the excess standard fee.

In this case, if your company pays 3 million 500 thousand yuan to raise interest in the accounting process, all of them will be paid in the "financial expense" account. Not only is the taxpayer's tax burden of 700 thousand yuan not allowed to be deducted before tax, but the remaining 2 million 800 thousand yuan more than the standard of the tax payment can not be deducted before tax.

Assuming that the same year and similar commercial banks have an annual loan interest rate of 6%, the approved amount of =2800 =112 ($10%) 6% yuan (10000 yuan) must be treated as an increase in tax adjustment when the enterprise income tax returns are filled.

The increase in tax adjustment amounts to 1 million 820 thousand yuan.

If the tax burden on taxpayers is 700 thousand yuan, all of them are listed in the "profit distribution - undistributed profit" account, which does not affect the calculation of enterprise income tax, so there is no tax adjustment problem of corporate income tax.