Our company purchased a trademark right from an overseas company. The total contract price is 4.5 million (before tax). Assume that our company withholds and pays corporate income tax of 400,000, value-added tax of 50,000, and surcharge of 30,000. , the remaining 4.02 million was paid to the other party by purchasing foreign exchange (US dollars).

The accounting treatment is as follows:

Debit: intangible assets.397

Debit: tax payable - value-added tax payable - input tax 5

Credit: bank deposit 402

Debit: business tax and surcharge - income tax 40

Debit: business tax and surcharge - various surcharges 3

Loan: Other payables 43

Since it involves replacing business tax with value-added tax, how can the value-added tax be deducted?

As long as you receive a true and legal special VAT invoice, it can be deducted. The procedure is the same as other invoice deductions

Another thing to remind you is that according to The bilateral tax terms signed between our country and other countries. For some countries, after we help withhold and pay income tax, the other party can deduct it locally with a copy of the tax bill we provide, but you need to check the taxation between that country and our country. agreement.