What is taxable profit? Calculation formula

The principles of the market system are based on various economic indicators. They are used in the planning process, financial assessment of the company's business activities and analysis. The key indicator is income. Of particular importance, in particular, is taxable profit. This is the part of the income on the basis of which one of the main budget payments is calculated.

General characteristics of income forms

The main goal of any enterprise engaged in commercial activities is profit. Its size is key in evaluating the effectiveness of a company. The amount of income is directly related to the quality of products. In any commercial activity, 4 forms of income are formed. They differ in function, aggregate size, financial value. As the main indicator of performance in the analysis used retained earnings. When reporting, gross income is used, on the basis of which taxable profit is calculated. The financial result obtained at the end of a certain period reflects a digital indicator of net income.

Value

Profit performs three main functions:

1. Reproduces the difference in income and expenses.
2. Stimulates reproduction.
3. Provides control over the effectiveness of the results of the enterprise.

The main sources of profit today are:

1. Monopoly activity. It involves the release of unique goods or the provision of specific services needed by society to maintain a normal standard of living.
2. Commercial activity. Any enterprise in the market deals with it.

Taxable income

This concept introduces NK into the market system. According to the Code, taxable profits are funds left over from total income received for the reporting year, minus revenues from it, from which payments to the budget are not deducted. For its calculation, the gross income, which is also identified with the balance, is used, as was said above. It is these revenues that characterize the effectiveness of the company regarding rational costs. Gross income reflects the financial result of the enterprise in the sale of services / goods, fixed assets and other property. The determination of taxable profit is carried out by reducing gross income the amount of income from which the current tax code does not make payments to the budget. During the calculation, certain benefits may be deducted, if any.

Conditions

The financial gain received by an entity may be expressed in cash or in cash. It acts as an economic income if it is established in the Tax Code. The formation of taxable profit is carried out if the income:

1. Received in the form of property or money.
2. Its size is subject to assessment.
3. It is set in the rules of Ch. 25 Tax Code.

These conditions must be met at the same time.

Documentation

For tax purposes, the income of an enterprise is determined by the sum of total cash receipts excluding expenses. The charges shown to buyers are also deducted from them. Accounting for taxable profit is carried out on the basis of accounting documentation. It includes:

• Primary documents of the corresponding unified forms.
• Invoices with the amounts of VAT paid.
• Other documents (different contracts and reports).

Types of income from which budget allocations are made

Taxable income, the formula of which will be discussed below, is formed from sales revenue. During the implementation, the company transfers products of its own production or previously acquired, as well as its services to other persons on a terms of retribution - receiving benefits. Sales revenue is therefore presented as revenue from this process. All other income is recognized as non-operating income. These include:

1. Positive exchange rate differences.
2. Dividends.
3. Proceeds from the provision of property for rent.
4. The cost of excess material values ​​determined during the inventory.
5. Interest on loans and credits granted.
6. Penalties, fines, penalties received for breach of obligations by counterparties.
7. Donated property.

The list of non-operating income is considered open. This means that they may include private, rarely encountered cases of obtaining revenue not in the main type of activity.

Exceptions

Taxable income does not include:

• Income in the form of collateral or rights to it.
• Inseparable investments in leased property.
• Revenues in the form of property acquired as targeted financing.
• Contributions to the authorized capital.
• Income in the form of borrowed property.
• Other income provided for in Art. 251 Tax Code.

Costs

Taxable income may be reduced at the expense of certain costs. In particular, expenses related to the production and sale of the main product are deductible. They are divided into the following economic groups:

1. Materials
2. Depreciation.
3. Salary.
4. Other expenses.

Also, taxable profit is reduced due to the costs of non-operating transactions. This category includes:

• Penalties and fines paid.
• Court expenses.
• Losses of previous periods.
• Payment for banking services.
• Other costs established by Art. 265 Tax Code.

Art. 270 of the Code formulates a closed list of expenses for which taxable profit cannot be reduced. To the costs incurred by enterprises, the Tax Code has stringent requirements. They should be:

1. Necessary and rational.
2. Documented.
3. Exclusively for the purposes of income-related activities.

Important point

Taxable income is calculated on an accrual basis from the very beginning of the period to the end date. If expenses exceed revenues, then it will be negative. In such cases, it is equal to 0. In the coming periods, in accordance with the provisions of the law, taxable profit may be reduced by the amount of previous losses.

Rate reduction

It must be said that taxable profits are calculated by enterprises using OSS. Companies working on the STS and UTII are exempt from this. The interest rate for tax is 20%. Of these, 2% goes to the federal, and 18% to regional budget. For certain types of activities, legislation provides for a rate reduction. In addition, some tax benefits have been established for certain groups of enterprises. In particular, a rate of 0% is provided for:

1. Educational institutions.
2. Medical facilities.
3. Agricultural enterprises.

To confirm the right to a reduced rate, it is necessary to provide the tax authorities with relevant documents proving that the organization is engaged in one of the listed types of activities.

Taxable income: formula

To establish the amount from which mandatory budget payments will be deducted, it is necessary to display the result of gross income. It is determined by establishing the difference between the total revenues of the enterprise and the cost of production of goods / services. The formula for the profit to be taxed is as follows: Pnal = Pbal - Nned - Pdop– Plg.

Thus, the amount obtained is a decrease in retained earnings (Pbal) by:

• real estate tax (Ned);
• profit on additional tax liabilities (Pdop);
• income-oriented operations related to benefits (Plg).

Revenue from financial activities using securities and other income is recognized as additional income. Profit aimed at eliminating natural or technological disasters, as well as charity, is considered preferential.