AccountingStandardsforEnterprisesNo.18-IncomeTaxesCaiKuai[2006]No.3ChapterIGeneralProvisionsArticle1Withaviewtoregulatingtherecognitionandmeasurementofenterpriseincometaxesandthepresentationofrelevantinformation,thepresentStandardsareformulatedaccordingtotheAccountingStandardsforEnterprises-BasicStandards.Article2The"incometaxes"asmentionedinthepresentStandardsshallincludealltypesofdomesticandoverseataxamountsbasedontheamountsoftaxableincomeofenterprises.Article3ThepresentStandardsshallnotcovertherecognitionandmeasurementofgovernmentsubsidies.ButthetemporarydifferenceofincometaxarisingfromgovernmentsubsidiesshallberecognizedandmeasuredaccordingtothepresentStandard.ChapterIITaxBaseArticle4Whereanenterpriseobtainsassetsorliabilities,itshalldetermineitstaxbase.Wherethereisdifferencebetweenthecarryingamountoftheassetsorliabilitiesanditstaxbase,thedeferredincometaxassetsorthedeferredincometaxliabilitiesshallbedeterminedaccordingtothepresentStandards.Article5The"taxbaseofanasset"shallrefertotheamountwhichmaybedeductedfromthetaxablebenefitswhentheamountoftaxableincomeiscalculatedaccordingtothetaxlawprovisionsduringthecourseoftheenterprise'recoveringthecarryingamountoftheasset.Article6The"taxbaseofanliability"shallrefertothecarryingamountofaliabilityminustheamountthatcanbedeductedaccordingtothetaxlawwhentheamountoftaxableincomeiscalculatedinthefutureperiod.ChapterIIITemporaryDifferenceArticle7The"temporarydifference"shallrefertothedifferencebetweenthecarryingamountofanassetorliabilityanditstaxbase.Asforanitemthathasnotbeenrecognizedasanassetorliability,ifitstaxbasecanbedeterminedinlightofthetaxlaw,thedifferencebetweenthetaxbaseanditscarryingamountshallalsobeatemporarydifference.Pursuanttotheeffectoftemporarydifferencesontaxableamountsduringfutureperiods,theycanbeclassifiedintotaxabletemporarydifferencesanddeductibletemporarydifferences.Article8Theterm"taxabletemporarydifference"shallrefertotemporarydifferencesthatwillresultintaxableamountsinthefuturewhenthecarryingamountoftheassetisrecoveredortheliabilityissettled.Article9Theterm"deductibletemporarydifference"shallrefertotemporarydifferencesthatwillresultinamountsthataredeductibleinthefuturewhenthecarryingamountoftheassetisrecoveredortheliabilityissettled.ChapterIVRecognitionArticle10Anenterpriseshallrecognizetheaccruedincometaxofthecurrentperiodandpriorperiodsasaliability,andshallrecognizethepartoftheincometaxalreadypaidminusthepayableamountasanasset.Wherethereisanytaxabletemporarydifferenceordeductibletemporarydifference,itshallberecognizedasadeferredincometaxliabilityordeferredincometaxassetaccordingtothepresentStandards.Article11Exceptforthedeferredincometaxliabilitiesarisingfromthefollowingtransactions,anenterpriseshallrecognizethedeferredincometaxliabilitiesarisingfromalltaxabletemporarydifferences:(1)theinitialrecognitionofbusinessreputation;(2)theinitialrecognitionofassetsorliabilitiesarisingfromthefollowingtransactionswhicharesimultaneouslyfeaturedbythefollowing:(a)Thetransactionisnotbusinesscombination;(b)Atthetimeoftransaction,theaccountingprofitswillnotbeaffected,norwillthetaxableamount(orthedeductibleloss)beaffected.Thedeferredincometaxliabilitiesarisingfromthetaxabletemporarydifferencesrelatedtotheinvestmentsofsubsidiarycompanies,associatedenterprisesandcontractualenterprisesshallberecognizedaccordingtoArticle12of...
