Research On The Coordination Of The Differences In Business Combination's Income Tax Accountant

Enterprise income tax is closely related with the tax burden and profit or loss of these subjects participating in the merger between enterprises. In this new century, with the development of domestic market economy, the acceleration of economic globalization and the merger wave rising ceaselessly, reform and development of accounting system and tax system in the field of business combination are also accelerating. There is no doubt that the 2006 New Accounting Standards and the 2007 Enterprise Income Tax Law should be considered as the landmark events. In response to the demand of market, in order to further standardize the processing of income tax within business combination, the Ministry of Finance and State Administration of Taxation jointly issued "the notice on enterprise income tax treatment of enterprise reorganization" in May 8th,2009. This article is produced under this situation. Facing with the latest policies and the market player's positive action in the merger activities, the target of this paper is guiding enterprises to participate in merger scientific and rational, also increasing economic efficiency of enterprises and government's tax revenue at the same time. To achieve this goal, this paper aims to study Income tax accounting of business combinations, then further study back to the differences between accounting and income tax caused by the two different systems. Firstly,based on the balance sheet liability method under the new accounting standards, this article describes the accounting principles and accounting procedures of income tax. Secondly, this paper researches into the specific segment. The second part separately analyzes the income tax accounting treatment of business combination under the same control as well as under common control, then clarifies and standardizes the accounting and tax treatment in business combination. Thirdly, because of the complexity of Income tax accounting within business combination, the paper further gives detailed analysis of the differences between business combination accounting standard and tax income system, and the problems caused by these differences. In the final conclusion section, this article would like to put forward to some theoretical and practical advices in order to realize the coordination between the two systems. Different from the majority of research literatures, for the purposes of better serving corporate body, this paper combines the researches in accounting standards and tax policy in the field of business combination, then makes depth analysis of the differences between the two systems, accounting procedures,tax adjustments, and lastly finds how to coordinate the differences between the two.