Account 821 - Business income tax expenses
1. Accounting principles
a) General principles
- This account is used to record income tax expenses of business, including current income tax and deferred income tax expenses incurred during year, these expenses will be based to determine operating results after tax of business in current financial year.
- Current business income tax expenses are business income taxes payables computed on taxable income during year, and current business income tax rate.
- Deferred business income tax expenses are business income taxes payables in the future, incurred from:
Recording deferred income tax payables in year;
Returning deferred business income tax expenses which were recorded in previous years.
- Revenues from deferred income tax are decrease recording deferred business income tax incurred from:
Recording deferred income tax expenses during year;
Returning of deferred income tax payables recorded in previous years.
b) Accounting principles of current business income tax expense
- Quarterly, accountants base on the business income tax form to record the income tax that enterprises temporarily pay in current business income tax expense. At the end of the fiscal year, based on the final tax declaration, if the business income tax in current year temporarily payable is less than the amount payable for that year, accountants record the business income tax payable additionally in current business income tax expense. In case the business income tax temporarily payable in current year is bigger than the amount payable for that year, accountants must record
a decrease current business income tax expense which is the difference between the temporary business income tax payable in current year is bigger than the amount payable.
- In case of detection of insignificant errors related to business income taxes payable of the previous years, enterprises shall account for as increase (or decrease) of the business income tax payable of the previous years in current business income tax expenses of the year in which errors are detected.
- For significant errors, accountants make retroactive adjustment as prescribed by the Accounting Standards - "Changes in accounting policies, accounting estimates and errors".
- When preparing the financial statements, accountants must transfer the current business income tax expenses incurred to account 911 - " Income summary" to determine the post-tax profits profit in accounting period.
b) Accounting principles of deferred business income tax expense
- When preparing the financial statements, accountants must determine the deferred income tax expense under the provisions of Accounting Standards "business income tax".
- Accountants must not record in this account the deferred income tax assets or deferred income tax payable arising from the transaction recorded directly in owner‘s equity.
- At the end of the period, accountants must transfer the difference between the sum incurred in debit side and that of credit side of Account 8212 - " Deferred business income tax expense " to account 911 - "Income summary".

2. Structure and content of account 821 - Business income tax expenses
General structure and content
Debit side:
- Business income tax expenses currently incurred during year;
- Current business income tax of previous years payable additionally due to detecting insignificant errors of the previous year recorded an increase in current business income tax expense of the current year;
- Deferred income taxes expenses incurred during year from recording deferred income tax payables (positive differential between deferred income tax incurred in year, and deferred income tax payables which were returned during the year).
- Recording deferred income tax expenses (positive differential between deferred business income tax which were returned in year, and deferred income tax incurred during the year).
- Posting differential between amount of Cr 8212 ―Deferred income tax expenses‖, which is greater than amount of Dr 8212 ―Deferred income tax expenses‖ incurred in period, to Cr 911 ―Income Summary‖.
Credit side:
- Current business income tax actually paid in year which is smaller than income tax expenses temporarily payables, will be deducted from current business income tax expenses recorded during year;
- business income tax payable recorded a decrease due to detecting insignificant errors of the previous year recorded an increase in current business income tax expense of the current year;
- Decrease record of deferred business income tax expenses and recording deferred income tax asset (positive difference between deferred income tax incurred in year and deferred income tax assets returned during year).
- Decrease record of deferred income tax expenses (positive differential between deferred income tax payables which has been returned during year and deferred income tax payables induced during year);
- Transferring positive difference between current income tax induced in year, and decreasingly recorded amount income tax expenses in year, to Account 911 ―Income Summary‖.
- Transferring positive differential between amount at Dr 8212, and amount at Cr 8212 ―Deferred business income expenses‖ induced in period, to Dr 911 ―Income Summary‖.
Account 821 “Business income tax expenses” has no ending balance
Account 821 – Business income tax expenses, comprises 2 sub - accounts:
- Account 8211 - Current business income tax expenses ;
- Account 8212 - Deferred business tax expenses
b) Structure and content of account 8211 - Current business income tax expenses
Debit side:
- Business income tax payables charged to current income tax expenses induced during year;
- Business income tax of previous years payables additionally because of detecting important errors of previous years, will be increasingly recorded in current business income expenses of present year.
Credit side:
- Current business income tax actually paid during year which is smaller than current income tax temporarily paid, will be deducted from current income tax expenses recorded in year;
- business income tax payable recorded a decrease due to detecting insignificant errors of the previous year recorded an increase in current business income tax expense of the current year;
- Transferring current business income tax expenses to Dr 911 ―Income Summary‖.
Account 8211 “Current business income tax expenses” has no ending balance.
c) Structure and content of account 8211 - Deferred business income tax expenses
Debit side:
- Deferred income taxes expenses incurred during year from recording deferred income tax payables (positive differential between deferred income tax incurred in year, and deferred income tax payables which were returned during the year).
- Returned amount of deferred income tax assets in previous year (which is positive differential between deferred income tax fiscal assets which was returned during year, and deferred income tax assets induced during year).
- Posting differential between amount of Cr 8212 ―Deferred income tax expenses‖, which is greater than amount of Dr 8212 ―Deferred income tax expenses‖ incurred in period, to Cr 911 ―Income Summary‖.
Credit side:
- Decreasingly record deferred income tax expenses (positive differential between deferred income tax fiscal assets which was returned during year).
- Decrease record of deferred income tax expenses (positive differential between deferred income tax payables which has been returned during year and deferred income tax payables induced during year);
- Transferring difference between amount at Cr 8212 ―Deferred business income tax expenses, which is smaller than amount at Dr 8212 ―Deferred business income tax expenses‖ induced during period, to Dr 911 ―Income Summary‖.
Account 8212 “Deferred business income tax expenses” has no ending balance.

3. Method of accounting for several major transactions

a) Accounting principles of current business income tax expense
- Quarterly, when determining income tax temporarily paid complying with business income tax law, accountants record cement income tax temporarily paid for state Budget to business income tax expenses, record:
Account 8211- Current business income tax expenses;
Cr 3334 - Business income tax
When paying business income tax to state Budget, record :
Dr 3334 - Business income tax
Cr 111, 112,...
- At end of fiscal year, accountants base on business income tax actually payables under final tax declaration or the sum payable notified by tax authorities:
If income tax expenses actually payables during year are higher than temporarily paid income tax, accountants record current business income tax that business must pay additionally, record:
Account 8211- Current business income tax expenses;
Cr 3334 - Business income tax
If income tax expenses actually payables during year are lower than temporarily paid income tax, accountants record a decrease current business income tax expenses, record:
Dr 3334 - Business income tax
Cr 8211- Current business income tax expenses.
- In case detecting unimportant errors of previous years relating to income tax payables of previous years, business is allowed to adjust account an increase (or decrease) in income tax payables of previous years, to income tax expenses of year detecting errors.
In case current income tax of previous years must be paid additionally, because of unimportant error detected of previous years, and this additional tax payment is recorded an increase in current income tax expenses of present year, record:
Dr 8211- Current business income tax expenses
Cr 3334 - Business income tax
In case income tax payables is decreased because of unimportant errors in previous years, this will be recorded a decrease in current income tax expenses of present year, record:
Dr 3334 - Business income tax
Cr 8211- Current business income tax expenses.
- At end of accounting period, transferring current income tax expenses, record:
If Account 8211 has Debit amount greater than Credit amount, then the differential will be recorded a:
Dr 911 - Income Summary
Cr 8211- Current business income tax expenses.
If Account 8211 has Debit amount smaller than Credit amount, then the differential will be recorded a:
Account 8211- Current business income tax expenses;
Cr 911 - Income Summary

b) Accounting principles of deferred business income tax expense
- Deferred income taxes expenses incurred during year from recording deferred income tax payables (positive differential between deferred income tax incurred in year, and deferred income tax payables which are returned during the year).
Dr 8212 - Deferred business tax expenses
Cr 347 – deferred income tax payable.
- Deferred income tax expenses incurred during year, which results from recording deferred income tax fiscal assets recorded from previous years (which is positive differential between deferred income tax assets which returned in year and deferred income tax assets incurred during year), record:
Dr 8212 - Deferred business tax expenses
Cr 243 - Deferred business income tax assets.
- Decrease recording of deferred income tax expenses (positive differential between deferred income tax assets induced during year and deferred income tax assets).
Dr 243 - Deferred business income tax assets.
Cr 8212 - Deferred business tax expenses
- Decrease recording of deferred income tax expenses (positive differential between deferred income tax payables induced during year), record:
Dr 347 - Deferred business tax expenses payable
Cr 8212 - Deferred business tax expenses
- At end of account period, posting differential between Debit and Cr 8212 - Deferred business income tax expenses :
If Account 8212 has Debit amount greater than Credit amount, than the differential will be recorded a:
Dr 911 - Income Summary
Cr 8212 - Deferred business tax expenses
If Account 8212 has Debit amount smaller than Credit amount, then the differential will be recorded a:
Dr 8212 - Deferred business tax expenses
Cr 911 - Income Summary

Source: Circular 200, Article 95