Gross profit is the difference between tax-free income and tax-free cost of goods. Because the value-added tax is separated from the price tax, it is particularly emphasized that it does not include tax. In the existing invoicing system, it is called after-tax gross profit.

1, the basic formula of gross profit calculation is:

Gross profit margin = (excluding tax price-excluding tax purchase price) ÷ excluding tax price × 100%

2. Price excluding tax = price including tax ÷( 1+ tax rate)

3. Purchase price excluding tax = purchase price including tax ÷( 1+ tax rate)

4. If you purchase non-agricultural products from general taxpayers, you will get a special VAT invoice at the time of purchase, get 17% of the input tax, and pay the output tax at 17% for sales.

5. Small-scale taxpayers purchase non-agricultural products, issue special VAT invoices from the tax bureau, get 4% income tax, and pay business tax at 17%.

6. If non-agricultural products are purchased from small-scale taxpayers without obtaining a special VAT invoice, the output tax shall be paid at 17% at the time of sale.

7. Generally speaking, value-added tax is an extra-price tax, which does not affect the gross profit margin, but affects the purchase price and selling price excluding tax. To correctly calculate the gross profit margin, we only need to convert it into the purchase price and selling price excluding tax according to the attributes of the goods.

Net profit refers to the profit left after gross profit MINUS all expenses and taxes.

Operating profit is the main source of enterprise profits. Refers to the profits generated by enterprises in their daily activities such as selling goods and providing services. Its content is the balance of main business profits and other business profits after deducting period expenses. Among them, the main business profit is equal to the main business income MINUS the main business cost and turnover tax that the main business should bear, which is usually also called gross profit. Other business profit is the difference between other business income and other business expenses.

Operating profit = main business profit+other business profit-operating expenses-management expenses-financial expenses.

Tips: The above contents are for reference only.

Reply time: 2021-12-16. Please refer to the latest business changes announced by Ping An Bank in official website.