Enforcement Rules of the Income Tax Act Article 31

For the amount of income of a profit-seeking enterprise stated in Paragraph 1, Article 24 of the Act, its calculation equation is stated below as an example:1. Retail Industry:(1)Gross Sales Revenue- (Sales Return ＋ Sales Allowance) ＝ Net Sales Revenue(2)Beginning Inventory＋(Purchase - (Purchase Return ＋Purchase Allowance)) ＋Purchasing Expenses - Ending Inventory ＝ Costs of Goods Sold(3)Net Sales Revenue - Costs of Goods Sold ＝ Gross Sales Revenue(4)Gross Sales Revenue - (Sales Expenses ＋ Managerial Expenses) ＝ Operating Income(5)Operating Income＋Non-Operating Earnings-Non-Operating Loss ＝ Net Income Amount (i.e. the income amount)2. Manufacturing Industry:(1)(Beginning Material ＋ Purchased Material - Ending Material) ＋ Direct Labor ＋ Production Expenses ＝ Production Costs(2)Beginning Work-in-Process Goods in Stock ＋ Production Costs - Ending Work-in-Process Goods in Stock ＝ Finished Goods Costs(3)Beginning Finished Goods in Stock ＋ Finished Goods Costs - Ending Finished Goods in Stock ＝ Costs of Goods Sold(4)Gross Sales Revenue-(Sales Return ＋ Sales Allowance) ＝ Net Sales Revenue(5)Net Sales Revenue-Costs of Goods Sold＝Gross Profit(6)Gross Profit - (Sales Expenses ＋ Managerial Expenses) ＝ Operating Income(7)Operating Income＋Non-Operating Revenue-Non-Operating Loss ＝ Net Income Amount (i.e. the income amount)3.Other Industries Providing Service or Credit:(1)Business Revenues - Operating Costs＝Business Gross Profit(2)Business Gross Profit- Managerial or Administrative Expenses ＝ Operating Income(3)Operating Income ＋ Non-Operating Revenue-Non-Operating Loss ＝ Net Income Amount (i.e. the income amount)