Introduction: When "Increasing Revenue but Not Profit" Meets Tax Dilemmas

For a food processing enterprise with annual revenue of tens of millions of yuan, the most painful thing is that sales volume increases year by year, but profits remain stagnant. A certain food company has fallen into such a vicious circle. After internal accounting, the management found that the heavy tax burden is quietly eroding the company's operating results - insufficient deduction of input VAT, ineffective preferential policies, disconnection between financial accounting and tax requirements, and a series of problems have put the enterprise in a predicament of "the harder it works, the more tired it gets".

I. Diagnosis: A Panoramic Perspective from Business Model to Financial and Tax Mechanism

In early 2025, the tax team of Luheng Law Firm accepted the entrustment and officially intervened in the enterprise's tax compliance and planning project. Instead of rushing to formulate a plan, the team first did one thing:Go deep into the front line of business to understand how the enterprise makes money.

• Business Process Sorting: Restore the capital flow and bill flow one by one from raw material procurement, production and processing to channel sales;
• Financial Data Penetration: Retrieve account books of the past three years, analyze cost structure, profit sources and tax burden distribution;
• Policy Applicability Investigation: Check item by item whether the enterprise meets the eligibility criteria by referring to the "Enterprise Income Tax Law", "Interim Regulations on Value-Added Tax" and local preferential documents.

Finally, the team identified three core issues:

1. "Small Ticket Dilemma" in Procurement: A large amount of raw materials are purchased from individual households and small-scale taxpayers, making it impossible to obtain special VAT invoices, resulting in serious insufficient deduction of input tax;
2. "Missing Dividends" in Identity: The enterprise's R&D investment has been continuously increasing, but it has not applied for the recognition of high-tech enterprises, thus missing out on the 15% preferential tax rate for nothing;

3. "Disconnection between Accounts and Taxes" in Management: Financial personnel are not sensitive to the update of tax policies, and the auxiliary books for R&D expenses are missing, making it impossible to claim additional deduction for R&D expenses.

II. Breaking the Deadlock: A "Combination of Measures" to Create Tax Savings Space

In response to the diagnosed problems, the Luheng team tailored a tax planning plan driven by both "VAT + Enterprise Income Tax" for the enterprise.

Supply Chain Restructuring: Retrieve the "Input Tax"

• Reorganize the supplier list, formulate the "Qualified Supplier Access Standards", and give priority to source enterprises with general taxpayer qualifications;
• For individual suppliers that must cooperate with, guide them to apply for special invoices on behalf of the tax authorities to ensure that every procurement has "matching invoices and goods, and valid deductions".

Qualification Upgrading: Obtain the "High-Tech" Identity

• Assist the enterprise in sorting out R&D projects of the past three years, sorting out project approval reports, R&D logs, expense vouchers, and establishing standardized auxiliary books for R&D expenses;
• Connect with third-party institutions to complete special audits and prepare application materials for high-tech enterprise recognition;
• Finally, successfully passed the recognition, and the enterprise income tax rate dropped directly from 25% to 15%.

R&D Additional Deduction: Let "Innovation" Offset Taxes

• Sort out the enterprise's technological transformation projects, distinguish between regular production and R&D activities, and ensure that eligible expenditures are accurately collected;
• In the annual final settlement and payment, declare additional deduction for R&D expenses in compliance with regulations to further reduce the taxable income.

III. Implementation: System Construction from Plan to Habit

No matter how perfect the planning plan is, it is only a piece of paper if it cannot be implemented. The Luheng team simultaneously assisted the enterprise in establishing three long-term mechanisms:

• Tax Internal Control System: Formulate documents such as the "Invoice Management Measures" and "R&D Expense Management Measures" to clarify the person responsible for each link;
• Monthly Review Mechanism: Conduct monthly reviews of input invoices and R&D collection, and rectify problems within the month if found;
• Quarterly Training System: Provide tax policy training for financial and procurement personnel to ensure that front-line personnel understand policies and can operate them.

IV. Achievements: 30% Savings in One Year, Enterprise Accelerates Development

One year after the implementation of the plan, the effect data is impressive:

• **VAT burden decreased by 22%**, mainly due to the improvement of the input deduction chain;
• **Enterprise income tax burden decreased by 40%**, driven by the superposition of high-tech preferential policies and R&D additional deductions;
• **Overall tax cost reduced by 30%**, equivalent to "凭空" adding a considerable amount of working capital to the enterprise.

The saved funds were quickly invested by the enterprise in the construction of new production lines and market expansion. In the same year, the enterprise's production capacity increased by 25%, and