How to keep the accounts of a school?

 

In tax matters, schools -like any other taxpayer- must pay taxes, which obey the category in which educational institutions are framed. Now, how is the accounting of a school kept, understanding that from it the amount to be paid to the treasury is obtained?

To understand how the accounting firm in slough of a school is kept, and as indicated by the Internal Revenue Service (SII) , “ for the purposes of the Income Law (LIR), the schools are classified in number 4, article 20, therefore, are taxpayers who pay taxes on the basis of effective income and, in accordance with what is stated in article 68 of the same law, they are obliged to keep complete accounts ”.

Before continuing, remember that you can download this kit of templates in excel that we have prepared for you to optimize your accounting management.


But what is effective income? It is a system under which taxpayers are taxed based on complete accounting (hence "effective income"). For this reason, and as indicated by the SII , this system “ obliges the taxpayer to keep Cash Books, General Journal, Inventories and Balances, in addition to the auxiliary books required by law, such as the Daily Sales Book, Remunerations, Withheld Taxes and the Registry of the Taxable Profits Fund (FUT) ”.

Taken to the case of a school, it implies that the tax base must be calculated considering all the accounting movements, from teachers' remuneration to the information contained in the FUT, which contains the detail of taxable and non-taxable profits .

Now that you know what effective income is, let's see what the accountants near me treatment of educational institutions is like, understanding that this is essential both to comply with the provisions of the law and to prepare a school budget.

School accounting: what does the law say?

Before seeing how the accounting of a school should be kept, it is necessary to specify that this type of institution can be divided into three categories: non-profit (corporations or foundations), subsidized  and private paid schools (CPP). Each of these categories includes unique aspects in accounting and tax matters:

1. Corporations and foundations

The College of Accountants, in its technical bulletin No. 63, establishes that this type of organization, for accounting purposes, must consider :

Types of income:  In general, the income of this type of institutions is made up of initial contributions, donations received from third parties, periodic fees from associates or collaborators, and sale of goods or provision of services carried out by the institution.

Initial contributions:  That is, the sums of money or goods delivered by partners or founders at the time of establishing the entity.

Social quotas : These are the financing that corporations or foundations receive from partners or collaborators, in the form of quotas that can be fixed or variable.

Donations: Donations and donation promises must be differentiated here, since each of these has a specific accounting treatment.

Sales of goods and provision of services:  Income from this type of activity must, once production expenses have been deducted, be recognized as income affected by the First Category Tax (IDPC).

In addition, it is worth noting which foundations and corporations must make, when applicable, the Provisional Monthly Payments (PPM) and, if they are exempt from paying the IDPC (due to special provis 2. Paid Private Schools

These types of entities, being subject to the IDPC, must comply with some standards such as:

The owners or partners must pay the Complementary Global Tax (IGC) , based on the withdrawals or powers derived from said profits. This, using the IDPC paid by the school as a credit against the IGC or Additional Tax, always depending on the tax regime of the holding company.

The profits, as long as they are not withdrawn, must be registered in the FUT , bookkeeping & VAT services slough as well as the credit of the IDPC. Non-taxable profits must also be included here, which cannot be withdrawn until taxable on 3. Subsidized schools

When it comes to understanding the accounting of subsidized schools, it is necessary to specify that:

Assets acquired with a State subsidy must be subject to the rules of correction and monetary depreciation.

Regarding the accounting of subsidized schools, we must consider that the so-called "business salary" assigned by the partners or owners, is deductible from the taxable amount because it is considered an expense.

By knowing the main points about school accounting, it is possible to present the financial statements in an orderly manner , as well as to prepare the budget of a school addressing all the aspects that involve the provision of resources. es are finished. ions), they must also submit their annual tax returns. .

 

 

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