Chinese accounting report 2012-05-04

 At the annual enterprise income tax settlement period is shorter and shorter, B company financial accounting for uncertain how to handle that loan losses and anxious.

Originally, because of the government's monetary tightening, early 2011 a company couldn't get enough money from the bank loan, has difficulty operating capital turnover. After being introduced to B company borrowing 1000000 yuan, enterprise production and management of funds for emergency, the loan period of 1 years, agreed in 2011 December 31 days to return, the annual interest rate of 12% (assuming that the bank loan interest rates 8%). However, the European debt crisis triggered the market amidst the winds of change, a company for the product is slow-moving, 1000000 yuan loan it owed overdue to return.

 Public opinions are divergent. loan loss deduction

 If that happened in 2010, 1000000 yuan loan company B the uncollectible, is certainly not as debt loss in the pre tax deduction.

 Because according to the "State Administration of Taxation issued 'management' pre tax deduction of enterprise assets loss notice" (Guo Shui Fa (2009) No. 88, announcement of the State Administration of Taxation in 2011 twenty-fifth, after the entry into force of the regulations of forty-second abolished), company B's loss which belongs to the "national may be engaged in the lending business outside of enterprises because of funding direct lending losses", is not to declare the tax deduction.

 However, in forty-sixth the State Administration of Taxation issued in 2011 Notice No. twenty-fifth, "corporate income tax deductible loss of assets management measures" article, not as a loss in the pre tax deduction of equity and debt, to retain the original tax (2009) 88, forty-second first to five and seven, the sixth "the state can be engaged in the loan business enterprises other than the fund direct lending losses" from "not as a loss in the pre tax deduction" project provisions deleted.

 The problem is, the 2011 twenty-fifth announcement of the original Guoshuifa [2009] 88 article forty-second article (six) term "tax deduction" is not the stipulation deletion, the possibility that "the state can be engaged in the loan business outside of enterprises because of funding direct lending losses" this problem after January 1, 2011 can be pre tax deduction? On this issue, the current Public opinions are divergent. from all walks of life, each sticks to his argument.

 The loan will not be paid back, can do loss deduction?

 1000000 yuan loan company B the uncollectible, the end can not as debt loss in the pre tax deduction?

 Company a and company B are not financial enterprises, the two companies have business dealings are not affiliated enterprises. Before the formation of the association between enterprises, loan losses are deductible, the tax authorities in the performance of aperture is not allowed to deduct, even meet the conditions allow tax deduction, are subject to the tax authorities audit can.

 The relevant policies and regulations including the following 3: one is the "Notice of the State Administration of Taxation on business transactions between affiliated enterprises of bad debt losses occurred in the pre tax deduction" (Guoshuihan No. 945 (2000), repealed) regulations, in order to prevent the profit transfer between associated enterprises, evade taxes, according to the State Administration of Taxation "enterprise income tax the pre tax deduction management approach" the provisions of article forty-eighth, the current accounts between correlated enterprises shall not be recognised as bad debts. Considering the actual economic activities, there are a lot of normal transactions between affiliated enterprise, in order to solve the problem of seek truth from facts, the State Administration of taxation advice: between correlated enterprises accounts receivable, the court ruled the liability side bankruptcy, bankruptcy property is insufficient to pay debt part, after the examination of the tax authority, should allow creditors enterprises as bad debt losses in pre tax deduction. Two is the "measures for the administration of pre income tax deduction of enterprises" (Order No. thirteenth of 2005, the State Administration of Taxation has been abolished) article twenty-second (seven) regulation, enterprise receivables, prepayments for bad debts tax deduction should provide "related party account must have a court judgment or the competent tax authorities proof." Three is the State Administration of Taxation issued "attestation standards pre income tax deduction of business tax (Trial)" notice (Guoshuifa [2007] 9) about the "loss of monetary assets audit" article (3) between the audit business affiliates account: "the association between current account shall not be recognised as bad debts. But the association enterprise accounts receivable, the court after the bankruptcy liquidation of the debt debt, property is insufficient to the bankrupt enterprise part, after the examination of the tax authority, creditors, enterprises can be as bad debt loss in the pre tax deduction."

 Now, in 2011 twenty-fifth Announcement No. forty-fifth stipulates clearly, enterprises to the related enterprises transfer according to the independent transaction principle asset losses, or to the related enterprises to provide loan guarantees, and the formation of the credit loss, deduction, but the enterprise should make a special explanation, a special report issued by the intermediary institutions and relevant certification materials at the same time.

 Correlation between enterprises can be deducted loan losses?

 And before the policy comparison, is not difficult to see, the form for the associated enterprises loan losses will allow a tax deduction, provisions in 2011 twenty-fifth announcement was clearly relaxed requirements, more humane. Even if is related enterprises, as long as the independent transaction principle, can be used as a loss in the pre tax deduction. At the same time, the scope of enterprise wide, according to the provisions of the 2011 twenty-fifth announcement, as long as the enterprises between the borrowing behavior to meet the prescribed conditions can be used as a loss deduction, no longer limited to financial enterprises.

 Formed between correlated enterprises loan losses are deductible, if non financial enterprises because of funding direct lending losses did not allow tax deduction, then 2011 Announcement No. twenty-fifth of forty-sixth, will not be deleted Guoshuifa (2009) No. 88, article forty-second (six) the provisions of item. That is to say, as long as the "independent transaction principle" business processing, non financial enterprises because of funding directly lending losses can be deducted before tax. Just, should be strictly in accordance with the provisions of the 2011 twenty-fifth announcement forty-fifth, namely the enterprise should make a special statement, issued at the same time special reports issued by the intermediary institutions and relevant certification materials.

 In conclusion, the author thinks 1000000 yuan loan company B the uncollectible debt losses can be deducted before tax.