Profit-seeking enterprises should pay attention to the applicable conditions when reporting the loss deduction amount

According to the National Taxation Bureau of the North District of the Ministry of Finance, according to Article 39 of the Income Tax Law, the operating losses of profit-seeking enterprises in previous years shall not be included in the calculation of the current year in principle. However, for a profit-making enterprise organized by a company, the accounting books and documents are complete, and the loss and declaration and deduction year are all used in the blue declaration form or certified by an accountant, and the declaration is made on time, it may be approved by the competent taxation agency within 10 years. The loss for the period shall be deducted from the net profit of the year, and then re-checked.
The Bureau stated that the applicable profit and loss offsetting should meet the requirements of "profit-making enterprises organized by companies", "accounting books and documents are complete", "losses and declarations and deductions are made in the blue declaration form referred to in Article 77 of the Income Tax Law or audited by an accountant. "Visa" and "Declaration on schedule" and other 4 requirements before you can declare and deduct losses from previous years. In addition to the above-mentioned requirements, it should be noted that the losses in the previous 10 years are deducted from the "net profit" of the current year. If there is no profit in the current year, the loss of previous years cannot be deducted.
The Bureau gave an example. In 2009, Company A reported a loss of RMB 830,000 in income tax for the profit-seeking enterprise, but it also reported a deduction of RMB 9.83 million for the approved loss in the previous 10 years, and calculated a loss of taxable income of RMB 10.66 million. After the inspection by the Bureau, it was found that there was no application of profit and loss offsetting, so it was not allowed to list the approved loss deduction for the previous 10 years, and the approved loss was 0 yuan.
The bureau reminded that when profit-seeking enterprises report the approved loss deduction for the previous 10 years, they should first review the relevant requirements and precautions in order to correctly declare the income tax of profit-seeking enterprises. ://www.ntbna.gov.tw) to inquire about relevant laws and regulations or call the toll-free service number 0800-000321. The bureau will wholeheartedly provide consulting services.
Contact person for press release: Section Chief Zhong of Review Division 1 Tel: (03) 3396789 ext. 1330

Issued by: Ministry of Finance Northern District State Taxation Bureau Release date: 2022-04-27 Update date: 2022-04-27