Provisions On Pre Tax Deduction For Loss Of Bad Debts In Telecommunication Enterprises

The 19 day from the State Administration of Taxation, the Bureau recently issued a "notice on the issue of pre tax deduction for the bad debt losses of telecom enterprises", and it is clear that the telecom enterprises can deduct some of their arrears as bad debts before tax.

The circular pointed out that the users who engage in telecommunication businesses should receive telephone charges, and if the amount of the single amount is small and the time of default is more than 1 years, the enterprise will not be able to recover it. After the unified explanation is made by the enterprise, it can be used as a deduction for the loss of bad debts before the enterprise income tax.

The notice has been implemented since January 1, 2009.

The notice also made it clear that the above bad debt losses that occurred in 2008 were no longer adjusted as bad debts, and that the loss of bad debts was not recognized as the loss of bad debts when the enterprise income tax was repaid in 2009.

It is understood that after January 1, 2008, the assets loss of enterprise income tax has been implemented in accordance with the Circular of the Ministry of Finance and the State Administration of Taxation on the pre Tax Deduction Policy for enterprise assets losses. However, the notice did not provide special provisions for the loss of bad debts of Telecom Enterprises, and the announcement made the problem clear.