Can asset impairment reserves be deducted before tax?

According to Article 10 of the "Enterprise Income Tax Law of the People's Republic of China" and the "Enterprise Income Tax Law of the People's Republic of China" According to Article 55 of the Regulations for the Implementation of the Income Tax Law, unapproved reserve expenditures shall not be deducted when calculating taxable income. Unapproved reserve expenditures refer to various asset impairment reserves, risk reserves and other reserve expenditures that do not comply with the provisions of the State Council's financial and tax authorities.

Provisions for impairment of fixed assets are provisions that cannot be deducted before tax.

The "Enterprise Income Tax Law of the People's Republic of China" (Order of the President of the People's Republic of China No. 63) stipulates:

Article 8 The actual occurrence of the enterprise and Reasonable expenses related to obtaining income, including costs, expenses, taxes, losses and other expenses, are allowed to be deducted when calculating taxable income.

Article 10 When calculating taxable income, the following expenditures shall not be deducted:

(1) Dividends, dividends and other equity investment income paid to investors;

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(2) Corporate income tax;

(3) Tax late payment fees;

(4) Fines, fines and losses of confiscated property;

(5) Donation expenditures other than those specified in Article 9 of this Law;

(6) Sponsorship expenditures;

(7) Unapproved reserve fund expenditures;

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(8) Other expenses not related to obtaining income.

According to the provisions of the "Announcement of the State Administration of Taxation on Several Issues Concerning the Taxable Income of Enterprises" (State Administration of Taxation Announcement No. 29, 2014): "(3) Fixed assets withdrawn by enterprises in accordance with accounting regulations Impairment provisions are not deductible before tax, and their depreciation is still calculated and deducted according to the tax basis of fixed assets determined by the tax law. This announcement is applicable to the final settlement of corporate income tax in 2013 and subsequent years. If the assets transferred from the government or shareholders have not yet been processed for corporate income tax, this announcement can be implemented. For incomplete procedures and unclear evidence, the enterprise should complete it before December 31, 2014. If it cannot be completed before the 31st of the month, it will be treated as taxable income or included in the total income for corporate income tax treatment.

Provisions for asset impairment can only be deducted before tax when they are actually incurred and approved by the tax bureau. /p>

Which reserve expenditures can be deducted before tax?

Since unapproved reserve expenditures refer to various asset impairment provisions that do not comply with the provisions of the State Council’s finance and taxation authorities, Risk reserves and other reserve expenditures are not allowed to be deducted before tax. So which reserve expenditures are approved? They mainly include the following categories:

(1) Financial enterprises: general loan losses, agricultural-related loans Loss reserves, small and medium-sized enterprise loan loss reserves;

(2) Insurance companies: insurance protection funds, unexpired liability reserves, life insurance liability reserves, long-term health liability reserves, and pending compensation reserves funds, catastrophic risk reserves;

(3) Small and medium-sized enterprise credit guarantee institutions: guarantee compensation reserves, undue liability reserves;

(4) Securities industry: Stock exchange risk fund, securities settlement risk fund, securities investor protection fund, futures exchange risk reserve, futures company risk reserve, futures investor protection fund;

(5) China UnionPay Co., Ltd. Company: Special risk reserves.

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