Q: Our company provided financing guarantee for a customer who supplied raw materials for a long time, but the company went bankrupt due to poor management. The guarantee provided by our company caused an irreparable loss of 750,000 yuan (bankruptcy liquidation announcement of the people's court). Can this part of the loss be deducted as asset loss before tax? Article 44 of the Measures for the Administration of Pre-tax Deduction of Income Tax on Enterprise Asset Loss (State Taxation Administration of The People's Republic of China Announcement No.201KLOC-0/No.25) stipulates that if an enterprise provides external guarantees related to its production and business activities, it shall be jointly and severally liable for the guarantor's failure to repay the debt on schedule. If the guarantor can repay the debt free of charge after recourse, the unrecoverable part shall be treated as the guarantee related to the enterprise's production and business activities according to the losses of accounts receivable stipulated in these Measures, which means that the enterprise has its taxable income. The Reply of People's Republic of China (PRC) and State Taxation Administration of The People's Republic of China on Pre-tax Deduction of Assets Loss of Erdos Cashmere Group Co., Ltd. (Guo Shui Zong Han [2065438]No. 193) clearly states that the property loss caused by mutual guarantee between enterprises shall be handled according to People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.2004. 20 1 1. Article 23 of People's Republic of China (PRC) State Taxation Administration of The People's Republic of China Announcement No.25 (20 1 1) clearly states that the accounts receivable overdue by an enterprise for more than three years have been treated as losses in accounting and can be regarded as bad debt losses, but a special report should be issued. Article 24 It is clear that accounts receivable that are overdue by an enterprise for more than one year, with a single amount of not more than 50,000 or not more than one ten thousandth of the total annual income of the enterprise, and have been treated as losses in accounting, can be regarded as bad debt losses, but the situation shall be explained and a special report shall be issued.