Article 10 of the Provisional Regulations on Value-added Tax stipulates that when the goods purchased or taxable services accepted by taxpayers are not used for VAT taxable items, but for non-taxable items, tax-exempt items or for collective welfare and personal consumption, the input tax paid by them cannot be deducted from the output tax.
In practical work, it is often the case that the goods or taxable services purchased by taxpayers in the current period are not determined in advance to be used for production or non-production operations, but their input tax amount has been deducted from the current output tax amount. When the purchased goods or taxable services with the input tax amount deducted are used for non-taxable items, tax-exempt items, collective welfare or personal consumption, etc.
In case of abnormal loss of purchased goods and abnormal loss of products and finished products, the input tax amount of purchased goods or taxable services shall be deducted from the input tax amount incurred in the current period and recorded as "input tax amount transfer out" in accounting treatment.
References:
Input tax transfer-Baidu Encyclopedia