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Q：
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What is the actual asset loss?
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A：
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It refers to the reasonable losses incurred by enterprises during the actual disposal and transfer of assets.
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Q：
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What is the statutory asset loss?
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A：
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It refers to the losses calculated and confirmed by enterprises that have not actually disposed of or transferred assets, but meet the conditions stipulated in relevant tax documents.
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Q：
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How should asset losses incurred by enterprises be deducted?
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A：
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after being reported to the competent tax authority. Unreported losses shall not be deducted before tax.
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Q：
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How to handle asset losses incurred by a company in previous years that were not deducted before tax in the year of losses incurred?
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A：
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If it belongs to actual asset losses, it is allowed to be deducted back in the year in which the loss occurred. The period for retrospective deduction generally shall not exceed five years.
However, for asset losses caused by the following special reasons, the deadline for retrospective deduction may be appropriately extended after approval by the State Administration of Taxation:
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The asset losses left over from the transition of planned economic system.
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Asset losses that were not deducted timely due to disputes over unclear ownership during the process of corporate restructuring and listing.
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Asset losses resulting from undertaking national policy tasks.
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Asset losses resulting from unclear policy nature.
If it belongs to statutory asset loss, it should be deducted in the reporting year.
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Q：
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How to deal with overpaid taxes or losses after retrospective deduction?
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A：
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When enterprise income tax was overpaid due to actual asset losses in previous years not being deducted before tax, the actual asset losses can be deducted retrospectively from the annual enterprise income tax payable of the year in which the losses occurred. If it is not enough to be deducted, it will be deferred to future years for deduction.
If the enterprise incurred a loss after deducting the actual asset loss retrospectively to the year it occurred, the loss amount of the year in which the asset loss occurred should be adjusted first, and then the excessive enterprise income tax paid in future years should be calculated based on the principle of making up for the loss, and tax treatment should be carried out according to the method in the preceding paragraph.
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FAQ
