There is no need to file a case with the tax bureau, but the scope of deduction is limited to 5‰ of the balance of accounts receivable at the end of the year. The bad debt reserve is allowed to be deducted before tax, and the excess is not allowed to be deducted.

The current tax laws, especially the State Administration of Taxation's "Notice on Issuing the Measures for Pre-tax Deduction of Enterprise Income Tax" (Guoshuifa [2000] No. 84) and "Relevant matters that need to be clarified regarding the implementation of the "Enterprise Accounting System" "Notice on Income Tax Issues" (Guoshuifa [2003] No. 45) also stipulates:

With the approval of the tax authorities, enterprises can use the allowance method to account for bad debt losses, and for the sake of simplicity, enterprises are allowed to accrue bad debts The scope of reserves is implemented in accordance with the provisions of the "Enterprise Accounting System";

At the same time, the conditions for writing off bad debts, the treatment of recovery of written-off bad debts, and the provisions of tax laws and accounting systems are also basically consistent. However, in order to facilitate the collection and management of income tax, the tax law also stipulates:

The bad debt reserves accrued by the enterprise shall be subject to a limited deduction method, that is, only the bad debt reserves accrued shall not exceed 5‰ of the balance of accounts receivable at the end of the year. Pre-tax deductions are allowed, and the excess amount is not allowed to be deducted. This is quite different from the accounting system's provision that "enterprises can determine the method of withdrawing bad debt reserves by themselves, and the withdrawn bad debt reserves shall be deducted in full from total profits."

Extended information:

Bad debt provision calculation formula

The bad debt provision that should be withdrawn in the current period = the amount of bad debt provision that should be withdrawn based on accounts receivable in the current period - "Bad debts" The credit balance of the "Preparation" account.

If the amount of bad debt provision that should be made based on accounts receivable in the current period is greater than the credit balance of the "Bad debt provision" account, the bad debt provision should be withdrawn based on the difference; if the amount of bad debt provision that should be made based on accounts receivable in the current period is calculated The credit balance that is less than the "Bad Debt Provision" account should be used to offset the bad debt provision that has been provided;

If the amount of bad debt provision that should be provided based on accounts receivable in the current period is zero, the "Bad Debt Provision" should be All balances in the "Preparation" account are reversed.

When an enterprise withdraws bad debt provisions, it debits the "Asset Impairment Loss" account and credits the "Bad Debt Provision" account. If the bad debt provision that should be withdrawn in the current period is greater than its book balance, the difference should be withdrawn; if the amount that should be withdrawn is less than the book balance, the "Bad Debt Provision" account will be debited and the "Asset Impairment Loss" account will be credited.

For receivables that are truly irrecoverable, the enterprise will, upon approval, treat them as bad debt losses, write off the bad debt provisions drawn, debit the "Bad Debt Provision" account, and credit "Accounts Receivable" and "Other Receivables". "Receipt" and other subjects.

If the bad debt losses that have been confirmed and written off are recovered later, "Accounts Receivable", "Other Receivables" and other accounts will be debited based on the actual amount recovered, and "Bad Debt Provision" will be credited. "Account; at the same time, the "Bank Deposit" account is debited and "Accounts Receivable", "Other Receivable" and other accounts are credited.

The ending credit balance of the "Bad Debt Provision" account reflects the bad debt provision that the company has withdrawn.

Baidu Encyclopedia-Bad debt provision