The provision for inventory depreciation cannot be deducted before tax. All kinds of reserves made in accordance with the provisions of the original Enterprise Income Tax Law before January 1, 2008, after January 1, 2008, without the approval of the Ministry of Finance If approved by the State Administration of Taxation, the corresponding losses actually incurred by the enterprise in subsequent years shall be offset against the balance of various reserves first.

According to the "Enterprise Income Tax Law of the People's Republic of China", the "Regulations on the Implementation of the Enterprise Income Tax Law of the People's Republic of China" and the "State Administration of Taxation on Certain Tax Treatment Issues in the Implementation of Enterprise Income Tax" According to the provisions of the Notice (Guo Shui Han [2009] No. 202), in addition to the reserves approved by the Ministry of Finance and the State Administration of Taxation, which can be deducted before tax, various asset impairment reserves and risk reserves provided by other industries and enterprises can be deducted before tax. Reserves are not deductible for tax purposes.

According to Article 10 of the "Enterprise Income Tax Law of the People's Republic of China", when calculating taxable income, the following expenditures shall not be deducted:

1. Dividends, bonuses and other equity investment income paid;

2. Corporate income tax;

3. Tax late payment fees;

4. Penalties, fines and losses of confiscated property;

5. Donation expenditures other than those provided for in Article 9 of this Law;

6. Sponsorship expenditures;

7. Approved reserve expenditures;

8. Other expenditures not related to obtaining income.

Which reserve expenditures can be deducted before tax?

Since 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 finance and tax authorities and are not allowed to be deducted before tax, then those reserves Are financial expenditures approved? It mainly includes the following categories:

1. Financial enterprises: general loan losses, agricultural-related loan loss reserves, and 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, pending compensation reserves, catastrophe risk reserves;

3. Small and medium-sized enterprise credit guarantee institutions: guaranteed compensation reserves 4. Securities industry: stock exchange risk fund, securities settlement risk fund, securities investor protection fund, futures exchange risk reserve, futures company risk reserve Gold and futures investor protection fund;

5. China UnionPay Co., Ltd.: special risk reserve.