Overdue scrapped inventory does not need to be transferred out of input tax. According to the regulations of the tax authorities, enterprises need to transfer the input tax due to abnormal losses, that is, losses caused by poor management, and no deduction is allowed. However, enterprises do not need to make investment transfer because their products are obsolete, which is not within the scope of abnormal losses.

When the inventory is overdue, the input tax needs to be transferred out. For the disposal of overdue inventory, the accounting treatment before approval is: debit: profit and loss of pending property, credit: inventory goods, taxes payable-value-added tax payable (transferred-out input tax).

After the inventory is overdue, the accounting treatment after approval is: debit: other receivables, non-operating expenses, and credit: gains and losses of pending property. Abnormal losses not specified in the Detailed Rules for the Implementation of the Provisional Regulations on Value-added Tax shall not be transferred out of the input tax. For those who have been financially transferred out, the opposite accounting entries can be made.

Legal basis:

Detailed rules for the implementation of the provisional regulations of the people's Republic of China on value-added tax

Article 21 The term "purchased goods" as mentioned in Item (1) of Article 10 of the Regulations does not include fixed assets used for VAT taxable items (excluding tax-exempt items) and non-VAT taxable items, tax-exempt items (hereinafter referred to as tax exemption), collective welfare or personal consumption. The fixed assets mentioned in the preceding paragraph refer to machines, machinery, means of transport and other equipment, tools and appliances related to production and operation with a service life of 12 months or more.

Provisional Regulations of People's Republic of China (PRC) Municipality on Value-added Tax

Article 10

The input tax of the following items shall not be deducted from the output tax:

(1) Goods, services, intangible assets and real estate purchased for simple taxation, exemption from value-added tax, collective welfare or personal consumption;

(two) abnormal losses of purchased goods and related labor and transportation services;

(3) Goods purchased (excluding fixed assets), services and transportation services consumed by products in process and finished products with abnormal losses;

(four) other projects stipulated by the State Council. How can I recover the wrong money?