How to substantiate losses

Sometimes the company during some reporting periods shows a loss in the tax return. In this case, the tax inspectorate may request a justification for unprofitable reporting. In this case, you should carefully consider the indicated information and take certain measures to solve the problem.

Instruction manual

1

Study the articles of tax legislation, which provides for a variety of measures for losses in the enterprise. Pay attention to paragraph 3 of Article 88 in the Tax Code of the Russian Federation, which states that an explanation must be written if there is an error in the tax return itself or if conflicting documents are provided that the taxpayer may attach. But the law does not say anything about unprofitable reporting, which is why the inspection refers to the above paragraph of the law, requiring an explanatory note, referring to incorrect calculations of income and expense.

2

Write an explanation. At the same time, keep in mind that it should be in arbitrary form and addressed to the head of the tax authorities. The explanatory must necessarily contain the reasons that reflect the formation of a loss as a result of the financial economic activity of the company for the past reporting year (or other period).

3

Analyze what in your case can be considered valid justification for the tax. Report that the funds were spent to develop the company. This reason is ideal for a new enterprise, because at the beginning of its own activities, it could face great competition, the search for contractors and the need for development.

4

Refer to some specific non-standard operations (if any). This reason can justify many unforeseen expenses in a stable company. Thus, you can indicate that your company has mastered new production or reconstructed assets (fixed assets of the company), which entailed an increase in costs and a drop in sales.

5

You can justify losses by the loss of important counterparties, which accounted for the largest part of the profit. In addition, the basis for unprofitability may be a decrease in the company's income. For example, you can write that the organization decided to temporarily lower prices for goods in order to increase competitiveness.