Unhelpful items in company costs
Many entrepreneurs have goods in their warehouses that are not popular among customers. They just stay in the warehouses, taking up space and losing their usefulness. Can a taxpayer remove unnecessary goods from their inventory and classify them as costs? How to make appropriate records? Answer below.
Unhelpful goods can sometimes be a cost
A company dealing with trade in goods or materials must take into account the risk of their damage, destruction, theft or expiry. In a situation where these events are not the fault of the entrepreneur himself or do not result from his negligence, then, in principle, they may constitute a tax deductible cost.
Necessary damage report
The taxpayer must draw up a damage / destruction report to be able to include unsuitable commercial goods and materials in costs. This protocol should contain at least:
place and date of preparation,
the term "damage report" or "destruction report",
data (name, surname, position) of the person drawing up the report,
name of the damaged goods or material,
the amount of damaged goods or material,
value of damaged goods or materials,
date of destruction / damage to goods / materials,
total value of damaged goods and materials included in the protocol,
signature of the author.
Valuation of goods and materials for the record
The method of valuation of goods or materials for the report depends on whether the entrepreneur is an active VAT payer or whether he is exempt in this respect.
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The active VAT taxpayer evaluates the components included in the protocol according to the net purchase prices. On the other hand, exempt entities take into account the gross purchase prices. The values of individual goods and materials should be taken from the purchase documents (e.g. invoices and bills). If an amount lower than the purchase or purchase price is assumed for the valuation of goods, e.g. due to damage or out of fashion, the unit purchase (purchase) price should also be shown for each item.
Recognition of the protocol in the KPiR
The prepared report is the basis for recording the event in the tax revenue and expense ledger. The total value of damaged goods should be written off from column 10 of the KPiR - purchase of commercial goods and basic materials (negative) and transferred to column 13 of the ledger - other expenses (positive).