Procedures to do with tax authorities

As defined in Circular 78/2014/TT-BTC and Circular 95/2016/TT-BTC detailing the Law on Taxation business income, goods damaged due to changes in the natural biochemical process or expiry date and not compensated, will be included in deductible expenses when determining taxable income.

Goods damaged due to natural change or expiry date, when included in deductible expenses, the following documents are required:

• Minutes of inventory value of damaged goods made by the enterprise.
• The record of inventory of damaged goods must clearly identify the value of damaged goods and the cause of the damage; type, quantity and value of recoverable goods (if any) together with a list of imports and exports of damaged goods with certification signed by the legal representative of the enterprise and take responsibility before law. .
• The claim file is accepted by the insurance agency (if any).
• Dossier specifying responsibilities of organizations and individuals to be compensated (if any).
• The above-mentioned dossier is kept at the enterprise and presented to the tax authority upon request.

Procedure with the health department

Currently, the law has not given specific instructions on the procedure for canceling drugs that have expired. Therefore, the same procedure for canceling expired drugs as prescribed in Article 15 of Circular 11/2018/TT-BYT. Accordingly:

The head of the establishment whose drugs need to be destroyed will decide to set up a drug destruction council, consisting of at least 03 members, of which there must be at least 1 person responsible for professional expertise.

The destruction of drugs must ensure the safety of people and animals and avoid causing environmental pollution, comply with the provisions on environmental protection in the law.

The drug destruction facility must report together with the drug destruction minutes to the Department of Health according to the instructions in Form No. 06, Appendix III issued together with the above Circular.

Destruction of damaged goods in stock

• Ask to destroy expired inventory, including information on quantity, product name, import date, and expiration date.
• Perform inspection of expired inventory and make inspection records.
• Leaders of the Company must make a decision to allow the destruction of expired inventory.
• Make a record of inventory destruction signed by witnesses and the Company’s leaders. The representative of the Tax Department should be the witness in the minutes.
• If the destruction of goods affects the environment, a permit or certificate of destruction of goods is required from the competent authority.

Concurrently with the destruction of expired goods, accountants need to make provision for devaluation of inventories as follows (Refer to Circular 228/2009/TT-BTC dated December 07, 2009 on setting up and using provisions for devaluation of inventories)

“Article 4. Provision for devaluation of inventories.

Cancellation of supplies and goods for which provision has been made:

a) Backlogged goods due to expiry date, loss of quality, disease, damage, due to no longer use value such as: pharmaceuticals, food, medical supplies, breeds, livestock, Other supplies and goods that must be destroyed shall be handled as follows:

• The enterprise sets up a council to handle the property to appraise the canceled property. The appraisal minutes must detail the name, quantity and value of the goods to be destroyed, the reason for the cancellation, the value recovered from the sale and liquidation, and the actual damage value.
• The actual loss of each type of unrecoverable backlogged goods is the difference between the value recorded in the accounting books minus the value recovered due to liquidation (compensated by the person causing the damage, due to sale and liquidation of goods).

b) Handling competence: Board of Directors (for enterprises with Board of Directors) or Board of Members (for enterprises with Council of members); General Director (or Director) for enterprises without a Board of Directors or Board of Members; The business owner shall base on the minutes of the Handling Council and other evidences related to backlogged goods to decide on handling and destruction of the above-mentioned materials and goods; decide to handle the responsibility of those related to the number of materials and goods and take responsibility for their decisions before the owner and before the law.

c) Accounting processing:

Actual loss value of unrecoverable backlogged goods that have been decided to cancel, after making up for with the provision for devaluation of inventories, the difference is accounted into cost price. goods sold by the business.”

• So, the above is the information that Eastern Environment sends to you. If you need to destroy goods, collect and treat industrial, hazardous or medical waste, please contact the information below. Thank you very much!

  • Eastern ENVIRONMENT CORPORATION
  • Address: Can Le Hamlet, Loc Thinh Commune, Loc Ninh District, Binh Phuoc Province
  • VPDD: No. 200 Nguyen Van Linh, Tan Thuan Tay Ward, District 7, Ho Chi Minh City
  •   Hotline: 0928.222.999 or 0931.849.879

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