Understand corporate taxation provisions for risks, charges, and asset depreciation, including stocks, receivables, and fixed assets.
Extract
[...] Therefore, the tax administration is entitled to reject the deduction of this provision and to proceed with its extra-accounting reintegration. FRAME N°5 - The fate of provisions - realization - omission and prescription STEP N°1 - THE PRINCIPLE OF FISCAL-ACCOUNTING CONNECTION COUNCIL OF STATE - 23 DEC 2013 - SAS FONCIÈRE DU ROND POINT - DECISION OF P.: lwhen a provision has been regularly established in accounting, the fiscal result of the exercise must, in principle, be reduced by the amount of this provision, unless an obstacle is posed by a rule specific to fiscal law. A company cannot therefore decide arbitrarily not to deduct a provision that has been accounted for. [...]
[...] If this indicator is supported by numbers, then depreciation becomes probable. IF IT IS A PROVISION IT WILL BE NECESSARY TO RECOVER THE CONDITIONS OF 39-I-5 - CGI 2. THE DEDUCTION LIMIT OF THE PROBABLE LOSS : when the VNC is greater than the net taxable value (gross value - accounting and derogatory depreciation), the depreciation is only deductible up to this difference. the provision does not cover the value loss segment that is not not covered by annual depreciation. [...]
[...] The administration will be able to rectify the opening balance sheet of the non-prescribed exercise to record the provision and thus tax its resumption in N. The studio cannot invoke its own mistake to avoid tax when exiting the provision. STEP N°2 - THE PROVISION SETTLEMENT - REALIZATION OR LOSS OF OBJECT 1. REALIZATION OF THE RISK: when the charge or loss is actually realized, the ENT must record the final charge and proceed with the accounting recovery of the provision. This operation is tax-neutral. =the charge is offset by the product of the recovery. 2. [...]
[...] If the current value is significantly lower, a depreciation is recorded. ART. 39-1-5° - CGI: The provisions for depreciation are deductible if they aim to cover a non-irreversible loss of value of an asset element made probable by ongoing events at the end of the exercise (for example: the release of a new model is the ongoing event that makes the loss probable). - If permanent loss, we must resort to depreciation. 1. CONDITION FISCAL: the probable character of depreciation must be supported by particular events (for example, obsolescence) or a independent expertise. [...]
[...] - On the other hand The works of ravalement are deductible even without precise programming due to the fact that the state of the buildings (often ruinous). 2. PRECISION: the load must be clearly specified and evaluable with a sufficient approximation. TA - PARIS - 2008 - FIAT CRÉDIT FRANCE: the statistical method is prohibited sincean individual and precise evaluation of the risk is possible. 3. PROBABILITY OF RISK: the risk must be probable and not only possible. COUNCIL OF STATE - 7 AUGUST 2008 - VOILLET BROTHERS COMPANY: the risk must be probable and not simply possible. [...]
