BIR Reminds Business Taxpayers Regarding Reporting of Losses

Due to the recent calamity brought about by Typhoons Ondoy and Pepeng, the BIR has issued a memorandum to business taxpayers about the requirements for reporting their claims for losses for purposes of income tax deduction.

For losses brought about by the recent typhoons, Large Taxpayers (LTs) and Non-Large Taxpayers with business, a Sworn Declaration of Loss and other requirements deemed necessary to substantiate proof of loss(es) claimed shall be submitted within forty-five (45) days after the date of event causing the loss to their Revenue District Office (RDO) or LT Division/District Office where they are registered,  as stated in Section 34(D) of the Tax Code and Revenue Regulations No. 12-77.

The Sworn Declaration of Loss shall state the following: nature of the event that gave rise to such loss(es) and the time of its occurrence; description and location of the damaged property(ies);items needed to compute the loss(es), such as a) cost or other basis of the property(ies); (b) depreciation allowed, if any c) value of the property (ies) before and after the event; d) cost of repair and lastly the amount of insurance or other compensation received or receivable.

Proof of the extent of loss(es) claimed whether due to casualty, robbery, theft or embezzlement have different requirements.

For casualty losses the documentary requirements includes photographs showing the extent of damage; the condition or value of the property after it was repaired, restored or replaced.

For those pertaining to robbery, theft or embezzlement a police and/or an insurance report should be attached to the Sworn Statement.

The said documents and requirements shall be verified by the concerned BIR office before the business taxpayer can actually claim deduction from his income tax.

Commissioner Sixto S. Esquivias IV has advised all the Taxpayer Service Units and BIR Personnel to advice and counsel all business taxpayers regarding the requirements in filing their claims of losses due to the recent typhoons. (TIED-mldn)