stock written off tax deductible

Stock written off tax deductible

Issue

Whether the stock written off need to add back in tax computation? in what circumstances have to add back?

Fact

According to PR 2/2020, this ruling explains that if it is an actual write-off of stock in trade, then it is deductible. If it is just a provision for obsolescence of stock in trade, it will need to add back to tax computation.

Tax opinion

If it is an actual write-off of stock in trade that is charged to the profit and loss account is allowable for tax-deductible. If it is a provision for obsolescence of stock in trade, it will need to add back in tax computation.

Source

Public Ruling 2/2020 tax treatment of stock in trade part 1 – valuation of stock

https://phl.hasil.gov.my/pdf/pdfam%20PR_02_2020.pdf

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