Another adjustment that should be made at the end of the financial year is that of the invoices pending collection . The Corporate Tax establishes the possibility of providing a provision for bad debts, which is a way of transferring the balance of the invoices owed to us at 31 December to losses. The provision is not a real loss, but the risk, valued at a figure, that this will occur. But it does represent a reduction in the profit obtained at the end of the year.
In order to provide a provision that is deductible, one of the following circumstances must occur:
* Six months have usa whatsapp number data passed since the obligation fell due without having collected or renewed the debt. We can provide a provision for the amount of an invoice that has been unpaid for 6 months.
• The debtor is declared bankrupt, in bankruptcy, in suspension of payments , in a procedure for cancellation and waiting or is prosecuted for a crime of concealment of assets. Any of these situations in itself constitutes proof of the impossibility of payment.
• That the credits are the subject of a judicial or arbitration procedure whose solution depends on their collection.
In any case, it must be taken into account that the provision is a reversible measure. If I collect all or part of the debt, I must carry out the opposite procedure : take that amount to income, even if the collection occurs in a different year. What would occur in this case is a deferral of taxation, what I have declared as an expense in one year I declare as income in another.
It must be remembered that this procedure is only admissible in the Corporate Tax , that is, it is valid for entities. But also for self-employed persons who declare under normal direct estimation. Those covered by simplified direct estimation already apply 5% of the net income as expenses that are difficult to justify.