Official letter 3407/CT-TT&HT dated 01 april 2013 by binh duong tax department guiding on the handling of the cost of damaged supplies and poor quality finished goods
According to the guidance at the official letter 3407/CT-TT&HT:
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For the cost of materials damaged beyond norms and inferior quality finished goods due to the fault of the processor to the Company, the Company shall not be included in the cost of business, the Company deducted this cost with fines for breach of contract. If the contract fine can not make the money to buy supplies and damaged the excess amount of this loss is accounted for in other costs, but the company must be excluded when determining taxable income.
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Input VAT on the purchase of raw material in the country corresponding to the cost of materials damaged beyond the norm and a poor quality product processed by the processor of the error is still fully deductible input VAT .
