Load Appendix on Loss Carryforward according to Circular 80? How many consecutive years is the enterprise allowed to carry forward losses?
Download Appendix for Loss Carryforward According to TT80
According to Circular 80/2021/TT-BTC, there is a prescribed form for the loss carryforward appendix.
See details and download the form here.
Download Appendix for Loss Carryforward According to TT80? How many consecutive years can enterprises carry forward losses? (Image from the Internet)
In the period when the enterprise carries forward losses and new losses arise, how are these new losses carried forward?
Clause 2, Article 9 of Circular 78/2014/TT-BTC provides regulations on loss determination and loss carryforward as follows:
Loss Determination and Loss Carryforward
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- After finalizing tax returns, enterprises that incur a loss must carry forward all and continuously the loss to the income (taxable income after excluding tax-exempt income) of subsequent years. The duration for carrying forward the loss is continuous and not more than 5 years, starting from the year following the year the loss arises.
Enterprises temporarily carry forward losses to the income of quarters of the following year after preparing the quarterly provisional tax returns, and officially to the following year after preparing the annual tax finalization returns.
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- Enterprises that incur losses between quarters within the same fiscal year are allowed to offset the previous quarter's losses against the subsequent quarters of that fiscal year. When finalizing corporate income tax, enterprises determine the annual loss amount and carry forward all and continuously the losses to the taxable income of the subsequent years following the year the loss arises, as stated above.
- Enterprises self-determine the losses to be deducted from income based on the above principles. If, during the loss carryforward period, new losses arise, the new losses (excluding previous carryforward losses) will be carried forward entirely and continuously for no more than 5 years, starting from the year following the year the new loss arises.
If the competent authority audits and inspects corporate income tax finalization returns and determines a different loss amount than the enterprise's determination, the carried forward loss is based on the inspection conclusions but ensures a continuous carryforward of no more than 5 years, starting from the year following the year the loss arises as prescribed.
After the 5-year period, starting from the year following the year the loss arises, any remaining losses not yet carried forward will not be allowed to be carried forward to the subsequent years' income.
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Thus, according to the regulation, if during the period an enterprise carries forward losses, new losses arise, these new losses (excluding previous carryforward losses) will be carried forward entirely and continuously for no more than 5 years, starting from the year following the year the new loss arises.
How many consecutive years can enterprises carry forward losses?
Article 7 of Decree 218/2013/ND-CP provides regulations on consecutive loss carryforward as follows:
Loss Determination and Loss Carryforward
The loss incurred during the tax period is the negative difference (-) related to taxable income before including carried forward losses from previous years, as determined by the formula stipulated in Clause 1, Article 6 of this Decree.
Enterprises incurring a loss may carry forward the loss to the following year, deducting this loss from taxable income. The duration for carrying forward the loss is continuous and not more than 5 years, starting from the year following the year the loss arises.
Losses from real estate transfers, investment project transfers, rights to participate in investment project transfers (except for mineral exploration and extraction projects), after offsetting against taxable income from such activities or offsetting losses according to Clause 2, Article 6 of this Decree, if remaining losses exist, and the enterprise has losses from transferring exploration and extraction project rights, these are carried forward to the taxable income of that activity in the subsequent years, with a continuous carryforward not exceeding 5 years, starting from the year following the year the loss arises.
Thus, enterprises can carry forward losses continuously for no more than 5 years, starting from the year following the year the loss arises. The loss is carried forward to subsequent years and deducted from taxable income.
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