Group 1 - The article discusses the importance of accurately reporting inventory losses for tax purposes, emphasizing the need to deduct insurance compensation from the reported loss amount [4][5] - It highlights the necessary documentation required for claiming inventory write-offs, including internal reports on inventory conditions and insurance compensation details [5] - The article mentions that significant losses (over 10% of the taxable cost of the asset) require additional professional assessments or reports from qualified intermediaries [5]

Core Viewpoint - Understanding the distinction between "revenue expenditures" and "capital expenditures" is crucial for businesses to determine how to deduct expenses before tax [5][6][7]. Group 1: Definitions - Revenue expenditures refer to expenses that only benefit the current tax year, such as employee wages [5]. - Capital expenditures are expenses that provide benefits over the current and future tax years, such as the purchase of fixed assets [5]. Group 2: Tax Deduction Treatment - Revenue expenditures can be deducted directly in the tax year they occur [6]. - Capital expenditures cannot be deducted in the same manner; instead, they must be amortized or depreciated over the useful life of the asset [6][7]. Group 3: Legal Framework - The implementation regulations of the Corporate Income Tax Law of the People's Republic of China stipulate that businesses must differentiate between revenue and capital expenditures for tax deduction purposes [7].

Core Viewpoint - Understanding "tax deduction before tax" is crucial for businesses as it directly impacts tax liabilities and overall financial health [3][4]. Group 1: Definition and Importance - "Tax before" refers to income amounts before tax payments, representing the gross income of a business [4]. - "Tax after" indicates the income remaining after tax obligations, reflecting the disposable income available to individuals or businesses [4]. - Tax deduction before tax allows businesses to deduct actual costs and expenses from their income before calculating taxable profits, thereby reducing tax liabilities [5]. Group 2: Legal Basis - According to Article 8 of the Corporate Income Tax Law of the People's Republic of China, reasonable expenses related to income generation, including costs, taxes, and losses, are deductible when calculating taxable income [7]. Group 3: Practical Example - For instance, if a company has a monthly sales revenue of 1 million and receives cost invoices totaling 700,000, this amount can be deducted as a cost, thus lowering the taxable income and reducing the overall tax burden [9].