One of our companies has made prepayments to a company we do business. This company could not meet the amounts for works and the business relationship has been terminated. We have engaged in a lawsuit. If we cannot collect the debt as a result of the lawsuit, can we state this debt as worthless?
The conditions in Article 322 of Tax Procedure Law must be met to state debt as worthless.
Worthless debts are receivables that are no longer able to be collected in accordance with the Article 322 judicial provision or any document proving that the debtor can no more pay the debt.
The worthless debts lose their saving values on the date when they become worthless and they are eliminated by stating them as a loss with their carrying values.
The worthless debts including in this article, of the taxpayers holding books in accordance with the operating account are eliminated by stating them as an expense.
Source: İSMMMO
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