Dáil Éireann Debate, Wednesday - 15 January 2014
106. Deputy Kevin Humphreys asked the Minister for Finance if a business can deduct the costs of petty theft of stock from a store against a tax bill; the rules for same; and if he will make a statement on the matter. [55234/13]
Amharc ar fhreagraI am informed by Revenue that the starting point for determining the taxable profits of a business is the accounting profits of that business, calculated in accordance with Generally Accepted Accounting Practice (GAAP ). Under GAAP, stock must be valued at the lower of cost or net realisable value. Accordingly, stock which has been stolen will have a Nil valuation and as the cost of acquiring such stock will be allowed as a deduction a business will obtain full relief for any stock that is stolen. A Revenue official, in some instances, may need to be satisfied that a low gross profit rate is correctly attributable to the theft of stock and in this regard it may be necessary to examine stock sheets, books and records and the steps taken to recover the alleged theft of such stock.
There are no VAT implications for a business relating to stock thefts and, where a business has incurred VAT on the acquisition of stock, the business is entitled to claim a credit for the VAT element of such purchases notwithstanding that the stock may subsequently be stolen.
