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How do you all usually deal with bad debt?
#1
Bad debt is debt that is not collectible and therefore worthless to the creditor. Bad debt is usually a product of the debtor going into bankruptcy but may also occur when the creditor's cost of pursuing the debt collection activities is more than the amount of the debt. Once a debt is considered bad, the business may be able to write it off as an expense on its income tax return.

Fortunately IRAS actually allow you to write of bad debt base on approval.
Quote:Qualifying for Bad Debt Relief
You have to meet the following conditions to qualify for bad debt relief:
  • You have supplied goods or services for a consideration in money and have accounted for and paid GST on the supply;
  • You have written off the whole or any part of the consideration for the supply as a bad debt in your accounts;
  • A period of 12 months beginning with the date of supply has elapsed or the debtor has become insolvent before the period of 12 months has elapsed;
  • You have taken reasonable steps to recover the debts;
  • The value of the supply is equal to or less than its open market value; and
  • In the case of goods, the ownership must have been transferred to your customer
Claiming Bad Debt Relief
  • Complete the Self-Review of Eligibility to Claim Bad Debt Relief checklist.
  • Proceed to make a claim in Box 7 (input tax and refunds claimed) of your GST return if you satisfy all the conditions in the self-review checklist.
  • You need not submit the self-review checklist to IRAS but you should keep it as part of your records. You may be asked to provide this checklist in the course of an audit.

However some companies still choose to just forfeit it because they are rich.
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#2
Can personal loan to my sister consider a bad debt and use it for tax rebate? Big Grin
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#3
Get an accountant to do for you duh...
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#4
Yup, if you write in to IRAS in hoping to write off your bad debt, chances are you will do it wrong or they will not pay so much attention to you. Just get a good accountant like myself.
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#5
So far we don't have any bad debt. Either we send letter of demand or file in small claim.
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#6
I will go to his office and talk and talk and talk until he give up and pay me
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