Through RNC No. 401-50625-4, the Ministry of Finance established a series of guidelines applicable to the so-called “Abbreviated Procedure,” which is used to credit and destroy inventories due to product shrinkage.
1. Minimum Elements
The regulations state that the minimum elements to be included in the technical report for accreditation and destruction of inventories due to shrinkage of perishable products are as follows:
- Functional and descriptive analysis of the taxpayer’s commercial activities, where functions, type of distribution (wholesale, retail, etc) can be established, and business segmentation and operational description are defined.
- Descriptive analysis of shrinkage by type and its technical justification, either aggregated by item or segmented by type of information available to the taxpayer, i.e., information on the products or business lines that allow the validation of their behavior, as well as the technical details with reference documentation that allows the delimitation of the referred shrinkage.
- Sector analysis.
- Definition of the risks associated with the products and/or segments.
- The methodology used for the measurement and quantification of shrinkage.
- Reference sources, comparable local and/or international sectorial information.
- Product and/or segment turnover rate.
- Description of the internal control systems associated with inventories, systems for the disposal of damaged products, history of at least the last three previous periods of shrinkage recorded in accounting, with the records that support it at the request of management.
- Inventory list at the end of the period.
- Accounting records and supporting documents.
It is important to point out that the shrinkage of perishable products established in the independent technician’s report referred to in General Standard No. 09-2021 maybe admitted by the abbreviated procedure for accreditation and destruction of inventory provided that they do not exceed the maximum percentage of the cost of sale established in the aforementioned resolution, and that said report meets the requirements and technical standards for evaluation of the type of good in question.
2. Maximum Percentages of Inventory Disposals
The maximum percentages of shrinkage allowed in the abbreviated procedure, concerning the cost of sale, shall be as follows:
|
MAXIMUM PERCENTAGES ALLOWED |
|
|
Commercial Sector |
Cost of Sale Percentages |
|
Supermarkets |
2.0% |
|
Other sectors |
1.80% |
|
Poultry Mortality |
3.0% |
Source: Dirección General de Impuestos Internos 16/12/21