[Investment] Cash on Stock Price Returned to Shareholders at Capital Deduction of a Investee Company Shall not be Recognized as Investment Loss if the Cash Is not Used for Loss Carry Forward

To expand business and promote operating performance, it is popular for an entity to invest in other industries. While a investee company is applying for capital deduction, loss of the company must be verified to be used for loss carry forward before being recognized as investment loss. In accordance with Paragraph 1 Article 99 of The Guidelines for Examination of Profit-seeking Enterprise Income Tax, only realized investment loss could be recognized. In case original capital is not reduced, loss of investment shall not be recognized. After a period of operation, the entity may apply for capital deduction to return part of the cash on stock price to shareholders. Such behavior shall be regarded as returning of invested capital and no loss of investment shall be recognized.