The necessary losses and expenses stated in Subparagraph 1, Category 5, Paragraph 1, Article 14 of the Act refer to the depreciation of fixed assets, depletion of depreciated assets, amortization of intangible assets, repair charges, insurance premiums and reasonable and necessary fees paid to have property leased to receive profits. Pertinent provisions of Section 4, Chapter III of the Act are applicable in deductions for depreciation, depletion and amortization. For deductions for necessary losses and expenses for which the taxpayer can provide substantive proof, the deduction of the declared amount shall be allowed; where the taxpayer fails to provide substantive proof or provides fraudulent proof, the tax authority may make adjustment in accordance with the deduction standards approved by the Ministry of Finance.
The standards stated in the preceding Paragraph shall be established by the national tax administration under the Ministry of Finance in all districts, and submitted to the Ministry of Finance for approval.