Tax Considerations
Trading Stock Stolen or Damaged
How to account for the loss?
The loss incurred due to stock being stolen or damaged may be
deductible for income tax purposes if the loss is not recoverable
from an insurance claim. If you are registered for VAT there is no
requirement to declare output on the value of stolen goods.
How to account for recovery through insurance
claims?
You may be prohibited to deduct the loss if the loss is
recoverable under an insurance contract whether you submitted a
claim or not. Where the loss was deducted and recovered from the
insurance, you will be required to include the proceeds received
from insurance claim in your gross income as a recoupment. You will
be required to declare Output VAT on the insurance claim received
if you are a registered VAT Vendor. There will be no implications
if the insurance proceeds relate to a part of the business that is
exempt from VAT . Where the insurer repairs or replaces the
