Reserves and provisions are not deductible for tax purposes unless booked in conformity with obligations stemming from the laws and regulations governing the specific taxpayer. Bad debts are deductible based on an average amount of uncollectable receivables (bad debts) for three years (including the current year).
Bolivia announced economic recovery measures from the COVID-19 pandemic, including that, while calculating the average amount of bad debts for three years for determining the amount of bad debts deductible for the tax year 2020, the higher of the below shall be considered as the bad debts for the second year (tax year 2019):
- the actual amount of bad debts for the tax year 2019; or
- 60% of the bad debts for the tax year 2020.