What are acceptable tax expenses and what are their conditions?
Dr. Ahmed Shahniai
What is the acceptable tax expense?
Allowable tax expenses are certain legal expenses that are paid or allocated by the taxpayer in order to earn income during a tax year. In order for an expense to be accepted for deduction from the annual income, at least a few conditions are necessary; First, the cost incurred must be among the costs that are identified as acceptable costs in the direct taxes law. Second, the expenses incurred are related to the acquisition of taxable income.
Tax-eligible expenses are only in the case of performance income tax
Acceptable tax expense for deducting from total income cannot be expressed in all income and tax sources, but only in the case of performance income tax (business tax and legal entities). In the case of other sources of income and other taxes such as salary income tax, transfer income tax, real estate rental income tax and incidental income tax, there is no acceptable cost. On the other hand, all taxpayers subject to performance income tax, including all legal entities as well as all taxable business owners, can use the possibility of deducting expenses from the total income, subject to the relevant legal conditions.
Tax acceptable cost conditions
In order for Modi’s expenses to be deductible from his total income, several conditions are necessary for the expenses; Payment must be supported by documents. Mere declaration or claim of the cost by the taxpayer without providing documents proving its payment or allocation does not lead to acceptance of the cost, but the declaration of the cost must be proven by the taxpayer by presenting conventional documents proving its payment or allocation to the tax office. Therefore, it is necessary to document all your expenses to earn income when paying or allocating, according to tax regulations. Join us: @Madeh_33
This post is written by Bijan_amin