Which revenues are deducted from expenses?

As we know, the income tax of individuals and the corporate income tax are calculated from the income generated by deducting expenses from income. What is meant by income and expenses, and what expenses are allowed to be deducted from income?

Income-deductible expenses are deductible from income in accordance with Article 108.1 of the Tax Code, except for expenses that are not deductible in income, as well as mandatory payments provided by law. Non-deductible expenses are listed as a separate item in Article 109 of the Tax Code. But what are the expenses that are not deducted from a good income? Let's take a look at them.

- Expenses on acquisition and construction of fixed assets and other capital expenditures in accordance with Article 143 of this Code shall not be deducted from income.

- Expenses related to non-commercial activities are not allowed to be deducted from income.

- Entertainment and food expenses (excluding expenses for treatment and preventive food, milk and other equivalent products and means within the norms established by the relevant executive authority, as well as food expenses for floating personnel in maritime transport), as well as housing and other expenses of employees deduction of social expenses from income is not allowed.

-If the expenses of a taxpayer whose entrepreneurial activity is of entertainment or social nature are incurred within the framework of such activity, entertainment and social expenses shall be deducted from the income accordingly.

-Expenses of an individual related to personal consumption or salary are not deducted from income, except for the cost of obtaining salary cards.

- Amounts allocated to reserve funds shall be deducted from income only in accordance with Articles 111 and 112 of this Code.

- The part of the actual travel expenses in excess of the norm set by the relevant executive authority is not deducted from the income.

- Receipt of goods (works, services) by a cashier's check or receipt (except for receipts or other serious reporting forms issued by persons referred to in Articles 16.1.11-6.1 - 16.1.11-6.3 of this Code) is not considered a document confirming the expenses incurred in connection with

- Documents obtained in the framework of non-commodity transactions are not considered a document confirming expenses deducted from income, and the value of goods (works, services) provided is deducted from income, taking into account Articles 14, 14-1 and 67 of this Code.


Apparently, a company can only deduct the expenses it incurs in order to make a profit.