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There is a somewhat controversial provision in the Personal Income Tax Act which may introduce some dissonance, namely Art. section point of the Act. Expenditures incurred for the purchase of tangible assets of the company that are not classified as fixed assets are not considered tax deductible costs - if it is found that these components are not used for the purposes of the business activity, but serve the personal purposes of the entrepreneur, employees or other persons, or without justifications are located outside the company's headquarters.

However, in the cases we are discussing, this provision will not apply. Liquidation of commercial goods - income tax We have philippines photo editor already written about the fact that sometimes it will be better for an entrepreneur to liquidate commercial goods rather than having them lying in a warehouse. The most common reason for such a decision is the loss of economic and economic value of the goods. However, in this case the question arises whether such goods will be able to constitute tax deductible costs? Here we will refer to interpretation no. -KDIB - SGof April , in which this topic was raised.



Although the case concerned a legal entity that settles the costs of purchasing goods only at the time of their sale, the general principle of settling costs is the same in both PIT and CIT. In the opinion of the KIS Director, expenses for the purchase of commercial goods may be included in tax deductible costs, provided that the entire event is reliably documented. It is also about proving that the liquidation of commercial goods does not result from intentional action or negligence on the part of the entrepreneur.