10. Profits Tax 5

10. Profits Tax 5 - BUSI0018 HK Taxation Tutorial Notes on...

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BUSI0018 – HK Taxation Tutorial Notes on Profits Tax (5) IRO s17 Non-deductible expenses Certain expenses are not deductible from a taxpayer’s assessable profits. S17 prohibits the deduction of s17(1)(a) Domestic or private expenses Expenses which are non-deductible under this provision are those which are personal to the taxpayer and not incurred in the production of taxable profits. Expenses which are likely to be disallowed include: - Living expenses - Entertainment costs - Household insurance - Medical expenses s17(1)(b) Expenses not incurred for profit-producing purposes s17(1)(c) Capital expenditure In determining whether the expenditure is of capital in nature, the following three elements must be considered: 1. the nature of the payment (i.e. whether the payment is recurrent or non-recurrent) Non-recurrent expenditure test - Expenditure which is capital in nature is generally non-recurrent, that is, it is normally spent “once and for all ”. -
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This note was uploaded on 02/23/2012 for the course BUSI 0018 taught by Professor C.ng during the Spring '11 term at HKU.

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10. Profits Tax 5 - BUSI0018 HK Taxation Tutorial Notes on...

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