Claiming Business Expenses:

Most businesses incur expenses when generating income and most of these can be deducted from its income to arrive at its net profit or taxable income. It is on this amount that you pay income tax.

Tax - deductible expenses include:

• salary and wages
• rent
• rates
• stationery and supplies
• accountants fees
• accident compensation levies

However, certain business expenses that are paid for out of business income cannot be claimed as allowable business expenses.

Non-deductable expenses include:

• legal fee incurred in setting up a business
• the cost of plant and machinery
• private expenses such as life insurance
• improvements to equipment apart from repairs and maintenance

Refer to the IRD website for information on claiming business expenses and how to keep track of your expenses.