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6.4. Reserves and Provisions

Expenses incurred for the purpose of business are deductible unless they are specifically disallowed. Provisions made for specified losses or charges and probable losses or charges that are clearly specified and that are made likely by certain events, provided they have actually been recorded in the financial statements for the year, are deductible provisions. Further, provisions are only deductible when the company demonstrates that the asset has become entirely unrecoverable and consequently, self-insurance provisions made by a company cannot be deducted from its taxable profit, such as provision for paid leave and for retirement pay.