Accounting treatments are usually followed in determining the assessable profits, except when there is an explicit tax law rule providing otherwise.
Expense items for which a tax adjustment is necessary in determining the amount of taxable profits from the accounting profits include:
- tax depreciation allowance vs. accounting depreciation
- expenses that are capital in nature
- general provisions that are non-deductible
- non-deductible interest expenses on borrowings used to finance non-income producing assets
Book depreciation is adjusted for tax purposes in accordance with the following depreciation allowances.