Part of running your business are the expenses you have. BIR allows certain expenses to be deducted to your income. Below are the allowable deductible expenses from BIR.

  • Advertising and Promotions
  • Amortizations
  • Bad Debts
  • Charitable Contributions (Note: Donations should be made to BIR accredited donee institutions, otherwise individual taxpayers can only claim 10% of the donation as deductible)
  • Commissions
  • Communication, Light and Water
  • Depletion
  • Depreciation
  • Director’s Fees
  • Fringe Benefits
  • Fuel and Oil Insurance
  • Interest (Note: The taxpayer’s allowable deduction for interest expense shall be reduced by an amount equal to the 33% of the interest income subjected to final tax. Moreover, all interest incurred or paid to related parties cannot be claimed as deductions to income)
  • Janitorial and Messengerial Services
  • Losses
  • Management and Consultancy Fee (Note: A portion of expenses must be withheld and paid to BIR.)
  • Miscellaneous
  • Office Supplies
  • Other Services
  • Professional Fees (Note: A portion of expenses must be withheld and paid to BIR.)
  • Rental (Note: A portion of expenses must be withheld and paid to BIR.)
  • Repairs and Maintenance-Labor
  • Repairs and Maintenance-Materials/Supplies
  • Representation and Entertainment (Note: Limited to 0.5% of net sales for sellers of goods or 1% of net revenue for seller/provider of services.)
  • Research and Development
  • Royalties
  • Salaries and Allowances
  • Security Services
  • SSS, GSIS, Philhealth, HDMF and Other Contributions
  • Taxes and Licenses
  • Tolling Fees
  • Training and Seminars
  • Transportation and Travel
  • Others (Case to case)

 

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