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Disallowed Business Expenses Overview

The document outlines various expenditures and items that are disallowed or added back to a company's profit before income tax, categorized under specific sections. It includes private or domestic expenditures, capital expenditures, recoverable losses, and certain types of payments such as fines and donations exceeding limits. Each item is referenced with a corresponding section for clarity on tax regulations.

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kansiime rodney
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3 views3 pages

Disallowed Business Expenses Overview

The document outlines various expenditures and items that are disallowed or added back to a company's profit before income tax, categorized under specific sections. It includes private or domestic expenditures, capital expenditures, recoverable losses, and certain types of payments such as fines and donations exceeding limits. Each item is referenced with a corresponding section for clarity on tax regulations.

Uploaded by

kansiime rodney
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

EXPENDITURE/ITEMS THAT ARE DISALLOWED OR ADDED BACK TO THE PROFIT

BEFRORE INCOME TAX FOR A COMPANY

ITEM/EXPENDITURE SECTION CALCULATION IN CASE


REQUIRED
Expenditure or loss that is Sec 22(3)a
of a private or domestic
nature. i.e. maintenance
of a person’s family or
residence, cost of
commuting from home to
work, purchasing cloth
worn to work, cost of
education given to a
person not directly
relevant to the business
Any capital expenditure Sec 22(3)b
Any expenditure or loss Sec 22(3)c
recoverable by insurance
Any expenditure or loss //
recoverable by contract
or indemnity
Any expenditure spent on Sec 22(3)d
Income Tax
Capitalized income Sec 22(3)e
Income paid to a reserve //
fund
Expenditure on gifts that Sec 22(3)f
are not included in an
individual’s gross income
Fines and penalties paid Sec 22(3)g
to the
Government/Municipality
Expenditure on Sec 22(3)h
retirement fund of
employees
Expenditure on life Sec 22(3)i
insurance payment
Expenditure on pension Sec 22(3)j
Alimony paid or Sec 22(3)k
allowance paid under
matrimonial proceedings
Expenditure above UGX Sec 22(3)l
5million on a transaction
with a supplier that
doesn’t have a TIN
Expenditure above UGX Sec 22(3)m
5million on a transaction
with a supplier that is
meant to use e-invoicing
or e-receipts but doesn’t
Expenses of meals, Sec 23(a)
refreshments and
entertainment not
included in the
employment income of an
employee
Provision for bad debts. Sec 24(2)
The bad debt that is not
fully legally written off
but rather just provided
for
Foreign exchange debt Sec 46(2)
gain
Unrealized foreign Sec 46
exchange loss
Depreciation (capital in Sec 22(3)b
nature and thus can’t be
expensed)
Amortization (Capital in Sec 22(3)b
nature and thus can’t be
expensed)
Expenditure on repairs on Sec 26
revenue account
Balancing Charge Sec 27(5)
Unsupported bad debts
Increase in provision
Any expenditure or loss Sec 22(1)a
that wasn’t incurred in
the production of income
Rental income
Donation that is made to Sec 33
an organization that is
not exempt under that
Act
Or
A donation that exceeds
5% of the Chargeable
income of the company
Loss on sale of capital Sec 22(3)b
items or disposal

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