Company Expenses: 10 Tax-Deductible Items Small Businesses Shouldn’t Miss
One of the most significant advantages of doing business as a company is the ability to deduct various "expenses" from revenue to calculate net profit for tax purposes, which can save you a substantial amount on taxes. However, many small business owners unfortunately miss out on this opportunity simply because they are unsure which expenses are eligible.
To ensure you don't miss out on the tax benefits you deserve, here is a checklist of 10 company expenses that are legally tax-deductible.
Key Principle: Expenses must be "business-related."
Before we get to the list, you must remember the golden rule of the Revenue Department: the expense must be exclusively for the benefit of the business, related to generating revenue or the company's operations, and most importantly, there must be "documentary evidence" to prove it.
Checklist: 10 Company Expenses to Help Save on Taxes
1. Salaries of Directors and Employees
The salary you pay yourself as a company director, as well as the salaries of all employees, are considered fully deductible company expenses.
2. Office Rent
The cost of renting space for an office or place of business can be fully claimed as an expense, provided there is a clear lease agreement in the company's name.
3. Water, Electricity, and Internet Bills
These utility expenses are fully deductible if the invoices or receipts are issued in the company's name.
4. Telephone and Communication Expenses
Monthly telephone service fees for the company's number, or a number used specifically for business contact, are considered operating expenses.
5. Travel and Fuel Expenses
If a company car is used for traveling to meet clients, for business contact, or to transport goods, expenses such as fuel, expressway tolls, or maintenance can be claimed (a travel log should be kept as supporting documentation).
6. Client Entertainment Expenses
The cost of food and drinks used for entertaining clients or business partners can be claimed as an expense, but it must comply with the conditions stipulated by law.
7. Advertising and Marketing Expenses
Expenses for promoting the business, such as advertising costs on Facebook and Google, website development fees, and printing costs for business cards and brochures, are considered expenses for directly generating revenue.
8. Office Supplies
Consumable supplies such as paper, pens, printer ink, or small office equipment can be fully expensed in the year of purchase.
9. Professional Service Fees
This is another important item: the "fees" you pay to external service providers, such as for accounting, auditing, or legal consultation.
10. Depreciation of Assets
For the purchase of high-value assets with a useful life of more than one year, such as computers, furniture, or vehicles, you cannot expense the entire amount in a single year. Instead, you can "deduct depreciation" to gradually recognize it as an expense over several years.
Important Tip: "Documentation" is key. It must be emphasized again that every company expense must have proper supporting documents, such as a full tax invoice or a receipt that clearly states the seller's name, address, and taxpayer identification number. This is because, for tax purposes, "no document means no expense."
Understanding and systematically collecting these expenses is the best tax planning strategy for your business. Having an accounting consultant to provide advice will help ensure you don't miss out on any benefits you are entitled to.
