Tax relief - hypothetical interest on subsidies and retained profit
Hypothetical interest - what is it?
Hypothetical interest is a special tax relief for CIT taxpayers. It applies only to those taxpayers who have allocated the company's profit to reserve or supplementary capital or contributed to the company. This relief is based on the calculation of hypothetical interest that burden tax costs and reduce the tax. Hypothetical interest is a kind of incentive for companies to increase their equity capital. As a consequence, they are to lead to limiting the share of foreign capital in the structure of the company's financing sources.
Christmas gift - tax effects
Is the gift a tax deductible cost for the giver (provider)?
The purchase of a gift will constitute a tax cost, provided that the expenditure is incurred in order to generate income or to maintain or secure a source of income. In practice, this means that gifts should bear a company logo, of low value, and their delivery should be massively for advertising purposes (i.e. promoting the brand or products of the company). In addition, when input VAT on the purchase of gifts is not deductible, it is a tax deductible cost. In contrast, elegant and valuable gifts given to selected contractors and gift baskets in which we place branded sweets and alcohols are used to build or maintain good relationships and create a favorable image of the company, are representative and do not charge tax costs.
