Question: What are the additions and deductions when calculating taxable profit.
Taxable profit on your Uganda Business is the profit (or loss) upon which income taxes are payable.
The composition of taxable profit varies by taxation authority, so it will vary depending upon the rules of the taxation authorities within which an entity is located or does business.
In Uganda’s however, according to the Income Tax Act, Cap 340; tax is imposed on the chargeable income of the person. The chargeable income is the gross income of a person for the year less total deductions allowable as detailed under Section 22 up to Section 36 of the Act.
These allowable deductions include: (1) Expenses of deriving income (2) Meals, refreshment and entertainment expenditure (3)Bad debts (4)Interest (5)Repairs and minor capital equipment (6)Depreciable assets (7)Initial allowance (8)Industrial buildings (9)Start-up costs (10)Costs of intangible assets (11)Scientific research expenditure (12)Training expenditure (13)Charitable donations (14)Farming (15)Mineral exploration expenditures