The long term success of every business enterprise is determined by not just its profit, but also its Net Income after Taxes (NIAT). A profitable year in business will count for little, if only a negligible portion of the gross profit/income is composed of deductible expenses .The tax expense liability of the business owner can be minimized by regulating the nature of the expenses to attract more deductions, leading to increased NIAT.
The Canada Revenue Agency has, in this regard, laid down certain guidelines, wherein, it has listed various deductible corporate expenses and also clarified that personal expenses as well as expenses incurred in the process of acquiring any capital gain have to be excluded from income tax deduction. Every business owner has the opportunity to limit the tax expense liability and increase the NIAT by complying with these guidelines.
Listed below are deductible corporate expenses, subject to qualifications, as validated by the Canada Revenue Agency:
In addition to the above expenses, the deductible corporate expenses would also include the following:
Thus, every business owner has the opportunity to reduce his tax exposure by regulating the nature of the expenses to attract larger deductions, thereby increasing the Net Income After Tax .The residual profits provide the business the extra capital required to expand, increase the market share and pave the way for a future full of hope and limitless potential for growth.