Deductible Business Expenses: A Guide for Business Owners

Every correctly recorded expense reduces your taxable profit; every incorrectly recorded one creates risk in a tax audit. The basic rule for deducting a cost is that it must be business-related, incurred to earn and sustain income, and supported by a proper document.

Usually deductible

• Office rent: Rent is deductible; renting from individuals creates a withholding obligation.
• Staff costs: Salaries, employer social security and meal and transport allowances within legal limits.
• Utilities and communication: Electricity, water, gas, phone and internet bills for the workplace.
• Professional services: Accounting, legal, software and design services.
• Technology: Computers, software licences and subscriptions, expensed directly or depreciated depending on value.
• Marketing: Advertising, website and digital campaign costs.
• Training: Business-related courses, certificates and professional publications.

Conditional or restricted

• Passenger car costs: Only the portion and amount permitted by law of fuel, maintenance, leasing and depreciation is deductible.
• Travel and accommodation: Documented business-related costs proportionate to the length of the trip.
• Entertainment: Client hospitality is deductible within reason and with documentation.
• Donations: Deductible within legal limits when made to qualifying institutions.
• Working from home: If part of the home is used as a workplace, part of the costs may be deductible under certain conditions.

Not deductible

• Personal and family expenses (groceries, personal clothing, holidays, etc.)
• Tax penalties, late payment interest and traffic fines
• Costs without a proper document

Tips for good documentation

1. Have invoices issued in the company or business name with your tax number.
2. Pay business expenses from the business bank account or card.
3. Send a photo of the document to your accountant at the time of purchase.

Ankara Muhasebem reviews your documents every month and discusses questionable items with you before recording them. Rates and limits are updated every year, so apply current legislation.