Inland Revenue's Interpretation Statement IS 14/04 provides clear guidance on whether various company expenditures are deductible under the Income Tax Act 2007 (ITA 2007). Principles of Deductibility The statement highlights three main principles for determining deductibility under the ITA 2007: 1.Capital and Private Limitations (Para 25) : Expenditures of a capital or private nature are not deductible. For instance: Registering a company and liquidating a company are considered capital in nature and, therefore, not deductible. 2.General Permission (Para 27) : For an expense to be deductible, it must have a clear nexus with income. This means the expense should directly contribute to earning assessable income. Ongoing operational costs, provided they have a nexus with income , may qualify as deductible. 3.Apportionment: If an expense serves both income-earning and non-income-earning purposes, it must be apportioned accordingly. Application to Share Market-Registered Companie...