What Are Deductible Expenses?
Deductible expenses are those that companies or individuals can subtract from their gross income to reduce the taxable base of their tax income, i.e., they are those necessary to afford an activity benefitting the company, and are duly supported with evidentiary documentation.
Relevant Support
Properly supporting deductible expenses is essential to avoid problems with the SUNAT (Superintendencia Nacional de Aduanas y Administración Tributaria – National Superintendence of Customs and Tax Administration). The lack of support, such as receipts or contracts, may result in tax assessments, fines, or adjustments in tax returns. Therefore, orderly documentation must be under the legal provisions in force. In this regard, the SUNAT has published the “Guía de Referencia – Fehaciencia de Gastos” (Reference Guide – Reliability of Expenses), containing a list of suggested evidentiary means to prove the reliability of certain business expenses.
Support Failure Consequences
Failure to support an expense may generate tax assessments affecting the income tax calculation. In addition, the SUNAT could impose possible fines to initiate audits, which is a financial risk and an additional burden of proof for any business.
Recommendations
In order to guarantee a correct deduction of expenses, companies should:
- Have valid payment vouchers.
- Ensure that the outflows are directly related to their economic activities.
- Keep an orderly file of supporting documents.
- Review the “Reliability Guide” prepared by the SUNAT.
Tax Contingencies Avoidance
At VAG Global, we offer you specialized advice for tax management and regulatory compliance. Our team assists you in identifying, registering, and correctly supporting your deductible expenses, reducing risks before the SUNAT audits.
Contact us now to protect your business and optimize your tax burden.
Source: Andina