Disallowed expenses: the costs your company pays but cannot fully deduct
Booking a cost through your company does not always mean it is fully deductible. A category called disallowed expenses gets partly or wholly added back to taxable profit — and being surprised by them at year-end is expensive.
What “disallowed” means
Some expenses your company pays are not (fully) deductible for corporate tax. The non-deductible portion is added back to the taxable base, so you pay corporate tax on it even though the money left the company. Common examples include a portion of restaurant and reception costs, certain car costs, and non-deductible items like fines.
- Part of restaurant and reception costs is typically non-deductible
- Certain car costs are limited by emissions
- Fines and penalties are not deductible
- Some taxes and specific items are added back
Why it matters
Disallowed expenses quietly raise your effective corporate tax. Knowing which costs are limited helps you plan — choosing deductible alternatives where possible and not being surprised when the taxable base is higher than the accounting profit.
Frequently asked
- Are restaurant costs deductible?
- Typically only partly. A portion of restaurant and reception costs is treated as a disallowed expense and added back to taxable profit.
- Why is my taxable profit higher than my accounting profit?
- Disallowed expenses are the usual reason: costs booked in the accounts but added back for tax. Your accountant reconciles the two on the corporate return.
This article is general information for a one-person company (BV/SRL), not tax advice. Rules and figures change — confirm your situation with your accountant before acting.
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