PowerPoint Presentation
HWHS1HARISON SAMARATUNGACTA, ATII, B. Sc. (B. Ad), MAAT,
HNDC
Chartered Tax Advisor andAuthorized RepresentativeTAX
DEDUCTIBILITY OF ADVERTISING
CONTENTSThe definition of Advertising Expenditure.Tax
deductibility of Advertising Expenditure.Advertising Expenditure in
Sri Lanka.Cost of Public Notice.Commercial Advertising.Expenditure
in Capital Nature.Advertising Expenditure outside Sri Lanka.
2HWHS
A common DEFINITION OF ADVERTISINGAdvertising is any paid form
of non-personal presentation and promotion of goods, services, or
ideas by an identified sponsor.Philip KotlerMore clearly,
advertising is a paid form of mass communication that consists of
the special message sent by the specific person for the specific
group of people, for the specific period of time, in the specific
manner to achieve the specific goals.
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TAX Deductibility of advertisingAdvertising costs are tax
deductible if these expenses meet the criteria defined by Sri Lanka
Inland Revenue Act No. 10 of 2006 (as amended).In terms of Section
26 (1) (v), one fourth of Advertisement Cost in connection with any
trade, business, profession or vocation carried on or exercised by
any person, can not deductible as an expenditure in arriving at
profits and income, other than the cost of advertisement outside
Sri Lanka incurred solely in connection with the export trade of
any article or goods or the provisions of any services for payment
in foreign currency.
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ADVERTISING EXPENDITURE IN SRI LANKAThe following expenditures
are not treated as advertising and the full amount is allowable as
a deduction in arriving at profits and income.Advertising for staff
vacancies.Shifting office premises one place to another.Termination
of employees.
Cost of Public Notice100 % Allowable
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ADVERTISING EXPENDITURE IN SRI LANKAEven though the following
expenditures are treated as advertising and only 75% is allowable
as a deduction in arriving at profits and income.Salaries paid to
staff engaged in advertising.Any gift given to customers as a part
of advertising campaign.Any expenditure on public relation in
connection with advertising.Cost of calendars, wallets, dairy
etc..Cost of any sponsorship.Commercial Advertising75 %
Allowable
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ADVERTISING EXPENDITURE IN SRI LANKAAny expenditure in capital
nature is fully not allowed as a deduction in arriving at profits
and income of any trade, business, profession or vocation. For
examples;Cost of Hoarding.Cost of Neon Sign Boards.Cost of
Demonstration Vehicles.Cost of Digital Boards.Expenditure in
Capital Nature100 % NotAllowableBut depreciation allowances can be
claimed depending on the nature of the asset.
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ADVERTISING EXPENDITURE IN SRI LANKAThe allowable limitation of
75% for domestic advertising will not apply to any Sponsorship of
International Sport Event approved by the Minister of Sports with
effect from 1st August 2012.
Accordingly, these expenditures are fully claimable.
100 % Allowable
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Advertising Expenditure outside Sri LankaAny expenditure is
incurred in advertising outside Sri Lanka is fully claimable in
arriving at profits and income subject to following conditions.
Solely in connected with the export of any article or goods,
or
The provision of any service for payment in foreign currency.100
% Allowable
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"Our new Constitution is now established, everything seems to
promise it will be durable; but, in this world, nothing is certain
except death and taxes.Benjamin FranklinABOUT TAX"We have a system
that increasingly taxes work and subsidizes non work.
Milton Friedman
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THANKING YOU FOR WATCHINGHarison SamaratungaCTA, ATII, MAAT, B.
Sc. (B. Ad.) Sp, HNDC
Chartered Tax Advisor andAuthorized Representative24th November
2015
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Other232269.55
