PwC

Tax & Legal

Tax & Legal

No trade tax add-back of rental costs allocated to production costs of current assets


Rental and lease payments for the use of movable fixed assets are not to be added back to trading profits in accordance with Section 8 No. 1 Letter d Trade Tax Act (TTA), insofar as they are to be attributed to the costs for the production/manufacture of current assets. This will also be the case in situations where the rent and lease payments would have been capitalized as production costs, had the asset still been included in the business’ assets as at the balance sheet date and therefore had to have been capitalized. This was decided by the Supreme Tax Court in a ruling published on 12 November 2020. Continue reading