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How is the 2% limit under Article 109.8 applied?
How is the 2% limit under Article 109.8 applied?
According to Article 109.8 of the Tax Code, in certain cases restrictions are applied to the deduction of expenses documented by a purchase act and cash register receipt (NKA). Under the legislation, the deductible portion of such expenses is limited to 2% of whichever is higher between the taxpayer’s annual income or annual expenses.
Under the current rules, the 2% limit applied to purchase acts and NKA receipts is calculated separately, not jointly. This means that within the same calendar year, a taxpayer may separately use the limit both for goods purchased from individuals not registered with the tax authorities through a purchase act and for goods purchased from taxpayers based on NKA receipts.
In other words, an entrepreneur has the right to deduct up to a separate 2% limit for expenses documented by purchase acts and another separate 2% limit for expenses supported by NKA receipts. These two categories of expenses are not combined under a single limit and are assessed independently.
It should be noted that this rule does not apply to certain goods specified in the Law “On Cashless Payments.” In particular, these benefits and limitations do not apply to the purchase of precious metals, precious stones, real estate, motor vehicles, and other fixed assets.
Thus, Article 109.8 of the Tax Code allows taxpayers to benefit from separate limits for both purchase acts and NKA receipts, with each type of expense being considered separately as a deductible expense.
According to Article 109.8 of the Tax Code, in certain cases restrictions are applied to the deduction of expenses documented by a purchase act and cash register receipt (NKA). Under the legislation, the deductible portion of such expenses is limited to 2% of whichever is higher between the taxpayer’s annual income or annual expenses.
Under the current rules, the 2% limit applied to purchase acts and NKA receipts is calculated separately, not jointly. This means that within the same calendar year, a taxpayer may separately use the limit both for goods purchased from individuals not registered with the tax authorities through a purchase act and for goods purchased from taxpayers based on NKA receipts.
In other words, an entrepreneur has the right to deduct up to a separate 2% limit for expenses documented by purchase acts and another separate 2% limit for expenses supported by NKA receipts. These two categories of expenses are not combined under a single limit and are assessed independently.
It should be noted that this rule does not apply to certain goods specified in the Law “On Cashless Payments.” In particular, these benefits and limitations do not apply to the purchase of precious metals, precious stones, real estate, motor vehicles, and other fixed assets.
Thus, Article 109.8 of the Tax Code allows taxpayers to benefit from separate limits for both purchase acts and NKA receipts, with each type of expense being considered separately as a deductible expense.