In the typical scenario, business expenditures that are incurred to generate Taxable Income are eligible for deductions, with certain exceptions and constraints as outlined in the Corporate Tax Law. The timing of these deductions may vary depending on the nature of the expenses and the chosen accounting method. In the case of capital assets, the expenses are typically recognized through depreciation or amortization deductions spread over the asset’s economic lifespan or utility.

Expenditures that serve a dual purpose, such as those incurred for both personal and business reasons, must be apportioned. In this case, the relevant portion of the expenditure is treated as having been incurred exclusively for the purpose of the Taxable Person’s business activities.