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A company has enquired whether sponsorship expenses paid to a motor racing team are deductible for Corporate Tax purposes. The DGT has ruled that these constitute deductible advertising expenses, provided that the requirements for accounting entry, accrual, correlation with income, and documentary justification are satisfied.
Companies engaging in sports sponsorship can deduct these costs from their taxable base, provided they maintain rigorous accounting records and can prove the business purpose and correlation with their income-generating activities.
The tax team reviews your specific situation.
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