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A query was raised regarding whether the salary of a child working in their parents' company is deductible for Corporate Tax purposes. The DGT ruled that it is possible provided the expense is recorded in the accounts, imputed on an accrual basis, justified, and aligns with market value.
This ruling clarifies the conditions under which payments to family members of shareholders can be treated as deductible business expenses, emphasizing the need for genuine work performance and market-rate compensation to avoid tax scrutiny.
The tax team reviews your specific situation.
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