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When are attorney fees tax deductible On what basis? from thelawadvisory.com

Are Tax Attorney Fees Deductible in Kenya?

Introduction

Taxes are an essential part of any country's economy, and every citizen has a responsibility to pay taxes. However, tax laws can be complicated, and not everyone is familiar with them. This is where tax attorneys come in. They can help individuals and businesses understand tax laws, file tax returns, and represent them in case of a tax dispute. But, are tax attorney fees deductible in Kenya? Let's find out.

Tax Attorney Fees in Kenya

In Kenya, tax attorney fees are not deductible for individuals. This means that if you hire a tax attorney to help you with your tax affairs, you cannot claim the fees as a deduction on your tax return. However, for businesses, tax attorney fees are deductible as a business expense.

What are Deductible Expenses?

Before we dive deeper into whether tax attorney fees are deductible in Kenya, let's first understand what deductible expenses are. Deductible expenses are expenses that can be subtracted from your income to reduce your taxable income. This means that you pay taxes on a lower income, which can result in a lower tax bill.

Business Expenses

As mentioned earlier, tax attorney fees are deductible as a business expense. This means that if you are a business owner and you hire a tax attorney to help with your tax affairs, you can claim the fees as a deduction on your business tax return. However, there are some conditions that need to be met.

Conditions for Deductibility

For tax attorney fees to be deductible as a business expense, they must be incurred wholly and exclusively for the purpose of earning income. This means that the fees must have been paid to a tax attorney for services that directly relate to your business. Additionally, the fees must be reasonable and not excessive.

Individual Expenses

For individuals, tax attorney fees are not deductible. This means that if you hire a tax attorney to help you with your personal tax affairs, you cannot claim the fees as a deduction on your tax return. However, there are some exceptions.

Exceptions for Individuals

If you are an employee and you incur tax attorney fees while trying to protect your employment income, you can claim the fees as a deduction. Similarly, if you are a landlord, you can deduct tax attorney fees incurred while trying to protect your rental income.

Conclusion

In conclusion, tax attorney fees are not deductible for individuals in Kenya, but they are deductible as a business expense. For businesses to claim the deduction, the fees must be incurred wholly and exclusively for the purpose of earning income, and they must be reasonable and not excessive. As for individuals, there are some exceptions, but in general, tax attorney fees cannot be claimed as a deduction on personal tax returns. It is always advisable to consult a tax attorney to understand your tax obligations and to get professional advice on tax matters.

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