Document Type : opinion article

Authors

• kobra sohrabi ¹
• Laeya Misolo ²
• Zahra Alimadadi ²

¹ Payam Noor university

² BSc Student in Accounting, Farabi Campus, University of Tehran, Qom, Iran

Abstract

Allowable tax expenses constitute one of the most important elements in the process of determining taxable income and play a fundamental role in the accurate calculation of taxpayers’ tax liabilities. In the Iranian tax system, Articles 147 and 148 of the Direct Taxes Law establish the legal framework for the recognition, acceptance, and classification of such expenses. According to these provisions, expenses are considered allowable when they are reasonable and customary, supported by valid documentation, and incurred directly for the purpose of generating the taxpayer’s income within the same fiscal period. The primary objective of recognizing such expenses in tax regulations is to prevent taxation on gross income and to promote balance and fairness within the tax system.
This article adopts a descriptive–analytical approach to examine the concept of allowable tax expenses, the conditions for their acceptance, their major categories, and their distinction from non‑allowable expenses. In this regard, the provisions of Articles 147, 148, and 149 of the Direct Taxes Law are analyzed, and several relevant categories—including employment expenses, rent, insurance costs, advertising expenditures, research and development expenses, depreciation of assets, allowable losses, and certain special cases—are discussed. Furthermore, the study emphasizes the importance of proper documentation, compliance with legal requirements, and the direct relationship between expenses and the taxpayer’s economic activities in the acceptance of such expenses for tax purposes.
The findings indicate that taxpayers’ awareness of the regulations governing allowable tax expenses, along with strict compliance with legal requirements, can reduce tax disputes, enhance financial transparency, and improve the management of tax obligations. Ultimately, the proper utilization of legal provisions related to allowable expenses can contribute not only to reducing taxpayers’ tax burden but also to improving the efficiency of the tax system and strengthening financial discipline in economic activities.

Keywords

• Direct Taxes Law
• Allowable Tax Expenses
• Tax Regulations
• Iranian Tax System
• Taxable Income

Main Subjects

• Accounting
• Interdisciplinary with Accounting