1 December 2017
Tax & Exchange
For purposes of determining the taxable income derived by any person from carrying on a trade, s11(c) of the Income Tax Act, No. 58 of 1962 (Act) provides for the deduction of legal expenses which arise in the course of or by reason of a taxpayer’s ordinary trading operations. More specifically, any legal expenses actually incurred by a taxpayer in respect of “any claim, dispute or action at law arising in the course of or by reason of the ordinary operations undertaken by the [taxpayer] in the carrying on of [its] trade” will be deductible.