Eswatini

Corporate - Deductions

Last reviewed - 15 August 2024

Depreciation

Depreciation (wear-and-tear) allowances calculated by the net-reducing-balance method are available as follows:

Asset	Depreciation rate (%)
Aircraft	25
Casino equipment	15
Construction equipment	25
Computer hardware	33.33
Computer software	33.33
Furniture and fittings	10
Hotel soft furnishings, including carpets	10
Legal and professional libraries	5
Lifts and elevators	25
Motor vehicles:
Buses	33.33
Cars	20
Light delivery vehicles	25
Lorries	33.33
Office equipment	10
Plant and machinery	10
Sound and projection equipment	20
Television sets	20
Tractors	25
Trailers	20
Video recorders	33.33
Videotapes	25

For the first year after the addition of an asset, the wear-and-tear allowance is calculated on a monthly basis. With respect to leased assets, the lessor's claim for wear-and-tear allowance is usually spread over the lease period.

An initial allowance of 50% is granted for plant and machinery used in a manufacturing process, including hotel equipment. An initial allowance of 50% is granted for industrial buildings used for manufacturing purposes and hotels, together with a 4% annual allowance.

Goodwill

The write-off of any goodwill is not allowed for tax purposes.

Start-up expenses

It is departmental practice to not allow the deduction of any start-up expenses.

Interest expenses

Interest is deductible as long as it is incurred in the production of income.

Bad debt

Eswatini does allow a deduction for bad debts, subject to the Commissioner's approval and provided that the debts were included in the taxpayer's income in the year of assessment or in years past.

Charitable contributions

Subject to the Commissioner's approval in regard to the amount allowable as a deduction in the year of grant and subsequent years, Eswatini allows a deduction for, among other things, grants made to the government for the building of schools and hospitals.

Fines and penalties

Fines and penalties resulting from late payment of any tax or levied as payable under any Act administered by the Commissioner will be a non-deductible expense.

Taxes

Taxes are not deductible.

Net operating losses

Losses may not be carried back but may be carried forward for as long as trading continues (i.e. indefinitely). If any break in trading occurs, however, the losses are forfeited.

Payments to foreign affiliates

Deductions may be claimed for payments of management service fees, interest, and royalties to foreign affiliates, provided the payments are made under a written agreement, are reasonable, and receive exchange control approval for transfers outside the rand monetary area. Note that this approval is routinely given without any significant delay for bona fide transactions.

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