Depreciation (wear-and-tear) allowances calculated by the net-reducing-balance method are available as follows:
|Asset||Depreciation rate (%)|
|Furniture and fittings||10|
|Hotel soft furnishings, including carpets||10|
|Legal and professional libraries||5|
|Lifts and elevators||25|
|Light delivery vehicles||25|
|Plant and machinery||10|
|Sound and projection equipment||20|
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.
The write-off of any goodwill is not allowed for tax purposes.
It is departmental practice to not allow the deduction of any start-up expenses.
Interest is deductible as long as it is incurred in the production of income.
Swaziland 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.
Subject to the Commissioner's approval in regard to the amount allowable as a deduction in the year of grant and subsequent years, Swaziland 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 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.