Practice Note No 04/2004 Date of Issue 15th December 2004 ... - TRA

0.0 HOW THE LAW APPLIES.0.1 Activities constituting conducting a business.“Business” includes a trade, concern in the nature of trade, manufacture,profession, vocation or isolated arrangement with a business character;and a past, present or prospective business, but excludes employmentand any activity that having its nature and the principal occupation of itsowners or underlying owners, is not carried on with a view to derivingprofits.Income from business is calculated as follows:-Amounts derived from conducting the businessDeduct any payments which have been subjected to a finalwithholding tax.Deduct depreciation allowanceDeduct or Add depreciation balancing adjustmentsDeduct trading stock allowanceAdd net capital gains (after deducting capital losses)Deduct any loss carry forward from previous yearDeduct donations.0.2 Receipts deemed to be gains or profits from a businessAmount treated as gains or profits from a business is the total amountcoming into the business for sale of goods and services (including sale oftrading stock) and any other amount derived in doing business.In calculating the profits from any business the following amounts areincluded –(a)(b)(c)(d)(e)(f)Service fees.Incoming for trading stock.Gains from realisation of business assets or liabilities.Excess amounts derived in realisation of depreciable assets.Amounts derived as consideration for accepting a restruction on thecapacity to conduct the business.Gifts and ex gratia payments received by the person in respect ofthe business.