Acquisition costs

Acquisition costs

The tax treatment of settlements of acquisition costs

The tax treatment of settlements of acquisition costs

The tax treatment of acquisition costs is constantly controversial. In view of present tax regulations and inconsistent line of interpretive authority in this area, the tax qualification of costs related with acquisition and the scale of its connection with insurance activity are even more unclear. The latter determines if acquisition may be the tax deductible cost.

The insurance activity is very specific in terms of the variety of incurred total costs, both qualitative and quantitative. It’s often unclear how these costs should be classified, if they should be the tax deductible costs or they should be excluded from this category. Therefore, the KPMG helps corporations to properly classify incurred expenses with indicating when the cost should be settled and also with particular attention to expenses connected with acquisition activity both direct and indirect.

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