Penalty and Fine
Normally, the IRD does not allow deductions for fines and penalties. Fines and penalties are not deductible because of public policy considerations and the punishing purpose of imposing fine and penalty. Therefore, fine and penalty are not deductible for income tax purposes.
Moreover, there are no GST on fine and penalty, so taxpayer cannot claim input tax for fine and penalty.
Disclaimer: The following answer necessarily sets out general principles only. The facts of particular cases always need to be considered carefully, and it may be necessary to obtain advice from a tax expert.
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