Necessary and indispensable expenses deduction

Novena Época
Registro: 173334
Instancia: Primera Sala
Tesis Aislada
Fuente: Semanario Judicial de la Federación y su Gaceta
XXV, Febrero de 2007
Materia(s): Administrativa
Tesis: 1a. XXX/2007Página: 637

NECESSARY AND INDISPENSABLE EXPENSES DEDUCTION. INTERPRETATION OF ARTICLES 29 AND 31, SECTION I, OF THE INCOME TAX LAW.
After reading Articles 29 and 31, section I of the IncomeTax Law, it appears that the corporations taxed under the terms of Title II of the Income Tax Law have the ability to deduct, among other items, expenses strictly necessary for the purpose oftaxpayer’s activity. The above provisions made a pointed reference to a generic requirement, which is justified by responding to the amount of casuistic assumptions that in each case will receive the title of"strictly necessary", because it is impossible to give a definition that encompasses all feasible hypotheses or establish general rules for its determination, it is necessary to interpret this concept,considering the corporate purpose of each company and the specific expenses involved. In general terms, it is possible to say that the character of indispensability is closely linked to theachievement of the corporate propose, i.e., the expense must be necessary to fulfill the goals as a corporation and to report a benefit from them, if not, this could result in the suspension or decrease ofbusiness activities, that is, if the spending is not made, it would stop stimulating the activity of the company, seeing, therefore, that the incomes are being reduced. It follows that the expenditureeligible for deduction of incomes obtained are those which are necessary for the operation of the company and without which its operational goals would be hampered to a degree that would prevent therealization of the goals. The regular disbursement character is form by the indispensability of the deduction. This character is a variable element, affected by circumstances of time, manner and...