Can we deduct pecuniary and non-pecuniary damages paid due to the mistake of the enterprise owner or employees and legal interest regarding compensations in the determination of the corporate income?
In order to be able to make a deduction for the paid compensations as expenses, they must be related to the work, be paid in accordance with the contract, proclamation or law order and the damage must not be caused by the fault of the enterprise owner or employees. It is not possible to state the expenses of the compensations paid without contract, declaration or law order. Compensation arising from the mistake of the enterprise owner or employees shall be deemed as expense, which is not legally accepted, even if it is paid in accordance with the court decision.
Source: GİB
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