in principle the company derives its profits by subtracting expenses incurred from the business from its revenue within an accounting period on an accrual basis.5 the major rules for calculation are as follows
-profits are calculated on an accounting period basis each accounting period lasts 12 months except except in the first or last accounting period of a company
-all income arising directly or indirectly from the business must be brought into calculation
-loss may be carried forward for 5 accounting periods no allowances for carrying back losses
-the following expenses may be deducted
-ordinary and necessary expenses incurred in the course of business during an accounting period
-interest except interest on capital reserves or funds of the company
-bad debt in accordance with the rules stipulated in the royal decree No.145