1. In computing the taxable profits of a sole proprietor for a tax year, a deduction shall not be allowed in respect of remuneration paid or payable to himself.

2. Nevertheless, in computing the taxable profits of a sole proprietor for a tax year, a deduction not exceeding 10% (ten percent) of the specified profits shall be allowed in respect of the aggregate remuneration paid or payable in that tax year to persons who are related to that sole proprietor.

3. For the purpose of this Tax Ruling:

(a) “remuneration” includes any benefit received in respect of the performance of any duties or otherwise, whether or not in money, but where the benefit is not money or money’s worth it is included only to the extent that regulations provide for its valuation;

(b) “specified profits” means the aggregate of the taxable profits, the amount of any donation which is deductible in accordance with Section 10(e) of the Business Profit Tax Act, and any remuneration mentioned in paragraph 2 above;

(c) “relatives” shall have the same definition as in Section 11(e) of the Business Profit Tax Act.

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