My company received a government grant or subsidy — is that taxable income?

Article 20 of the Corporate Tax Law clarifies that taxable income includes any "gains or profits," which explicitly captures grants and government subsidies — there's no automatic exemption just because the source is a government body. When exactly a grant becomes taxable follows how it's recognized under IAS 20: if the grant relates to operating expenses, it's recognized as income in the same period as the expense it's meant to offset.

If the grant relates to a fixed asset (equipment or machinery, for example), two treatments are accepted: either reduce the asset's carrying cost (which lowers depreciation deductions over its life), or record the grant as deferred income spread across the asset's useful life. Both approaches arrive at the same tax outcome over time, but the choice is made at filing time and affects when the income is recognized. RASEEKH helps you pick and document the right accounting treatment, especially when the grant carries conditions that could require repaying part of it later.