How do I distinguish between “capital expenditure” (CAPEX) and “operating expenditure” (OPEX) for accounting purposes? What effect does this have on my tax?

In financial and tax planning, it is crucial to distinguish correctly between “capital expenditure” (Capital Expenditure, CAPEX) and “operating expenditure” (Operating Expenditure, OPEX). CAPEX refers to long-term investments to acquire or improve fixed assets, such as purchasing property, carrying out major renovations or buying expensive production equipment. These expenses cannot be deducted in full in the year incurred; instead, they are deducted over the asset's useful life through annual “depreciation” or “allowances”. OPEX refers to expenses incurred to maintain day-to-day operations, such as staff salaries, rent, utilities and medicine purchasing costs. These expenses can be deducted in full from assessable profits in the year of assessment in which they are incurred.