Accelerated Capital Allowance for Qualifying Capital Expenditure incurred on Machinery and Equipment including Information and Communication Technology Equipment from 1 March 2020 to 31 December 2021
P.U. (A) 268/2021 Income Tax (Accelerated Capital Allowance) (Machinery and Equipment including Information and Communication Technology Equipment) Rules 2021 finally was gazetted on 15 June 2021. The Rules shall have effect from the Year of Assessment “YA” 2020.
Any persons who have incurred or will be incurring qualifying plant expenditure (“QPE”) on machinery and equipment (including information and communication technology equipment (“ICT Equipment”)) for business purposes between 1 March 2020 and 31 December 2021 are eligible for Accelerated Capital Allowance (“ACA”) in the following manner:
· Initial allowance 20% of the QPE
· Annual allowance: 40% of the QPE
QPE refers to a capital expenditure incurred under paragraph 2 of Schedule 3 to the Income Tax Act 1965 (“ITA”) in relation to provision of machinery and equipment including ICT Equipment except motor vehicle. According to the Rules, ICT Equipment includes the following equipment:
· Access control system;
· Banking systems;
· Barcode equipment;
· Bursters / Decollators;
· Cables and connectors;
· Computer Assisted Design (CAD);
· Computer Assisted Manufacturing (CAM);
· Computer Assisted Engineering (CAE);
· Card readers;
· Computers and components;
· Central Processing Units (CPU);
· Scanners / readers
· Accessories and
· Communications and networks
*Remarks: If a person has previously been eligible and claimed the same QPE, it will not be eligible to claim ACA under the Rules.
If you need further clarification, please do not hesitate to contact our tax team.
Source: P.U. (A) 268 15th June 2021
This material or communication has been prepared for the sole purpose of providing general information to our clients, and is not intended to be relied upon as accounting, tax or other professional advice. Consent has to be obtained from the firm prior to any act of republishing or circulating to the general public. While the information is considered correct at the date of publication, changes in circumstances or updates in tax ruling after the time of publication may impact its accuracy and reliability. We have not, by means of this material or communication, rendered any professional advice or services. Thus, we shall not be responsible for any losses sustained by any person who relies on this material or communication. Please refer to our tax advisors should you require our consultancy services.
Welcome to Letter Box! A tiny space with lots of big ideas to share with everyone!
The Mail Room