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24 Investment Tax Allowance (ITA) - Coggle Diagram
24 Investment Tax Allowance (ITA)
to companies
carrying on
Promoted Activities/Products
(PAPP) :star:
carrying on project of national interest
a contract R&D Co
a R&D Co
carrying in-house research
carrying on high tech activities
carrying on technical or vocational training
Conditions
a Co intending to manufacture a PAPP
does NOT enjoy other tax incentive
will incur QCE within 5 years from date of disposal
Tax Mechanism
ITA: additional relief over and above the claim for CA on the same QBE
quantum of ITA is
60% of the QBE
incurred each year
within 5 years
from
date of approval
, is a
one-off allowance
ITA used to
exempt SI up to a max of 70%
Excess ITA c/f
indefinitely
to subsequent YAs to similarly set off against
70% of SI
until fully utilized
Exempted Y is credited into exempt acc
ITA will be withdrawn in the
YA of claim
if asset is disposed
within 5 years
from date of acquisition
QCE
Manufacturing
Factory, warehouse
P+M (exclude replacement)
Agriculture
CPRAPIO
Tourism
C
learing of land for tourist project
P
lanting of trees+plant
R
oads + infrastructure facilities
Provision of
B
irds + animals etc
P
lant + machinery
Hotel (include renovation cost)
MSC companies
P/S VS ITA
ITA let
CI :arrow_down::
Exempt acc :arrow_up:
Loss c/f :arrow_up:
ITA c/f :arrow_up:
Absorption of donations :arrow_up:
ITA will be chosen if
Co is
NOT making profits
(making a loss)
Co is
capital intensive
, high CA,
SI :arrow_down:, exempt acc :arrow_down:
Replacement of asset
cannot qualify for ITA