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Intermediate Tax: Topic 6 Industrial Building Allowance - Coggle Diagram
Intermediate Tax: Topic 6
Industrial Building Allowance
Relief for Capital Allowance
given in the form of either manner
Capital allowances on plant and machinery
Industrial building allowances on industrial building
10% King Rule
Expenditure incurred on preparing, cutting, tunneling or leveling land, cost does not exceed 10% in aggregate
Rates of Capital Allowance
Initial Allowances
Rate: 10%
Company has incurred QPE during the basis period
Assets used for business purpose
Annual allowance
Assets used for business purpose
Rate: 3%
Company is the owner of the asset at the end of the basis period
Balancing Charge/Allowance
Balancing Charge
Disposal value < residual expenditure
Balancing Allowance
Disposal value > residual expenditure
Qualifying Business Expenditure (QBE)
Consists of:
Architect’s fees
Cost of preparing plans in connection with obtaining building approval
Construction cost
Other incidental cost
10% Rule
If building or extension of building is less then 10%, the building shall be treated as an industrial building
75% Rule
Capital expenditure on machinery or plant and on preparing, cutting, tunneling or leveling land shall be treated as QBE if they satisfy 75% rule