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11. Apart for those allowable deductions mentioned in the above Q&A, are there any other allowances available under Profit Tax assessments?

The tax payers may also enjoy "depreciation allowances" as follows:

 

  1. Industrial Building Allowances on Industrial Buildings and Structures
    • Initial allowance: 20% on the cost of construction of the premises.
    • Annual allowance: 4% on the cost of construction of the premises.
    • Balancing allowance or charge will be due upon disposal of the premises.
  2. Commercial Building Allowances on Commercial Buildings and Structures
    • Annual allowance: 4% on the cost of construction of the premises.
    • Balancing allowance or charge will be due upon disposal of the premises.
  3. Plant and Machinery
    • Initial allowance: 60% on the cost.
    • Annual allowance: at rates of 10%, 20% or 30% as prescribed by the Board of Inland Revenue in the Inland Revenue Rules, on the reducing value of the asset. Items qualifying for the same rate of annual allowance are grouped under one "pool".
    • A balancing allowance is available only on cessation of a business to which there is no successor. A balancing charge can, however, arise whenever the disposal proceeds of one or more assets exceed the reducing value of the whole "pool" of assets to which the disposed items belong.
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