Category: Capital Allowances

IRAS clarifies COE costs qualifies for capital allowance

On By taxsgIn Capital Allowances, Corporate Tax, Latest Tax News

15 April 2015

The Inland Revenue Authority of Singapore (IRAS) has clarified through its website that the cost of renewing an existing vehicle’s Certificate of Entitlement (COE) qualifies for capital allowance.

Expenditure on obtaining a COE to acquire a motor vehicle is part of the cost of the motor vehicle. If the motor vehicle qualifies for capital allowance, the cost of obtaining the COE may be included when claiming capital allowance on the motor vehicle.

For purposes of claiming capital allowances under section 19 or 19A of the Income Tax Act, the amount paid by a registered owner of an existing vehicle upon renewal of the COE to enable the continued operation of the vehicle will be regarded as an additional cost of the vehicle.

The update was done on 10 April 2015.

Source: IRAS

IRAS issues e-Tax Guide, “Pioneer Incentive: Capital Allowances upon Expiry of Tax Relief Period (2nd edition)”

On By taxsgIn Capital Allowances, Economic Expansion Incentives (Relief from Income Tax) Act, Latest Tax News

2 September 2014

On 29 August 2014, IRAS issued a second edition of the e-Tax Guide, “Pioneer Incentive: Capital Allowances upon Expiry of Tax Relief Period”.

This e-Tax Guide spells out the manner of apportioning capital allowances (CA) under section 10(3)(b) of the Economic Expansion Incentives (Relief from Income Tax) Act (EEIA) and is relevant to a pioneer enterprise or pioneer service company claiming CA upon expiry of its tax relief period during the basis period for any YA.

In the second edition, the Guide has been updated and re-written to reflect relevant changes made to the EEIA and ITA since the first edition of this guide was published on 15 July 1994. In particular,

  • re-numbering sections 10(1A) and 10(1B) of the EEIA as sections 10(2) and 10(3) respectively; and
  • including sections 18B, 18C, 19A and 19B of the ITA in sections 10(2) and 10(3) of the EEIA.

For full details, please refer the e-Tax Guide on the IRAS website.

Source: This article was extracted from the Inland Revenue Authority of Singapore’s (IRAS) website. Visit http://www.iras.gov.sg/ for more information.

IRAS updates website content on “PIC IT and Automation Equipment List”

On By taxsgIn Capital Allowances, Corporate Tax, Deductions, Latest Tax News

2 June 2014

On 30 May 2014, the Inland Revenue Authority of Singapore (“IRAS”) updated its website content on “PIC IT and Automation Equipment List”.

Bi-directional Mass Flow Metering system (“MFM”) installed on bunker tankers and approved for use by the Maritime and Port Authority of Singapore (“MPA”) has been added to the list of information technology (“IT”) and automation equipment qualifying for enhanced deduction/allowances under the Productivity and Innovation Credit (“PIC”) scheme. With effect from year of assessment 2015, expenditure incurred on bi-directional MFM will qualify for PIC. However, it will not qualify for 100% accelerated write-off for capital allowances under sec 19A(2) of the Income Tax Act.

For the full list, please refer to the IRAS website.

Source: Inland Revenue Authority of Singapore

IRAS updates e-Tax Guide “Pharmaceutical Manufacturing Industry: Tax Treatment of Research & Development and Intellectual Property-Related Expenditures”

On By taxsgIn Capital Allowances, Corporate Tax, Deductions, Latest Tax News, Withholding Tax

19 May 2014

On 16 May 2014, the Inland Revenue Authority of Singapore (“IRAS”) issued the e-Tax Guide “Pharmaceutical Manufacturing Industry: Tax Treatment of Research & Development and Intellectual Property-Related Expenditures (Second Edition)”.

The e-Tax guide provides guidance on tax treatments for the following items common to pharmaceutical manufacturing companies in:

(a) Deduction of research and development(“R&D”) expenditure under sec 14D and sec 14DA of the Income Tax Act (“the Act”);

(b) Writing down allowances under sec 19B of the Act;

(c) Provision of R&D services;

(d) Deduction of royalty payments and withholding tax implications.

The new edition reflects the changes to R&D since the first edition of the e-Tax Guide was published on 22 August 2011. The major changes are:

  • The extension of the R&D scheme from year of assessment (“YA”) 2015 to YA 2025;
  • The expansion of sec 14D and sec 14DA to include payments made under R&D cost-sharing agreements with effect from YA 2012; and
  • The removal of writing down allowances claim under sec 19C for approved R&D cost sharing agreements.

For the full details, please refer the e-Tax Guide on the IRAS website.

Source: Inland Revenue Authority of Singapore