Taxes Hw Many Personal Allowances Can You Claim?

Majuscule allowances are deductions claimable for the wear and tear of qualifying fixed assets. They are by and large granted in identify of depreciation, which is not deductible.

On this page:

• What Qualifies for Capital Allowances
• How to Calculate Capital Allowances
• How to Claim Capital letter Allowances
• Sale/ Disposal/ Transfer of Fixed Assets
• Related Content

What Qualifies for Upper-case letter Allowances

Fixed assets suffer 'wear and tear' and depreciate over time. Depreciation accounted for in fiscal statements is not tax-deductible.

Your company tin can instead claim capital allowances for the wear and tear of qualifying stock-still assets bought and used in its trade or business concern.

Claiming capital allowances over a period of fourth dimension is too known equally 'writing off the asset'.

Your company can merits uppercase allowances when the expense is incurred. An expense is incurred when the legal liability to pay arises, regardless of the date of actual payment of the money.

Capital allowances are no longer given on expenditure funded by upper-case letter grants from the Government or Statutory Boards that are approved on or later on 1 January 2021, equally appear in Budget 2020.

Example

A visitor bought a qualifying stock-still asset for $400,000 for apply in its concern. This expenditure is partially funded by a authorities capital grant of $100,000 canonical on 1 Jan 2021. Capital allowances are given on the net expenditure of $300,000.

Learn more through our e-Learning video on Upper-case letter Allowances.

Qualifying Fixed Avails

Qualifying fixed assets must be 'plant and machinery' used in your company'south merchandise, business or profession. For instance, a company making drinking glass bottles may claim capital allowances on the cost of a machine that packs these bottles into boxes.

Capital allowances cannot be claimed on the costs of assets bought solely for donation purposes as they are not used in the trade or concern.

Majuscule allowances besides cannot be claimed on the costs of assets specifically prohibited under the Income Taxation Act 1947 (e.yard. South-plated private passenger machine).

'Plant and machinery' generally refers to a stock-still nugget that has the following characteristics:

• Is not a trading stock of your company (not for resale purposes);
• Functions as an apparatus used for carrying out the business or trade activities of your company; and
• Is not part of the setting or part of the premises where your business is conducted. Expenses incurred on items that are role of the setting or office of the premises may be included as renovation or refurbishment expenses to be claimed instead.

Acquire more on what is considered to exist plant and machinery under Section 19/19A of the Income Taxation Act 1947 (PDF, 154KB).

Examples of Assets Qualifying every bit Establish or Machinery

• Carpet
• Containers used for carriage of appurtenances by any mode of transportation
• Electrical and electronic equipment (due east.g. air-workout organisation, security/ alert system, sprinkler arrangement and electrical appliances)
• Furniture and fixtures
• Industrial plant and machinery
• Motorbike and bicycle
• Motor vehicle (e.1000. goods/ commercial vehicle such as pick up, van, truck, lorry and bus)
• Movable partitions
• Office equipment (e.g. computer, printer, photocopier, fax machine and telecommunication equipment)
• Showcase or display lightings
• Signboard and other signage
• Venetian blind and curtain

Examples of Assets which do not Authorize equally Plant or Mechanism

• Awning*
• Container office
• Designer's fees on renovation
• Doors, roller shutters and gates*
• Electrical fittings* (except cabling for identifiable found, switchboard and transformer)
• False ceiling, ceiling boards and other ceiling work*
• Fixed partitions, walls, wall tiles and other wall finishes*
• Floor tiles, raised floors or other flooring work*
• Lightings and lite fittings*
• Motor vehicle (e.grand. S-plated individual passenger car)
• H2o and gas pipings*

Assets Purchased for Utilize by Subcontractors and Other Parties

Your visitor may also merits capital allowances on the costs of plant and machinery used by its subcontractors in outsourcing arrangements. However, in that location must be commercial justifications for allowing your subcontractors to use the plant and mechanism purchased by your company. Your visitor must as well bear witness that this was done for its business.

An case is where your visitor derives cost savings from outsourcing the manufacturing of its products and provides plant and machinery to the subcontractor for the exclusive use of manufacturing its products.

The following documents should exist prepared and retained by your company and submitted upon IRAS' request:

• The business arrangement with your visitor'south subcontractor (e.m. a contract)
• The connection betwixt the expenditure incurred on the plant and mechanism and your company's trade (i.e. how providing the establish and machinery to the sub-contractor benefits your company)
• The level of control your visitor has over the found and mechanism
• Compliance with the arm's length principle for subcontractors who are related parties

Capital Assart Merits for Motor Vehicles

Upper-case letter allowances cannot exist claimed on the costs of private cars (east.g. S-plated cars) and business organisation cars (e.g. Q-plated and RU-plated cars), unless the cars are registered as 'private hire cars'/ 'cars for instructional purpose' and are hired out or used for providing driving instruction in the grade of the company's business organization.

Upper-case letter allowances tin can be claimed on the costs of other motor vehicles such equally vans, lorries and motor cycles caused for concern use, too as on capital expenditure incurred on a foreign registered car used exclusively outside Singapore for business purposes, under Section xix or 19A of the Income Taxation Act 1947.

Expenditure incurred on obtaining a Certificate of Entitlement (COE) to acquire a motor vehicle is function of the cost of the motor vehicle. If the motor vehicle qualifies for capital allowances, the expenditure incurred on obtaining the COE may be included when claiming capital allowances on the price of the motor vehicle. The corporeality paid past a registered owner of an existing vehicle upon renewal of the COE to enable the continued operation of the vehicle is besides regarded as an boosted cost of the vehicle.

However, capital allowances cannot be claimed on expenditure incurred to obtain a COE that is not subsequently used to larn a motor vehicle.

How to Calculate Capital Allowances

There are a few methods for calculating capital allowances. Your visitor may write off the cost of an asset over ane year, three years or the prescribed working life of the asset. For assets acquired during the footing periods for the Years of Cess (YAs) 2022 and 2022, your company has an additional option to write-off the toll over 2 years.

Indicate clearly in your capital assart schedule the assets beingness claimed and the method(due south) adopted and submit the upper-case letter allowance claims in your Corporate Income Revenue enhancement Returns.

Methods for Computing Capital Allowances

• 100% Write-Off in i Year
• Write-Off Over ii Years
• Write-Off Over 3 Years
• Write-Off Over the Prescribed Working Life of the Nugget

100% Write-Off in 1 Yr [Sections 19A(2) and 19A(10A)]

Under Section 19A of the Income Tax Act 1947, assets that qualify for 100% write-off are:

• Computers [Section 19A(2)]
• Prescribed automation equipment [Department 19A(ii)]
• Low-value assets [Section 19A(10A)]

Computers and Prescribed Automation Equipment

Commonly claimed prescribed automation equipment include computers, laptops, printers and calculator software. View the full listing of prescribed automation equipment (PDF, 25KB).

Under the 100% write-off, capital allowance is given in the form of annual allowance (AA) where:

• For assets purchased with cash:

AA = 100% of the cost of the asset

• For assets purchased nether hire buy:

AA = 100% of the master payment (and deposit paid where applicable)

Example 1: Nugget Purchased with Cash

Your company purchased a reckoner for $2,000 and a printer for $200 with cash in the financial yr 2020.

AA for figurer = 100% x $ii,000 = $2,000

AA for printer = 100% ten $200 = $200

Your company'south upper-case letter assart schedule is as follows:

Description	Computer ($)	Printer ($)
Price	ii,000	200
YA 2022 AA	ii,000	200
Tax written downward value (TWDV) c/f	0	0

Instance ii: Asset Purchased nether Rent Purchase

Your visitor purchased a calculator for $ii,000 nether hire purchase in the financial twelvemonth 2020.

The details of the hire purchase understanding are as follows:

Purchase Price	$2,000
Deposit	$100
Hire purchase interest	$50
Number of instalments	5
Amount payable per instalment	$390
Hire purchase interest per instalment	$50/ 5 = $x
Principal payment per instalment	$390 - $10 = $380

A deposit of $100 and 2 instalments were paid in the financial year 2022 and the remaining 3 instalments were paid in the fiscal year 2021.

Deposit and principal payments in the year 2020 = $100 + (2 x $380) = $860

Principal payments in the year 2021 = 3 10 $380 = $1,140

YA 2022 AA = 100% ten $860 = $860

YA 2022 AA = 100% ten $ane,140 = $1,140

Your company's capital allowance schedule is every bit follows:

Description	Computer ($)
Cost	2,000
YA 2022 AA	860
TWDV c/f	i,140
YA 2022 AA	1,140
TWDV c/f	0

Low-Value Avails

Your company may choose to write off depression-value assets in 1 yr. The total claim for a one-year write-off of all depression-value assets must non exceed $30,000 per YA.

A depression-value asset is ane that does non price more than $5,000. An asset acquired under hire buy terms too qualifies for the one-yr write-off on the instalments paid in any YA if its original cost does not exceed $5,000.

If your company does not wish to employ the i-year write-off, you may write off the cost of the nugget over 2 years (for YAs 2022 and 2022 as announced in Budget 2022 and 2021), three years or its prescribed working life.

In any YA, the low-value assets that can be written off in 1 year, subject to a total claim of $thirty,000, are:

• Low-value assets acquired in the YA
• Low-value assets acquired before the YA where:
  • No claim for upper-case letter allowance has been made before (i.eastward. claim for capital allowance was deferred previously)
  • A claim for capital letter allowance was previously fabricated under Sections xix, 19A(ane) or 19A(1E) and there is a tax written down value brought frontwards to the electric current YA

If the corporeality of all the depression-value avails exceeds $30,000, yous can withal claim capital allowances over 2 years (for YAs 2022 and 2022), 3 years or the prescribed working life for the low-value assets exceeding the cap for the YA.

Example: 1-Year Write-Off of Low-Value Avails

Visitor A purchased vii pieces of Asset X at $iv,400 each in the financial year 2020.

In the financial year 2019, Company A also purchased:

• Asset Y at $one,500, for which the majuscule allowance merits was deferred
• Asset Z at $3,000, for which a capital assart claim of $one,000 was made in YA 2022 nether Section 19A(1) (i.east. iii-year write-off), and the tax written downwardly value carried forward to YA 2022 is $two,000

All 9 pieces of avails qualify for capital letter allowances.

Company A can merits a 1-year write-off on the cost of the following avails in YA 2021:

Cost of six pieces of new Asset X ($4,400 x 6)	$26,400
Add together: Cost of Asset Y purchased in the year 2019	$one,500
Add: TWDV of Asset Z brought frontward from YA 2020	$ii,000
Total claim under one-year write-off	$29,900*

* Within the total cap of $30,000 per YA.

Company A cannot claim the 7^th slice of Nugget Ten under Section 19A(10A) in YA 2022 equally the additional cost of $4,400 will exceed the $30,000 cap (i.eastward. $four,400 x 7 = $30,800).

Company A can claim capital allowances on the 7^th piece of Asset X over 2 years, 3 years or over its working life instead. Assuming that upper-case letter allowances are claimed over 3 years, the capital letter allowance for YA 2022 for this asset is $1,467 ($iv,400/ three years).

In total, the capital allowance merits for YA 2022 is $31,367 ($29,900 + $1,467).

Write-Off Over ii Years [Section 19A(1E)]

As appear in Budget 2022 and 2021, your company may accelerate the write-off over ii years, instead of 3 years or the prescribed working life of the asset, on the cost incurred in acquiring the nugget during the footing periods for YAs 2022 and 2022. This is to support businesses that intend to invest in new assets and ease the cash period of businesses.

The rates of accelerated capital allowances are as follows:

1. 75% of the cost incurred to be written off in the offset year (i.eastward. YA 2022 or YA 2022); and
2. 25% of the toll incurred to exist written off in the second yr (i.e. YA 2022 or YA 2023).

No deferment of upper-case letter assart claim is allowed under this option.

The write-off over two years is optional and your company can keep to claim capital allowances over 1 yr, 3 years or the prescribed working life.

For new assets acquired under a hire purchase agreement during the basis periods for YAs 2022 and 2022, the accelerated rates of 75% and 25% apply to all the instalments (principal component) paid on such rent purchase assets, yet that the instalments may be paid in a basis catamenia after the ground periods for YAs 2022 and 2022.

Example i: Nugget Purchased with Cash

Your company purchased office equipment for $three,000 with cash in the financial year 2020.

Your company's capital allowance schedule is as follows:

Description	Function Equipment ($)
Cost	3,000
YA 2022 AA (75% of cost)	2,250
TWDV c/f	750
YA 2022 AA (25% of cost)	750
TWDV c/f	0

Example 2: Asset Purchased nether Hire Purchase

Your visitor caused an role equipment for $two,000 under rent purchase in the financial yr 2020.

The details of the hire purchase understanding are every bit follows:

Buy Toll	$2,000
Eolith	$100
Hire purchase involvement	$l
Number of instalments	5
Amount payable per instalment	$390
Hire buy interest per instalment	$50/ v = $x
Principal payment per instalment	$390 - $10 = $380

A eolith of $100 and 2 instalments were paid in the fiscal year 2022 and the remaining 3 instalments were paid in the financial yr 2021.

Eolith and principal payments in the year 2020 = $100 + (2 x $380) = $860

Master payments in the twelvemonth 2021 = 3 x $380 = $i,140

AA for each YA is computed as follows:

Year of Payment	Deposit and Principal Amount Paid ($)	YA 2022 AA ($)	YA 2022 AA ($)	YA 2023 AA ($)
2020	860	645	215
2021	1,140		855	285
Total		645	ane,070	285

Your company's capital allowance schedule is equally follows:

Description	Office Equipment ($)
Toll	ii,000
YA 2022 AA	645
TWDV c/f	one,355
YA 2022 AA	1,070
TWDV c/f	285
YA 2023 AA	285
TWDV c/f	0

Write-Off Over 3 Years [Section 19A(1)]

Your company may choose to write-off all avails that qualify for capital allowances over iii years.

Under the 3-year write-off, capital allowance is given in the form of annual allowance (AA) where:

• For avails purchased with cash:

AA for each year = 1/3 of the toll of asset

• For assets purchased under rent purchase:

AA = 1/iii of the master payment (and deposit paid where applicable)

Instance one: Asset Purchased with Cash

Your company purchased office equipment for $3,000 with cash in the financial year 2020.

AA for each YA = 1/iii x $3,000 = $1,000

Your company'due south capital assart schedule is every bit follows:

Description	Office Equipment ($)
Cost	3,000
YA 2022 AA	i,000
TWDV c/f	2,000
YA 2022 AA	1,000
TWDV c/f	i,000
YA 2023 AA	1,000
TWDV c/f	0

Example ii: Nugget Purchased under Hire Purchase

Your company acquired office equipment for $ii,000 nether hire purchase in the financial year 2020.

The details of the hire purchase agreement are as follows:

Purchase Price	$2,000
Deposit	$100
Hire purchase interest	$l
Number of instalments	5
Amount payable per instalment	$390
Hire purchase interest per instalment	$50/ 5 = $10
Master payment per instalment	$390 - $ten = $380

A deposit of $100 and 2 instalments were paid in the fiscal year 2022 and the remaining 3 instalments were paid in the financial year 2021.

Deposit and principal payments in the year 2020 = $100 + (2 x $380) = $860

Principal payments in the yr 2021 = 3 x $380 = $1,140

AA for each YA is computed equally follows:

Yr of Payment	Deposit and Principal Corporeality Paid ($)	YA 2022 AA ($)	YA 2022 AA ($)	YA 2023 AA ($)	YA 2024 AA ($)
2020	860	287	287	286
2021	1,140		380	380	380
Total		287	667	666	380

Your company's capital allowance schedule is as follows:

Description	Office Equipment ($)
Cost	2,000
YA 2022 AA	287
TWDV c/f	i,713
YA 2022 AA	667
TWDV c/f	one,046
YA 2023 AA	666
TWDV c/f	380
YA 2024 AA	380
TWDV c/f	0

Write-Off Over the Prescribed Working Life of the Asset (Section 19)

Under this method, capital allowances are given over an nugget's prescribed working life based on the Sixth Schedule of the Income Taxation Act 1947.

To simplify capital allowance claims under Section xix, the prescribed working life of assets in the Sixth Schedule has been streamlined to 6, 12 and sixteen years:

• If the prescribed working life of the asset in the Sixth Schedule is 12 years or less, your company may make an irrevocable election to merits capital letter allowances over either 6 or 12 years
• If the prescribed working life of the nugget in the 6th Schedule is xvi years, your company may brand an irrevocable election to claim capital allowances over 6, 12 or sixteen years

The above change applies to avails acquired in the footing periods relating to YA 2023 and subsequent YAs. Information technology besides applies to assets acquired in the ground periods relating to YA 2022 and prior YAs, if your visitor had deferred and is yet to start its capital assart claims for the assets.

Your company must make the irrevocable election for the number of years of working life for the asset at the fourth dimension of its revenue enhancement filing for the YA relating to the basis menses in which the asset is acquired. For assets acquired in basis periods prior to the footing period for YA 2023, your visitor must brand the election at the time of the tax filing for YA 2023.

The initial assart (IA) and almanac assart (AA) are computed every bit follows:

• For assets purchased with cash:

In the showtime YA relating to the year in which the stock-still nugget is purchased:

1. IA = twenty% x the cost of asset
2. AA = (fourscore% x the toll of asset)/ number of years of working life*

In the second and subsequent YAs:

1. IA is non applicable
2. AA = (80% x the cost of nugget)/ number of years of working life* (same as the first YA)

• For avails purchased under hire purchase:

In the YA where in that location is a deposit paid and/or instalment payments:

1. IA = twenty% of the main corporeality (and deposit paid where applicable)
2. AA = (80% x the cost of asset)/ number of years of working life*

In the YA where at that place is no payment made:

1. IA is not applicable
2. AA = (80% x the cost of nugget)/ number of years of working life*

* The number of years of working life is based on the Sixth Schedule of the Income Tax Act 1947 (e.thou. the working life for motor vehicle is 6 years).

Summary of the Different Methods to Claim Capital Allowances

How to Summate	Qualifying Avails	Initial Assart (IA)/ Almanac Allowance (AA)
Over working life of nugget [Department 19]	Applies to all qualifying avails Refer to 6th Schedule of the Income Tax Act 1947 for working life From YA 2023, option to claim: half dozen or 12 years for prescribed working life of 12 years or less 6, 12 or 16 years for prescribed working life of 16 years	IA = 20% of cost  AA = (lxxx% of cost)/ No. of years of working life
3-twelvemonth write-off [Section 19A(1)]	Applies to all qualifying assets	AA = 1/3 of cost
ii-twelvemonth write-off [Section 19A(1E)]	Applies to all qualifying assets acquired during the basis periods relating to YAs 2022 and 2022	YA 2022 or YA 2022 AA = 75% of cost  YA 2022 or YA 2023 AA = 25% of toll
1-year write-off (for specific assets) [Department 19A(2)]	Computers Prescribed automation equipment listed in Income Tax (Automation Equipment) Rules 2004; and Subpoena Rules 2010 (effective from 15 Dec 2010)	AA = 100% of cost
1-year write-off (only for low-value assets) [Section 19A(10A)]	Price of each low-value asset not more than $5,000 Total claim for one-yr write-off of all such assets capped at $thirty,000 per YA	AA = 100% of cost

Deferring Capital Allowance Claims

Generally, companies defer capital letter allowances when:

• The company is in a loss position; or
• The visitor qualifies for the tax exemption for new first-upwardly companies.

Companies in a loss position may still claim upper-case letter allowances instead of deferring the claim. Any unutilised capital allowance can be carried forwards for set-off confronting the income for subsequent YAs, subject to the shareholding test and business continuity exam.

Method of Calculation	Deferment
Over working life of asset [Section 19]	Initial allowance (IA) must be claimed in the YA the uppercase expenditure is incurred. In the event that IA is not claimed, annual allowance (AA) is computed based on the full cost (i.eastward. 100% of the price over the prescribed working life). AA tin can exist deferred and it does not demand to be claimed consecutively over the prescribed working life of the asset.
3-year write-off [Department 19A(1)]	A capital letter allowance merits made under Section 19A(1) can be deferred and does not need to be claimed consecutively over 3 YAs.
2-year write-off [Section 19A(1E)]	No deferment of capital allowance claim is allowed under this option.
1-year write-off (for specific avails) [Section 19A(ii)]	You can cull to defer the capital allowance merits to subsequent YAs.
one-year write-off (simply for low-value assets) [Department 19A(10A)]	You can cull to defer the upper-case letter allowance merits to subsequent YAs.

Example 1: Asset Purchased with Cash

Your visitor purchased a machine for $120,000 with greenbacks in the basis period relating to YA 2017. It defers its claim for capital allowances in YAs 2022 and 2019, and only makes a claim in YAs 2018, 2022 and 2021.

Your company's uppercase allowance schedule is every bit follows:

Description	Auto ($)
Cost	120,000
YA 2022 AA	Deferred
Tax written down value (TWDV) c/f	120,000
YA 2022 AA (i/3 of price)	40,000
TWDV c/f	eighty,000
YA 2022 AA	Deferred
TWDV c/f	80,000
YA 2022 AA (one/3 of cost)	40,000
TWDV c/f	40,000
YA 2022 AA (1/iii of cost)	40,000
TWDV c/f	0

Example 2: Nugget Purchased under Hire Purchase

Your company purchased role equipment for $12,000 under hire purchase in YA 2019.

The details of the hire purchase understanding are as follows:

Buy Toll	$12,000
Deposit	$600
Rent purchase interest	$300
Number of instalments	vi
Corporeality payable per instalment	$one,950
Hire purchase involvement per instalment	$300/ half dozen = $50
Main payment per instalment	$1,950 - $50 = $1,900

The deposit of $600 and 3 instalments were paid in the basis flow relating to YA 2022 and the remaining 3 instalments were paid in the ground period relating to YA 2020.

Deposit and principal payments in YA 2019 = $600 + (3 10 $1,900) = $vi,300
Principal payments in YA 2020 = iii x $1,900 = $5,700

Scenario A: Your visitor makes a claim for capital allowances in YAs 2019, 2021, 2022 and 2023 but defers its claim in YA 2020.

AA for each YA is computed equally follows:

Year of Payment	Eolith and Principal Corporeality Paid ($)	YA 2022 AA ($)	YA 2022 AA ($)	YA 2022 AA ($)	YA 2022 AA ($)	YA 2023 AA ($)
2018	vi,300	two,100	Deferred	2,100	two,100
2019	5,700		Deferred	1,900	1,900	1,900
Total		2,100	Deferred	four,000	4,000	one,900

Your company'southward upper-case letter allowance schedule is as follows:

Description	Office Equipment ($)
Cost	120,000
YA 2022 AA	2,100
TWDV c/f	9,900
YA 2022 AA	Deferred
TWDV c/f	9,900
YA 2022 AA	four,000
TWDV c/f	5,900
YA 2022 AA	4,000
TWDV c/f	1,900
YA 2023 AA	ane,900
TWDV c/f	0

Scenario B: Your company makes a claim for capital allowances as follows:

• On the YA 2022 deposit and principal payments - claims capital allowances in YAs 2019, 2022 and 2021
• On the YA 2022 principal payments - defers its merits for uppercase allowances in YA 2022 and claims in YAs 2021, 2022 and 2023

AA for each YA is computed as follows:

Year of Payment	Deposit and Principal Corporeality Paid ($)	YA 2022 AA ($)	YA 2022 AA ($)	YA 2022 AA ($)	YA 2022 AA ($)	YA 2023 AA ($)
2018	half-dozen,300	2,100	ii,100	2,100
2019	5,700		Deferred	ane,900	ane,900	i,900
Total		2,100	2,100	4,000	one,900	ane,900

Your company's capital allowance schedule is as follows:

Description	Office Equipment ($)
Cost	120,000
YA 2022 AA	two,100
TWDV c/f	nine,900
YA 2022 AA	2,100
TWDV c/f	7,800
YA 2022 AA	iv,000
TWDV c/f	3,800
YA 2022 AA	1,900
TWDV c/f	1,900
YA 2023 AA	one,900
TWDV c/f	0

Deferment of Upper-case letter Allowances nether the Productivity & Innovation Credit (Pic) Scheme

The Moving picture scheme has expired after YA 2022 and your company is not allowed to merits Motion-picture show benefits on expenditure incurred subsequently the ground period of YA 2018.

If your company incurred qualifying PIC expenditure on equipment while the scheme was bachelor, and the equipment has a tax written down value brought forward to the current YA, your company may cull to defer its capital allowance claims. Nevertheless, your company needs to defer both the base capital allowances (100%) and enhanced capital allowances (300%) at the same time. Information technology cannot cull to defer merely the base allowances or only the enhanced allowances.

Example

Your company purchased a computer for $5,000 with greenbacks in YA 2018. It wishes to defer its claim for upper-case letter assart in YA 2022 every bit the company is in a loss position.

The capital assart to be deferred is as follows:

Description	Figurer ($)
Cost	v,000
Base allowance (100%)	5,000
Enhanced allowance (300%)	15,000
Total capital allowance deferred	20,000

FAQs

1. Can my company claim 100% of the price of energy efficient equipment and technology in 1 yr?

   Yep, your company may claim the total cost of such equipment as capital allowance in 1 year, if the equipment is certified past a company approved by the National Environmental Agency (NEA) and is installed at whatsoever time from i Jan 1996 to 31 December 2022 (both dates inclusive).

2. Can my company merits 100% of the cost of equipment purchased for chemical hazard control or racket command in ane year?

   Yeah, your company may claim the full cost of such equipment as capital allowance in 1 year, if the equipment is certified by a company approved by the Ministry of Manpower (MOM).

   Find out more about the details of accelerated capital assart for equipment used for Chemical Risk Control or Noise Command at MOM's website.

3. Can my company merits 100% of the cost of purchasing or developing a website?

   Yes. A website qualifies as plant or mechanism nether Section 19A(x) and your company may merits upper-case letter allowance on the evolution cost or buy price of a website in one twelvemonth.

   From YAs 2022 to 2018, the website development toll, including costs incurred for the sometime registration of a domain proper name for the website, also qualifies for Picture benefits.

How to Claim Capital Allowances

Your company must make the capital allowance claims in its Corporate Income Taxation Return for the relevant Year of Assessment (YA) and prepare the following supporting schedules in its tax computation. The taxation computation must exist filed with Form C. If you are filing Course C-S/ Form C-Southward (Lite), retain the tax computation and submit it merely upon IRAS' asking.

1	Fixed assets additions	Requite a cursory clarification and cost of the new avails purchased during the accounting year.
ii	Stock-still avails disposals	Give a cursory clarification, price, sale proceeds and profit/ loss on disposal in respect of fixed assets sold/ written off during the bookkeeping year.
3	Capital allowances	Prove your basis of calculating the total capital allowance claimed, giving a breakup of the cost/ tax written downward value brought forward, upper-case letter allowance amount and tax written downwardly value carried forward for each category of assets.

If you demand assist in preparing the capital allowance schedule, yous may use our Basic Corporate Income Tax Calculator.

Sale/ Disposal/ Transfer of Fixed Assets

Selling or Scrapping Stock-still Avails

When a fixed asset is sold or written off, you need to calculate balancing allowance (BA) or balancing charge (BC) if capital allowances have been claimed on the cost of the asset previously. BA is taxation-deductible and BC is taxable as income.

Calculating BA/ BC

BA or BC is derived past calculating the difference between the sale proceeds and the tax written down value (TWDV) of the asset tending. TWDV is the cost of the asset less the amount of uppercase allowances allowed previously.

Sale Gain - TWDV = BA or BC

Where the sale gain are lower than the TWDV, the difference is known as BA. BA is tax-deductible.

Where the sale proceeds are higher than the TWDV, the deviation is known as BC. BC is taxable as income. The corporeality of BC taxable is restricted to the full corporeality of capital allowances allowed previously in respect of the asset disposed.

Example

Clarification	Furniture ($)	Computer ($)	Van ($)
Price	3,000	ii,000	xx,000
Sale proceeds	200	200	21,000
Less: TWDV	ane,000	0	13,333
BA	800
BC		200	vi,667*

* Amount of BC taxable is restricted to $half-dozen,667 ($20,000 - $thirteen,333), which is the full amount of uppercase allowances immune previously, instead of $vii,667 ($21,000 - $13,333).

Donation of Computers Before 21 Feb 2017

Donors are granted tax deduction for the donation of computers to prescribed educational, research or other institutions and all IPCs before 21 Feb 2017. The Infocomm Media Development Authority (IMDA) is required to perform a valuation of the computers to be donated.

A company may take incurred capital expenditure on a calculator bought for its ain trade and claimed capital letter assart on the reckoner in full over 1 year. If the computer was subsequently donated to an IPC, a BC equal to the value of the donated items (as assessed by IMDA) will be taxed.

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Source: https://www.iras.gov.sg/taxes/corporate-income-tax/income-deductions-for-companies/claiming-allowances/capital-allowances

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