Businesses can enjoy 400% tax deduction/allowances on up to $400,000 of their expenditure per year in each of the six qualifying activities, instead of the 100% deduction/allowances under the existing tax rules.
|Year of Assessment (YA)||Expenditure Cap per Qualifying Activity*||Tax Deduction per Qualifying Activity|
2011 and 2012
2013 to 2015
For example, a company has a “Gross Taxable Profit” of $1M. It has bought about $100K of IT equipments.
It will enjoy PIC 400% tax rebate of $400k. Thus, it lowered the taxable income to $600k.
Currently, the corporate tax is 17%. Therefore, there is a tax saving of $68k ($170k – $102) or 68% off ($68k/$100k).
In short, the company pay $32k for $100k worth of IT hardware and softwares.
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