Double the Tax Benefits for your Business!
Updated: Sep 7, 2021
You would be entitled for double tax incentives from the government upon outright purchase of the solar system.
Green Investment Tax Allowance
This tax incentive is applicable for green technology projects, where there would an Investment Tax Allowance of 100% of Qualifying Capital Expenditure for projects applied, constructed, and implemented until the year of assessment 2023. This allowance can be offset against 70% of statutory income in the year of assessment. If the allowance was unutilized, it can be carried forward until they are fully absorbed.
These tax incentives are claimable deductions for qualifying fixed assets such as industrial machinery, office equipment, and signboards. In this instance, if you installed a solar photovoltaic (PV) system, it would be classified under “Plant & Machinery”, making it eligible for depreciation of over six (6) years. The CA incentive contains the following:
Initial Allowance (IA) of 20% for the first year.
Annual Allowance (AA) of 14% for subsequent years until the full amount has been accounted for.