The following amendments are effective from 1 January 2020.
Existing provisions – Summary
Intellectual Property capital expenditure is capitalized and capital allowances are claimed throughout the useful life of the asset with a maximum useful life of 20 years.
New provisions
- Disposal of the Intellectual Property and Preparation of balancing statement. The obligation to prepare a balancing statement on the disposal of an intangible asset is no longer required, therefore, no balancing addition or deduction will be included in the taxpayer’s taxable income in the year of disposal.
- Capital Allowances. The taxpayer now has the option not to claim capital allowances in a specific year. Also, Taxpayers can claim, over the remaining useful life of the asset, any capital allowances that have not been previously claimed in a year. Therefore, at the beginning of each year, the tax written down value of the IP must be recalculated over the remaining useful life of the Intellectual Property.
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