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Press Release
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Tax deduction for environment-friendly facilities
to be introduced
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The Government will introduce accelerated tax deduction for environment-friendly
facilities in an effort to encourage the business community to use
them.
The proposal, among other budgetary
measures, was contained in the Revenue Bill 2008 gazetted yesterday
(April 25). Subject to the passing of the Bill by the Legislative
Council, amendments will be made to the Inland Revenue Ordinance
(IRO).
A government spokesman said that
eligible facilities were divided into two categories - environmental
protection machinery and environmental protection installations.
"Environmental protection machinery
includes low noise construction machinery or plant registered under
the Quality Powered Mechanical Equipment system administered by
the Environmental Protection Department (EPD), as well as waste
treatment, wastewater treatment and air pollution control machinery
or plant in compliance with the requirements under the various ordinances
administered by the EPD," he said.
"A 100% deduction under profits
tax will be provided in the year of purchase for the capital expenditure
incurred on the provision of eligible machinery," he said.
"Environmental protection installations
will mainly be renewable energy installations, including solar photovoltaic
installations, wind turbine installations and thermal waste treatment
installations. Other eligible installations are the energy efficient
building installations registered under the Hong Kong Energy Efficiency
Registration Scheme for Buildings administered by the Electrical
and Mechanical Services Department."
"A deduction under profits tax
for 20% of the capital expenditure incurred on the construction
of eligible installations will be provided in each of the five consecutive
years starting from the year of acquisition," the spokesman
said.
Eligible machinery and installations
will be listed in Part 1 and Part 2 respectively of a new schedule
to the IRO (Schedule 17). After the enactment of the amendments
to the IRO, taxpayers may claim the deductions in their profits
tax returns for 2008-09 and subsequent years of assessment.
A taxpayer may have owned and have
been using environmental protection machinery or installations before
implementation of the proposal, in which they may elect to have
the reducing value of the machinery under the depreciation allowance
regime fully deducted in 2008-09 or, in the case of installations,
to have 20% of the residual value of the installations deducted
in each of the five consecutive years starting from 2008-09.
Ends/Saturday, April 26, 2008
Issued at HKT 11:00
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