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Frequently Asked Questions & Answers on Completion of Supplementary Form S4 – Expenditure on energy efficient building installation (applicable for year of assessment 2018/19 and subsequent years)
Introduction
For the benefit of the tax paying public and their tax representatives, some frequently asked questions and their answers are listed below for general information and guidance.
Section 1 – EEBI expenditure
1.
Q:
What is the new tax incentive on the capital expenditure on energy efficient building installation (EEBI) to be deducted?
A:
With effect from the year of assessment 2018/19, the capital expenditure on qualified installations is allowed to be deducted in full in one year instead of over five years.
2.
Q:
I have claimed the deduction for expenditure on the EEBI by instalments over the past years, can the remaining part to be deducted in full in the year of assessment 2018/19?
A:
Yes, so long as the installation has not been sold on or before 1 April 2018.
3.
Q:
If I wish to claim deduction for expenditure incurred on the EEBI registered under the Hong Kong Energy Efficiency Registration Scheme for Buildings ("HKEERSB"), what do I need to provide in the supplementary form?
A:
You have to complete sections 1.1, 1.4, and Table 1 (provide the details of EEBI, the number of the HKEERSB certificate and the effective date). The figure in 1.1 should be equal to the sum of the individual amount in the column "Expenditure" in Table 1.
4.
Q:
I have applied for the registration of the EEBI under the HKEERSB to the Electrical and Mechanical Services Department ("EMSD") but it is being processed. Can I claim the deduction on the expenditure on such EEBI?
A:
Yes. You have to complete sections 1.2, 1.4, Table 2 (provide the details of the EEBI and the details of the application being processed by the EMSD), and make the undertaking in the first checkbox of section 2. The figure in 1.2 should be equal to the sum of the individual amount in the column "Expenditure" in Table 2.
5.
Q:
Can I claim the deduction on the expenditure on EEBI which the registration under the HKEERSB has not yet been applied for?
A:
You may still claim the deduction but have to complete section 1.3, 1.4, Table 3 (provide the details of EEBI, and reason(s) for having not applied for the registration), and make the undertaking in the second checkbox of section 2. The figure in 1.3 should be equal to the sum of the individual amount in the column "Expenditure" in Table 3.
6.
Q:
How do I provide the reason(s) for having not applied for the registration of EEBI under the HKEERSB in Table 3?
A:
If the reason is "BEAS certificate to be obtained", please provide the type of standard, date of application/anticipated date of application, provisional rating (if available) and anticipated issue date of certificate in the relevant column of Table 3. Otherwise, please specify the reason(s) in the "Others" column.
7.
Q:
What does the BEAS certificate refer to?
A:
It refers to a certificate issued for the building/premises installed with EEBI(s) showing their compliance with the assessment standards under the building environmental assessment system.
8.
Q:
If the building/premise is an office and residential building/premise, which type should I select in Table 1/2/3?
A:
You can select the code 3.1 (for office) and 3.2 (for residential) in the column. For this column, you may select up to a maximum of 2 types of the building/premise.
9.
Q:
If space provided in Table 1/2/3 is insufficient, what should I do?
A:
You can give the details on a separate sheet of paper and staple it to the Control List for Supplementary Form and Other Form (IR1477). For each sheet, you have to put the file number and sign at the bottom of the sheet. Do not complete another set of the form to provide the additional information.
10.
Q:
What is BEAM Plus standard?
A:
BEAM Plus standard refers to the standard under the BEAM Plus Assessment System managed by the Hong Kong Green Building Council.
Section 2 – Undertaking
11.
Q:
Under what circumstances should I make the undertaking?
A:
You only need to make the undertaking if you wish to claim deduction for expenditure on EEBI but you have not yet made the application or the application for registration of EEBI under the HKEERSB is being processed by the EMSD.