Non-residential renovation or alteration expenses

Non-residential renovation or alteration expenses

Taxpayers’ business operations incurred non-initial capital expenditures for the renovation or renovation of non-domestic buildings or structures. Such non-initial expenditures are for the purpose of earning assessable profits and can be deducted in full for five years. The definition of refurbishment or refurbishment refers to alterations or additions/improvements. No functional changes or alterations are in fact repairs and can be fully deducted.

Refurbishment or renovation expenses cannot be deducted in full or divided over five years in the following situations:

• The building is for self-occupation, that is, a private residence but does not include a hotel

• Expenses were incurred before opening, which is the first capital expenditure

• Expense makes the use and function of a building or structure different from the use or function performed immediately before the expenditure was incurred

Nevertheless, the categories of expenditure in the above circumstances can claim commercial building allowances. Until the building or structure is no longer in use, the taxpayer can claim all remaining commercial building allowances in the year of suspension.

The above information is for reference only. If in doubt, we welcome your tax inquiries

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