Industrial building allowance

Taxpayers operating business to purchase properties are of a capital nature and cannot be deducted in one go, but they can be granted tax exemptions for industrial buildings or commercial buildings. Among them, only industrial buildings can receive an initial allowance of 20% in the first year, which is more than the commercial allowance, and the two types of allowances can receive an annual allowance of 4%.

According to the tax regulations, taxpayers’ industrial buildings must meet the following uses and be used in related industries to obtain the industrial building allowance:

• Operating workshops or factories, such as industrial production

• Public service transportation, tunnel, water, gas or power companies

• The entire industry is industrial manufacturing and processing

• The entire industry is engaged in storing goods or materials that will be used in manufacturing and processing industries

• Agricultural business

• R&D activities

If part of the property is a non-industrial building, the capital expenditure for this part must be no more than one-tenth of the capital expenditure for the entire building before the building can be fully regarded as an industrial building.

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