3 Key Difference Between Tax Capital Allowance and Accounting Depreciation

1. New Asset Yet in Use
MPERS S17: Depreciation of an asset begins when available for use. The asset must be in use.

2. Assets Acquired from Related Party
Account point of view: Cost is depreciated over the asset’s useful life. Tax point of view: Only remaining residual expenditure qualifies.

3. Company Assets Used by Related Party
According to Public Ruling No. 5/2014, assets not for business purpose is not entitled to claim capital allowance.

References
1. Public Ruling No. 5/2014
2. MPERS 17 – Property, Plant and Equipment
3. Income Tax Act 1967

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