Industrial Buildings and Structures (Capital Allowances) Rules,

L.N. 349 of 2016

INCOME TAX ACT

(CAP. 123)

Industrial Buildings and Structures (Capital Allowances) Rules,

IN exercise of the powers conferred by articles 2, 14(2) and 96

of the Income Tax Act, the Minister for Finance has made the

following rules:-

The title of these rules is the Industrial Buildings and

Structures (Capital Allowances) Rules, 2016.

For the purpose of the definition "industrial building or

structure" in article 2 of the Income Tax Act, hereinafter referred to as

"the Act", the term "offices" means an office business centre that is

first used and occupied on or after the 1st January 2016. The word

"office business centre" means any number of units suitably furnished

and equipped, with a total office space area of more than two

thousand five hundred square meters, to be used exclusively for

offices, provided that such units are grouped together and have in

common ancillary services and amenities within a single and defined

parcel of land and are operated by a common management for the use

by the owner or tenants, in the course of their trade or business

against payment

Provided that the deductions referred to in article 14(1)(f)

and (j) shall be available only to the owner of the office business

centre.

If the owner of an industrial building or structure is a

person that acquired the property by means of a transfer that was not

subject to tax in virtue of the provisions of articles 5(9), 5A(4)(f) or

5A(4)(j) of the Act ("exemption provisions"), the said owner shall be

deemed, for the purpose of article 14(1)(f) and (j) of the Act and of

these rules, to have acquired the property

(a)

at a cost equivalent to the actual consideration for

that acquisition or the consideration for the original transfer,

whichever is the lower, increased by any construction costs

incurred by it after the acquisition; and

(b)

on the date of the original transfer,

and for this purpose "original transfer" means the last transfer of that

property that did not qualify for relief under any of the above-

mentioned exemption provisions.

For the purpose of article 14(1)(j) of the Act, the capital Cost of the land

expenditure on an industrial building and structure shall not include to be excluded.

the cost of the land on which it is constructed.

When an industrial building or structure forms part of a Apportionment

building that comprises other premises, the land on which it is of land area.

constructed shall be deemed to be a portion of the total area of the

land occupied by the whole building that is proportionate to the

surface area of the industrial building or structure.

When the ownership of an industrial building or structure Value of

includes any real right over the airspace, the value to be attributed to airspace.

the cost of the land over which it is constructed shall include the value

of that real right.

(1) For the purpose of article 14(1)(f) and (j) of the Act Deemed cost of

and of these rules, the cost of the land on which an industrial building the land.

or structure is constructed shall, unless otherwise identified, be

deemed to be equivalent to the market value of the land at the time of

the construction or acquisition of the property, taking into account

also the provisions of rule 5.

(2) In any dispute over the market value of property to which

these rules refer, an architect’s valuation that has been confirmed on

oath and that includes a declaration that the provisions of these rules

have been taken into account shall be admissible as evidence. When

different valuations are produced in the proceedings in the

Administrative Review Tribunal, the Tribunal shall, unless the parties

otherwise agree, appoint another architect to report on the value after

examining the valuations that have been produced and inspecting the

property, and the Tribunal shall decide the matter after taking into

account the said report and any other consideration that it may

consider appropriate.

(1) When a person claims, for a year of assessment, a Exclusions.

deduction in terms of article 14(1)(f) or (j) of the Act in respect of

property consisting of offices as defined in these rules, the Deduction S.L. 123.26

of Expenses in respect of Immovable Property Rules shall not apply

to the deductions that may be claimed by that person in respect of that

property for that year or for any subsequent year.

(2) When a person claims, for a year of assessment, a

deduction in terms of the Deduction of Expenses in respect of S.L. 123.26

Immovable Property Rules in respect of property consisting of offices

as defined in these rules, that person may not claim deductions under

article 14(1)(f) or (j) of the Act in respect of that property for that

year or for any subsequent year.

(3) When, for any year of assessment, the tax on rental income

derived by a person from property consisting of offices as defined in

these rules is determined in accordance with the provisions of article

31D of the Act, that person shall not be entitled to claim deductions

under article 14(1)(f) or (j) of the Act in respect of that property for

that year or for any subsequent year.

€0.27