INDUSTRIAL BUILDINGS AND STRUCTURES (CAPITAL ALLOWANCES) RULES (tnaqqiskapitali)

INDUSTRIAL BUILDINGS AND STRUCTURES

(CAPITAL ALLOWANCES)

SUBSIDIARY LEGISLATION 123.173

INDUSTRIAL BUILDINGS AND STRUCTURES

(CAPITAL ALLOWANCES) RULES

28th October, 2016

LEGAL NOTICE 349 of 2016.

The title of these rules is the Industrial Buildings and

Structures (Capital Allowances) Rules.

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

expenditure on an industrial building and structure shall not include

the cost of the land on which it is constructed.

When an industrial building or structure forms part of a

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

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

INDUSTRIAL BUILDINGS AND STRUCTURES

(CAPITAL ALLOWANCES)

surface area of the industrial building or structure.

When the ownership of an industrial building or structure

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

to 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 and

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

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

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 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 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.