Section 16
Initial and annual allowances. Machinery or plant
(1)
Where, in or after the basis period for the first year of assessment under this Act, a person carrying on a trade, profession or business incurs capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, there shall be made to him, for the year of assessment in the basis period for which the expenditure is incurred, an allowance (in this section referred to as an initial allowance)
equal to 40 per cent of that expenditure.
The provisions of this subsection apply in relation to expenditure incurred by a person on or after the 1st day of January 2009 but before the commencement of the first basis period as if it had been incurred by him on the first day of that period if such machinery or plant was in use for the purposes of that trade, profession or business at the commencement of that period.
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(2)
Where at the end of the basis period for any year of assessment a person has in use machinery or plant for the purpose of his trade, profession or business, there shall be made to him in respect of that year of assessment an allowance (in this section referred to as an annual allowance)
for depreciation by wear and tear of those assets. The allowance shall be calculated at the rate of 25 per cent and shall be computed on the reducing value of the asset, which shall be the original cost of the asset reduced by —
(a)
any initial allowance granted in accordance with the provisions of this section; and
(b)
the annual allowances made under the provisions of this section:
Provided that the Collector may, in his discretion, allow a higher rate than the rate of 25 per cent.
(3)
Notwithstanding the foregoing, where chargeable income of a company resident in Brunei Darussalam derives from the business of transportation by sea of liquefied natural gas and that company incurs capital expenditure on the purchase of a vessel or vessels for the purposes of that business, the initial allowance in respect of the expenditure so incurred shall be one-sixth of that expenditure. Thereafter there shall be a maximum of five annual allowances in respect of such expenditure, which annual allowances shall be made consecutively in each of the next succeeding five basis periods in respect of any such vessel in use by such company, each such annual allowance being equal to the initial allowance.
(4)
Notwithstanding subsections (1) and (2), in respect of a motor car to which this subsection applies —
(a)
the initial allowance to be made under subsection (1) shall be calculated on an amount equal to the capital expenditure incurred in respect of that motor car or $50,000, whichever is the less;
(b)
the annual allowance to be made under subsection (2)
shall be calculated on the basis that the original cost of that motor car is the capital expenditure incurred or $50,000, whichever is the less;
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(c)
the aggregate of the initial and annual allowances to be made under this subsection for all the relevant years of assessment shall not exceed $50,000.
(5)
Subsection (4) applies to a motor car which is constructed or adapted for the carriage of not more than seven passengers (exclusive of the driver) and the weight of which unladen does not exceed 3,000 kilograms.