Profits Tax -
Environmental Protection Expenditure
Section 16H to Section 16K of Inland Revenue Ordinance allows
deduction for expenditure incurred on environmental protection by a
person carrying on a trade or business as follows.
deduction is allowed for the expenditure incurred on purchase of
machinery and equipment. In other words, the deduction is
similar to that for prescribed
fixed asset under Section 16G.
Environmental protection machinery includes low-nose construction
machinery, air pollution machinery, waste treatment machinery,
waste water treatment machinery ... etc.
installation cost of the machinery, allow 20% deduction of the
installation cost in each of the 5
consecutive years of assessment from the year of purchase. In
other words, full deduction is spread over 5 years of
assessment, like deduction of
expenditure under Section 16F.