* Take a special depreciation allowance
. This is allowed for qualified property placed in service after September 10, 2001.
The present value of depreciation allowance
is computed in Section 3.3 under the prevailing rules for this computation.
The property's basis and depreciation allowances
for the year of purchase and subsequent years are reduced to reflect this new deduction.
If the primary use of MACRS property changes, the depreciation allowance
for the year of change is determined as though the use had changed on the first day of the year of change.
Finally, the federal government allowed 5 years old cars to be imported under the personal baggage scheme instead of 3 years with depreciation allowance
of 1 per cent on the value.
Finally the Federal Government allowed 5 years old cars to be imported under the personal baggage scheme instead of 3 years with depreciation allowance
of 1% on the value.
Also of primary importance to the construction company owner is the fact that this bonus depreciation allowance
is allowed for Alternative Minimum Tax purposes.
Corporate cash flow isn't the issue, it's getting firms to spend it, he says, though the depreciation allowance
has caused a ripple effect throughout the industrial machinery sector as production has climbed and capacity utilization rates have risen.
Under the package approved by the ECC the import of second hand cars of more than 2 years has been banned and that the 25 per cent depreciation allowance
on second hand cars has also been withdrawn.
In Pakistan the tax code are such that the firms in the tax holidays region are not allowed to claim or defer accelerated depreciation allowance
but can claim normal depreciation allowance
only after the expiry of tax holidays period.
Specifically, no deduction is allowed for (1) any amount paid for new buildings or for permanent improvements that increase the value of the property or (2) any amount spent restoring property or in making good the exhaustion of property for which a depreciation allowance
has been made.
This will also allow importers to fully claim the 50 percent duty depreciation allowance
, at 1 percent/ month, that was previously capped at 36 percent due to age restriction and hence further lower their cost.