CAPITAL ALLOWANCE IN NIGERIA("TAX DEPRECIATION")

Capital allowance is allowance given to tax payer for capital expenditure("fixed asset") incurred during the year. 

The rate of capital allowance is  fixed by law.

CAPITAL ALLOWANCE  involves the following

1. Initial allowance- once in a life of qualify asset. Full amount  even when not upto 12months= 

2.Annual allowance- claimed annually. prorated in accordance to month. (cost-I.A)/N

3.Balancing charge = sales proceed > TWDV

4. Balancing charge= Sales Proceed <TWDV

5.Investment Allowance as specified  by law


CAPITAL ALLOWANCE is allowance given by tax authority for ‘fixed asset’ used in the business .
is used in replacement of depreciation.

The rate is stipulated by law.

Capital allowance is restricted to 2/3 of  assessable profit for any year of assessment except for agricultural and manufacturing business.

 

 

GET TAX PLANNING TEMPLATE FOR 70,000NGN  WHATSAPP 234 8098810999, 08067922530

 


Disclaimer: Obi Azubuike is not by this publication acting as a professional advisers and therefore not liable to any  damage whatsoever for your acting or refraining to act based on  this publication. Consult your professional for advice. 

copyright(c) 2020-Obi Azubuike

 




GET TAX PLANNING TEMPLATE FOR 70,000NGN  WHATSAPP 234 8098810999 08067922530


Disclaimer: Obi Azubuike is not by this publication acting as a professional advisers and therefore not liable to any  damage whatsoever for your acting or refraining to act based on  this publication. Consult your professional for advice. 

copyright(c) 2020-Obi Azubuike


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