Question
TT Ltd. is a corporation carrying on business in Hong Kong and prepares its accounts to 31 March each year. During the year ended 31
TT Ltd. is a corporation carrying on business in Hong Kong and prepares its accounts to 31 March each year. During the year ended 31 March 2016, TT Ltd. conducted the following activities: It incurred $800,000 on the renovation of its showroom which was not newly acquired. No depreciation allowance, if allowable, has been claimed in this regard. It also purchased, with full cash payment of 200,000, a plastic manufacturing machinery specially and directly used for its manufacturing process. No depreciation allowance, if allowable, has been claimed in this regard. It cancelled a lease of a warehouse and thus paid $100,000 in compensation to the landlord of the warehouse. It made a payment of $500,000 to a retiring director who has agreed not to compete with taxpayer company after his retirement. It operates a recognized retirement scheme which is a defined contribution scheme. It paid a special contribution of $3,000,000 to the scheme. It paid a commission of $40,000 to an external service provider but did not disclose the service provider's identification and information such as full name, address, business registration number, relationship with taxpayer, etc. to the Inland Revenue Department. It purchased an unused industrial building including land from a property developer for $10,000,000 for use in its qualifying trade and business for the whole year. The cost of development to the property developer was $8,000,000, comprising cost of land $5,000,000 and cost of construction $3,000,000. No depreciation allowance, if allowable, has been claimed in this regard. Required: How much in total could TT Ltd. claim as deductible expense and/or deductible allowance in respect of the expenditures above for the year of assessment 2015/16? Support your answer with computation in an itemized format. |
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