Amendments to tax treatment of intangible assetsnconstantinou
On 17 July 2020, the Income Tax Law was amended with respect to the treatment of intangible assets. The amendment if applicable from 1 January 2020 and affects the following:
- When disposing an intangible asset, the obligation to prepare a balancing statement is abolished. As a result, no balancing addition or disposal would be included in the taxpayer’s income tax return which means that any profit from disposal of such intangible assets is exempt from corporate income tax.
- The taxpayer has the option not to claim capital allowances in a given year. Any unclaimed capital allowances are claimed over the remaining useful life of the asset and thus increase the capital allowances claimed in later years.
It should be noted that the above relate to intangible assets except goodwill and assets qualifying for the current IP regime.