INCOMES FROM USE OF PROPERTY
10.1 Royalty income:
This is income earned by a person for rights granted to others to use his intellectual properties. These properties include:
- Copyright, Literally, artistic or scientific works.
- ii) Cinematograph including film or tape used in radio or any other form of broadcasting.
iii) Patents, trademarks, designs, model, plan or formula.
- iv) Any industrial, commercial or scientific equipment or information concerning industrial commercial or scientific equipment.
Expenses will be allowed as long as they were incurred wholly and exclusively in earning such income.
Note:
- For non-residents the income is taxed at 20% with-holding tax which is a final tax. No expenses are allowed.
- For residents, a 5% withholding tax is first deducted before determining net royalty income. It is then deducted from gross tax liability of the resident individual as a tax credit.
10.2 Rent income
This is income earned by a person for rights granted to others to occupy his property. In determining the taxable rent income, all expenses incurred wholly and exclusively in earning such income are allowed (deducted) against such income. These expenses include the following:
- Bad debts and rental losses.
- Advertising and promotional costs of revenue nature.
- Legal costs and stamp duty on acquiring a lease of less than 99 years.
- Water and rates
- Management and Agency fees.
- Insurance
- Staff wages and salaries.
- Repairs and maintenance
- Structural alterations on the building necessary to maintain existing rent.
- Heating and lighting.
- Capital allowances as per the second schedule
Note
1) Any cost incurred with the intention to increase rent will be disallowed.
2) Any cost in respect of extension or replacement of the building or part thereof is not allowable.
3) All costs of a capital nature are not allowed.
4) For non-residents the income is taxed at a rate of 30% with-holding tax which is a final tax. No expenses are allowed.
