Tax credit for investment in green field projects section 65g

Tax credit for investment in green field projects section 65g

Tax credit for investment in green field projects section 65g: A new section 64G was introduced in Tax Laws (Second Amendment) Ordinance 2021 dated 24.03.2021 and same has been made a part in Finance Bill 2021. Under the said section, an investment tax credit equal to 25% of the eligible investment amount, shall be allowed against tax payable including minimum tax and final tax:

“Eligible Investment means investment made in purchase and installation of new machinery, buildings, equipment, hardware and software, except self-created software and used capital

“Eligible person means”

Green field industrial undertaking as defined in clause (27A) of section 2 engaged in the following:

  1. the manufacture of goods or materials or the subjection of goods or materials to any process which substantially changes their original condition; or
  2. ship building

Provided that the person incorporated between the 30th day of June, 2019 and the 30th day of June, 2024 and the person is not formed by the splitting up or reconstitution of an undertaking already in existence or by transfer of machinery, plant or building from an undertaking established in Pakistan prior to commencement of the new business and is not part of an expansion project; and

industrial undertaking set up by the 30th day of June 2023 and engaged in the manufacture of plant, machinery, equipment and items with dedicated use (no multiple uses) for generation of renewable energy from sources like solar and wind, for a period of five years beginning from the date such industrial undertaking is set up.

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