Section 266: Chargeable profits and allowances.

1 The chargeable profits of any company for any accounting period shall be the amount of the assessable profits of that period after the deduction of any amount to be allowed in accordance with the provisions of this section, namely —
a the aggregate amount of capital allowances due to the company under the provisions of the Fifth Schedule to this Act for the accounting period; [Fifth Schedule.]
b the aggregate amount of all production allowances due to the company under the provisions of the Sixth Schedule to this Act for the accounting period; and; [Sixth Schedule.]
c in the case of acquisition costs of petroleum rights, the value of the rights and the value of the assets acquired shall be reported separately to the Service, provided that the value of the rights shall be eligible for annual allowance of 20% per annum and the value of the assets shall be depreciated based on the applicable depreciation rates for the respective assets, and there shall be a retention of 1% in the last year until the asset is disposed of.

2 In determining the chargeable profit, the total cost shall not exceed the cost-price ratio as determined in the Sixth Schedule to this Act. [Sixth Schedule]

3 The chargeable profits and allowances shall be determined separately for the two classes of assessable profits under section 267 (a) and (b) of this Act.