27. Section 19A of the principal Act is amended by inserting, immediately after subsection (14A), the following subsections:
“(14B) Subject to subsection (14C), this section (other than subsections (2) to (10C)) shall, with the necessary modifications, apply to a person carrying on any trade or business who incurs during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2013 (both years inclusive) capital expenditure on the provision of machinery or plant for any research and development undertaken by him directly in Singapore or by a research and development organisation on his behalf in Singapore, even though the machinery or plant is not for the purpose of that trade or business.
(14C) Section 14D(4) and (5) shall apply in relation to the allowance for the capital expenditure referred to in subsection (14B) as they apply in relation to the deduction of the expenditure and payments referred to in section 14D(1)(aa) and (c), subject to the following modifications:
(a)
a reference to the amount of the expenditure or payments is a reference to the amount of the allowance;
(b)
a reference to unabsorbed losses is a reference to unabsorbed allowances; and
(d)
a reference to a specified amount of the expenditure or payments is a reference to an amount computed in accordance with the following formula:
A | x | B, |
C |
where | A | is the amount of allowance that could have been made against the income of the person under subsection (14B) if the income had been subject to tax at the rate specified in section 43(1)(a); |
B | is the rate of tax specified in section 43(1)(a); and | |
C | is — | |
(i) in a case where the concessionary income (as defined in section 14D(5)) derived by the person from the trade or business carried on by him is subject to tax at a single concessionary rate of tax, that rate; or | ||
(ii) in a case where the concessionary income derived by the person from the trade or business carried on by him is subject to tax at 2 or more concessionary rates of tax, the higher or highest of those rates.”. |