Long Title

Part I PRELIMINARY

Part II ADMINISTRATION

Part III IMPOSITION OF INCOME TAX

Part IV EXEMPTION FROM INCOME TAX

Part V DEDUCTIONS AGAINST INCOME

Part VI CAPITAL ALLOWANCES

Part VII ASCERTAINMENT OF CERTAIN INCOME

Part VIII ASCERTAINMENT OF STATUTORY INCOME

Part IX ASCERTAINMENT OF ASSESSABLE INCOME

Part X ASCERTAINMENT OF CHARGEABLE INCOME AND PERSONAL RELIEFS

Part XI RATES OF TAX

Part XII DEDUCTION OF TAX AT SOURCE

Part XIII ALLOWANCES FOR TAX CHARGED

Part XIV RELIEF AGAINST DOUBLE TAXATION

Part XV PERSONS CHARGEABLE

Husband and wife

Trustees, agents and curators

Part XVI RETURNS

Part XVII ASSESSMENTS AND OBJECTIONS

Part XVIII APPEALS

Part XIX COLLECTION, RECOVERY AND REPAYMENT OF TAX

Part XX OFFENCES AND PENALTIES

Part XXA Exchange of information under avoidance of double taxation arrangements and exchange of information arrangements

Part XXB INTERNATIONAL AGREEMENTS TO IMPROVE TAX COMPLIANCE

Part XXI MISCELLANEOUS

FIRST SCHEDULE Institution, authority, person or fund exempted

SECOND SCHEDULE Rates of tax

THIRD SCHEDULE

FOURTH SCHEDULE Name of bond, securities, stock or fund

FIFTH SCHEDULE Child relief

SIXTH SCHEDULE Number of years of working life of asset

SEVENTH SCHEDULE Advance rulings

EIGHTH SCHEDULE Information to be included in a request for information under Part XXA

Legislative History

Comparative Table

Comparative Table

Expenditure on research and development
14D.
—(1)  For the purpose of ascertaining the income of any person carrying on any trade or business and subject to subsection (4), the following expenditure incurred (other than any amount which is allowable as a deduction under section 14) by that person shall be allowed as a deduction:
(a)
expenditure incurred on research and development undertaken directly by him and related to that trade or business (except to the extent that it is capital expenditure on plant, machinery, land or buildings or on alterations, additions or extensions to buildings or in the acquisition of rights in or arising out of research and development);
(aa)
expenditure incurred during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2015 (both years inclusive) on research and development undertaken in Singapore directly by him and not related to that trade or business (except to the extent that it is capital expenditure on plant, machinery, land or buildings or on alterations, additions or extensions to buildings or in the acquisition of rights in or arising out of research and development);
(b)
payments made by that person to a research and development organisation for undertaking on his behalf in Singapore research and development related to that trade or business;
(ba)
payments made by that person to a research and development organisation for undertaking on his behalf, partly in Singapore and partly outside Singapore, research and development related to that trade or business;
(c)
payments made during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2015 (both years inclusive) by that person to a research and development organisation for undertaking on his behalf in Singapore research and development not related to that trade or business;
(d)
payments made by that person to a research and development organisation for undertaking on his behalf outside Singapore research and development related to that trade or business;
(e)
payments made by that person under any cost-sharing agreement during the basis period for the year of assessment 2012 or a subsequent year of assessment, in respect of research and development that is related to that trade or business (excluding any payment made by him for the right to become a party to the cost-sharing agreement), regardless of who undertakes the research and development so long as it is undertaken wholly or partly for himself or on his behalf; and
(f)
payments made by that person during the basis period for any year of assessment between the year of assessment 2012 and the year of assessment 2015 (both years inclusive), under any cost-sharing agreement in respect of research and development that is undertaken in Singapore and is not related to that trade or business (excluding any payment made by him for the right to become a party to the cost-sharing agreement), regardless of who undertakes the research and development so long as it is undertaken wholly or partly for himself or on his behalf.
[28/80; 3/89; 24/2000; 37/2002; 34/2008; 29/2010; 29/2012]
(1A)  The expenditure or payment referred to in subsection (1) shall not include any such expenditure or payment to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board.
[29/2010; 29/2012]
(2)  For the purposes of this section, any expenditure incurred by a person prior to the commencement of his trade or business shall be deemed to have been incurred by that person on the first day on which he carries on that trade or business.
(3)  For the purposes of subsection (1)(ba) or (d), a claim for deduction shall be allowed to a person only if —
(a)
there is an undertaking by the person that any benefit which may arise from the conduct of the research and development shall accrue to the person; and
(b)
the claim is made by the person in such manner and subject to such conditions as the Comptroller may require.
[37/2002; 34/2008; 29/2012]
(3A)  For the purposes of subsection (1)(e) in respect of research and development that is undertaken wholly or partly outside Singapore, a claim for deduction shall be allowed to a person only if —
(a)
there is an undertaking by the person that any benefit which may arise from the conduct of the research and development shall accrue, wholly or partly, to the person; and
(b)
the claim is made by the person in such manner and subject to such conditions as the Comptroller may require.
[29/2012]
(4)  The deduction of the expenditure and payments referred to in subsection (1)(aa), (c) and (f) shall be made in accordance with the following provisions:
(a)
if the person derives from the trade or business carried on by him both normal income and concessionary income, the amount of the expenditure or payments (after deducting any amount in respect of which an election for a cash payout has been made under section 37I) shall so far as possible be deducted against the normal income, and any remaining balance of the amount shall be treated as part of the unabsorbed losses in respect of the normal income to be deducted against the concessionary income in accordance with section 37B;
(b)
if the concessionary income referred to in paragraph (a) is subject to tax at 2 or more concessionary rates of tax, the deduction under section 37B of the remaining balance referred to in that paragraph shall so far as possible be made against the part of the concessionary income that is subject to tax at the higher or highest concessionary rate of tax, and the deduction under section 37B of any remaining balance shall so far as possible be made against the part of the concessionary income that is subject to tax at the lower or next lowest concessionary rate of tax, and so on;
(c)
if the person derives from the trade or business only concessionary income which is subject to tax at a single concessionary rate of tax, a specified amount of the expenditure or payments shall be deducted against the concessionary income;
(d)
if the person derives from the trade or business only concessionary income which is subject to tax at 2 or more concessionary rates of tax, a specified amount of the expenditure or payments shall so far as possible be deducted against the part of the concessionary income that is subject to the higher or highest concessionary rate of tax, and any remaining balance of the specified amount shall be treated as part of the unabsorbed losses in respect of that part of the concessionary income that is subject to the higher or highest concessionary rate of tax, to be deducted in accordance with section 37B against the rest of the concessionary income;
(e)
if the rest of the concessionary income referred to in paragraph (d) is subject to tax at 2 or more concessionary rates of tax, then paragraph (b) shall apply, with the necessary modifications, to the last-mentioned deduction in paragraph (d).
[34/2008; 29/2010; 29/2012]
(4A)  Where a person to whom deductions have been allowed for payments referred to in subsection (1)(e) or (f) becomes entitled to any royalty or other payments (in one lump sum or otherwise) for the use of or right to use any technology or know-how developed from the research and development activities conducted under the cost-sharing agreement, such royalty or payments shall be deemed to be income of that person that is derived from Singapore for the year of assessment which relates to the basis period in which he becomes entitled to the royalty or payments.
[29/2012]
(5)  In this section —
“concessionary income” means income that is subject to tax at a concessionary rate of tax;
“concessionary rate of tax” has the same meaning as in section 14C;
“cost-sharing agreement” means any agreement or arrangement made by 2 or more persons to share the expenditure of research and development activities to be carried out under the agreement or arrangement;
“normal income” means income that is subject to tax at the rate of tax specified in section 43(1)(a);
“specified amount”, in relation to any expenditure or payments, means an amount computed in accordance with the formula
where A
is the amount of the expenditure or payments (after deducting any amount in respect of which an election for a cash payout has been made under section 37I);
B
is the rate of tax specified in section 43(1)(a); and
C
is —
 
(a)
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 a single concessionary rate of tax, that rate; or
 
(b)
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.
[34/2008; 29/2010; 29/2012]