On 25/05/2013,
you requested for the version in force on 25/05/2013
incorporating all amendments published on or before 25/05/2013.
The closest version currently available is that of 16/12/2008.
34. The principal Act is amended by inserting, immediately after section 37F, the following sections:
37G.
—(1) Subject to this section, where any company incurs during the basis period for any year of assessment between the year of assessment 2010 and the year of assessment 2016 (both years inclusive) any incremental qualifying research and development expenditure, then there shall be allowed to that company, on due claim, a deduction against its assessable income computed in accordance with this section.
(2) For the purposes of this section, the company shall keep an account to be known as its research and development account.
(3) If —
(a)
the company derives any income chargeable to tax under this Act during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2013 (both years inclusive); and
(b)
the amount standing to its research and development account on the last day of that basis period is less than $450,000,
then there shall be credited to the research and development account on the last day of that basis period the lowest of —
(i)
an amount computed in accordance with the specified formula;
(ii)
the difference between $450,000 and the amount standing to the research and development account on the last day of that basis period; and
(iii)
$150,000.
(4) For the purposes of subsection (3), the specified formula means —
(A – B – C – D – E) x 50%, |
where | A | is the assessable income of the company for the year of assessment; |
B | is the amount of deduction allowed against the assessable income of the company under subsection (5) for the year of assessment (if applicable); | |
C | is the amount of investment allowance deducted under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) against the chargeable income of the company for the year of assessment (if any); | |
D | is the amount of qualifying deduction transferred to the company under section 37C (if any) and qualifying deduction allowed to the company under section 37E for the year of assessment (if any); and | |
E | is the amount of income of the company not charged to tax under section 43(6) or (6A) for the year of assessment. |
(5) Where on the first day of the basis period for any year of assessment between the year of assessment 2010 and the year of assessment 2016 (both years inclusive), the research and development account of the company is in credit, and —
(a)
the company has assessable income for that year of assessment; and
(b)
the company has incurred incremental qualifying research and development expenditure during that basis period,
then there shall be deducted from the assessable income of the company for that year of assessment an amount equal to the lowest of —
(i)
the incremental qualifying research and development expenditure incurred by that company during the basis period;
(ii)
the amount of credit standing in the research and development account as at the first day of the basis period; and
(iii)
the assessable income of the company for that year of assessment.
(6) As soon as an amount is deducted against the assessable income of a company under subsection (5), the research and development account shall be debited with such amount.
(7) Any deduction under this section shall so far as possible be made against the part of its assessable income that is subject to the highest rate of tax, and any remaining balance of the deduction shall so far as possible be made against the part of its assessable income that is subject to the next highest rate of tax, and so on.
(8) For the purpose of this section, the Minister may make regulations to give effect to or for carrying out the purposes of this section.
(9) A company to which a deduction has been given under this section shall deliver to the Comptroller a copy of the audited account made up to any date specified by him whenever called upon to do so by notice in writing.
(10) In this section, unless the context otherwise requires —
“assessable income”, in relation to a company for any year of assessment, means the remainder of its statutory income for the year of assessment after making the deductions under sections 37 and 37B;
“base qualifying research and development expenditure” means the amount of qualifying research and development expenditure incurred in the base year;
“base year” —
(a)
in relation to a company incorporated in the basis period relating to the year of assessment 2009 or any subsequent year of assessment, means the basis period in which the company is incorporated; or
(b)
in relation to any other company, means the basis period relating to the year of assessment 2008;
“incremental qualifying research and development expenditure”, in relation to the basis period for any year of assessment, means the excess of qualifying research and development expenditure incurred during the basis period relating to the year of assessment over the base qualifying research and development expenditure;
“qualifying research and development expenditure” means any research and development expenditure which ––
(a)
qualifies for deduction under section 14D;
(b)
is incurred in respect of research and development activities carried out in Singapore; and
(c)
is not funded by any grant or subsidy from the Government.
37H.
—(1) Subject to this section and such conditions as may be prescribed by the Minister by regulations, a qualifying start-up company may apply to the Comptroller for any of its first 3 years of assessment falling between the year of assessment 2009 and the year of assessment 2013 (both years inclusive) for a cash grant of the specified amount, or $20,250, whichever is the lower, if the qualifying start-up company —
(a)
has incurred at least $150,000 of qualifying research and development expenditure in the basis period relating to that year of assessment;
(b)
where the qualifying start-up company has commenced any trade or business before or in the basis period relating to that year of assessment, has incurred any tax adjusted loss in that basis period; and
(c)
carries on research and development in Singapore at the time the application under this section is made.
(2) An application made to the Comptroller under subsection (1) shall be —
(a)
made at the time of lodgment by the qualifying start-up company of a return of its income for that year of assessment or within such earlier or extended time as the Comptroller may allow; and
(b)
accompanied by a copy of the audited account of the qualifying start-up company for the basis period relating to that year of assessment, as well as such information and supporting documentation to be given in such form and manner as the Comptroller may specify.
(3) The specified amount for any year of assessment under subsection (1) shall be computed in accordance with the formula
A x 9%, |
Where | A | is — |
(a) where the qualifying start-up company has not commenced any trade or business, the lower of –– | ||
(i) the sum total of qualifying research and development expenditure incurred by the company in the basis period relating to that year of assessment and any amounts described under section 14DA(1)(a) and (b) for that year of assessment; and | ||
(ii) $225,000; or | ||
(b) where the qualifying start-up company has commenced any trade or business, the lowest of — | ||
(i) the tax adjusted loss of the company for the basis period relating to that year of assessment; | ||
(ii) the sum total of qualifying research and development expenditure incurred by the company in the basis period relating to that year of assessment and any amounts described under section 14DA(1)(a) and (b) for that year of assessment; and | ||
(iii) $225,000. |
(4) Where any tax, duty, interest or penalty is due under this Act, the Goods and Services Tax Act (Cap. 117A), the Property Tax Act (Cap. 254) or the Stamp Duties Act (Cap. 312) by the qualifying start-up company to the Comptroller of Income Tax, Comptroller of Goods and Services Tax, Comptroller of Property Tax or Commissioner of Stamp Duties, as the case may be, the amount of cash grant payable by the Comptroller to the company shall be reduced by the amount so due.
(5) Any amount reduced under subsection (4) shall be deemed to be tax, duty, interest or penalty paid by the qualifying start-up company under the relevant Act and shall (if it is due under an Act other than this Act) be paid by the Comptroller to the Comptroller of Goods and Services Tax, Comptroller of Property Tax or Commissioner of Stamp Duties, as the case may be.
(6) For the purposes of sections 14D(2) and 37(3)(a), the expenditure and loss incurred by a qualifying start-up company shall be reduced by the amount in respect of which a cash grant has been given to the company under subsection (1).
(7) Where a qualifying start-up company has not commenced any trade or business, any amount of expenditure in respect of which a cash grant has not been given to that company under subsection (1) shall not qualify for any cash grant under that subsection in any subsequent year of assessment.
(8) Where a company has received an amount under subsection (1) —
(a)
without having satisfied all of the requirements in that subsection; or
(b)
that is in excess of that which may be given to it under this section,
such amount shall be recoverable by the Comptroller from the company as a debt due to the Government.
(9) The amount recoverable under subsection (8) shall be payable at the place stated in a notice served by the Comptroller on the company within one month after the service of the notice.
(10) The Comptroller may, in his discretion and subject to such terms and conditions, including the imposition of interest, as he may impose, extend the time limit within which payment is to be made.
(11) Sections 87(1) and (2), 89(1) to (4) and 90 shall apply to the collection and recovery by the Comptroller of the amount recoverable under subsection (8) and any interest imposed under subsection (10) as they apply to the collection and recovery of tax, and for the purpose of such application, references in section 87(1) to the provisions of this Act relating to the collection and recovery of tax are references to sections 89(1) to (4) and 90.
(12) Where the Comptroller has recovered any amount under subsection (8), the amount of the expenditure or loss referred to in subsection (6) shall be increased by an amount determined in accordance with regulations made by the Minister under this subsection, unless disallowed by the Comptroller under subsection (13).
(13) The Comptroller may disallow the increase under subsection (12) if he is satisfied that the company has —
(a)
provided the Comptroller with any information or document, in connection with an application under subsection (1), which is false or misleading in a material particular; or
(b)
made use of any fraud, art or contrivance whatsoever or authorised the use of any such fraud, art or contrivance, in connection with an application under subsection (1).
(14) In this section —
“first 3 years of assessment”, in relation to a qualifying start-up company, means the year of assessment relating to the basis period during which the company is incorporated in Singapore and the 2 consecutive years of assessment immediately following that year of assessment;
“qualifying research and development expenditure” has the same meaning as in section 37G;
“qualifying start-up company” means any company —
(a)
which is incorporated in Singapore;
(b)
which has any of its first 3 years of assessment falling within the period from the year of assessment 2009 to the year of assessment 2013 (both years inclusive);
(c)
which is resident in Singapore for the year of assessment for which the company makes an application under subsection (1);
(d)
the total share capital of which is beneficially held directly by no more than 20 shareholders —
(i)
all of whom are individuals throughout the basis period for the year of assessment for which the company makes an application under subsection (1); or
(ii)
at least one of whom is an individual holding at least 10% of the total number of issued ordinary shares of the company throughout the basis period for the year of assessment for which the company makes an application under subsection (1);
“tax adjusted loss”, in relation to a qualifying start-up company, means any loss in its trade or business —
(a)
which is incurred in the basis period referred to in subsection (1)(b);
(b)
which, had it been a profit, would have been assessable under this Act; and
(c)
which is not deducted for the year of assessment to which the basis period relates because of insufficiency of statutory income of the qualifying start-up company.”.