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Contents  

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THIRD SCHEDULE Repealed

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

 
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On 26/09/2017, you requested the version in force on 26/09/2017 incorporating all amendments published on or before 26/09/2017. The closest version currently available is that of 02/07/2017.
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PART V
DEDUCTIONS AGAINST INCOME
Deductions allowed
14.
—(1)  For the purpose of ascertaining the income of any person for any period from any source chargeable with tax under this Act (referred to in this Part as the income), there shall be deducted all outgoings and expenses wholly and exclusively incurred during that period by that person in the production of the income, including —
(a)
except as provided in this section —
(i)
any sum payable by way of interest; and
(ii)
any sum payable in lieu of interest or for the reduction thereof, as may be prescribed by regulations (including the restriction of the deduction of the sum in respect of money borrowed before the basis period relating to the year of assessment 2008),
upon any money borrowed by that person where the Comptroller is satisfied that such sum is payable on capital employed in acquiring the income;
(b)
rent payable by any person in respect of any land or building or part thereof occupied by him for the purpose of acquiring the income;
(c)
any expenses incurred for repair of premises, plant, machinery or fixtures employed in acquiring the income or for the renewal, repair or alteration of any implement, utensil or article so employed:
Provided that no deduction shall be made for the cost of renewal of any plant, machinery or fixture, which is the subject of an allowance under section 19 or 19A; or for the cost of reconstruction or rebuilding of any premises, buildings, structures or works of a permanent nature;
(d)
bad debts incurred in any trade, business, profession or vocation, which have become bad during the period for which the income is being ascertained, and doubtful debts to the extent that they are respectively estimated, to the satisfaction of the Comptroller, to have become bad during that period, notwithstanding that those bad or doubtful debts were due and payable before the commencement of that period:
Provided that —
(i)
all sums recovered during that period on account of amounts previously written off or allowed in respect of bad or doubtful debts, other than debts incurred before the commencement of the basis period for the first year of assessment under this Act, shall for the purposes of this Act be treated as receipts of the trade, business, profession or vocation for that period;
(ii)
the debts in respect of which a deduction is claimed were included as a trading receipt in the income of the year within which they were incurred;
(e)
any sum contributed by an employer to an approved pension or provident fund or society or any pension or provident fund constituted outside Singapore in respect of any of his employees engaged in activities relating to the production of the income of the employer, the contribution of which sum by the employer was obligatory by reason of any contract of employment or of any provision in the rules or constitution of the fund or society:
Provided that in the case of any contribution to the Central Provident Fund or any approved pension or provident fund designated by the Minister under section 39(8) —
(i)
a deduction in respect of any such contribution by an employer in respect of an employee for any period —
(A)
commencing on or after 1st September 2010 shall not exceed 15%;
(B)
commencing on or after 1st March 2011 shall not exceed 15½%;
(C)
commencing on or after 1st September 2011 shall not exceed 16%;
(D)
commencing on or after 1st January 2015 shall not exceed 17%,
of the remuneration paid by the employer to the employee for that period, and “remuneration” in this proviso means that part of an employee’s emoluments by reference to which his employer’s contributions are calculated;
[Act 37 of 2014 wef 27/11/2014]
(ii)
where any such fund or society is first established and a special contribution is made thereto by the employer whereby persons in his employment whose employment commenced prior to the establishment of the fund or society may qualify for the benefits thereunder in respect of such prior employment, the Comptroller may, when approving the fund or society, authorise such deductions in respect of that special contribution as he thinks fit;
(iii)
no deduction shall be allowed in respect of any sum contributed by an employer for the period on or after 1st January 1999 to the Central Provident Fund in respect of an employee who holds a professional visit pass or a work pass or who would be required to obtain such a pass if he were to work in Singapore:
And provided that no deduction shall be allowed in respect of any contribution or part thereof to a pension or provident fund constituted outside Singapore made in respect of an employee, if the employee has been exempted from tax on such contribution or part thereof under section 13N;
(f)
any sum contributed by an employer in any calendar year before 2013 to the medisave account maintained under the Central Provident Fund Act (Cap. 36) in respect of any of his employees engaged in activities relating to the production of the income of the employer, subject to a maximum deduction of the amount in subsection (1A) for that year for each employee:
Provided that no deduction shall be allowed in respect of any sum contributed by an employer for the period on or after 1st January 1999 to the medisave account maintained under the Central Provident Fund Act in respect of an employee who holds a professional visit pass or a work pass or who would be required to obtain such a pass if he were to work in Singapore;
(fa)
any voluntary contribution in cash made in 2011 or 2012 by a person of a description prescribed by the Minister for the purposes of this paragraph, to the medisave account of a self‑employed individual maintained under the Central Provident Fund Act, subject to a maximum deduction of the amount in subsection (1A) for that year for each individual:
Provided that the amount of voluntary contribution does not exceed the amount allowable under the Central Provident Fund Act and is within the medisave contribution ceiling prevailing at the time the contribution is made;
(fb)
any sum contributed by an employer in 2013 or any subsequent year to the medisave account maintained under the Central Provident Fund Act in respect of any of his employees engaged in activities relating to the production of the income of the employer, up to a maximum deduction of $1,500 for that year for each employee’s medisave account, less any previous contribution made to that medisave account in that year by that employer in his capacity as a person of a prescribed description under paragraph (fc) (if applicable) and that is deductible under that provision:
Provided that no deduction shall be allowed in respect of any sum contributed by an employer to the medisave account maintained under the Central Provident Fund Act in respect of an employee who holds a professional visit pass or a work pass or who would be required to obtain such a pass if he were to work in Singapore;
(fc)
any voluntary contribution in cash made in 2013 or any subsequent year by a person of a description prescribed by the Minister for the purposes of this paragraph, to the medisave account of a self-employed individual maintained under the Central Provident Fund Act, up to a maximum deduction of $1,500 for that year for each individual’s medisave account, less any previous contribution made to that medisave account in that year by the person of the prescribed description in his capacity as an employer under paragraph (fb) (if applicable) and that is deductible under that provision;
(g)
zakat, fitrah or any religious dues, payment of which is made under any written law; and
(h)
where the income is derived from the working of a mine or other source of mineral deposits of a wasting nature, such deductions in respect of capital expenditure as may be prescribed in rules made under section 7.
[37/75; 7/79; 28/80; 5/83; 7/85; 31/86; 1/90; 23/90; 2/92; 26/93; 11/94; 32/95; 1/98; 32/99; 24/2001; 21/2003; 49/2004; 30/2007; 53/2007; 34/2008; 29/2010; 22/2011; 29/2012; 19/2013]
(1A)  For the purposes of subsection (1)(f) and (fa), the maximum amount which may be deducted for contributions made in any year to the medisave account maintained under the Central Provident Fund Act of any individual is $1,500 less —
(a)
any deduction allowed under subsection (1)(f) for any previous contribution made by the same or another employer to that medisave account in that year; and
(b)
any deduction allowed under subsection (1)(fa) for any previous contribution made by the same or another person to that medisave account in that year.
[29/2012]
(2)  Notwithstanding subsection (1), payments made by way of compensation for injuries or death, salaries, wages or similar emoluments or death gratuities to an employee (or his legal representative) who is the husband, wife or child of —
(a)
any employer;
(b)
any partner of the firm in which that employee is employed;
(c)
any individual who by himself or with his spouse or child or all of them have the ability to control, directly or indirectly, the company in which that employee is employed; or
(d)
any individual whose spouse or child or all of them have the ability to control, directly or indirectly, the company in which that employee is employed,
shall be allowed as deductions only to the extent to which, in the opinion of the Comptroller, they are reasonable in amount having regard to the services performed by that employee.
[26/93]
(3)  Notwithstanding subsection (1), where outgoings and expenses falling within that subsection are incurred, whether directly or in the form of reimbursements, in respect of a motor car (whether or not owned by the person incurring the outgoings and expenses) to which this subsection applies, the sum to be allowed as a deduction shall be limited to the amount which bears to such outgoings and expenses the same proportion as $35,000 bears to the capital expenditure incurred by the owner in respect of the motor car, where such capital expenditure exceeds $35,000.
[7/79]
(3A)  Any deduction for the cost of renewal of a motor car to which subsection (3) applies shall not exceed $35,000.
(4)  Subsections (3) and (3A) shall apply to a motor car which is constructed or adapted for the carriage of not more than 7 passengers exclusive of the driver and the weight of which unladen does not exceed 3,000 kilograms and which —
(a)
was registered before 1st April 1998 as a business service passenger vehicle for the purposes of the Road Traffic Act (Cap. 276) but excludes such a motor car which is —
(i)
used principally for instructional purposes; and
(ii)
acquired by a person who carries on the business of providing driving instruction and who holds a driving school licence or driving instructor’s licence issued under that Act; or
(b)
[Deleted by Act 19 of 2013]
[32/99; 19/2013]
(5)  Notwithstanding subsection (1), where, in the basis period for any year of assessment, any employer (other than an employer who derives any income from any trade, business, profession or vocation which is wholly or partly exempt from tax or subject to tax at a concessionary rate of tax under this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86)) incurs medical expenses falling within that subsection in excess of the maximum allowable amount in that basis period, the amount of the excess medical expenses shall not be allowed as deductions.
[26/93; 34/2005; 34/2008]
(6)  Where, in the basis period for any year of assessment, any employer derives any income from any trade, business, profession or vocation which is wholly or partly exempt from tax or subject to tax at a concessionary rate of tax under this Act or the Economic Expansion Incentives (Relief from Income Tax) Act and incurs medical expenses in excess of the maximum allowable amount in that basis period, an amount equal to the excess medical expenses shall be deemed to be income of the employer chargeable to tax at the rate of tax under section 42(1) or 43(1), as the case may be, for that year of assessment.
[26/93; 34/2005; 34/2008]
(6A)  For the purpose of subsections (5) and (6), the maximum allowable amount in the basis period for any year of assessment shall be —
(a)
2% of the total remuneration of the employer’s employees in that basis period in a case where the employer has —
(i)
contributed the specified amount into the medisave accounts maintained under the Central Provident Fund of —
(A)
at least 20% of the number of local employees who are employed by him as at the first day of the basis period for that year of assessment, for every calendar month in that basis period they are employed by the employer; and
(B)
every local employee who commences his employment with him during the basis period for that year of assessment, for the calendar month he commences his employment and every subsequent calendar month in that basis period he is employed by the employer; or
(ii)
incurred expenses in or in connection with the provision of a specified insurance plan to cover, for every calendar month in the basis period for that year of assessment, the cost of medical treatment of at least 50% of the number of local employees who are employed by him as at the first day of that basis period; and
(b)
in any other case, the amount determined in accordance with the formula in subsection (6B).
[34/2005; 34/2008]
(6B)  For the purpose of subsection (6A)(b), the maximum allowable amount in any basis period shall be ascertained —
(a)
where the total amount of expenses incurred by the employer in providing qualifying insurance in that basis period is nil, in accordance with the formula
where A
is the lower of —
 
(i)
the total amount of medical expenses incurred by the employer for his employees in that basis period (excluding the total amount of general contributions made by the employer); and
 
(ii)
1% of the total remuneration of his employees in that basis period; and
B
is the lower of —
 
(i)
the total amount of general contributions made by the employer in that basis period; and
 
(ii)
the difference between 2% of the total remuneration of his employees in that basis period and A; and
(b)
where the total amount of expenses incurred by the employer in providing qualifying insurance in that basis period is not nil, in accordance with the formula
where C
is the lower of —
 
(i)
the total amount of expenses incurred by the employer in providing riders for his employees in that basis period; and
 
(ii)
1% of the total remuneration of his employees in that basis period; and
D
is the lower of —
 
(i)
the total amount of medical expenses incurred by the employer for his employees in that basis period (excluding the total amount of expenses incurred by the employer in providing riders for his employees); and
 
(ii)
the difference between 2% of the total remuneration of his employees in that basis period and C.
[34/2008]
(6C)  For the purpose of subsection (6B), a reference to expenses incurred by an employer in providing qualifying insurance excludes any reimbursement in cash by the employer of the employee for payment by the employee of premiums on such qualifying insurance.
[34/2008]
(7)  The references to medical expenses in subsections (5), (6) and (6B) shall be read as references to medical expenses which would, but for subsection (5), be allowable as deductions under this Act.
[26/93; 34/2008]
(8)  In this section —
“co-payment” means the part of the amount of any claim, after deducting the deductible, which a person insured under the MediShield Life Scheme or an integrated medical insurance plan has to bear under the Scheme or plan;
“deductible” means the amount of any claim which a person insured under the MediShield Life Scheme or an integrated medical insurance plan has to bear before the insurer becomes liable to make payment under the Scheme or plan;
“general contribution” means any contribution falling within subsection (1)(f) or (fb), as the case may be, which is not —
(a)
a contribution falling within subsection (6A)(a)(i); or
(b)
a sum paid by an employer to the medisave account maintained under the Central Provident Fund Act in respect of any of his employees as reimbursement of the employee for premiums paid or payable by the employee on a qualifying insurance;
[Act 34 of 2016 wef 28/11/2013]
“gross rate of pay” has the same meaning as in section 2 of the Employment Act (Cap. 91);
“integrated medical insurance plan” has the same meaning as in the regulations made under section 34(2)(j) of the MediShield Life Scheme Act 2015 or section 77(1)(k) of the Central Provident Fund Act;
“local employee” means a full-time or part-time employee who is a citizen or permanent resident of Singapore;
“medical expenses” means expenses incurred in or in connection with the provision of medical treatment and includes —
(a)
expenses incurred in or in connection with the provision of maternity health care, natal care, and preventive and therapeutic treatment;
(b)
expenses incurred in or in connection with the provision of a medical clinic by the employer;
(c)
cash allowance in lieu of medical expenses;
(d)
expenses incurred in or in connection with the provision of insurance against the cost of medical treatment; and
(e)
contributions which are deductible under subsection (1)(f) or (fb), as the case may be;
[Act 34 of 2016 wef 28/11/2013]
“medical treatment” includes all forms of treatment for, and procedures for diagnosing, any physical or mental ailment, infirmity or defect;
[Deleted by Act 4 of 2015 wef 01/11/2015]
“MediShield Life Scheme” means the MediShield Life Scheme referred to in section 3 of the MediShield Life Scheme Act 2015 and includes the MediShield Scheme established and maintained under section 53 of the Central Provident Fund Act as in force immediately before the date of commencement of section 37(7) of the MediShield Life Scheme Act 2015;
“part-time employee” has the same meaning as in section 66A of the Employment Act;
“qualifying insurance”, in relation to any basis period of an employer, means medical insurance under the MediShield Life Scheme or an integrated medical insurance plan that is provided by an employer to employees to cover the cost of medical treatment of —
(a)
at least 20% of the number of local employees who are employed by the employer as at the first day of the basis period; and
(b)
every local employee who commences his employment with the employer during the basis period,
for every calendar month or part thereof in the basis period that the employees are employed by the employer;
“remuneration” means any wage, salary, leave pay, fee, commission, bonus, gratuity, allowance, other emoluments paid in cash by or on behalf of an employer and contributions to any approved pension or provident fund by any employer which are allowable as deductions under this Act, but does not include any director’s fee, medical expense, cash allowance in lieu of medical expenses and benefit-in-kind;
“rider” means any insurance under which the insurer of the rider is liable to pay in full or in part the deductible or co-payment relating to the MediShield Life Scheme or an integrated medical insurance plan;
“specified amount”, in relation to any calendar month, means —
(a)
in the case of a full-time employee who falls under subsection (6A)(a)(i), an amount equal to at least 1% of the employee’s gross rate of pay for the calendar month, subject to a minimum contribution of $16 per calendar month;
(b)
in the case of a part-time employee who falls under subsection (6A)(a)(i), an amount equal to at least 1% of the employee’s gross rate of pay for the calendar month;
“specified insurance plan” means a medical insurance plan sponsored by an employer that —
(a)
confers hospitalisation benefits during the period of employment of an employee and up to a period of 12 months immediately after the employee leaves his employment for any reason; and
(b)
treats the employee as being continuously insured when he is employed by another employer who provides him with an insurance plan that confers the hospitalisation benefits described in paragraph (a).
[26/93; 32/95; 34/2005; 34/2008]
Deduction for costs for protecting intellectual property
14A.
—(1)  Subject to this section, where a person carrying on a trade or business has incurred —
(a)
patenting costs during the period from 1st June 2003 to the last day of the basis period for the year of assessment 2010 (both dates inclusive); or
[Act 37 of 2014 wef 27/11/2014]
(b)
qualifying intellectual property registration costs during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2020 (both years inclusive),
[Act 37 of 2014 wef 27/11/2014]
for the purposes of that trade or business, there shall be allowed to him a deduction of the amount of such costs.
[29/2010]
(1A)  Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2011 or the year of assessment 2012, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under subsection (1), a deduction for qualifying intellectual property registration costs incurred for the purposes of those trades and businesses, computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2011, the lower of the following:
(i)
such costs incurred during the basis period for that year of assessment;
(ii)
$800,000; and
(b)
for the year of assessment 2012, the lower of the following:
(i)
such costs incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $800,000 the lower of the amounts specified in paragraph (a)(i) and (ii).
[22/2011]
(1B)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under subsection (1), a deduction for qualifying intellectual property registration costs incurred for the purposes of those trades and businesses, computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2013, the lower of the following:
(i)
such costs incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2014, the lower of the following:
(i)
such costs incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2015, the lower of the following:
(i)
such costs incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(1BA)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under subsection (1), a deduction for qualifying intellectual property registration costs incurred for the purposes of those trades and businesses, computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2016, the lower of the following:
(i)
such costs incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2017, the lower of the following:
(i)
such costs incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2018, the lower of the following:
(i)
such costs incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[Act 37 of 2014 wef 27/11/2014]
(1C)  In subsection (1A), the amount under paragraph (a)(ii) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2012, and the balance under paragraph (b)(ii) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011.
[22/2011]
(1D)  In subsection (1B) —
(a)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
for the avoidance of doubt, no deduction shall be made from the substituted amount in subsection (1B)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (1B)(a)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2013, and no deduction shall be made from the substituted amount in subsection (1B)(c)(ii) of the lower of the amounts specified in subsection (1B)(b)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2014.
[22/2011]
(1DA)  In subsection (1BA) —
(a)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
to avoid doubt, no deduction shall be made from the substituted amount in subsection (1BA)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (1BA)(a)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2016, and no deduction shall be made from the substituted amount in subsection (1BA)(c)(ii) of the lower of the amounts specified in subsection (1BA)(b)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2017.
[Act 37 of 2014 wef 27/11/2014]
(1E)  For the purposes of subsections (1A), (1B) and (1BA), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred qualifying intellectual property registration costs in respect of such firms for the purposes of his trade or business, the deduction that may be allowed to him for those costs in respect of all his trades and businesses shall not exceed the amount computed in accordance with subsection (1A), (1B) or (1BA) (as the case may be) for that year of assessment.
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(1F)  For the purposes of subsections (1A), (1B) and (1BA), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred qualifying intellectual property registration costs for the purposes of its trade or business, the aggregate of the deductions that may be allowed to all the partners of the partnership for those costs in respect of all the trades and businesses of the partnership shall not exceed the amount computed in accordance with subsection (1A), (1B) or (1BA) (as the case may be) for that year of assessment.
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2)  The claim for deduction under subsection (1), (1A), (1B) or (1BA) shall be allowed to a person only if —
(a)
there is an undertaking by the person that he would be the proprietor of the patent or registered trade mark, the registered owner of the registered design or the grantee of the plant variety, as the case may be, when the patent is granted, the trade mark or design is registered or the plant variety is granted protection; and
(b)
the claim is made by the person in such manner and subject to such conditions as the Comptroller may require.
[29/2010]
[Act 37 of 2014 wef 27/11/2014]
(3)  For the purposes of this section, any patenting costs or qualifying intellectual property registration costs, as the case may be, 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 he carries on that trade or business but a deduction for these is subject to section 14Z.
[21/2003; 29/2010]
[Act 34 of 2016 wef 25/03/2016]
(4)  Where a person to whom a deduction for patenting costs or qualifying intellectual property registration costs, as the case may be, has been allowed under subsection (1) sells, transfers or assigns in the basis period for any year of assessment all or any part of the rights for which such patenting costs or qualifying intellectual property registration costs, as the case may be, were incurred, the person shall be deemed to have derived an amount of income for that year of assessment equal to the price at which the rights were sold, transferred or assigned or the deduction which has been allowed under subsection (1), whichever is less.
[21/2003; 29/2010]
(5)  For the purposes of subsection (4), where there is more than one sale, transfer or assignment of any part of the rights for which such patenting costs or qualifying intellectual property registration costs, as the case may be, were incurred, the total amount deemed as income shall not exceed the total amount of deduction previously allowed under subsection (1).
[21/2003; 29/2010]
(5A)  Where —
(a)
a deduction has been made to any person under subsection (1A), (1B) or (1BA) in respect of any qualifying intellectual property registration costs; and
[Act 37 of 2014 wef 27/11/2014]
(b)
the person sells, transfers or assigns all or any part of the qualifying intellectual property rights or the application for the registration or grant of the qualifying intellectual property rights for which such costs were incurred, within a period of one year from the date of filing of the application,
the deduction allowed under subsection (1A), (1B) or (1BA) (as the case may be) shall be deemed as income of the person for the year of assessment relating to the basis period in which the sale, transfer or assignment occurs.
[29/2010]
[Act 37 of 2014 wef 27/11/2014]
(6)  In this section —
“patenting costs” means the fees paid to —
(a)
the Registry of Patents in Singapore or an equivalent registry outside Singapore for the —
(i)
filing of a patent;
(ii)
search and examination report on the application for a patent; or
(iii)
grant of a patent; and
(b)
any registered patent agent for —
(i)
applying for any patent in Singapore or elsewhere;
(ii)
preparing specifications or other documents for the purposes of the Patents Act (Cap. 221) or the patents law of any other country; or
(iii)
giving advice on the validity or infringement of the patent;
“qualifying intellectual property registration costs” means the fees paid to —
(a)
the Registry of Patents, Registry of Trade Marks, Registry of Designs or Registry of Plant Varieties in Singapore or an equivalent registry outside Singapore for the —
(i)
filing of an application for a patent, for the registration of a trade mark or design, or for the grant of protection of a plant variety;
(ii)
search and examination report on the application for a patent;
(iii)
examination report on the application for grant of protection of a plant variety; or
(iv)
grant of a patent; and
(b)
any person acting as an agent for —
(i)
applying for any patent, for the registration of a trade mark or design, or for the grant of protection of a plant variety, in Singapore or elsewhere;
(ii)
preparing specifications or other documents for the purposes of the Patents Act, the Trade Marks Act (Cap. 332), the Registered Designs Act (Cap. 266), the Plant Varieties Protection Act (Cap. 232A) or the intellectual property law of any other country relating to patents, trade marks, designs or plant varieties; or
(iii)
giving advice on the validity or infringement of any patent, registered trade mark, registered design or grant of protection of a plant variety;
“qualifying intellectual property right” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of any patent, registered trade mark or design, or grant of protection of a plant variety;
“registered patent agent” has the same meaning as in the Patents Act.
[21/2003; 29/2010]
(7)  In this section, “patenting costs” and “qualifying intellectual property registration costs” exclude any expenditure 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]
Further deduction for expenses relating to approved trade fairs, exhibitions or trade missions or to maintenance of overseas trade office
14B.
—(1)  Subject to this section, where the Comptroller is satisfied that the expenses specified in subsection (2) have been incurred by an approved firm or company resident in or having a permanent establishment in Singapore for the primary purpose of —
(a)
promoting the trading of goods or the provision of services; or
(b)
the provision of services in connection with the use of any right under a master franchise or master intellectual property licence where the firm or company is the holder of the franchise or licence,
there shall be allowed a further deduction of the amount of such expenses in addition to the amount allowed under section 14.
[31/98]
(2)  The expenses referred to in subsection (1) are —
(a)
expenses in establishing, maintaining or otherwise participating in —
(i)
a trade fair, trade exhibition, trade mission or trade promotion activity held or conducted outside Singapore; or
(ii)
an approved trade fair or trade exhibition held in Singapore;
(b)
expenses in maintaining an approved overseas trade office; or
(c)
market development expenditure for the carrying out of any approved marketing project.
[31/98; 29/2012]
(2A)  For the purposes of subsection (1), the firm or company need not be an approved firm or approved company to be allowed a deduction under that subsection in respect of expenses referred to in subsection (2)(a) which are incurred at any time from 1st April 2012 to 31st March 2020 (both dates inclusive) for the primary purpose of promoting the trading of goods or the provision of services, provided that the aggregate of —
(a)
the expenses for which the deduction is so allowed; and
(b)
the expenditure for which a deduction is allowed to the firm or company under section 14K(1A),
does not exceed $100,000 for each year of assessment.
[29/2012]
[Act 34 of 2016 wef 01/04/2016]
(3)  The Minister or such person as he may appoint may specify the maximum amount of expenditure (or any item thereof) to be allowed under subsection (1), other than expenses that are the subject of a claim for deduction under subsection (2A).
[26/93; 31/98; 7/2007; 29/2012]
(4)  No deduction shall be allowed under this section in respect of —
(a)
any expenses which are not allowed as deductions under section 14;
(b)
travelling, accommodation and subsistence expenses or allowances for —
(i)
more than 2 employees taking part in the trade fair, trade exhibition, trade mission or trade promotion activity, being one held or conducted overseas; or
(ii)
more than the approved number of employees taking part in the approved marketing project;
(c)
any expenses relating to an approved overseas trade office —
(i)
which are incurred in the establishment of the approved overseas trade office;
(ii)
by way of remuneration, travelling, accommodation and subsistence expenses or allowances for more than the approved number of employees of the approved overseas trade office;
(iii)
which are specifically excluded as a condition for the approval of the overseas trade office under this section;
(iv)
which are incurred after the end of the approved number of years from the date of establishment of the approved overseas trade office; or
(v)
which are incurred by a firm or company having a permanent establishment subject to tax in the country in which the approved trade office is established;
(d)
any expenses incurred during the basis period for a year of assessment by a firm or company if —
(i)
any part of its income for that year of assessment is exempt or partly exempt from tax under section 13A, 13F, 13S or 13V;
(ii)
any part of its income for that year of assessment is subject to tax at a concessionary rate of tax under section 43C, 43E, 43G, 43J, 43P, 43Q, 43W, 43ZA, 43ZB, 43ZC, 43ZF or 43ZG or the regulations made thereunder; or
[Act 2 of 2016 wef 01/04/2015]
(iii)
it is given tax relief under Part II, III or IIIB of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) for that year of assessment, or is given an investment allowance under Part X of that Act for that year of assessment; or
(e)
any expenses to the extent they are or are to be subsidised by a grant or subsidy from the Government or a statutory board.
[26/93; 31/98; 32/99; 22/2011; 29/2012]
(4A)  Notwithstanding subsection (4), the Minister or such person as he may appoint may, in any particular case, subject to such conditions precedent and conditions subsequent as he may impose, allow a deduction of any expenses referred to in subsection (4)(c)(v) provided that they are not also expenses referred to in subsection (4)(c)(i), (ii), (iii) or (iv).
[22/2011]
[Act 2 of 2016 wef 01/07/2015]
(5)  Despite subsection (4), the Minister or such person as the Minister may appoint may, in any particular case, and subject to such conditions precedent and conditions subsequent as the Minister or appointed person may impose, allow a deduction of any expenses referred to in subsection (4)(d).
[Act 2 of 2016 wef 01/07/2015]
(6)  If the firm or company fails to comply with a condition subsequent imposed under subsection (4A) or (5), the deduction allowed to the firm or company under that subsection is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the non-compliance.
[Act 2 of 2016 wef 01/07/2015]
(7)  In relation to a deduction under this section, a condition is a condition subsequent if or to the extent that it can only be satisfied after the deduction is allowed, and a condition is a condition precedent if or to the extent that it is not a condition subsequent; and accordingly a condition may, depending on the circumstances, be either a condition precedent or a condition subsequent.
[Act 2 of 2016 wef 01/07/2015]
(8)  [Deleted by Act 19 of 2013]
(9)  [Deleted by Act 19 of 2013]
(10)  Notwithstanding anything in this section, where it appears to the Comptroller that in any year of assessment any further deduction which has been allowed under this section or section 14E or 14L ought not to have been so allowed, the Comptroller may, within the year of assessment or within 4 years after the expiration thereof, make such assessment or additional assessment upon the firm or company as may be necessary in order to make good any loss of tax.
[19/2013]
(11)  In this section —
“approved” means approved by the Minister or such person as he may appoint;
“market development expenditure” means —
(a)
approved expenses directly attributable to the carrying out of market research or obtaining of market information, including any feasibility study;
(b)
expenses in respect of advertisements placed in approved media;
(c)
expenses incurred on approved promotion campaigns; or
(d)
approved expenses incurred in the design of packaging, or in the certification of goods or services where such certification is carried out by an approved person;
“master franchise” means any agreement under which the franchisor authorises or permits the franchisee to use in Singapore or overseas a business system owned or controlled by the franchisor, including the sub-franchising of the business system;
“master intellectual property licence” means any licence under which the licensor authorises or permits the licensee to use in Singapore or overseas the rights under a patent, copyright, trade mark, design or know-how, including the sub-licensing of the same.
[32/95; 31/98]
(12)  No approval shall be granted under this section after 31st March 2020.
[22/2011]
[Act 34 of 2016 wef 01/04/2016]
14C.  [Deleted by Act 34 of 2016 wef 29/12/2016]
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 2025 (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);
[Act 37 of 2014 wef 27/11/2014]
(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 2025 (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;
[Act 37 of 2014 wef 27/11/2014]
(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 2025 (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]
[Act 37 of 2014 wef 27/11/2014]
(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 but a deduction for this is subject to section 14Z.
[Act 34 of 2016 wef 25/03/2016]
(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” means the rate of tax in accordance with —
(a)
any order made under section 13(12);
(b)
section 43C (in respect of those relating to offshore general insurance business only), 43E, 43G, 43I, 43J, 43N, 43P, 43Q, 43R, 43U, 43W, 43X, 43Y, 43Z, 43ZA, 43ZB, 43ZC, 43ZD, 43ZE, 43ZF, 43ZG or 43ZH, or the regulations made under any of them, as the case may be; or
(c)
section 19J(5C) or (5E) or 19KA(1)(b) (as the case may be) of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86);
[Act 34 of 2016 wef 29/12/2016]
“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]
Enhanced deduction for qualifying expenditure on research and development
14DA.
—(1)  Subject to this section, for the purpose of ascertaining the income of a person carrying on any trade or business during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2025 (both years inclusive), there shall be allowed in respect of all his trades and businesses, in addition to the deductions allowed under section 14D, a deduction for expenditure or payments for research and development undertaken by him, of an amount computed in accordance with the following formula:
where U
is the amount of qualifying expenditure incurred during the basis period on any local research and development undertaken directly by the person, including on that part undertaken in Singapore of any mixed research and development undertaken directly by that person, but excluding any 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; and
V
is the aggregate of the following:
 
(a)
the amount referred to in subsection (2A) of payments made during the basis period by the person to a research and development organisation for undertaking local research and development on his behalf, including for that part undertaken in Singapore of any mixed research and development that is undertaken by a research and development organisation on his behalf; and
 
(b)
the amount referred to in subsection (2A) of payments made during the basis period (being the basis period for the year of assessment 2012 or a subsequent year of assessment) by the person under a cost-sharing agreement (excluding any payment made by him for the right to become a party to the cost-sharing agreement) —
 
(i)
for any local research and development; or
 
(ii)
for that part of any mixed research and development that is undertaken in Singapore,
 
regardless of who undertakes the research and development so long as it is undertaken wholly or partly for himself or on his behalf.
[22/2011; 29/2012]
[Act 37 of 2014 wef 27/11/2014]
(2)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on any trade or business during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), there shall be allowed in respect of all his trades and businesses, in addition to the deductions allowed under subsection (1) and section 14D, a deduction for expenditure or payments for research and development undertaken by him, of —
(a)
an amount computed in accordance with the formula
(b)
if the aggregate of U, V, W and X exceeds the specified amount for the year of assessment, an amount computed in accordance with the formula
where U and V
have the same meanings as in subsection (1);
W
is the amount of qualifying expenditure incurred during the basis period on any foreign research and development undertaken directly by the person, including on that part undertaken outside Singapore of any mixed research and development undertaken directly by that person, but excluding any 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;
X
is the aggregate of the following:
 
(a)
the amount referred to in subsection (2A) of payments made during the basis period by the person to a research and development organisation for undertaking any foreign research and development on his behalf, including for that part undertaken outside Singapore of any mixed research and development that is undertaken by a research and development organisation on his behalf; and
 
(b)
the amount referred to in subsection (2A) of payments made during the basis period (being the basis period for any year of assessment between the year of assessment 2012 and the year of assessment 2018 (both years inclusive)) by the person under a cost-sharing agreement (excluding any payment made by him for the right to become a party to the cost-sharing agreement) —
 
(i)
for any foreign research and development; or
 
(ii)
for that part of any mixed research and development that is undertaken outside Singapore,
 
regardless of who undertakes the research and development so long as it is undertaken wholly or partly for himself or on his behalf;
Y
is the whole or any part of the sum of U and V which the person has elected for inclusion in the computation of the deduction under this paragraph, which when aggregated with Z does not exceed the specified amount; and
Z
is the whole or any part of the sum of W and X which the person has elected for inclusion in the computation of the deduction under this paragraph, which when aggregated with Y does not exceed the specified amount.
[22/2011; 29/2012]
[Act 37 of 2014 wef 27/11/2014]
(2A)  The amount of any of the payments in the definitions of V and X in subsections (1) and (2) is —
(a)
if more than 60% of all the payments made during the basis period to the research and development organisation or under the cost-sharing agreement to which the definition applies are qualifying expenditure, the actual amount of the qualifying expenditure; or
(b)
in all other cases, 60% of all such payments,
and where there is more than one research and development organisation or cost-sharing agreement, the aggregate of all the amounts computed in this manner of the payments to every organisation or under every agreement.
[29/2012]
(2B)  In subsections (1) and (2) —
“foreign research and development” means research and development that is undertaken outside Singapore, and that is related to the trade or business of the first-mentioned person in subsection (1);
“local research and development” means research and development that is undertaken in Singapore;
“mixed research and development” means research and development that is undertaken partly in Singapore and partly outside Singapore, and that is related to the trade or business of the first-mentioned person in subsection (1) or (2), as the case may be.
[29/2012]
(3)  The election under subsection (2)(b) shall be made at the time of lodgment of the return of income for the year of assessment or within such further time as the Comptroller may, in his discretion, allow.
[22/2011]
(4)  The specified amount referred to in subsection (2)(b) is —
(a)
for the year of assessment 2011, $800,000;
(b)
for the year of assessment 2012, the balance after deducting from $800,000 the subsection (2) amount for the year of assessment 2011;
(c)
for the year of assessment 2013, $1,200,000;
(d)
for the year of assessment 2014, the balance after deducting from $1,200,000 the subsection (2) amount for the year of assessment 2013;
[Act 37 of 2014 wef 27/11/2014]
(e)
for the year of assessment 2015, the balance after deducting from $1,200,000 the subsection (2) amount for the year of assessment 2013 and the subsection (2) amount for the year of assessment 2014;
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(f)
for the year of assessment 2016, $1,200,000;
[Act 37 of 2014 wef 27/11/2014]
(g)
for the year of assessment 2017, the balance after deducting from $1,200,000 the subsection (2) amount for the year of assessment 2016; or
[Act 37 of 2014 wef 27/11/2014]
(h)
for the year of assessment 2018, the balance after deducting from $1,200,000 the subsection (2) amount for the year of assessment 2016 and the subsection (2) amount for the year of assessment 2017.
[Act 37 of 2014 wef 27/11/2014]
(5)  In subsection (4) —
(a)
the amount under paragraph (a) of that subsection shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2012;
(b)
the balance under paragraph (b) of that subsection shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011;
(c)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(d)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”;
[Act 37 of 2014 wef 27/11/2014]
(da)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
[Act 37 of 2014 wef 27/11/2014]
(db)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”;
[Act 37 of 2014 wef 27/11/2014]
(e)
for the avoidance of doubt, no deduction shall be made from the substituted amount in subsection (4)(d) or (e) of the subsection (2) amount for the year of assessment 2013 if the person does not carry on any trade or business during the basis period for that year of assessment, and no deduction shall be made from the substituted amount in subsection (4)(e) of the subsection (2) amount for the year of assessment 2014 if the person does not carry on any trade or business during the basis period for that year of assessment; and
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(f)
for the avoidance of doubt, no deduction shall be made from the substituted amount in subsection (4)(g) or (h) of the subsection (2) amount for the year of assessment 2016 if the person does not carry on any trade or business during the basis period for that year of assessment, and no deduction shall be made from the substituted amount in subsection (4)(h) of the subsection (2) amount for the year of assessment 2017 if the person does not carry on any trade or business during the basis period for that year of assessment.
[Act 37 of 2014 wef 27/11/2014]
(6)  For the purposes of subsections (4) and (5), “subsection (2) amount”, in relation to a year of assessment, means —
(a)
if the deduction allowed under subsection (2) for that year of assessment is the amount referred to in subsection (2)(a), the aggregate of U, V, W and X referred to in that subsection; or
(b)
if the deduction allowed under subsection (2) for that year of assessment is the amount referred to in subsection (2)(b), the aggregate of Y and Z referred to in that subsection.
[22/2011]
(7)  For the purpose of subsection (2)(b), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred qualifying expenditure or made payments in respect of such firms entitling him to a deduction under subsection (2), the deduction that may be allowed to him for those expenditure or payments in respect of all his trades and businesses shall not exceed the amount computed in accordance with subsection (2)(b) for that year of assessment.
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(8)  For the purpose of subsection (2)(b), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred qualifying expenditure or made payments entitling the partners of the partnership to a deduction under subsection (2), the aggregate of the deductions that may be allowed to all the partners of the partnership for the expenditure or payments in respect of all the trades and businesses of the partnership shall not exceed the amount computed in accordance with subsection (2)(b) for that year of assessment.
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(9)  Section 14D(4) and (5) shall apply in relation to the deduction for expenditure and payments for which a deduction is allowed under subsection (1) or (2) for research and development that is not related to the trade or business carried on by the person, as they apply in relation to the deduction for the expenditure and payments referred to in section 14D(1)(aa), (c) and (f), subject to the following modifications:
(a)
a reference to 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) in section 14D(4) is a reference to the remaining amount of the deduction under subsection (1) or (2) (as the case may be) after deducting the amount of the deduction under that subsection that corresponds to the qualifying expenditure or payments in respect of which an election for a cash payout has been made under section 37I;
(b)
a reference to the specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula
where A
is the remaining amount of the deduction under subsection (1) or (2) (as the case may be) after deducting the amount of the deduction under that subsection that corresponds to the qualifying expenditure or payments 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 —
 
(i)
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
 
(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.
[22/2011; 29/2012]
(10)  No deduction shall be allowed to a company under subsection (2) for any year of assessment if a deduction for any expenditure has been allowed under section 37G for that year of assessment.
[22/2011]
(11)  In this section —
“consumables” means any materials or items used in the research and development which, upon such use, are consumed or transformed in such a manner that they are no longer useable in their original form, but does not include utilities;
“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;
“qualifying expenditure” means any expenditure attributable to the research and development that is incurred on —
(a)
staff costs;
(b)
consumables; or
(c)
such other matter as the Minister may prescribe by regulations;
“staff costs” means any salary, wages and other benefits paid or granted in respect of employment (excluding director’s fees), whether in money or otherwise, to any employee for carrying out the research and development, and includes —
(a)
expenses incurred for training or certifying the employee for the purpose of carrying out the research and development; and
(b)
such other expenses as may be prescribed.
[22/2011; 29/2012]
(12)  In this section —
(a)
a reference to a person undertaking research and development includes —
(i)
a reference to a research and development organisation undertaking research and development on his behalf; and
(ii)
for any year of assessment between the year of assessment 2012 and the year of assessment 2025 (both years inclusive), a reference to any person undertaking research and development under a cost‑sharing agreement of which the first-mentioned person is a party, so long as the research and development is undertaken wholly or partly for the first-mentioned person or on his behalf; and
[Act 37 of 2014 wef 27/11/2014]
(b)
a reference to any expenditure or payment excludes 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.
[29/2012]
Further deduction for expenditure on research and development project
14E.
—(1)  Subject to this section, where the Comptroller is satisfied that —
(a)
a person carrying on any trade or business has incurred expenditure in undertaking directly by himself, or in paying a research and development organisation to undertake on his behalf, an approved research and development project in Singapore which is related to that trade or business;
(aa)
a person carrying on any trade or business has incurred during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2020 (both years inclusive) expenditure in undertaking directly by himself, or in paying a research and development organisation to undertake on his behalf, an approved research and development project in Singapore which is not related to that trade or business; or
[Act 37 of 2014 wef 27/11/2014]
(b)
a research and development organisation has incurred expenditure in undertaking an approved research and development project in Singapore and no deduction under this section has been allowed to another person in respect of any expenditure for that project or for another project of which that project forms a part,
there shall be allowed to that person or research and development organisation a further deduction of the amount of such expenditure in addition to the deduction allowed under section 14, 14D or 14DA, as the case may be.
[28/80; 3/89; 37/2002; 34/2008; 29/2010]
(2)  The Minister or such person as he may appoint may —
(a)
specify the maximum amount of the expenditure (or any item thereof) incurred to be allowed under subsection (1);
(b)
impose such conditions as he thinks fit when approving the research and development project; and
(c)
specify the period or periods for which deduction is to be allowed under this section.
[7/2007]
(3)  No deduction shall be allowed under this section in respect of any expenditure which is not allowed under section 14 or 14D.
(3A)  The total amount of deduction allowed under this section and sections 14, 14D and 14DA in respect of any expenditure incurred by a person for an approved research and development project in Singapore shall not exceed 200% of such expenditure incurred.
[34/2008]
(3AA)  No deduction shall be allowed to any person under this section in respect of any expenditure for which a deduction has been allowed under section 14DA(2).
[29/2010; 22/2011]
(3B)  Section 14D(4) and (5) shall apply in relation to the deduction of the expenditure and payments referred to in subsection (1)(aa), as they apply in relation to the deduction of the expenditure and payments referred to in section 14D(1)(aa), (c) and (f), subject to the following modifications:
(a)
a reference to the amount of the expenditure or payments is a reference to the amount of deduction that would have been allowed under this section for the expenditure or payments referred to in subsection (1)(aa) but for this subsection;
(b)
a reference to a specified amount of the expenditure or payments is a reference to an amount computed in accordance with the following formula:
where A
is the amount of the deduction referred to in paragraph (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.
[34/2008; 29/2012]
(3C)  No research and development project may be approved under this section after 31st March 2020.
[29/2012]
[Act 37 of 2014 wef 27/11/2014]
(4)  In this section, “approved” means approved by the Minister or such person as he may appoint.
[3/89; 37/2002]
Management expenses of investment companies
14F.
—(1)  Subject to this section, for the purpose of ascertaining the income for the basis period for any year of assessment of an approved investment company, there shall be allowed as a deduction any expenses for the management of its investments paid to any person who is a resident of or has a permanent establishment in Singapore and the amount of the deduction shall be ascertained by the formula
where A
is the total expenses for the management of its investments paid for that basis period;
B
is the total interest and dividends chargeable to tax in that basis period; and
C
is the total investment income (whether chargeable to tax or not) for that basis period.
[1/82]
(2)  The deduction allowed under this section for any year of assessment shall not exceed the total interest and dividends chargeable to tax of the approved investment company in the basis period for that year of assessment.
(3)  This section shall not apply to any investment company which has been approved under section 10A or any unit trust which has been approved under section 10B or any designated unit trust within the meaning of section 35(14).
[3/89; 23/90; 32/95]
[Act 37 of 2014 wef 01/09/2014]
(4)  In this section —
“approved” means approved by the Minister or such person as he may appoint;
“investment company” means any company whose business consists wholly or mainly in the making of investments and the principal part of whose income is derived therefrom, and includes any unit trust.
14G.  [Repealed by Act 21 of 2003]
Expenditure on building modifications for benefit of disabled employees
14H.
—(1)  Subject to subsections (2) and (3), where any person being the owner or lessee of any premises and carrying on a trade, business or profession at those premises has incurred approved expenditure on any addition or alteration to those premises for the purpose of facilitating the mobility or work of any disabled employee, there shall, in ascertaining the income of that person for the basis period during which the expenditure was incurred, be allowed as a deduction an amount equal to that expenditure.
[1/90]
(2)  Where any person has been allowed a deduction under subsection (1), no deduction shall be allowed under any other provision of this Act in respect of the expenditure for which the deduction was allowed.
(3)  Where a person has been allowed a deduction or deductions under this section amounting to $100,000, whether for one or more years of assessment, no further deduction shall be allowed to that person under this section.
(4)  In this section, “approved” means approved by the Minister or such person as he may appoint.
Provisions by banks and qualifying finance companies for doubtful debts and diminution in value of investments
14I.
—(1)  Subject to this section, for the purpose of ascertaining the income for the basis period for any year of assessment of a bank or qualifying finance company, there shall be allowed as a deduction an amount in respect of the provision for doubtful debts arising from its loans and the provision for diminution in the value of its investments in securities, made in that basis period.
[2/92; 28/96]
(2)  Where in the basis period for any year of assessment —
(a)
any amount of the provisions is written back, that amount shall be treated as having been allowed as a deduction under this section and shall be deemed to be a trading receipt of the bank or qualifying finance company for that basis period;
(b)
the bank or qualifying finance company permanently ceases to carry on business in Singapore, any provisions in the account of the bank or qualifying finance company as at the date of the cessation shall be deemed to be a trading receipt of the bank or qualifying finance company for that basis period.
[28/96]
(3)  The total amount deemed as trading receipts under subsection (2) shall not exceed the total amount of all deductions previously allowed under this section.
(4)  Where in a scheme of amalgamation involving 2 or more banks or finance companies whereby the whole or substantially the whole of the undertaking of any bank or finance company is transferred to another bank or finance company, the Minister may, if he thinks fit and on such conditions as he may impose, by order declare that any provisions in the account of the transferor bank or transferor finance company which have been transferred to the transferee bank or transferee finance company shall not be deemed under subsection (2)(b) to be a trading receipt of the transferor bank or transferor finance company; and the provisions so declared shall for the purposes of this section be treated as having been allowed to the transferee bank or transferee finance company as a deduction under this section.
[28/96]
(5)  Subject to subsection (6), the total amount of the provisions to be allowed as a deduction under this section for any year of assessment shall not exceed the lowest of —
(a)
25% of the qualifying profits for the basis period for that year of assessment;
(b)
1/2% of the prescribed value of the loans and investments in securities in the basis period for that year of assessment; and
(c)
3% of the prescribed value of the loans and investments in securities in the basis period for that year of assessment, less the total amount of all deductions previously allowed under this section which have not been deemed to be trading receipts under subsections (2) and (3).
[32/95; 1/98; 32/99]
(6)  No deduction shall be allowed for any year of assessment —
(a)
where there are no qualifying profits in the basis period for that year of assessment; or
(b)
where the total amount of all deductions previously allowed under this section, which have not been deemed to be trading receipts under subsections (2) and (3), is in excess of 3% of the prescribed value of the loans and investments in securities for the relevant basis period for that year of assessment.
[1/98; 32/99]
(7)  In this section —
“bank” means a bank licensed under the Banking Act (Cap. 19) or a merchant bank approved by the Monetary Authority of Singapore;
“capital funds” has the same meaning as in the Finance Companies Act (Cap. 108);
“loan” means any loan, advance or credit facility made or granted by a bank or qualifying finance company, including an overdraft except for —
(a)
loans to and placements with financial institutions in Singapore or any other country;
(b)
loans to the Government of Singapore or the government of any other country;
(c)
loans to and placements with the Monetary Authority of Singapore or the central bank or other monetary authority of any other country;
(d)
loans to statutory bodies or corporations guaranteed by the Government of Singapore or the government of any other country; and
(e)
such other loans or advances as may be prescribed;
“prescribed value of loans and investments in securities”, in relation to the basis period for any year of assessment, means the value (ascertained in such manner as the Comptroller may determine) of the loans and investments in securities (excluding any loan or investment in respect of which any deduction has been allowed under any other section of this Act) as at the last day of each month in that basis period added together and divided by the number of months in that basis period;
“provisions” means the provision for doubtful debts arising from the loans of a bank or qualifying finance company and the provision for diminution in the value of its investments in securities;
“qualifying finance company” means a company licensed under the Finance Companies Act to carry on financing business which has, in the basis period for any year of assessment for which the deduction under this section is first allowed, capital funds of not less than $50 million and a capital adequacy ratio of not less than 12% as determined under that Act;
“qualifying profit” means the net profit (excluding any extraordinary gain which is not subject to tax) as shown in the audited accounts of the bank or qualifying finance company before deducting provision for taxation, tax paid, any extraordinary loss not allowed as a deduction, provision for doubtful debts arising from loans and provision for diminution in value of investments in securities;
“securities” means —
(a)
debentures, stocks, shares, bonds or notes excluding —
(i)
those issued or guaranteed by the Government of Singapore or the government of any other country; and
(ii)
stocks and shares held by a bank or qualifying finance company and issued by any company in which 5% or more of the total number of its issued shares are beneficially owned, directly or indirectly, by the bank or qualifying finance company at any time during the basis period for the relevant year of assessment;
(b)
any right or option in respect of any debentures, stocks, shares, bonds or notes referred to in paragraph (a);
(c)
units in any unit trust within the meaning of section 10B;
(d)
units in a registered business trust within the meaning of section 36B;
(e)
any right or option in respect of any unit in a registered business trust within the meaning of section 36B; or
(f)
units in a real estate investment trust within the meaning of section 43(10).
[28/96; 34/2005; 29/2010]
14J.  [Repealed by Act 19 of 2013]
Further or double deduction for overseas investment development expenditure
14K.
—(1)  Where the Comptroller is satisfied that any investment development expenditure for the carrying out of an approved investment project overseas has been incurred by an approved firm or company resident in Singapore and carrying on business in Singapore, there shall be allowed —
(a)
where such expenditure is allowable as a deduction under section 14, a further deduction of the amount of such expenditure in addition to the deduction allowed under that section; and
(b)
where such expenditure is not allowable as a deduction under section 14, a deduction equal to twice the amount of such expenditure.
[26/93; 22/2011]
(1A)  For the purposes of subsection (1) —
(a)
the firm or company need not be an approved firm or approved company to be allowed a deduction under that subsection in respect of expenditure incurred at any time from 1st April 2012 to 31st March 2020 (both dates inclusive) that is directly attributable to the carrying out of any study to identify investment overseas; and
[Act 34 of 2016 wef 01/04/2016]
(b)
the firm or company need not seek approval for the investment project to which the expenditure relates,
provided that the aggregate of —
(i)
the expenditure for which the deduction is so allowed; and
(ii)
the expenses for which a deduction is allowed to the firm or company under section 14B(2A),
does not exceed $100,000 for each year of assessment.
[29/2012]
(2)  The Minister or such person as he may appoint may —
(a)
specify the maximum amount of investment development expenditure for the carrying out of an approved investment project overseas (or any item thereof) to be allowed under subsection (1), other than expenditure that is the subject of a claim for deduction under subsection (1A); and
(b)
impose such conditions as he thinks fit when approving the investment project for which the deduction is to be allowed under this section.
[22/2011; 29/2012]
(2A)  The sum of —
(a)
the amount of expenditure allowed as a deduction or a further deduction to a firm or company under subsection (1); and
(b)
any amount of expenditure allowed as a deduction or a further deduction to the firm or company under section 14KA(1),
must not exceed $1 million for each year of assessment.
[Act 2 of 2016 wef 01/07/2015]
(3)  No deduction shall be allowed under this section in respect of —
(a)
travelling, accommodation and subsistence expenses or allowances for —
(i)
more than 2 employees taking part in any study to identify investment overseas; or
(ii)
more than the approved number of employees taking part in any feasibility or due diligence study on any approved investment overseas;
(b)
any expenditure incurred during the basis period for a year of assessment by a firm or company if —
(i)
any part of its income for that year of assessment is exempt or partly exempt from tax under section 13A, 13F, 13S or 13V;
(ii)
any part of its income for that year of assessment is subject to tax at a concessionary rate of tax under section 43C, 43E, 43G, 43J, 43P, 43Q, 43W, 43ZA, 43ZB, 43ZC, 43ZF or 43ZG or the regulations made thereunder; or
[Act 2 of 2016 wef 01/04/2015]
(iii)
it is given tax relief under Part II, III or IIIB of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) for that year of assessment, or is given an investment allowance under Part X of that Act for that year of assessment; or
(c)
any expenditure to the extent it is or is to be subsidised by a grant or subsidy from the Government or a statutory board.
[29/2012]
(4)  Despite subsection (3), the Minister or such person as the Minister may appoint may, in any particular case, and subject to such conditions precedent and conditions subsequent as the Minister or appointed person may impose, allow a deduction of any expenditure referred to in subsection (3)(b).
[Act 2 of 2016 wef 01/07/2015]
(5)  If the firm or company fails to comply with a condition subsequent imposed under subsection (4), the deduction allowed to the firm or company under that subsection is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the non‑compliance.
[Act 2 of 2016 wef 01/07/2015]
(5A)  In relation to a deduction under this section, a condition is a condition subsequent if or to the extent that it can only be satisfied after the deduction is allowed, and a condition is a condition precedent if or to the extent that it is not a condition subsequent; and accordingly a condition may, depending on the circumstances, be either a condition precedent or a condition subsequent.
[Act 2 of 2016 wef 01/07/2015]
(6)  Section 14B(10) shall apply, with the necessary modifications, to any firm or company to which a deduction is allowed under subsection (1).
[19/2013]
(7)  In this section —
“approved” means approved by the Minister or such person as he may appoint;
“investment development expenditure” means expenses directly attributable to the carrying out of —
(a)
any study to identify investment overseas; and
(b)
any feasibility or due diligence study on any approved investment overseas.
[22/2011]
(8)  No approval shall be granted under this section after 31st March 2020.
[22/2011]
[Act 34 of 2016 wef 01/04/2016]
Further or double deduction for salary expenditure for employees posted overseas
14KA.
—(1)  Where the Comptroller is satisfied that —
(a)
an approved firm or company resident and carrying on business in Singapore has incurred, at any time between 1 July 2015 and 31 March 2020 (both dates inclusive), salary expenditure specified for it under subsection (7) for its employees posted to an overseas establishment of the firm or company; and
(b)
the firm or company has satisfied the conditions precedent imposed under subsection (6) for a deduction under this section,
then there is to be allowed to the firm or company —
(i)
where such expenditure is allowable as a deduction under section 14, a further deduction of the amount of such expenditure in addition to the deduction allowed under that section; or
(ii)
where such expenditure is not allowable as a deduction under section 14, a deduction equal to twice the amount of such expenditure.
(2)  No deduction is to be allowed under subsection (1) for salary expenditure that is incurred more than 3 years after either of the following dates:
(a)
the date the overseas establishment is incorporated, established or formed;
(b)
if the overseas establishment (being a company) is an overseas establishment of the approved firm or company as a result of any shareholding of the approved firm or company in the establishment, but the firm or company did not hold any shares in the overseas establishment on the date of the establishment’s incorporation, the earliest date on which the firm or company acquires any shares in the overseas establishment.
(3)  Subject to subsection (4), the amount of salary expenditure allowed as a deduction for a year of assessment under subsection (1) must not exceed the amount specified for the firm or company under subsection (8).
(4)  The sum of —
(a)
the amount of expenditure allowed as a deduction or a further deduction to a firm or company under subsection (1); and
(b)
any amount of expenditure allowed as a deduction or a further deduction to the firm or company under section 14K(1),
must not exceed $1 million for each year of assessment.
(5)  The Minister or such person as the Minister may appoint may approve a firm or company for the purposes of claiming a deduction under subsection (1).
(6)  When approving a firm or company under subsection (5), the Minister or appointed person may impose conditions precedent and conditions subsequent for a deduction under this section.
(7)  When approving a firm or company under subsection (5), the Minister or appointed person must specify the salary expenditure for which the firm or company may be allowed the deduction by reference to —
(a)
the employees for whom the expenditure is incurred;
(b)
the overseas establishment in which they work;
(c)
the work which they carry out in the overseas establishment; and
(d)
the period in which the expenditure is incurred.
(8)  When approving a firm or company under subsection (5), the Minister or appointed person may also specify the maximum amount of expenditure for which the deduction is allowed.
(9)  No approval may be granted under subsection (5) after 31 March 2020.
(10)  No deduction may be allowed under subsection (1) in respect of —
(a)
any expenditure incurred during the basis period for a year of assessment by a firm or company if —
(i)
any part of its income for that year of assessment is exempt or partly exempt from tax under section 13A, 13F, 13S or 13V;
(ii)
any part of its income for that year of assessment is subject to tax at a concessionary rate of tax under section 43C, 43E, 43G, 43J, 43P, 43Q, 43W, 43ZA, 43ZB, 43ZC, 43ZF or 43ZG or the regulations made under any of those sections; or
(iii)
it is given tax relief under Part II, III or IIIB of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) for that year of assessment, or is given an investment allowance under Part X of that Act for that year of assessment; or
(b)
any expenditure to the extent it is or is to be subsidised by a grant or subsidy from the Government or a statutory board.
(11)  Despite subsection (10), the Minister or such person as the Minister may appoint may, in any particular case, subject to such conditions precedent and conditions subsequent as the Minister or appointed person may impose, allow a deduction of any expenditure referred to in subsection (10)(a).
(12)  A firm or company is not entitled to a deduction under subsection (1) for any salary expenditure if and to the extent that an overseas establishment of the firm or company has been allowed at any time a deduction for it under any law relating to income tax or tax of a similar character of a country outside Singapore.
(13)  Despite anything in this section, where it appears to the Comptroller that in any year of assessment any deduction which has been allowed under this section ought not to have been allowed, the Comptroller may, within the year of assessment or within 4 years after the expiry of that year of assessment, make such assessment or additional assessment upon the firm or company as may be necessary to make good any loss of tax.
(14)  If a condition subsequent imposed under subsection (6) is not complied with in respect of any deduction allowed to a firm or company under subsection (1) or part of such deduction, the deduction or part of the deduction is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the non‑compliance.
(15)  If a condition subsequent imposed under subsection (11) is not complied with, the deduction allowed to the firm or company under that subsection is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the non‑compliance.
(16)  Where a firm or company has been allowed a deduction under subsection (1) even though it is not entitled to it or a part of it by reason of subsection (12), the deduction or part of the deduction is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the facts by reason of which the firm or company is not entitled to the deduction or part of it.
(17)  If, at any time after a firm or company has been allowed a deduction under subsection (1) for any salary expenditure, the firm or company is reimbursed for any amount of the expenditure, the amount of the deduction that corresponds to the expenditure reimbursed is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the reimbursement.
(18)  In this section —
“overseas establishment”, in relation to an approved firm or company, means any of the following:
(a)
a branch, representative office, or subsidiary of the firm or company that is established, formed or incorporated in a country outside Singapore;
(b)
a partnership of which the firm or company is a partner, that is established or formed in a country outside Singapore;
(c)
such other entity as the Minister or appointed person approves as an overseas establishment of the firm or company at the time of the approval of the firm or company under subsection (5);
“salary expenditure”, in relation to an employee of a firm or company, means expenditure comprising wages and salary for the employee, but excludes any bonus, commission, gratuity, leave pay, perquisite, allowance, or any other payment (whether in cash or kind) prescribed under section 7.
(19)  In this section, a firm or company is treated as having incurred salary expenditure for its employees posted to an overseas establishment of the firm or company, if —
(a)
it directly incurs that amount of expenditure for which it is not reimbursed; or
(b)
the overseas establishment directly incurs that amount of expenditure and the firm or company is liable to reimburse the overseas establishment for it, and the incurring of the expenditure and of the liability both occur —
(i)
when the firm or company is an approved firm or company resident and carrying on business in Singapore; and
(ii)
in the period between 1 July 2015 and 31 March 2020 (both dates inclusive).
(20)  In a case referred to in subsection (19)(b), the date on which salary expenditure is treated as incurred for the purposes of subsection (2) is the later of the date it is incurred by the overseas establishment and the date the firm or company incurs the liability to reimburse the overseas establishment.
(21)  In relation to a deduction under this section, a condition is a condition subsequent if or to the extent that it can only be satisfied after the deduction is allowed, and a condition is a condition precedent if or to the extent that it is not a condition subsequent; and accordingly a condition may, depending on the circumstances, be either a condition precedent or a condition subsequent.
[Act 2 of 2016 wef 01/07/2015]
Further deduction for expenses incurred in relocation or recruitment of overseas talent
14L.  The Minister may by regulations provide that, for the purpose of ascertaining the income of any person or class of persons carrying on a trade, profession or business, there shall be allowed to such person or class of persons a further deduction, in addition to the deduction allowed under section 14, of any prescribed expenses incurred in relocating or recruiting any prescribed employee from outside Singapore to be employed in Singapore by the person or class of persons.
[31/98]
Deduction for hotel refurbishment expenditure
14M.
—(1)  Where any person carrying on a hotel trade or business at any hotel premises proposes to carry out a project for any refurbishment of the hotel premises, he may apply to the Minister, or such person as he may appoint, on or before 30th June 2003 for that project (which shall be completed on or before 30th June 2006) to be approved for the purposes of claiming a deduction under this section in respect of expenditure incurred by him on the refurbishment project.
[21/2003]
(2)  Where the Minister, or such person as he may appoint, considers it expedient in the public interest to do so, he may approve the refurbishment project subject to such terms and conditions as he may impose.
[32/99]
(3)  Every approval given under this section shall specify —
(a)
the qualifying period during which the approved refurbishment project is to be carried out;
(b)
the qualifying expenditure and the maximum amount thereof to be allowed as a deduction under this section; and
(c)
a percentage, exceeding 100% but not exceeding 150%, of the qualifying expenditure to be allowed as a deduction under this section.
[32/99]
(4)  Where in the basis period for any year of assessment the person has incurred any qualifying expenditure on the approved refurbishment project, he shall be allowed, on due claim, for a period of 5 years (consecutive or otherwise) a deduction against the income from his hotel trade or business computed in accordance with subsection (5).
[32/99]
(5)  The amount of deduction under subsection (4) for any year of assessment shall be ascertained by the formula
where A
is the percentage referred to in subsection (3)(c); and
B
is the amount of qualifying expenditure incurred.
(6)  No deduction shall be allowed under this section in respect of —
(a)
any expenditure which is not incurred during the qualifying period referred to in subsection (3)(a);
(b)
any expenditure which was incurred before 1st July 1998; or
(c)
any year of assessment relating to any basis period during which the hotel premises are not used for the purposes of a hotel trade or business of the person who incurs the qualifying expenditure.
[32/99]
(7)  Where any person has been allowed a deduction under this section in respect of any qualifying expenditure, no deduction shall be allowed under any other provision of this Act in respect of the expenditure for which the deduction was allowed.
[32/99]
(8)  [Deleted by Act 19 of 2013]
(9)  [Deleted by Act 19 of 2013]
(10)  [Deleted by Act 19 of 2013]
(11)  [Deleted by Act 19 of 2013]
(12)  [Deleted by Act 19 of 2013]
(13)  [Deleted by Act 19 of 2013]
(14)  [Deleted by Act 19 of 2013]
(15)  [Deleted by Act 19 of 2013]
(16)  [Deleted by Act 19 of 2013]
(17)  [Deleted by Act 19 of 2013]
(18)  During the qualifying period referred to in subsection (3)(a) or within 5 years after the date of completion of the approved refurbishment project, a person who has been allowed any deduction under this section shall not, without the written approval of the Minister or such person as he may appoint —
(a)
sell, lease out or otherwise dispose of any asset in respect of which a deduction has been allowed under this section;
(b)
cease to use the hotel premises or any part thereof for his hotel trade or business; or
(c)
sell, lease out or otherwise dispose of the hotel premises or any part thereof.
[32/99]
(19)  Where any of the events referred to in subsection (18) occurs in the basis period for any year of assessment, the person shall be deemed to have derived an amount of income for that year of assessment equal to the total amount of deduction which has been allowed under this section in respect of the assets or any part of the hotel premises to which the event relates.
[32/99]
(20)  Notwithstanding subsection (19), the Minister or such person as he may appoint may, subject to such terms and conditions as he may impose and upon any application by the person deemed to have derived income under that subsection, reduce the amount of income so deemed.
[32/99]
(21)  Where any deduction allowed under this section is in respect of any capital expenditure incurred by a person on any machinery or plant and where at any time after 5 years from the date of completion of the approved refurbishment project any of the events referred to in section 20(1) occurs in respect of that machinery or plant, section 20(1) to (3) shall apply, with the necessary modifications, and a balancing allowance or a balancing charge shall be made to or, as the case may be, on that person for the year of assessment in the basis period for which that event occurs.
[32/99]
(22)  For the purposes of subsection (21) —
(a)
any reference in section 20(1) to allowances made under section 19 or 19A shall be read as a reference to a deduction allowed under this section;
(b)
the amount of the capital expenditure on the provision of the machinery or plant still unallowed as at the time of the occurrence of the event shall be ascertained by the formula
where C
is the amount of capital expenditure incurred on the provision of the machinery or plant; and
D
is the number of years of assessment for which any deduction has been allowed under this section in respect of that capital expenditure; and
(c)
notwithstanding anything in section 20(3), in no case shall the amount on which a balancing charge is made on a person exceed an amount computed in accordance with the formula
where C and D
have the same meanings as in paragraph (b).
[32/99]
(23)  Notwithstanding anything in this section, where it appears to the Comptroller that in any year of assessment any deduction allowed under this section ought not to have been so allowed, the Comptroller may, in the year of assessment or within 4 years after the expiration thereof, make such assessment or additional assessment upon the person as may be necessary in order to make good any loss of tax.
[19/2013]
Deduction for upfront land premium
14N.
—(1)  Where the Comptroller is satisfied that an upfront land premium has been paid by a lessee to a relevant body in respect of a designated lease for the construction or use of a building or structure for the purposes of carrying on any qualifying activity in that building or structure, there shall, subject to this section, be allowed to the lessee, for each year of assessment in the basis period for which the qualifying activity is carried on, a deduction of an amount of such expenditure ascertained by the formula
where A
is the amount of upfront land premium paid; and
B
is the number of years of the term of the designated lease for which the upfront land premium was paid.
[32/99]
(2)  Where an assignee has incurred any expenditure in acquiring the remaining term of a designated lease for the construction or use of a building or structure for the purposes of carrying on any qualifying activity, there shall, subject to this section, be allowed to the assignee, for each year of assessment in the basis period for which the qualifying activity is carried on, a deduction of an amount of such expenditure ascertained by the formula
where C
is —
 
(a)
the residual expenditure immediately after the assignment; or
 
(b)
the upfront land premium at the time of the assignment as determined by the relevant body for the remaining term of the designated lease,
 
whichever is the lower; and
D
is the remaining number of years (excluding any part of a year) of the term of the designated lease for which the upfront land premium was paid.
[32/99]
(3)  Subsection (2) shall apply, with the necessary modifications, to any subsequent assignment of the remaining term of the designated lease.
[32/99]
(4)  The total amount of deductions to be allowed —
(a)
to a lessee under subsection (1), shall not exceed the amount of the upfront land premium paid by him to the relevant body in respect of the designated lease; and
(b)
to an assignee under subsection (2) or (3), as the case may be, shall not exceed the amount of C as ascertained in the formula in subsection (2).
[32/99]
(5)  Where more than 1/10 of the total built-up area of a building or structure constructed on any industrial land under a designated lease is not in use for any qualifying activity, no deduction under subsection (1), (2) or (3) shall be allowed in respect of such part of the building or structure which is not in use for any qualifying activity.
[32/99]
(6)  No deduction shall be allowed under this section to any person for any year of assessment if the building or structure constructed on any industrial land under a designated lease is not in use for any qualifying activity at the end of the basis period for that year of assessment.
[32/99]
(7)  The following provisions shall apply where a designated lease is assigned:
(a)
where the consideration received by the assignor for the remaining term of the designated lease is less than the residual expenditure immediately before the assignment, the difference shall be allowed as a deduction to the assignor for the year of assessment in the basis period in which he assigns the remaining term of the designated lease;
(b)
where the consideration received by the assignor for the remaining term of the designated lease is more than the residual expenditure immediately before the assignment, the difference shall be deemed to be income subject to tax under section 10(1)(g) and shall be included as income of the assignor for the year of assessment in the basis period in which he assigns the remaining term of the designated lease.
[32/99]
(8)  The amount deemed to be income of an assignor for the purposes of subsection (7)(b) shall not exceed the total amount of deduction allowed to the assignor under subsection (1), (2) or (3), as the case may be.
(9)  In this section —
“designated lease” means any lease in respect of any industrial land granted to a lessee by a relevant body —
(a)
for a period of 30 years or less during the period from 1st January 1998 to the last day of the basis period for the year of assessment 2003 of the lessee (both dates inclusive); or
[Act 37 of 2014 wef 27/11/2014]
(b)
for a period of 60 years or less on or after the first day of the basis period for the year of assessment 2004 of the lessee and before 28th February 2013,
and includes an assignment of such a lease;
“industrial land” means any land permitted to be used for industrial purposes under the Planning Act (Cap. 232);
“qualifying activity” means —
(a)
any activity in respect of any of the purposes referred to in section 18(1) other than the activities for purposes referred to in section 18(1)(h) and (i);
(b)
any activity in respect of any prescribed purposes under section 18(1)(j) other than any activity relating to postal services or to the organisation or management of exhibitions and conferences; and
(c)
any activity relating to the examination of motor vehicles for the purposes of section 90 of the Road Traffic Act (Cap. 276) and the rules made thereunder;
“relevant body” means —
(a)
the Housing and Development Board constituted under the Housing and Development Act (Cap. 129); or
(b)
the Jurong Town Corporation constituted under the Jurong Town Corporation Act (Cap. 150);
“residual expenditure”, in relation to an assignment of a designated lease, shall be the amount of expenditure available for deduction to the assignor reduced by —
(a)
the amount of any deduction allowed to the assignor under this section; and
(b)
the amount of any deduction not allowed to the assignor under subsection (5) or (6),
and increased by any amount deemed to be income of the assignor under subsection (7)(b);
“upfront land premium”, in relation to a designated lease, means the lump sum payment paid by a lessee to a relevant body at the commencement of the term of the designated lease.
[32/99; 21/2003]
Deduction for special reserve of approved general insurer
14O.
—(1)  The Minister may by regulations provide that, for the purpose of ascertaining the income of a general insurer approved by the Minister or such person as he may appoint from carrying on the business of insuring and reinsuring offshore risks, there shall be allowed for a period of 10 years a deduction for the prescribed amount of special reserves set aside by the approved general insurer for prescribed offshore risks.
[37/2002; 34/2005]
(2)  Regulations made under subsection (1) may provide for —
(a)
any amount transferred to the special reserve on an earlier date to be deemed to have been transferred out of the special reserve first;
(b)
the circumstances in which any amount which has been allowed as deduction under this section may be deemed as trading receipt for any basis period;
(c)
the adjustment of any amount deemed as trading receipt for any basis period in respect of any amount which has been allowed as deduction under this section; and
(d)
generally for giving full effect to or for carrying out the purposes of this section.
[37/2002]
(3)  In this section —
“insurer” has the same meaning as in section 43C;
“offshore risk” has the same meaning as in section 26.
[34/2005]
Deduction for treasury shares transferred under employee equity-based remuneration scheme
14P.
—(1)  Where a company transfers, in the basis period for the year of assessment 2007 or any subsequent year of assessment, treasury shares held by it to any person under a stock option scheme or a share award scheme by reason of any office or employment held in Singapore by that person, there shall be allowed a deduction to that company for that year of assessment.
[7/2007]
(2)  Subject to subsection (8), the amount of deduction to be allowed to a company under subsection (1) shall be the cost to the company of acquiring the treasury shares transferred to the person less any amount payable by that person for the treasury shares.
[7/2007]
(3)  For the purpose of subsection (2), the cost to the company of acquiring the treasury shares shall be determined by any of the methods referred to in subsection (4), being (if the company has previously been allowed a deduction under this section) the method consistently adopted by it when ascertaining its cost of acquiring shares under this section.
[22/2011]
(4)  The methods referred to in subsection (3) are as follows:
(a)
on the basis that the treasury shares acquired by the company at an earlier point in time are deemed to be transferred first;
(b)
on the basis of the formula
where A
is the number of the treasury shares transferred;
B
is the total number of treasury shares held by the company immediately before the transfer; and
C
is the total cost to the company of acquiring the treasury shares held by it immediately before the transfer;
(c)
on the basis of the aggregate cost of all treasury shares transferred under subsection (1) within every regular interval in the basis period during which the transfer in question occurred, where the cost of all treasury shares so transferred within a regular interval is ascertained by the formula
where D
is the total number of treasury shares transferred under subsection (1) within that interval;
E
is the total number of treasury shares held by the company at the end of the period equal in length to the regular interval immediately preceding that interval;
F
is the total number of treasury shares acquired by the company within that interval;
G
is the total cost to the company of acquiring the treasury shares held by it at the end of the period equal in length to the regular interval immediately preceding that interval; and
H
is the total cost to the company of acquiring treasury shares within that interval.
[22/2011]
(5)  Where any amount payable by a person for any treasury shares transferred to him exceeds the cost to the company of acquiring the treasury shares transferred as determined under subsection (3), the amount of the excess shall be credited to an account to be kept by the company for the purpose of this section.
[7/2007]
(6)  Where there is any balance in the account kept by the company under subsection (5) and any treasury shares are subsequently transferred by the company to any person under subsection (1), the cost to the company of acquiring the treasury shares as determined under subsection (3) shall be reduced —
(a)
where the amount of the balance is equal to or exceeds the amount of the cost, to zero; or
(b)
where the amount of the balance is less than the amount of the cost, by the amount of the balance,
and the amount of the reduction shall be debited to the account.
[7/2007]
(7)  For the purpose of this section, a company transfers treasury shares held by it to a person when the person acquires the legal and beneficial interest in the treasury shares.
[7/2007]
(8)  Where a holding company transfers treasury shares held by it to any person employed at any time by a subsidiary company of the holding company under a stock option scheme or a share award scheme —
(a)
no deduction shall be allowed to the holding company under subsection (1);
(b)
if any amount is paid or payable by the subsidiary company to the holding company for the transfer of the treasury shares, there shall be allowed to the subsidiary company for the year of assessment which relates to the basis period in which the shares are transferred or in which the payment to the holding company for the shares becomes due and payable (whichever is the later), a deduction under subsection (1) of the lower of —
(i)
the amount, less any amount paid or payable by the person for the treasury shares, to the extent the amount so paid or payable has not been deducted from the first-mentioned amount; and
(ii)
an amount equal to the cost to the holding company of acquiring the treasury shares transferred to that person as determined under subsection (8A) less any amount paid or payable by the person for the treasury shares; and
(c)
subsections (5) and (6) shall not apply to a company to which this subsection applies.
[7/2007; 22/2011]
(8A)  For the purpose of subsection (8)(b), the amount equal to the cost to the holding company of acquiring the treasury shares transferred to a person shall be determined —
(a)
in accordance with subsection (3); or
(b)
where the holding company is incorporated outside Singapore and the following conditions are satisfied, on the basis that the treasury shares acquired by the holding company at the latest point in time are deemed to be transferred first:
(i)
the basis is in accordance with the accounting policy of the group of companies of which the holding company is a member;
(ii)
if there are applicable accounting principles which are generally accepted in the country in which the holding company is incorporated, the basis is in accordance with those principles;
(iii)
the basis is consistently adopted by the holding company unless otherwise allowed by the Comptroller; and
(iv)
the Comptroller is satisfied that the basis is not adopted for the purposes of deriving any tax benefit or obtaining any tax advantage.
[34/2008]
(9)  In this section —
“holding company” and “subsidiary company” have the same meanings as in section 5 of the Companies Act (Cap. 50);
“regular interval”, in relation to a basis period, means one of a number of equal periods within the basis period —
(a)
where the aggregate of all of those equal periods is equal to the basis period; and
(b)
where the duration of each equal period —
(i)
in a case where the company has previously been allowed a deduction under this section, is the one previously adopted by the company for the purpose of this section; or
(ii)
in any other case, is any duration adopted by the company for the purpose of this section.
[7/2007; 22/2011]
Deduction for shares transferred by special purpose vehicle under employee equity-based remuneration scheme
14PA.
—(1)  Where —
(a)
a special purpose vehicle has acquired treasury shares or previously issued shares in a company and, in the basis period for the year of assessment 2012 or any subsequent year of assessment, transfers those shares to any person under a stock option scheme or a share award scheme by reason of any office or employment held in Singapore by that person in the company; and
(b)
payment by the company for the shares transferred to the person has become due and payable,
then the company shall be allowed a deduction for the relevant year of assessment of an amount referred to in subsection (2).
[22/2011]
(2)  The amount of deduction under subsection (1) is —
(a)
where the transferred shares are previously issued shares, the lower of the following:
(i)
the amount paid or payable by the company for the shares, less any amount paid or payable by the person for the shares, to the extent the amount so paid or payable has not been deducted from the first‑mentioned amount;
(ii)
the cost to the special purpose vehicle of acquiring the shares, less any amount paid or payable by the person for the shares; or
(b)
where the transferred shares are treasury shares, either —
(i)
the lowest of the following:
(A)
the amount paid or payable by the company to the special purpose vehicle for the shares, less any amount paid or payable by the person for the shares, to the extent the amount so paid or payable has not been deducted from the first‑mentioned amount;
(B)
the cost to the special purpose vehicle of acquiring the shares, less any amount paid or payable by the person for the shares to the extent the amount so paid or payable has not been deducted from the amount paid or payable by the special purpose vehicle to the company for those shares;
(C)
the cost to the company of acquiring the shares, less any amount paid or payable by the person for the shares; or
(ii)
where the amounts referred to in sub‑paragraph (i)(A) and (B) are both nil, the cost to the company of acquiring the shares less any amount paid or payable by the person for the shares.
[22/2011]
(3)  For the purposes of subsection (2)(a)(ii) and (b)(i)(B), the cost to the special purpose vehicle of acquiring the transferred shares shall be determined by any of the methods referred to in subsection (4), being (if the company has previously been allowed a deduction under this section for a transfer of shares by the special purpose vehicle) the method that is consistently adopted by the special purpose vehicle when ascertaining its cost of acquiring transferred shares under this section.
[22/2011]
(4)  The methods referred to in subsection (3) are as follows:
(a)
on the basis that the company’s shares acquired by the special purpose vehicle at an earlier point in time are deemed to be transferred first;
(b)
on the basis of the formula
where A
is the number of the transferred shares;
B
is the total number of the company’s shares held by the special purpose vehicle immediately before the transfer; and
C
is the total cost to the special purpose vehicle of acquiring the company’s shares held by it immediately before the transfer;
(c)
on the basis of the aggregate cost of all of the company’s shares transferred by the special purpose vehicle under subsection (1) within every regular interval in the basis period during which the transfer in question occurred, where the cost of all shares so transferred within a regular interval is ascertained by the formula
where D
is the total number of the company’s shares transferred by the special purpose vehicle under subsection (1) within that interval;
E
is the total number of the company’s shares held by the special purpose vehicle at the end of the period equal in length to the regular interval immediately preceding that interval;
F
is the total number of the company’s shares acquired by the special purpose vehicle within that interval;
G
is the total cost to the special purpose vehicle of acquiring the company’s shares held by it at the end of the period equal in length to the regular interval immediately preceding that interval; and
H
is the total cost to the special purpose vehicle of acquiring the company’s shares within that interval.
[22/2011]
(5)  For the purpose of subsection (2)(b)(i)(C) and (ii), the cost to the company of acquiring the transferred shares shall be determined by any of the methods referred to in section 14P(4) as modified in accordance with subsection (6), being (if the company has previously been allowed a deduction under this section) the method that is consistently adopted by the company when ascertaining its cost of acquiring transferred shares under this section.
[22/2011]
(6)  The methods referred to in section 14P(4) shall apply for the purposes of subsection (5) as if a reference to the transfer under section 14P were a reference to the transfer of the treasury shares by the company to the special purpose vehicle.
[22/2011]
(7)  Where —
(a)
a special purpose vehicle has acquired treasury shares or previously issued shares in the holding company of another company (referred to in this section as the subsidiary company) and, in the basis period for the year of assessment 2012 or any subsequent year of assessment, transfers those shares to a person under a stock option scheme or a share award scheme by reason of any office or employment held in Singapore by that person in the subsidiary company; and
(b)
payment by the subsidiary company for the shares transferred to the person has become due and payable,
then the subsidiary company shall be allowed a deduction for the relevant year of assessment of an amount referred to in subsection (8).
[22/2011]
(8)  The amount of deduction under subsection (7) is —
(a)
where the transferred shares are previously issued shares, the lower of the following:
(i)
the amount paid or payable by the subsidiary company for the shares, less any amount paid or payable by the person for the shares, to the extent the amount so paid or payable has not been deducted from the first‑mentioned amount;
(ii)
the cost to the special purpose vehicle of acquiring the shares, less any amount paid or payable by the person for the shares; or
(b)
where the transferred shares are treasury shares, either —
(i)
the lowest of the following:
(A)
the amount paid or payable by the subsidiary company for the shares, less any amount paid or payable by the person for the shares, to the extent the amount so paid or payable has not been deducted from the first-mentioned amount;
(B)
the cost to the special purpose vehicle of acquiring the shares, less any amount paid or payable by the person for the shares to the extent the amount so paid or payable has not been deducted from the amount paid or payable by the special purpose vehicle to the holding company for those shares;
(C)
the cost to the holding company of acquiring the shares, as determined in accordance with section 14P(8A), less any amount paid or payable by the person for the shares; or
(ii)
where the amount referred to in sub-paragraph (i)(B) is nil, the lower of the amounts referred to in sub‑paragraph (i)(A) and (C).
[22/2011]
(9)  For the purpose of subsection (8), the cost to the special purpose vehicle of acquiring the transferred shares shall be determined by any of the methods referred to in subsection (4) as modified in accordance with subsection (10), being (if the subsidiary company has previously been allowed a deduction under this section for a transfer of shares by the special purpose vehicle) the method that is consistently adopted by the special purpose vehicle when ascertaining its cost of acquiring shares under this section.
[22/2011]
(10)  The methods referred to in subsection (4) shall apply for the purposes of subsection (9) as if —
(a)
a reference to the company is a reference to the holding company; and
(b)
a reference to subsection (1) is a reference to subsection (7).
[22/2011]
(11)  For the purposes of this section, shares are transferred to a person when both the legal and beneficial interests in the shares are so transferred.
[22/2011]
(12)  No deduction shall be allowed to a company under this section if a deduction has already been allowed to the company under any other provision of this Act in respect of the transferred shares.
[22/2011]
(13)  In this section —
“group of companies” means 2 or more companies each of which is either a holding company or subsidiary of the other or any of the others;
“holding company” and “subsidiary” have the same meanings as in section 5 of the Companies Act (Cap. 50);
“previously issued shares”, in relation to a company, means shares previously issued by the company and acquired by the special purpose vehicle —
(a)
on a stock exchange in Singapore or elsewhere; or
(b)
from a person other than the company which issued the shares;
“regular interval”, in relation to a basis period, means one of a number of equal periods within the basis period —
(a)
where the aggregate of all of those equal periods is equal to the basis period; and
(b)
where the duration of each equal period —
(i)
in a case where the company or subsidiary company has previously been allowed a deduction under this section for a transfer of shares by the special purpose vehicle, is the one previously adopted by the special purpose vehicle for the purpose of this section; or
(ii)
in any other case, is any duration adopted by the special purpose vehicle for the purpose of this section;
“relevant year of assessment” means the year of assessment which relates to the basis period in which the later of the following occurs:
(a)
the transfer of the shares under subsection (1) or (7) (as the case may be) to the person under a stock option scheme or a share award scheme by reason of any office or employment held in Singapore by that person in the company or subsidiary company (as the case may be);
(b)
the payment by the company or subsidiary company (as the case may be) for the shares so transferred becomes due and payable;
“special purpose vehicle” means a trustee of a trust (when acting in such capacity) that is set up solely for the administration of a stock option scheme or share award scheme under which —
(a)
in the case of subsection (1), either —
(i)
shares in the company referred to in that subsection are to be used for the remuneration of a person by reason of any office or employment held by that person in the company; or
(ii)
shares in one company within a group of companies to which the company referred to in that subsection belongs, are to be used for the remuneration of a person by reason of any office or employment held by that person in a company within the same group of companies; or
(b)
in the case of subsection (7), shares in one company within a group of companies to which both the holding company and subsidiary company referred to in that subsection belong, are to be used for the remuneration of a person by reason of any office or employment held by that person in a company within the same group of companies.
[22/2011]
Deduction for renovation or refurbishment expenditure
14Q.
—(1)  Subject to this section, where any person carrying on a trade, profession or business has incurred on or after 16th February 2008 expenditure on any renovation or refurbishment works for the purposes of that trade, profession or business (referred to in this section as renovation or refurbishment expenditure), he may claim a deduction in respect of the renovation or refurbishment expenditure in accordance with this section.
[34/2008; 29/2012]
(2)  Any claim for renovation or refurbishment expenditure under this section shall be made at the time of lodgment of the return of income for the year of assessment relating to the basis period in which the expenditure is incurred or within such further time as the Comptroller may, in his discretion, allow.
[34/2008]
(3)  For the purposes of subsection (1) and subject to subsections (7), (8), (8A) and (9), a deduction is allowed for one‑third of the renovation or refurbishment expenditure for the basis period in which the expenditure was incurred and the balance is to be allowed by 2 equal deductions, one for each of the basis periods for the next 2 succeeding years of assessment.
[34/2008; 29/2012]
(3A)  Notwithstanding subsection (3), for the purposes of subsection (1) and subject to subsections (7), (8), (8A) and (9), where the renovation or refurbishment expenditure is incurred during the basis period relating to the year of assessment 2010 or 2011, a deduction is allowed for the year of assessment 2010 or 2011, as the case may be, for the full amount of the renovation or refurbishment expenditure so incurred, unless a person elects for the deduction to be allowed in accordance with subsection (3).
[27/2009; 29/2012]
(3B)  An election made by a person under subsection (3A) shall be irrevocable.
[27/2009]
(4)  For the purposes of this section, any renovation or refurbishment expenditure incurred by any person prior to the commencement of his trade, profession or business shall be deemed to have been incurred by that person on the first day he carries on that trade, profession or business but the deduction for this is subject to section 14Z.
[34/2008]
[Act 34 of 2016 wef 25/03/2016]
(5)  Where it appears to the Comptroller that a deduction under this section which has been allowed to any person in any year of assessment ought not to have been allowed by virtue of subsection (9)(a), there shall be deemed to be income of the person chargeable to tax, for the year of assessment in which the Comptroller discovers the incorrect claim, an amount equal to such deduction.
[34/2008]
(6)  For the years of assessment 2009 to 2012, a deduction under this section shall be made against income from the trade, profession or business for which the renovation or refurbishment expenditure was incurred after all other deductions under this Part have been allowed.
[34/2008; 29/2012]
(7)  A person shall not be entitled to —
(a)
a deduction for renovation or refurbishment expenditure under this section where a deduction or an allowance for that expenditure is allowed under any other provision of this Act;
(b)
a deduction for renovation or refurbishment expenditure under this section in any basis period subsequent to the basis period in which the person permanently ceases the trade, profession or business for which purpose the expenditure was incurred;
(c)
a deduction for any amount of renovation or refurbishment expenditure incurred by a person during a specified period that begins with the basis period for the year of assessment 2009 or 2010 that is in excess of $150,000 of such expenditure;
(d)
a deduction for any amount of renovation or refurbishment expenditure incurred by a person during a basis period within a specified period that begins with the basis period for the year of assessment 2011 that is in excess of —
(i)
in the case of the basis period for the year of assessment 2011, $150,000 of such expenditure;
(ii)
in the case of the basis period for the year of assessment 2012, the amount of such expenditure derived from the formula
where A is the lower of —
(A)
the renovation or refurbishment expenditure incurred by him during the basis period for the year of assessment 2011 which qualifies for the deduction; and
(B)
$150,000; and
(iii)
in the case of the basis period for the year of assessment 2013, the amount of such expenditure derived from the formula
where A
has the same meaning as in sub‑paragraph (ii); and
B
is the lower of —
 
(A)
the renovation or refurbishment expenditure incurred by him during the basis period for the year of assessment 2012 which qualifies for the deduction; and
 
(B)
$150,000 – A;
(e)
a deduction for any amount of renovation or refurbishment expenditure incurred by a person during a basis period within a specified period that begins with the basis period for the year of assessment 2012 that is in excess of —
(i)
in the case of the basis period for the year of assessment 2012, $150,000 of such expenditure;
(ii)
in the case of the basis period for the year of assessment 2013, the amount of such expenditure derived from the formula
where A is the lower of —
(A)
the renovation or refurbishment expenditure incurred by him during the basis period for the year of assessment 2012 which qualifies for the deduction; and
(B)
$150,000; and
(iii)
in the case of the basis period for the year of assessment 2014, the amount of such expenditure derived from the formula
where A
has the same meaning as in sub‑paragraph (ii); and
B
is the lower of —
 
(A)
the renovation or refurbishment expenditure incurred by him during the basis period for the year of assessment 2013 which qualifies for the deduction; and
 
(B)
$300,000 – A; or
(f)
a deduction for any amount of renovation or refurbishment expenditure incurred by a person during a specified period that begins with the basis period for the year of assessment 2013 or any subsequent year of assessment that is in excess of $300,000 of such expenditure.
[34/2008; 29/2012; 19/2013]
(8)  In subsection (7)(c) to (f), “specified period” means a period of 3 consecutive basis periods beginning with the basis period for the year of assessment in which a deduction is first allowed to the person under this section, or any successive period of 3 consecutive basis periods.
[29/2012]
(8A)  Subsection (7)(c) to (f) shall apply for the purpose of determining the total amount of the deductions to be allowed to all the partners of a partnership carrying on a trade, profession or business, for the renovation or refurbishment expenditure incurred by the partnership, as if —
(a)
references in those provisions to an amount of renovation or refurbishment expenditure incurred by a person were references to an amount of such expenditure incurred by the partnership; and
(b)
references in those provisions to a specified period were references to a period of 3 consecutive basis periods beginning with the basis period for the year of assessment in which a deduction is first allowed to any partner of the partnership under this section for the renovation or refurbishment expenditure incurred by the partnership, or any successive period of 3 consecutive basis periods.
[29/2012]
(9)  No deduction shall be allowed to a person under this section for any renovation or refurbishment expenditure relating to —
(a)
unless otherwise approved by the Minister or such person as he may appoint, any renovation or refurbishment works, the plans of which require the approval of the Commissioner of Building Control under the Building Control Act (Cap. 29);
(b)
any designer or professional fees;
(c)
any antique;
(d)
any type of fine art, including any painting, drawing, print, calligraphy, mosaic, sculpture, pottery or art installation;
(da)
any works carried out in relation to a place of residence provided or to be provided by the person to his employees, where the expenditure is incurred on or after 18th December 2012; or
(e)
such other item as may be prescribed by the Minister by regulations.
[34/2008; 29/2012]
Deduction for qualifying training expenditure
14R.
—(1)  Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2011 or the year of assessment 2012, there shall be allowed in respect of all his trades and businesses, in addition to the deduction under section 14, a deduction for qualifying training expenditure incurred for the purposes of those trades and businesses computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2011, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
$800,000; and
(b)
for the year of assessment 2012, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $800,000 the lower of the amounts specified in paragraph (a)(i) and (ii).
[22/2011]
(2)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under section 14, a deduction for qualifying training expenditure incurred for the purposes of those trades and businesses computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2013, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2014, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2015, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2A)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under section 14, a deduction for qualifying training expenditure incurred for the purposes of those trades and businesses computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2016, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2017, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2018, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[Act 37 of 2014 wef 27/11/2014]
(3)  No deduction shall be allowed to a person under this section in respect of any expenditure which is not allowed as a deduction under section 14.
[22/2011]
(4)  In subsection (1), the amount under paragraph (a)(ii) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2012, and the balance under paragraph (b)(ii) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011.
[22/2011]
(5)  In subsection (2) —
(a)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
for the avoidance of doubt, no deduction shall be made from the substituted amount in subsection (2)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2)(a)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2013, and no deduction shall be made from the substituted amount in subsection (2)(c)(ii) of the lower of the amounts specified in subsection (2)(b)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2014.
[22/2011]
(5AA)  In subsection (2A) —
(a)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraphs of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
to avoid doubt, no deduction shall be made from the substituted amount in subsection (2A)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2A)(a)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2016, and no deduction shall be made from the substituted amount in subsection (2A)(c)(ii) of the lower of the amounts specified in subsection (2A)(b)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2017.
[Act 37 of 2014 wef 27/11/2014]
(5A)  For the purposes of subsections (1), (2) and (2A), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred qualifying training expenditure in respect of such firms for the purposes of his trade or business, the deduction that may be allowed to him for that expenditure in respect of all his trades and businesses shall not exceed the amount computed in accordance with subsection (1), (2) or (2A) (as the case may be) for that year of assessment.
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(5B)  For the purposes of subsections (1), (2) and (2A), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred qualifying training expenditure for the purposes of its trade or business, the aggregate of the deductions that may be allowed to all the partners of the partnership for that expenditure in respect of all the trades and businesses of the partnership shall not exceed the amount computed in accordance with subsection (1), (2) or (2A) (as the case may be) for that year of assessment.
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(6)  In this section —
“accredited”, in relation to a course, means accredited —
(a)
by the Singapore Workforce Development Agency before the date of commencement of section 9 of the Singapore Workforce Development Agency (Amendment) Act 2016; or
(b)
by the SkillsFuture Singapore Agency on or after that date;
“central hirer”, in relation to a central hiring arrangement for a group of related parties, means the person who carries out hiring functions for those parties under the arrangement;
[Act 37 of 2014 wef 27/11/2014]
“central hiring arrangement” means an arrangement for a group of related parties entered into for a bona fide commercial reason, where the hiring functions of the parties in the group are carried out by a single person;
[Act 37 of 2014 wef 27/11/2014]
“employee”, for the purposes of the year of assessment 2012 and subsequent years of assessment, and in relation to a person carrying on a trade or business (referred to in this definition as the first person), includes an individual within such class of individuals as may be prescribed —
(a)
who is either —
(i)
engaged by the first person (whether as agent, independent contractor or otherwise) to carry on that trade or business; or
(ii)
engaged by another person (whether as agent, independent contractor or otherwise) to carry on that trade or business, where that other person also engages the first person (whether as agent, independent contractor or otherwise) both to carry on that trade or business and to oversee the individual in carrying on that trade or business; or
(b)
to whom the first person leases property, in the course of such trade or business, to enable the individual to provide a service to any person;
“employee”, for the purposes of the year of assessment 2014 and subsequent years of assessment, and in relation to a person carrying on a trade or business (referred to in this definition as the first person), includes —
(a)
an individual —
(i)
who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the first person, and who is deployed to work solely for the first person; and
(ii)
whose salary and other remuneration (including training expenditure incurred in respect of the individual) is borne, directly or indirectly, by the first person and not claimed by the central hirer as a deduction against the central hirer’s own income; and
(b)
an individual —
(i)
being an employee of another person, who is seconded to the first person under a bona fide commercial arrangement to work solely for the first person; and
(ii)
whose salary and other remuneration (including training expenditure in respect of the individual) is borne, directly or indirectly, by the first person and not claimed by the other person as a deduction against the other person’s own income;
[Act 37 of 2014 wef 27/11/2014]
“qualifying training expenditure” means —
(a)
any training expenditure incurred directly in providing for employees —
(i)
a Workforce Skills Qualification (WSQ) training course which is accredited and conducted by a WSQ in-house training provider;
(ii)
a course approved by the Institute of Technical Education (ITE) under the ITE Approved Training Centre scheme;
(iii)
on-the-job training by an on-the-job training centre which is certified by the ITE; or
(iv)
for the purposes of the year of assessment 2012 and subsequent years of assessment, any other in-house training course,
and includes any salary and other remuneration paid to in-house trainers for conducting such courses and training (based on the hours spent in conducting the courses and training), but excludes salaries and other remuneration or payments of any employee attending or providing administrative support for the courses and imputed overheads like rental and the cost of utilities;
(b)
course fees for employees paid (whether directly or in the form of reimbursement) to an external training provider, including —
(i)
registration or enrolment fees;
(ii)
examination fees;
(iii)
tuition fees; and
(iv)
aptitude test fees; and
(c)
rental of training facilities for any course or training referred to in paragraph (a) or (b), expenditure for meals and refreshments provided during any such course or training, and expenditure for training materials and stationery used for any such course or training,
but excludes any accommodation, travelling or transportation expenditure incurred in respect of employees attending or conducting the course or training, or, for the purposes of the year of assessment 2012 and subsequent years of assessment, any expenditure to the extent that it is recovered or recoverable from the employee;
[29/2012]
[Act 37 of 2014 wef 27/11/2014]
“related parties” has the same meaning as in section 13(16).
[Act 37 of 2014 wef 27/11/2014]
(7)  Any expenditure incurred during any basis period for a training course referred to in paragraph (a)(iv) of the definition of “qualifying training expenditure” in subsection (6), including the rental of training facilities for the course, expenditure for meals and refreshments provided during the course, and expenditure for training materials and stationery used for the course, that is in excess of $10,000 shall be disregarded for the purposes of the computation of a deduction under subsection (1), (2) or (2A).
[29/2012]
[Act 37 of 2014 wef 27/11/2014]
(8)  For the purposes of the year of assessment 2011 and subsequent years of assessment, a reference in this section to qualifying training expenditure excludes any expenditure to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board.
[29/2012]
Deduction for qualifying design expenditure
14S.
—(1)  Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2011 or the year of assessment 2012, there shall be allowed, in respect of all his trades and businesses, the following deductions for qualifying design expenditure incurred for the purposes of those trades and businesses during each basis period:
(a)
where such expenditure is allowable as a deduction under section 14, a deduction of 300% of A, in addition to the deduction allowed under that section; and
(b)
where such expenditure is not allowable as a deduction under section 14, a deduction of 400% of A,
where A is —
(i)
for the year of assessment 2011, the lower of the following:
(A)
such expenditure incurred during the basis period for that year of assessment;
(B)
$800,000; and
(ii)
for the year of assessment 2012, the lower of the following:
(A)
such expenditure incurred during the basis period for that year of assessment;
(B)
the balance after deducting from $800,000 the lower of the amounts specified in paragraph (i)(A) and (B).
[22/2011]
(2)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, there shall be allowed, in respect of all his trades and businesses, the following deductions for qualifying design expenditure incurred for the purposes of those trades and businesses during the basis period:
(a)
where such expenditure is allowable as a deduction under section 14, a deduction of 300% of A, in addition to the deduction allowed under that section; and
(b)
where such expenditure is not allowable as a deduction under section 14, a deduction of 400% of A,
where A is —
(i)
for the year of assessment 2013, the lower of the following:
(A)
such expenditure incurred during the basis period for that year of assessment;
(B)
$1,200,000;
(ii)
for the year of assessment 2014, the lower of the following:
(A)
such expenditure incurred during the basis period for that year of assessment;
(B)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (i)(A) and (B); and
(iii)
for the year of assessment 2015, the lower of the following:
(A)
such expenditure incurred during the basis period for that year of assessment;
(B)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (i)(A) and (B), and the lower of the amounts specified in paragraph (ii)(A) and (B).
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2AA)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there shall be allowed, in respect of all his trades and businesses, the following deductions for qualifying design expenditure incurred for the purposes of those trades and businesses during the basis period:
(a)
where such expenditure is allowable as a deduction under section 14, a deduction of 300% of A, in addition to the deduction allowed under that section; and
(b)
where such expenditure is not allowable as a deduction under section 14, a deduction of 400% of A,
where A is —
(i)
for the year of assessment 2016, the lower of the following:
(A)
such expenditure incurred during the basis period for that year of assessment;
(B)
$1,200,000;
(ii)
for the year of assessment 2017, the lower of the following:
(A)
such expenditure incurred during the basis period for that year of assessment;
(B)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (i)(A) and (B); and
(iii)
for the year of assessment 2018, the lower of the following:
(A)
such expenditure incurred during the basis period for that year of assessment;
(B)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (i)(A) and (B), and the lower of the amounts specified in paragraph (ii)(A) and (B).
[Act 37 of 2014 wef 27/11/2014]
(2A)  In subsection (1), the amount under paragraph (i)(B) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2012, and the balance under paragraph (ii)(B) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011.
[22/2011]
(2B)  In subsection (2) —
(a)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
for the avoidance of doubt, no deduction shall be made from the substituted amount in subsection (2)(ii)(B) or (iii)(B) of the lower of the amounts specified in subsection (2)(i)(A) and (B) if the person does not carry on any trade or business during the basis period for the year of assessment 2013, and no deduction shall be made from the substituted amount in subsection (2)(iii)(B) of the lower of the amounts specified in subsection (2)(ii)(A) and (B) if the person does not carry on any trade or business during the basis period for the year of assessment 2014.
[22/2011]
(2C)  In subsection (2AA) —
(a)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraphs of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
to avoid doubt, no deduction shall be made from the substituted amount in subsection (2AA)(ii)(B) and (iii)(B) of the lower of the amounts specified in subsection (2AA)(i)(A) and (B) if the person does not carry on any trade or business during the basis period for the year of assessment 2016, and no deduction shall be made from the substituted amount in subsection (2AA)(iii)(B) of the lower of the amounts specified in subsection (2AA)(ii)(A) and (B) if the person does not carry on any trade or business during the basis period for the year of assessment 2017.
[Act 37 of 2014 wef 27/11/2014]
(3)  For the purposes of subsections (1), (2) and (2AA), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has incurred qualifying design expenditure during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive) in respect of such firms for the purposes of his trade or business, the deduction that may be allowed to him for that expenditure in respect of all his trades and businesses shall not exceed the amount computed in accordance with subsection (1), (2) or (2AA) (as the case may be) for that year of assessment.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
(4)  For the purposes of subsections (1), (2) and (2AA), where a partnership carrying on a trade or business has incurred qualifying design expenditure during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive) for the purposes of its trade or business, the aggregate of the deductions that may be allowed to all the partners of the partnership for that expenditure in respect of all the trades and businesses of the partnership shall not exceed the amount computed in accordance with subsection (1), (2) or (2AA) (as the case may be) for that year of assessment.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
(5)  For the purpose 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 but a deduction for this is subject to section 14Z.
[29/2010]
[Act 34 of 2016 wef 25/03/2016]
(6)  In this section —
“approved design service provider” means any person who provides design consultancy services for any trade or business, and who is approved by the Minister or such person as he may appoint;
“industrial or product design” means the professional specifications of creating and developing concepts or specifications that improve or enhance the functions, value or appearance of physical products, taking into account users’ needs, marketability and production;
“qualified designer” means an individual with a design-related tertiary academic qualification of at least a diploma that is approved by such person as the Minister may appoint;
“qualifying design expenditure” means —
(a)
expenditure incurred by the person on the staff costs of in-house qualified designers which are attributable to an industrial or product design project approved under subsection (7) and undertaken primarily in Singapore and directly by that person; and
(b)
where an approved design service provider has been engaged by the person to undertake primarily in Singapore for the trade or business in question an industrial or product design project approved under subsection (7) —
(i)
where more than 60% of all payments made by the person to the approved design service provider for the project are staff costs, the actual amount of staff costs; or
(ii)
in all other cases, 60% of those payments,
but does not include any 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;
“staff costs” means any salary, wages and other benefits whether in the form of money or otherwise (but excluding directors’ fees), paid or granted in respect of the employment of any qualified designer which are attributable to the industrial or product design project.
[29/2010; 22/2011; 29/2012]
(7)  The Minister or such person as he may appoint may approve an industrial or product design project for the purposes of the definition of “qualifying design expenditure” under subsection (6), and may in granting the approval impose such conditions as he thinks fit.
[29/2010]
(7A)  For the purpose of the definition of “qualifying design expenditure” in subsection (6), an industrial or product design project is undertaken primarily in Singapore if at least 3 of the following 5 design phases of the project are carried out wholly in Singapore:
(a)
design research;
(b)
idea generation;
(c)
concept development;
(d)
technical development;
(e)
communication.
[22/2011]
(8)  Where a person fails to comply with any condition imposed under subsection (7), the aggregate of deductions allowed to him under this section shall be deemed to be his income for the year of assessment in which the Comptroller discovers such non‑compliance.
[29/2010]
Deduction for expenditure on leasing of PIC automation equipment under qualifying lease
14T.
—(1)  Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2011 or the year of assessment 2012, there shall be allowed in respect of all his trades and businesses, in addition to the deduction under section 14, a deduction for the expenditure incurred for the purposes of those trades and businesses on the leasing of one or more PIC automation equipment under a qualifying lease or leases, computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2011, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
$800,000; and
(b)
for the year of assessment 2012, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $800,000 the lower of the amounts specified in paragraph (a)(i) and (ii).
[22/2011]
(2)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under section 14, a deduction for the expenditure incurred for the purposes of those trades and businesses on the leasing of one or more PIC automation equipment under a qualifying lease or leases, computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2013, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2014, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2015, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2A)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under section 14, a deduction for the expenditure incurred for the purposes of those trades or businesses on the leasing of one or more PIC automation equipment under a qualifying lease or leases, computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2016, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2017, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2018, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[Act 37 of 2014 wef 27/11/2014]
(3)  No deduction shall be allowed to a person under this section in respect of —
(a)
any expenditure which is not allowed as a deduction under section 14; or
(b)
any expenditure incurred during the basis period for a year of assessment on the leasing of any PIC automation equipment under a qualifying lease where —
(i)
the equipment is sub-leased to another person during that basis period; or
(ii)
an allowance has been previously made to that person under section 19 or 19A in respect of the equipment.
[22/2011]
(4)  Where a person has incurred expenditure on both the leasing under a qualifying lease and the provision of one or more PIC automation equipment during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2015 (both years inclusive), the aggregate of the deduction under subsection (1) or (2) and the allowance under section 19A(2A) or (2B) in respect of all such expenditure shall not exceed —
(a)
in the case of the year of assessment 2011, 300% of the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
$800,000;
(b)
in the case of the year of assessment 2012, 300% of the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
the balance after deducting from $800,000 the lower of the amounts specified in paragraph (a)(i) and (ii);
(c)
in the case of the year of assessment 2013, 300% of the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
$1,200,000;
(d)
in the case of the year of assessment 2014, 300% of the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (c)(i) and (ii); and
(e)
in the case of the year of assessment 2015, 300% of the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (c)(i) and (ii), and the lower of the amounts specified in paragraph (d)(i) and (ii).
[22/2011]
(4A)  Where a person has incurred expenditure on both the leasing under a qualifying lease and the provision of one or more PIC automation equipment during the basis period for any year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the aggregate of the deduction under subsection (2A) and the allowance under section 19A(2BAA) in respect of all such expenditure shall not exceed —
(a)
in the case of the year of assessment 2016, 300% of the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
$1,200,000;
(b)
in the case of the year of assessment 2017, 300% of the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
in the case of the year of assessment 2018, 300% of the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[Act 37 of 2014 wef 27/11/2014]
(5)  In subsections (1) and (4), the amounts under subsections (1)(a)(ii) and (4)(a)(ii) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2012, and the balances under subsections (1)(b)(ii) and (4)(b)(ii) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011.
[22/2011]
(6)  In subsections (2) and (4) —
(a)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the reference to “$1,200,000” in the paragraphs of those subsections applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
for the avoidance of doubt —
(i)
if the person does not carry on any trade or business during the basis period for the year of assessment 2013, no deduction shall be made from the substituted amount in subsection (2)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2)(a)(i) and (ii), or from the substituted amount in subsection (4)(d)(ii) or (e)(ii) of the lower of the amounts specified in subsection (4)(c)(i) and (ii); and
(ii)
if the person does not carry on any trade or business during the basis period for the year of assessment 2014, no deduction shall be made from the substituted amount in subsection (2)(c)(ii) of the lower of the amounts specified in subsection (2)(b)(i) and (ii), or from the substituted amount in subsection (4)(e)(ii) of the lower of the amounts specified in subsection (4)(d)(i) and (ii).
[22/2011]
(6AA)  In subsections (2A) and (4A) —
(a)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
to avoid doubt —
(i)
if the person does not carry on any trade or business during the basis period for the year of assessment 2016, no deduction shall be made from the substituted amount in subsection (2A)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2A)(a)(i) and (ii), or from the substituted amount in subsection (4A)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (4A)(a)(i) and (ii); and
(ii)
if the person does not carry on any trade or business during the basis period for the year of assessment 2017, no deduction shall be made from the substituted amount in subsection (2A)(c)(ii) of the lower of the amounts specified in subsection (2A)(b)(i) and (ii), or from the substituted amount in subsection (4A)(c)(ii) of the lower of the amounts specified in subsection (4A)(b)(i) and (ii).
[Act 37 of 2014 wef 27/11/2014]
(6A)  For the purposes of subsections (1), (2), (2A), (4) and (4A), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred expenditure on the leasing of one or more PIC automation equipment under a qualifying lease or leases and (if applicable) the provision of one or more PIC automation equipment, in respect of such firms for the purposes of his trade or business, the deductions and allowances that may be allowed to him for that expenditure in respect of all his trades and businesses shall not exceed the amount computed in accordance with subsection (1), (2), (2A), (4) or (4A) (as the case may be) for that year of assessment.
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(6B)  For the purposes of subsections (1), (2), (2A), (4) and (4A), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred expenditure on the leasing of one or more PIC automation equipment under a qualifying lease or leases and (if applicable) the provision of one or more PIC automation equipment, for the purposes of its trade or business, the aggregate of the deductions and allowances that may be allowed to all the partners of the partnership for that expenditure in respect of all the trades and businesses of the partnership shall not exceed the amount computed in accordance with subsection (1), (2), (2A), (4) or (4A) (as the case may be) for that year of assessment.
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(6C)  This section applies to expenditure incurred on procuring cloud computing services as it applies to expenditure incurred on the leasing of PIC automation equipment under a qualifying lease and, accordingly, a reference in this section (other than subsection (3)(b)) to the leasing of any PIC automation equipment under a qualifying lease includes a reference to procuring cloud computing services.
[22/2011]
(7)  In this section —
“cloud computing” means a model for delivering information technology services under which shared resources or software, or both, are provided to computers and other devices over a network such as the Internet;
“cloud computing service” means any information technology service delivered by means of cloud computing;
“finance lease” has the same meaning as in section 10D;
“operating lease” means a lease of any machinery or plant, other than a finance lease;
“PIC automation equipment” has the same meaning as in section 19A(15);
[Act 37 of 2014 wef 27/11/2014]
“qualifying lease” means —
(a)
any operating lease; or
(b)
any finance lease other than a lease of PIC automation equipment which has been treated as though it had been sold pursuant to regulations made under section 10D(1).
[29/2010; 22/2011]
(8)  In this section, a reference to expenditure incurred on the leasing of PIC automation equipment under a qualifying lease or the provision of PIC automation equipment excludes any such expenditure to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board.
[29/2010; 22/2011; 29/2012]
Deduction for expenses incurred before first dollar of income from trade, business, profession or vocation
14U.
—(1)  Subject to section 14Z, a person who —
(a)
derives the first dollar of income from a trade, business, profession or vocation in an applicable basis period; and
(b)
incurs a previous expense for which he would have been allowed a deduction or further deduction under a provision of this Part if he had commenced the trade, business, profession or vocation by the time it is incurred,
shall be allowed the deduction or further deduction for the previous expense under and in accordance with that provision.
[22/2011]
[Act 34 of 2016 wef 25/03/2016]
(2)  For the purposes of subsection (1) —
(a)
a previous expense is any outgoing or expense incurred for the purpose of that trade, business, profession or vocation at any time before the date the person derives that first dollar of income, but no earlier than 12 months before the first day of the applicable basis period (referred to in this section as the first day);
(b)
the person shall be deemed to have commenced his trade, business, profession or vocation on the first day; and
(c)
any previous expense incurred by the person before the first day but no earlier than 12 months before that day shall be deemed to have been incurred by him on that day.
[22/2011]
(3)  For the avoidance of doubt —
(a)
subsection (1) is subject to any other requirement to be satisfied under the relevant provision of this Part before the deduction or further deduction may be allowed; and
(b)
a deduction or further deduction that may be or has been allowed by virtue of subsection (1) is considered for the purposes of this Act as one that may be or has been allowed under the relevant provision of this Part.
[22/2011]
(4)  Subsection (1) does not apply to the business of making investments carried out by a company or trustee of a property trust, to which section 10E applies.
[22/2011]
(5)  Subsection (1) is without prejudice to any provision of this Part allowing the deduction or further deduction of any expense or outgoing incurred at an earlier point in time.
[22/2011]
(6)  In this section —
(a)
a reference to an applicable basis period is a reference to the basis period for the year of assessment 2012 or a subsequent year of assessment; and
(b)
a reference to a provision of this Part includes a reference to regulations made under a provision of this Part, but excludes this section.
[22/2011]
Deduction for amortisation of intangible asset created under public-private partnership arrangement
14V.
—(1)  Where —
(a)
a person provides services under a public-private partnership arrangement —
(i)
that is the subject of a contract entered into between the Government or any approved statutory body and any person; and
(ii)
to which INT FRS 112 applies;
(b)
section 10F(1A) or (1C) applies to him in respect of those services;
(c)
the person recognises in his financial statements, prepared in accordance with INT FRS 112, an intangible asset as having been created in the course of providing the services; and
(d)
in accordance with FRS 38, amortisation of the asset is recognised in the person’s financial statements for the basis period for the year of assessment 2012 or any subsequent year of assessment,
then the amount of the amortisation that is recognised in the person’s financial statements as an expense in accordance with FRS 38, shall be allowed to the person as a deduction against an amount that is deemed as income derived by that person for that basis period under section 10F(1A) or (1C).
[19/2013]
(2)  In this section —
“FRS 38” means the financial reporting standard known as Financial Reporting Standard 38 (Intangible Assets) issued by the Accounting Standards Council under the Accounting Standards Act (Cap. 2B);
“INT FRS 112” has the same meaning as in section 10F.
[19/2013]
Deduction for expenditure on licensing intellectual property rights
14W.
—(1)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, 2014 or 2015, there shall be allowed, in respect of all his trades and businesses and in addition to the deduction allowed under section 14 or 14D (as the case may be), a deduction for expenditure incurred during the basis period for the purposes of those trades and businesses on the licensing from another person of any qualifying intellectual property rights that is computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2013, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2014, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2015, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[19/2013]
[Act 37 of 2014 wef 27/11/2014]
(2)  Notwithstanding anything in this section or section 19B, where a person has, during the basis period for any year of assessment between the years of assessment 2013 and 2015 (both years inclusive), incurred both expenditure on the licensing from another person of any qualifying intellectual property rights and expenditure on the acquisition of any intellectual property rights, the aggregate of the expenditure which may be given a deduction under subsection (1) and the expenditure which may be given an allowance under section 19B(1B) shall not exceed —
(a)
in the case of the year of assessment 2013, the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
$1,200,000;
(b)
in the case of the year of assessment 2014, the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
in the case of the year of assessment 2015, the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[19/2013]
(3)  In subsections (1) and (2) —
(a)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2013 and 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2013 and 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
for the avoidance of doubt —
(i)
if the person does not carry on any trade or business during the basis period for the year of assessment 2013, no deduction shall be made from the substituted amount in subsection (1)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (1)(a)(i) and (ii), or from the substituted amount in subsection (2)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2)(a)(i) and (ii); and
(ii)
if the person does not carry on any trade or business during the basis period for the year of assessment 2014, no deduction shall be made from the substituted amount in subsection (1)(c)(ii) of the lower of the amounts specified in subsection (1)(b)(i) and (ii), or from the substituted amount in subsection (2)(c)(ii) of the lower of the amounts specified in subsection (2)(b)(i) and (ii).
[19/2013]
(4)  Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under section 14 or 14D (as the case may be), a deduction for expenditure incurred during the basis period for the purposes of those trades and businesses on the licensing from another person of any qualifying intellectual property rights that is computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2016, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2017, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2018, the lower of the following:
(i)
such expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[Act 37 of 2014 wef 27/11/2014]
(4A)  Notwithstanding anything in this section or section 19B, where a person has, during the basis period for any year of assessment between the years of assessment 2016 and 2018 (both years inclusive), incurred both expenditure on the licensing from another person of any qualifying intellectual property rights and expenditure on the acquisition of any intellectual property rights, the aggregate of the expenditure which may be given a deduction under subsection (4) and the expenditure which may be given an allowance under section 19B(1BAA) shall not exceed —
(a)
in the case of the year of assessment 2016, the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
$1,200,000;
(b)
in the case of the year of assessment 2017, the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
in the case of the year of assessment 2018, the lower of the following:
(i)
the aggregate of all such expenditure;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[Act 37 of 2014 wef 27/11/2014]
(4B)  In subsections (4) and (4A) —
(a)
if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
to avoid doubt —
(i)
if the person does not carry on any trade or business during the basis period for the year of assessment 2016, no deduction shall be made from the substituted amount in subsection (4)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (4)(a)(i) and (ii), or from the substituted amount in subsection (4A)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (4A)(a)(i) and (ii); and
(ii)
if the person does not carry on any trade or business during the basis period for the year of assessment 2017, no deduction shall be made from the substituted amount in subsection (4)(c)(ii) of the lower of the amounts specified in subsection (4)(b)(i) and (ii), or from the substituted amount in subsection (4A)(c)(ii) of the lower of the amounts specified in subsection (4A)(b)(i) and (ii).
[Act 37 of 2014 wef 27/11/2014]
(4C)  For the purposes of subsections (1) and (4), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the years of assessment 2013 and 2018 (both years inclusive), incurred expenditure on the licensing from another person of any qualifying intellectual property rights in respect of such firms for the purposes of his trade or business, the deductions that may be allowed to him for that expenditure in respect of all his trades and businesses shall not exceed the amount computed in accordance with subsection (1) or (4) (as the case may be) for that year of assessment.
[Act 37 of 2014 wef 27/11/2014]
(5)  For the purposes of subsections (1), (2), (4) and (4A), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the years of assessment 2013 and 2018 (both years inclusive), incurred expenditure on the licensing from another person of any qualifying intellectual property rights and (if applicable) the acquisition of any intellectual property rights, for the purposes of its trade or business, the aggregate of the deductions and allowances that may be allowed to all the partners of the partnership for that expenditure in respect of all the trades and businesses of the partnership shall not exceed the amount computed in accordance with subsection (1), (2), (4) or (4A) (as the case may be) for that year of assessment.
[19/2013]
[Act 37 of 2014 wef 27/11/2014]
(6)  No deduction shall be allowed under this section in respect of —
(a)
any expenditure which is not allowed as a deduction under section 14 or 14D (as the case may be);
(b)
any expenditure incurred by a person on licensing from its related party carrying on any trade or business in Singapore, of any qualifying intellectual property rights, where such rights were acquired or developed (in whole or in part) by the related party during the basis period relating to the year of assessment 2011 or any subsequent year of assessment; or
(c)
any qualifying intellectual property rights for which a writing-down allowance has been previously made to that person under section 19B.
[19/2013]
(7)  The Minister may by order exempt a person from subsection (6)(b) in respect of such transaction as may be specified in the order.
[19/2013]
(8)  In this section —
“intellectual property rights” has the same meaning as in section 19B(11);
“qualifying intellectual property rights” means intellectual property rights but excludes the right to do or authorise the doing of anything which would, but for that right, be an infringement of —
(a)
any trade mark; or
(b)
any rights to the use of software;
“related party” has the same meaning as in section 13(16).
[19/2013]
(9)  In this section, a reference to expenditure incurred on the licensing from another person of qualifying intellectual property rights or the acquisition of intellectual property rights excludes any such expenditure to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board.
[19/2013]
(10)  In this section, a reference to expenditure incurred on the licensing from another person of qualifying intellectual property rights means the licence fees and excludes —
(a)
expenditure for the transfer of ownership of any of those rights; and
(b)
legal fees and other costs related to the licensing of such rights.
[19/2013]
Deduction for expenditure incurred to comply with statutory and regulatory requirements
14X.
—(1)  For the purpose of ascertaining the income of any person for the basis period for the year of assessment 2014 or any subsequent year of assessment, the following expenditure, not being capital expenditure, incurred during the basis period by that person shall be allowed as a deduction for that year of assessment, if the Comptroller is satisfied that the expenditure is incurred for the purpose of the business that is carried on in the production of the income:
(a)
expenditure incurred for the purpose of compliance by that person with any written law of Singapore or another country;
(b)
expenditure incurred for the purpose of compliance by that person with any code, standard, rule, requirement or other document issued by the Government, a public authority established by or under any public Act, or by the government or a public authority of another country, or by a securities exchange;
(c)
expenditure incurred —
(i)
to study the impact of any proposed law referred to in paragraph (a) or proposed document referred to in paragraph (b);
(ii)
to prevent or to detect any non‑compliance with any law referred to in paragraph (a) or document referred to in paragraph (b);
(iii)
to voluntarily comply with a requirement of any law referred to in paragraph (a) or document referred to in paragraph (b), even though the person does not need to comply with the requirement.
(2)  No deduction shall be allowed under this section for —
(a)
any expenditure which is deductible under any other provision of this Act; or
(b)
any fine or penalty imposed or security deposit forfeited for a breach of a requirement of any law referred to in subsection (1)(a) or document referred to in subsection (1)(b), including any sum paid to compound any offence.
[Act 37 of 2014 wef 27/11/2014]
Deduction for expenditure incurred by individual in deriving passive rental income in Singapore
14Y.
—(1)  This section applies for the purpose of ascertaining an individual’s income for the basis period for the year of assessment 2016 or a subsequent year of assessment from the letting of a residential property or a part of a residential property in Singapore (not being an excluded property for that basis period), that is chargeable to tax under section 10(1)(f) (called in this section rental income).
(2)  Despite any other provisions in this Part, if there are any outgoings or expenses deductible against the rental income under any provision of this Part apart from section 14(1)(a), then there is to be deducted, in lieu of those outgoings or expenses, an amount of expenses computed in accordance with the following formula:
where A
is 15% or such other percentage as may be prescribed under section 7; and
B
is the gross amount of the rental income from the residential property derived in the basis period for that year of assessment.
(3)  This section does not apply to —
(a)
an individual who has made an election under subsection (4) for this section not to apply to the individual’s rental income derived in the basis period for the year of assessment in question;
(b)
any rental income derived by an individual through a partnership; and
(c)
any rental income derived by an individual acting in the capacity of a trustee of a trust.
(4)  An individual may, in such form and manner and within such time as the Comptroller may determine, make an election to the Comptroller for this section not to apply to all of the individual’s rental income derived in the basis period for a particular year of assessment.
(5)  If an individual derives rental income, other than income referred to in subsection (3)(b) or (c), from more than one residential property (not being excluded properties for the basis period) in a basis period, the individual may not make an election under subsection (4) in respect of only one or some of those properties.
(6)  In this section —
“excluded property”, in relation to a basis period, means a residential property which, at any time during the period rental income is derived from the property by the individual in question, is permitted under the Planning Act (Cap. 232) to be used whether wholly or in part for any purpose that is not a residential purpose;
“residential property” means —
(a)
any detached house, semi‑detached house or terrace house; or
(b)
any part of a building (such as a flat or a condominium unit) constructed or adapted for human habitation,
that has a single annual value ascribed to it in the Valuation List prepared under section 10 of the Property Tax Act (Cap. 254), and is permitted under the Planning Act to be used for a residential purpose, and includes such other premises as may be prescribed as residential property, but (to avoid doubt) excludes premises that are so permitted for use as a dormitory.
(7)  In this section, a property or part of a property is permitted under the Planning Act to be used for a particular purpose if —
(a)
it is permitted by a written permission granted under section 14 of that Act to be used for that purpose;
(b)
it is authorised by a notification under section 21(6) of that Act to be used for that purpose; or
(c)
such use (being an existing use of the property or part and not being the subject of a written permission granted under section 14 of that Act or a notification under section 21(6) of that Act) was a use to which the building or part was put on 1 February 1960, and the building or part has not been put to any other use since that date.
[Act 2 of 2016 wef 11/04/2016]
Attribution of deductible expenses incurred before commencement of trade, etc.
14Z.
—(1)  This section applies where —
(a)
a person derives the first dollar of income from a trade, business, profession or vocation in a basis period;
(b)
the person incurs an expense —
(i)
before the date the person derives the first dollar of income mentioned in paragraph (a); but
(ii)
on or after 25 March 2016; and
(c)
for the purpose of ascertaining the person’s income from that trade, business, profession or vocation in that basis period, a deduction may be allowed under a provision of this Part for that expense by reason of section 14U.
(2)  This section also applies where —
(a)
a person commences a trade, business or profession in a basis period;
(b)
the person incurs an expense —
(i)
before the date the person commences the trade, business or profession; but
(ii)
on or after 25 March 2016; and
(c)
for the purpose of ascertaining the person’s income from that trade, business or profession in that basis period, a deduction may be allowed under section 14A, 14D, 14Q or 14S by reason of section 14A(3), 14D(2), 14Q(4) or 14S(5), as the case may be.
(3)  Where the person’s income from that trade, business, profession or vocation (as the case may be) in that basis period comprises any 2 or all of the following:
(a)
normal income;
(b)
concessionary income;
(c)
exempt income,
the deduction for the expense is to be allowed in the following manner:
(i)
where the Comptroller is of the opinion that —
(A)
where the expense is one mentioned in subsection (1) — it is incurred in the production of the normal income only; or
(B)
where the expense is one mentioned in subsection (1) or (2) and is incurred before the commencement of the trade, business, profession or vocation — it would have been incurred in the production of the normal income had it been incurred after such commencement,
the expense is to be deducted against the normal income;
(ii)
where the Comptroller is of the opinion that —
(A)
where the expense is one mentioned in subsection (1) — it is incurred in the production of the concessionary income only; or
(B)
where the expense is one mentioned in subsection (1) or (2) and is incurred before the commencement of the trade, business, profession or vocation — it would have been incurred in the production of the concessionary income had it been incurred after such commencement,
the expense is to be deducted against the concessionary income;
(iii)
where the Comptroller is of the opinion that —
(A)
where the expense is one mentioned in subsection (1) — it is incurred in the production of the exempt income only; or
(B)
where the expense is one mentioned in subsection (1) or (2) and is incurred before the commencement of the trade, business, profession or vocation — it would have been incurred in the production of the exempt income had it been incurred after such commencement,
the expense is to be deducted against the exempt income;
(iv)
in any other case, the expense is to be deducted against the normal income, concessionary income and exempt income (whichever is applicable), in the respective proportions that such part of the normal income, concessionary income and exempt income bear to such part of the total income from that trade, business, profession or vocation in the same basis period, as the Comptroller considers reasonable.
(4)  Where the person’s income from that trade, business, profession or vocation in that basis period comprises only concessionary income or only exempt income, the expense is to be deducted against that income.
(5)  In this section —
“concessionary income” means income that is subject to a concessionary rate of tax as defined in section 14D(5);
“exempt income” means income that is exempt from tax under this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86);
“normal income” means income that is subject to tax at the rate of tax in section 42(1) or 43(1), as the case may be.
[Act 34 of 2016 wef 25/03/2016]
Further or double deduction for qualifying expenditure on issue of debentures and making available debentures for secondary trading
14ZA.
—(1)  Where the Comptroller is satisfied that qualifying expenditure in connection with —
(a)
an issue of qualifying debentures; or
(b)
making available potential seasoned debentures for secondary trading within 5 years starting from the date of their issue,
has been incurred on or after 19 May 2016 by a person carrying on a trade or business in Singapore, that person is to be allowed —
(i)
where the expenditure is allowable as a deduction under section 14, a further deduction of the amount of such expenditure; or
(ii)
where the expenditure is not allowable as a deduction under section 14, a deduction equal to twice the amount of such expenditure.
(2)  The maximum amount of qualifying expenditure that may be allowed a deduction under this section is —
(a)
subject to paragraphs (b) and (c), $500,000 for each issue of qualifying debentures or making available of potential seasoned debentures for secondary trading;
(b)
subject to paragraph (c), $500,000 for both the issue of potential seasoned debentures and the making available of the same debentures for secondary trading; and
(c)
$1,000,000 per person, irrespective of the number of times the person issues qualifying debentures or makes available potential seasoned debentures for secondary trading.
(3)  It is a condition for allowing a deduction to a person under this section in respect of an issue of potential seasoned debentures, that they are made available for secondary trading within a period of one year starting from the date of their issue (called in this section the window period).
(4)  If the condition in subsection (3) is not satisfied, the total deductions under this section already allowed to the person in respect of that issue are treated as the person’s income for the year of assessment relating to the basis period in which the first day after the end of the window period falls.
(5)  Subsections (3) and (4) do not affect the right of the person to be allowed a deduction under this section in relation to making available the potential seasoned debentures for secondary trading after the window period, except that the deduction may only be allowed in the year of assessment relating to the basis period in which those debentures are so made available.
(6)  In this section —
“offering document” means a prospectus, an offer circular, an information memorandum, a pricing supplement or any other document issued to investors in connection with an offer of debentures;
“post-seasoning debenture”, “retail investor” and “seasoned debenture” have the meanings given to those expressions in the Post‑seasoning Debentures Regulations;
“Post-seasoning Debentures Regulations” means the Securities and Futures (Offers of Investments) (Exemption for Offers of Post‑seasoning Debentures) Regulations 2016 (G.N. No. S 224/2016);
“potential seasoned debentures” means debentures the offering documents for the offer of which include a statement to the effect that the debentures are intended to be made available on a securities exchange for trading by retail investors;
“product highlights sheet”  —
(a)
in relation to an offer of straight debentures, has the meaning given to it in the Straight Debentures Regulations; or
(b)
in relation to an offer of post-seasoning debentures, has the meaning given to it in the Post‑seasoning Debentures Regulations;
“qualifying debentures” means any of the following debentures:
(a)
potential seasoned debentures issued during the period between 19 May 2016 and 18 May 2021 (both dates inclusive);
(b)
post-seasoning debentures offered in reliance on an exemption under the Post-seasoning Debentures Regulations and issued within 5 years starting from the date of issue of the corresponding seasoned debentures, being a date falling within the period between 19 May 2016 and 18 May 2021 (both dates inclusive);
(c)
straight debentures offered in reliance on an exemption under the Straight Debentures Regulations and issued during the period between 19 May 2016 and 18 May 2021 (both dates inclusive);
“qualifying expenditure” means —
(a)
in relation to an issue of potential seasoned debentures, any of the following that are incurred in connection with the issue, and for the purpose of allowing the debentures to be made available for secondary trading, or for the purpose of the subsequent issue of post‑seasoning debentures:
(i)
professional fees for conducting due diligence;
(ii)
origination, underwriting and distribution fees;
(iii)
advertising and marketing expenses;
(b)
in relation to the making available of potential seasoned debentures for secondary trading, any of the expenditure mentioned in paragraph (a)(i), (ii) and (iii) that are incurred in connection with making available the debentures for secondary trading; or
(c)
in relation to an issue of post-seasoning debentures or straight debentures, any of the following that are incurred in connection with the issue:
(i)
professional fees for conducting due diligence;
(ii)
professional fees for the drafting and preparation of, and the printing costs of —
(A)
the product highlights sheet for the offer pertaining to the issue, in the case of an issue of post‑seasoning debentures; or
(B)
the product highlights sheet and simplified disclosure document for the offer pertaining to the issue, in the case of an issue of straight debentures;
(iii)
origination, underwriting and distribution fees;
(iv)
advertising and marketing expenses,
but excludes trustee fees, agency fees and Central Depository fees;
“securities exchange” has the same meaning as in section 2(1) of the Securities and Futures Act (Cap. 289);
“simplified disclosure document” and “straight debenture” have the meanings given to those expressions in the Straight Debentures Regulations;
“Straight Debentures Regulations” means the Securities and Futures (Offers of Investments) (Exemption for Offers of Straight Debentures) Regulations 2016 (G.N. No. S 225/2016).
(7)  In this section, a person makes available potential seasoned debentures for secondary trading if the person makes them available on a securities exchange for trading by retail investors.
[Act 34 of 2016 wef 19/05/2016]
Deduction for expenditure for services or secondment to institutions of a public character
14ZB.
—(1)  Subject to this section, where the Comptroller is satisfied that a qualifying person has incurred, during the period between 1 July 2016 and 31 December 2018 (both dates inclusive), qualifying expenditure in respect of —
(a)
the provision during that period by a qualifying employee of the qualifying person, of services that satisfy subsection (2) to an IPC; or
(b)
the secondment during that period of a qualifying employee of the qualifying person to an IPC,
then there is to be allowed to the qualifying person —
(i)
where the expenditure is allowable as a deduction under section 14, a further deduction equal to 150% of the endorsed amount of the expenditure in addition to the deduction allowed under that section; or
(ii)
where such expenditure is not allowable as a deduction under section 14, a deduction equal to 250% of the endorsed amount of the expenditure.
(2)  The services mentioned in subsection (1)(a) must be —
(a)
the subject of an arrangement between the qualifying person and the IPC; and
(b)
provided on the instruction or request of the qualifying person.
(3)  The maximum amount of qualifying expenditure for which a qualifying person may be allowed the deduction under subsection (1) is $250,000 for each year of assessment.
(4)  The maximum amount of qualifying expenditure for which deductions may be allowed under subsection (1) in relation to each IPC is $25,000 for the period between 1 July 2016 and 31 December 2016 (both dates inclusive) and $50,000 for each of the calendar years 2017 and 2018, and this is irrespective of the number of qualifying persons claiming the deduction.
(5)  Where 2 or more qualifying persons —
(a)
incur qualifying expenditure in relation to one IPC in a period or calendar year which in total exceeds the maximum amount for that period or calendar year under subsection (4); and
(b)
claim a deduction under subsection (1) for such expenditure,
the deduction is to be allowed for such part or parts of the expenditure incurred by such person or persons that the IPC specifies to the Comptroller.
(6)  A deduction under subsection (1) may only be allowed for any qualifying expenditure if —
(a)
before the date the services are first provided to the IPC in the basis period or the date of commencement of the secondment (as the case may be), the qualifying person makes a declaration, duly endorsed by the IPC and in a form determined by the Minister, regarding —
(i)
the nature of the services which the person has arranged with the IPC to be provided to the IPC, or the nature of the secondment (as the case may be); and
(ii)
the expected expenditure;
(b)
within such time as the Comptroller may specify, the IPC submits to the Comptroller a declaration by the qualifying person, in a form determined by the Minister, regarding —
(i)
the services provided to the IPC or the secondment to the IPC (as the case may be); and
(ii)
the amount of the actual qualifying expenditure incurred, as well as the part of that amount (which may be the full amount or a part of it) endorsed by the IPC for the deduction under subsection (1); and
(c)
the claim for the deduction is made in the manner determined by the Comptroller.
(7)  A deduction is not allowed under subsection (1) for any expenditure to the extent that it is or is to be subsidised by a grant or subsidy from the Government or a statutory board.
(8)  A deduction is not allowed under subsection (1) in relation to the provision of any service or any secondment if there is any agreement or understanding (whether oral or in writing and whether express or implied) that the IPC will confer a benefit of any kind on the qualifying person in return for the provision of the service or the secondment.
(9)  A deduction is not allowed under subsection (1) for any expenditure incurred on any activity that is or is to be subsidised, fully or partially, by a matching grant under the Share as One Programme administered by the National Council of Social Services.
(10)  The Comptroller may disallow in whole or in part a claim for a deduction under subsection (1) if the Comptroller is not satisfied that the endorsed amount of the expenditure is reasonable having regard to the period and nature of the services provided or the period and nature of the secondment (as the case may be), and other relevant circumstances.
(11)  If, at any time after a qualifying person has been allowed a deduction under subsection (1) for any qualifying expenditure, the person is reimbursed for any amount of the expenditure, the amount of the deduction that corresponds to the expenditure reimbursed is treated as the person’s income for the year of assessment in which the Comptroller discovers the reimbursement.
(12)  In this section —
“central hirer”, in relation to a central hiring arrangement for a group of related parties, means the person who carries out hiring functions for those parties under the arrangement;
“central hiring arrangement” means an arrangement for a group of related parties entered into for a bona fide commercial reason, where the hiring functions of the parties in the group are carried out by a single person;
“employee”, in relation to a qualifying person, includes an individual —
(a)
who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the qualifying person, and who is deployed to work solely for the qualifying person; and
(b)
whose salary and other remuneration is borne, directly or indirectly, by the qualifying person and not claimed by the central hirer as a deduction against the central hirer’s own income;
“endorsed amount”, in relation to any expenditure, means the amount of the expenditure endorsed by an IPC under subsection (6)(b);
“IPC” means an institution of a public character as defined in section 2(1);
“qualifying employee”, in relation to a qualifying person, means an employee who, at the time of provision of the services or during the secondment (as the case may be), is under a contract of service with the qualifying person or (if the employee is engaged under a central hiring arrangement) the central hirer, under which the employee is required to work for at least 35 hours each week, but excludes —
(a)
where the qualifying person is a partnership, a partner of the partnership; and
(b)
where the qualifying person is a company, a shareholder of the company who is also a director of the company;
“qualifying expenditure”  —
(a)
in relation to the provision of services by a qualifying employee of a qualifying person to an IPC, means the sum of —
(i)
the amount of the salary expenditure incurred by the qualifying person for —
(A)
the period during which the employee provided those services that falls within the employee’s working hours; or
(B)
if the period during which the employee provided those services does not fall within the employee’s working hours, the period of the time off in lieu given to the employee; and
(ii)
the amount of the expenditure (not being capital expenditure) incurred by the qualifying person that was necessary for the provision of the services, excluding any private or domestic expense; and
(b)
in relation to the secondment of a qualifying employee of the qualifying person to an IPC, means the sum of —
(i)
the amount of the salary expenditure incurred by the qualifying person for the period of the secondment; and
(ii)
the amount of the expenditure (not being capital expenditure) incurred by the qualifying person that was necessary for the provision of services by the qualifying employee to the IPC during the period of the secondment, excluding any private or domestic expense;
“qualifying person” means —
(a)
any company or firm (including a partnership) that carries on a trade, profession or business in Singapore;
(b)
a body of persons (whether corporate or unincorporate) that carries on a club or a similar institution and receives from its members (within the meaning of section 11) less than half of its gross receipts on revenue account (including entrance fees and subscriptions); or
(c)
a body of persons (whether corporate or unincorporate) that carries on a trade or professional association in such circumstances that more than half its receipts by way of entrance fees and subscriptions are from Singapore members (within the meaning of section 11) who claim or would be entitled to claim such sums as allowable deductions for the purposes of section 14;
“related party” has the same meaning as in section 13(16);
“salary expenditure”, in relation to an employee, means expenditure comprising wages and salary for the employee, but excludes any sum contributed to the Central Provident Fund in respect of the employee, or any bonus, commission, gratuity, leave pay, perquisite, allowance, or any other payment (whether in cash or kind) prescribed by rules made under section 7.
(13)  In this section, a qualifying person is treated as having incurred any expenditure, if —
(a)
it directly incurs that expenditure for which it is not reimbursed; or
(b)
another person directly incurs that expenditure and the qualifying person is liable to reimburse the other person for it, and the incurring of the expenditure and of the liability both occur in the period between 1 July 2016 and 31 December 2018 (both dates inclusive).
[Act 34 of 2016 wef 01/07/2016]
Deductions not allowed
15.
—(1)  Notwithstanding the provisions of this Act, for the purpose of ascertaining the income of any person, no deduction shall be allowed in respect of —
(a)
domestic or private expenses except as provided in section 14(1)(g);
(b)
any disbursements or expenses not being money wholly and exclusively laid out or expended for the purpose of acquiring the income;
(c)
any capital withdrawn or any sum employed or intended to be employed as capital except as provided in section 14(1)(h);
(d)
any capital employed in improvements other than improvements effected in the replanting of a plantation;
(e)
any sum recoverable under an insurance or contract of indemnity;
(f)
rent or cost of repairs to any premises or part of premises not paid or incurred for the purpose of producing the income;
(g)
any amount paid or payable in respect of income tax in Singapore, or in respect of any tax on income (by whatever name called) in any country outside Singapore;
(h)
any amount paid or payable in respect of goods and services tax by the person if he, being required to be registered under the Goods and Services Tax Act (Cap. 117A), has failed to do so, or if he is entitled under that Act to credit that amount of tax as an input tax;
(i)
any payment to any provident, savings, widows’ and orphans’ or other society or fund, including the Supplementary Retirement Scheme, except —
(i)
such payment made by an employer on his employee’s behalf to the Central Provident Fund that are obligatory under the Central Provident Fund Act (Cap. 36);
(ii)
such payment made by an employer on his employee’s behalf to the retirement account or special account of that employee in accordance with section 18 of the Central Provident Fund Act;
(iii)
such payment made by an employer on his employee’s behalf to the SRS account of that employee up to the amount of the SRS contribution cap applicable to that employee as determined in accordance with regulations made under section 10L(11); and
(iv)
such payments as are allowed under section 14(1)(e), (f), (fa), (fb) and (fc);
(j)
any sum referred to in section 12(6) payable by any person outside Singapore to another person outside Singapore except where the sum is exempt from tax, or tax has been deducted and accounted for under section 45;
(k)
any outgoings and expenses, whether directly or in the form of reimbursements, and any claim for the cost of renewal incurred on or after 1st April 1998 in respect of a motor car (whether owned by him or any other person) which is constructed or adapted for the carriage of not more than 7 passengers (exclusive of the driver) and the weight of which unladen does not exceed 3,000 kilograms except —
(i)
a taxi;
(ii)
a motor car registered outside Singapore and used exclusively outside Singapore;
(iii)
a private hire car if the person is carrying on the business of hiring out cars and the private hire car is used by the person principally for hiring;
(iv)
a motor car which was registered before 1st April 1998 as a business service passenger vehicle for the purposes of the Road Traffic Act (Cap. 276); and
(v)
a motor car registered on or after 1st April 1998 which is used principally for instructional purposes if the person is carrying on the business of providing driving instruction and holds a driving school licence or driving instructor’s licence issued under the Road Traffic Act;
(l)
any outgoings and expenses incurred in respect of any designated unit trust within the meaning of section 35(14) if the person is a unit holder of such trust;
[Act 37 of 2014 wef 01/09/2014]
(m)
any amount of output tax paid or payable under the Goods and Services Tax Act which is borne by the person if he is registered as a taxable person under that Act;
(n)
[Deleted by Act 37 of 2014 wef 01/09/2014]
(o)
[Deleted by Act 19 of 2013]
(p)
any outgoings and expenses, whether directly or in the form of reimbursements, incurred in respect of any right or benefit granted to any person to acquire shares on or after 1st January 2002 in any company, if the right or benefit is not granted by reason of any office or employment held in Singapore by the person; or
(q)
any outgoings and expenses, whether directly or in the form of reimbursements, incurred by any company in respect of any right or benefit granted to any person, by reason of any office or employment held in Singapore by that person, to acquire shares (other than treasury shares, or shares in respect of which the company is allowed a deduction under section 14PA(7)) of a holding company of that company.
[7/79; 9/80; 15/83; 11/94; 32/95; 31/98; 32/99; 24/2001; 37/2002; 7/2007; 53/2007; 34/2008; 22/2011; 19/2013]
(2)  Subsection (1)(b) and (d) shall not apply to any expenditure which qualifies for deduction under section 14A, 14D, 14DA, 14E, 14F, 14H, 14I, 14K, 14KA, 14M, 14N, 14O, 14P, 14PA, 14Q, 14S, 14V or 14W.
[9/80; 28/80; 1/82; 20/91; 2/92; 26/93; 32/99; 21/2003; 34/2008; 29/2010; 22/2011; 19/2013]
[Act 2 of 2016 wef 01/07/2015]
(2A)  Subsection (1)(b) shall not apply to any expenditure which qualifies for deduction under section 14X or 14ZB.
[Act 37 of 2014 wef 27/11/2014]
[Act 34 of 2016 wef 01/07/2016]
(2B)  Subsection (1)(b) and (c) does not apply to any expenditure which qualifies for deduction under section 14ZA.
[Act 34 of 2016 wef 19/05/2016]
(3)  In this section, “holding company” has the same meaning as in section 5 of the Companies Act (Cap. 50).
[7/2007]