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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THIRD SCHEDULE Repealed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 24/09/2017, you requested the version in force on 24/09/2017 incorporating all amendments published on or before 24/09/2017. The closest version currently available is that of 02/07/2017.
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PART IX
ASCERTAINMENT OF ASSESSABLE INCOME
Assessable income
37.
—(1)  The assessable income of any person from all sources chargeable with tax under this Act for any year of assessment shall be the remainder of his statutory income for that year after the deductions allowed in this Part have been made.
[23/69]
(2)  For the purposes of this section, unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86), where a person is a company whose income, if any, is subject to tax at different rates of tax for any year of assessment, the Comptroller shall apportion any sum allowable under subsection (3)(b), (c), (d) or (f) among the different rates of tax on such basis he considers reasonable.
[21/2003; 34/2005]
(3)  Subject to subsections (2) and (3B), there shall be deducted —
(a)
the amount of loss incurred by that person in any trade, business, profession or vocation, which, if it had been a profit would have been assessable under this Act, in the following order:
(i)
firstly, any balance of such loss which remains unabsorbed at the end of the basis period for the previous year of assessment; and
(ii)
secondly, the amount incurred during the basis period for the year of assessment;
(b)
an amount equivalent to twice the value, the value to be determined by the Minister or such person as he may appoint, of an approved donation of —
(i)
any artefact or work of art made by him in the year preceding the year of assessment to an approved museum;
(ii)
any sculpture or work of art for public display made by him in the year preceding the year of assessment to an approved recipient not being an approved museum; or
(iii)
money or services for installing or maintaining any sculpture or work of art for public display made by him in the year preceding the year of assessment,
and for this purpose, “approved” means approved by the Minister or such person as he may appoint;
(c)
an amount equivalent to twice the amount of any donation of money made by him in the year preceding the year of assessment to —
(i)
the Government; or
(ii)
any institution of a public character, whether made directly to the institution or indirectly through any grant-making philanthropic organisation registered by the Comptroller for the purpose of this sub‑paragraph;
(d)
an amount equivalent to twice the value of any donation of a computer (including computer software and peripherals) approved by the Minister or such person as he may appoint and made by any company in the year preceding the year of assessment to —
(i)
any institution of a public character; or
(ii)
a prescribed educational, research or other institution in Singapore;
(e)
an amount equivalent to —
(i)
twice the value of any donation of shares in a company listed on the Singapore Exchange; or
(ii)
twice the value of any donation of units in unit trusts traded in Singapore or listed on the Singapore Exchange,
made by an individual in the year preceding the year of assessment to any institution of a public character; and
(f)
an amount equivalent to twice the value, the value to be determined by an appraiser licensed under the Appraisers Act (Cap. 16) and approved by the Chief Valuer appointed under the State Lands Act (Cap. 314), of any donation of any immovable property made by him in the year preceding the year of assessment to any institution of a public character.
[31/86; 1/90; 26/93; 31/98; 24/2001; 37/2002; 21/2003; 49/2004; 34/2005; 7/2007; 10/2007; 34/2008; 25/2010; 29/2010]
(3A)  For the purpose of subsection (3), a reference to “twice the value” or “twice the amount” in subsection (3)(b) to (f) is to be read as a reference to —
(a)
in the case of a donation made during either of the following periods:
(i)
from 1 January 2009 to 31 December 2014 (both dates inclusive);
(ii)
from 1 January 2016 to 31 December 2018 (both dates inclusive),
2.5 times the value or 2.5 times the amount, as the case may be; or
(b)
in the case of a donation made during the period from 1 January 2015 to 31 December 2015 (both dates inclusive), 3 times the value or 3 times the amount, as the case may be.
[Act 2 of 2016 wef 11/04/2016]
(3B)  No deduction shall be made under subsection (3)(b), (c), (d), (e) or (f) to a person in respect of any donation made to an approved museum, approved recipient not being an approved museum, the Government, an institution of a public character or a prescribed educational, research or other institution in Singapore on or after 1st January 2012 unless he provides to —
(a)
the approved museum, approved recipient, Government, institution of a public character or educational, research or other institution; or
(b)
in a case where the donation is made under subsection (3)(c) to an institution of a public character indirectly through a grant-making philanthropic organisation, the grant-making philanthropic organisation,
as the case may be, such information within such time and in such form and manner as the Comptroller may specify.
[22/2011]
(3C)  A donation made on or after 18th December 2012 of any property or money referred to in subsection (3)(b)(i) or (ii), (c), (d), (e) or (f) to a recipient under that provision, which is subject to any condition specified by the donor as to the purpose for which the donation may be applied (including where the donor specifies another purpose for the application of the donation in the event the first‑mentioned purpose should fail), shall be treated as a donation under that provision if (and only if) all of the following requirements are satisfied:
(a)
except where the recipient is the Government, each specified purpose must be one that advances an objective of the recipient set out in its governing instrument;
(b)
none of the specified purposes must be to advance the interests (whether directly or indirectly) of a particular race, belief or religion, or of a particular person or persons;
(c)
the donor did not specify or imply in any manner that any part of the property or money that cannot be used for any of the specified purposes shall revert to him or be given to any other person (other than the recipient).
[29/2012]
(3D)  For the avoidance of doubt, subsection (3C) applies to a donation of money referred to in subsection (3)(c)(ii) to a recipient under that provision, whether made directly to the recipient or indirectly through a grant-making philanthropic organisation.
[29/2012]
(3E)  In subsections (3C) and (3D) —
“governing instrument”, in relation to a recipient under subsection (3)(b)(i) or (ii), (c), (d), (e) or (f), includes the memorandum and articles of association, constitution, trust instrument or any rules or regulations governing the objects and administration of the recipient;
“recipient”  —
(a)
in the case of a donation referred to in subsection (3)(b)(i), means an approved museum;
(b)
in the case of a donation referred to in subsection (3)(b)(ii), means an approved recipient not being an approved museum;
(c)
in the case of a donation referred to in subsection (3)(c), means the Government or an institution of a public character;
(d)
in the case of a donation referred to in subsection (3)(d), means an institution of a public character or a prescribed educational, research or other institution in Singapore; or
(e)
in the case of a donation referred to in subsection (3)(e) or (f), means an institution of a public character.
[29/2012]
(3F)  Subject to subsection (3G), a donation referred to in subsection (3)(b), (c), (d), (e) or (f) shall be eligible for a deduction under that provision notwithstanding that the donor or another person receives or will receive a benefit in consequence of making the donation.
[29/2012]
(3G)  Where a donor who makes a donation referred to in subsection (3)(b), (c), (d), (e) or (f), or a person connected with the donor, receives or will receive a benefit in consequence of making the donation, a reference to the value or amount of the donation under that provision shall exclude an amount equivalent to the value of the benefit.
[29/2012]
(3H)  The Minister may by rules —
(a)
exclude any type of benefit from the application of subsection (3G); and
(b)
provide for the basis for determining the value of any benefit under that subsection.
[29/2012]
(3I)  For the avoidance of doubt, the Comptroller may make an assessment or additional assessment under section 74 if the benefit is received only after the deduction of the donation under subsection (3) is made.
[29/2012]
(3J)  In subsection (3G), a person is connected with the donor if —
(a)
he is a relative of the donor within the meaning of section 37K(12);
(b)
he, or a person who is his relative within the meaning of section 37K(12), directly or indirectly controls the donor;
(c)
he is controlled, directly or indirectly, by the donor; or
(d)
he and the donor, directly or indirectly, are under the control of a common person.
[29/2012]
(4)  A deduction under subsection (3)(a)(i) shall be made in the following order:
(a)
firstly, against statutory income from the same trade, business, profession or vocation;
(b)
secondly, against statutory income from any other trade, business, profession or vocation; and
(c)
thirdly, against statutory income from any other source.
[49/2004]
(5)  A deduction under subsection (3)(a)(i) shall be made as far as possible in the order specified in subsection (4) from the statutory income of the first year of assessment after the year in which such loss was incurred, and, so far as it cannot be so made, then from the statutory income of the next year of assessment, and so on.
[49/2004]
(6)  Where, in any year of assessment, the amount of loss incurred by any person during the year preceding the year of assessment is not fully deducted under subsection (3)(a)(ii), the balance of such loss, after deducting any amount of such loss transferred to a claimant company under section 37C or to a spouse under section 37D or 37F, or deducted against income for the immediate preceding year of assessment under section 37E(1) or any of the 3 immediate preceding years of assessment under section 37E(1A), as the case may be, shall be available for deduction against his statutory income for subsequent year of assessment under subsection (3)(a)(i).
[37/2002; 49/2004; 34/2005; 27/2009]
(7)  A deduction under this section to any person in respect of any sum allowable under subsection (3)(b), (c), (d), (e) or (f) shall only be allowed against his statutory income after the deduction under subsection (3)(a) and section 37K.
[37/2002; 21/2003; 34/2005; 29/2010]
(8)  Subject to subsections (2), (7) and (12), the deduction to any person in respect of any sum allowable under subsection (3)(b), (c), (d), (e) or (f) shall be allowed —
(a)
as far as possible against his statutory income of the first year of assessment after the year in which the donation was made by him; and
(b)
so far as the deduction cannot be so allowed, after deducting any of such sum transferred to a claimant company under section 37C or to a spouse under section 37D, then from his statutory income of the next year of assessment,
and so on, except that any balance of the donation not deducted against his statutory income of the fifth year of assessment after the year of assessment relating to the basis period in which the donation was made shall be disregarded.
[37/2002; 21/2003; 49/2004; 34/2005; 29/2012]
(9)  For the purposes of subsections (7) and (8), any sum allowable under subsection (3)(b), (c), (d), (e) or (f) in respect of any donation made on an earlier date shall be deemed to have been deducted first.
[37/2002; 21/2003; 34/2005]
(10)  For the purposes of subsection (3), the loss incurred during any year shall be computed, where the Comptroller so decides, by reference to the year ending on a day in such year which would have been adopted under section 35(4) for the computation of the statutory income of the following year of assessment if a profit had arisen.
(10A)  For the purposes of subsection (3)(b) to (f), the reference to the year preceding any year of assessment shall —
(a)
if the person making the donation is not an individual and is one to whom a direction is made under section 35(4);
(b)
if the persons making the donation are the partners of a partnership, a direction is made under section 35(4) in relation to the income of that partnership, and the donation is made by them in the name of the partnership;
(c)
if the person making the donation is an individual to whom a direction is made under section 35(4), and the donation is made by him in the name of the trade, business or profession to which the accounts relate,
be read as a reference to —
(i)
the period of 12 months or such other period as the Comptroller may allow, ending on the day the accounts of the person or the partnership (as the case may be) are made up to; or
(ii)
such other period as the Comptroller, having regard to any special circumstance, otherwise directs.
[53/2007; 29/2012]
(11)  No deduction shall be allowed under this section to any person in respect of any sum which has been allowed as a deduction under this section against the income of his or her spouse chargeable in his or her own name.
(12)  Notwithstanding subsection (3), the amount of any loss incurred by a company in any trade or business or any sum allowable under subsection (3)(b), (c), (d), (e) or (f) to a company in respect of any donation shall be disregarded unless the Comptroller is satisfied that the shareholders of the company on the last day of the year in which the loss was incurred or the donation was made, as the case may be, were substantially the same as the shareholders of the company on the first day of the year of assessment in which such loss or donation would otherwise be deductible under subsection (3).
[37/2002; 21/2003; 34/2005]
(13)  A loss or donation disregarded under subsection (12) shall not be allowed in any subsequent year of assessment.
[37/2002]
(14)  For the purposes of subsection (12) —
(a)
the shareholders of a company at any date shall not be deemed to be substantially the same as the shareholders at any other date unless, on both those dates, not less than 50% of the total number of issued shares of the company are held by or on behalf of the same persons;
(b)
shares in a company held by or on behalf of another company shall be deemed to be held by the shareholders of the last-mentioned company; and
(c)
shares held by or on behalf of the trustee of the estate of a deceased shareholder or by or on behalf of the person entitled to those shares as beneficiaries under the will or any intestacy of a deceased shareholder shall be deemed to be held by that deceased shareholder.
[34/2005]
(15)  For the purpose of subsection (14), where any part of a share of a shareholder is not fully paid up, there shall be disregarded a proportion equal to
where A
is the amount that has not been paid in respect of the share; and
B
is the total amount payable in respect of the share.
[34/2005]
(16)  The Minister or such person as he may appoint may, where there is a substantial change in the shareholders of a company and he is satisfied that such change is not for the purpose of deriving any tax benefit or obtaining any tax advantage, exempt that company from the provisions of subsection (12).
[37/2002]
(17)  Upon an exemption under subsection (16) —
(a)
any loss referred to in subsection (3)(a) incurred by a company may only be deducted against the profits from the same trade or business of the company in respect of which that loss was incurred; and
(b)
any balance of the donation referred to in subsection (8) shall be allowed against the statutory income of the person of the year of assessment in which such donation would otherwise be deductible under that subsection.
[37/2002]
(18)  For the purposes of subsection (3)(b), “museum” includes any institution established for the purpose of acquiring any collection of artefacts and making them accessible to the public.
[7/2007]
(18A)  For the purposes of subsection (3)(c)(ii), the Minister may make regulations with respect to the following matters:
(a)
the registration of a grant-making philanthropic organisation;
(b)
the deregistration of an organisation referred to in paragraph (a);
(c)
the issue of tax deduction receipts and maintenance of records and accounts by a registered grant-making philanthropic organisation for donations received by it and the audit of such records and accounts;
(d)
the requirements to be complied with by a registered grant‑making philanthropic organisation;
(e)
any other matter for giving full effect to or for carrying out the purposes of that provision.
[34/2008]
(18B)  Where a registered grant-making philanthropic organisation contravenes any regulation made under subsection (18A), being a regulation prescribed as one to which this subsection applies —
(a)
the organisation shall be liable to pay to the Comptroller a financial penalty of the higher of $100 and the amount ascertained by the formula
(b)
the Minister or such person as he may appoint may deregister the organisation.
[34/2008]
(18BA)  The Comptroller may for any good cause remit the whole or any part of the financial penalty payable under subsection (18B).
[Act 37 of 2014 wef 27/11/2014]
(18C)  Notwithstanding anything to the contrary in this Act or any other written law, a registered grant-making philanthropic organisation shall keep and retain in safe custody all records and accounts in respect of any donation maintained under regulations made under subsection (18A), for a period of 7 years or such period as may be prescribed by regulations from the year of assessment relating to the year in which the donation is received by the organisation.
[34/2008]
(18D)  In subsection (3)(c)(ii), “grant-making philanthropic organisation” means —
(a)
a charity registered or exempt from registration under the Charities Act (Cap. 37); or
(b)
a not-for-profit organisation approved under section 13U.
[34/2008]
(19)  For the purposes of subsection (3)(e) and subject to subsection (3G) —
(a)
the amount in respect of any donation of shares in a company or units in a unit trust listed on the Singapore Exchange shall be the price of such shares or units, as the case may be, in the open market at the last transaction of such shares or units on the date of the donation;
(b)
the amount in respect of any donation of units in unit trusts traded in Singapore (other than those listed on the Singapore Exchange) shall be the bid price of such units immediately after the date of the donation quoted by the manager of the unit trusts; and
(c)
“date of the donation”, in relation to any shares or units referred to in paragraph (a) or (b), as the case may be, means the date of legal transfer to the institution of a public character of the donation of such shares or units.
[24/2001; 37/2002; 21/2003; 29/2012]
37A.  [Repealed by Act 19 of 2013]
Adjustment of capital allowances, losses or donations between income subject to tax at different rates
37B.
—(1)  This section shall apply to any company whose income for any year of assessment is subject to tax at different rates.
[26/93; 37/2002]
(2)  Where, for any year of assessment, there are any unabsorbed allowances, losses or donations in respect of the income of a company subject to tax at a lower rate of tax to which this section applies, and there is any chargeable income of the company subject to tax at a higher rate of tax to which this section applies, those unabsorbed allowances, losses or donations shall be deducted against that chargeable income in accordance with the following provisions:
(a)
in the case where those unabsorbed allowances, losses or donations do not exceed that chargeable income multiplied by the adjustment factor, that chargeable income shall be reduced by an amount arrived at by dividing those unabsorbed allowances, losses or donations by the adjustment factor, and those unabsorbed allowances, losses or donations shall be nil; and
(b)
in any other case, those unabsorbed allowances, losses or donations shall be reduced by an amount arrived at by multiplying that chargeable income by the adjustment factor, and those unabsorbed allowances, losses or donations so reduced shall be added to, and be deemed to form part of, the corresponding allowances, losses or donations in respect of the income subject to tax at the lower rate of tax, for the next succeeding year of assessment and any subsequent year of assessment in accordance with section 23 or 37, as the case may be, and that chargeable income shall be nil.
[37/2002]
(3)  Where, for any year of assessment, there are any unabsorbed allowances, losses or donations in respect of the income of a company subject to tax at a higher rate of tax to which this section applies, and there is any chargeable income of the company subject to tax at a lower rate of tax to which this section applies, those unabsorbed allowances, losses or donations shall be deducted against that chargeable income in accordance with the following provisions:
(a)
in the case where those unabsorbed allowances, losses or donations do not exceed that chargeable income divided by the adjustment factor, that chargeable income shall be reduced by an amount arrived at by multiplying those unabsorbed allowances, losses or donations by the adjustment factor, and those unabsorbed allowances, losses or donations shall be nil; and
(b)
in any other case, those unabsorbed allowances, losses or donations shall be reduced by an amount arrived at by dividing that chargeable income by the adjustment factor, and those unabsorbed allowances, losses or donations so reduced shall be added to, and be deemed to form part of, the corresponding allowances, losses or donations in respect of the income subject to tax at the higher rate of tax, for the next succeeding year of assessment and any subsequent year of assessment in accordance with section 23 or 37, as the case may be, and that chargeable income shall be nil.
[37/2002]
(4)  Where a company to which this section applies ceases to derive income subject to tax at a lower rate of tax in the basis period for any year of assessment but derives income subject to tax at a higher rate of tax in that basis period, subsection (2) shall apply, with the necessary modifications, to any unabsorbed allowances, losses or donations in respect of the income of the company subject to tax at the lower rate of tax for any year of assessment subsequent to that year of assessment.
[37/2002]
(5)  Where a company to which this section applies ceases to derive income subject to tax at a higher rate of tax in the basis period for any year of assessment but derives income subject to tax at a lower rate of tax in that basis period, subsection (3) shall apply, with the necessary modifications, to any unabsorbed allowances, losses or donations in respect of the income of the company subject to tax at the higher rate of tax for any year of assessment subsequent to that year of assessment.
[37/2002]
(6)  Nothing in this section shall be construed as affecting the application of section 23 or 37 unless otherwise provided in this section.
(6A)  If, during the basis period for the year of assessment 2013 or any subsequent year of assessment (referred to in this subsection as the relevant year of assessment), a company only derives income that is exempt from tax, then subsection (3) shall, with the necessary modifications, apply to any year of assessment subsequent to the relevant year of assessment as if any sum allowable under section 37(3)(b), (c), (d) or (f) in respect of any donation made by that company during the basis period for the relevant year of assessment were unabsorbed donation in respect of the income of a company that is subject to tax at the rate of tax specified in section 43(1)(a).
[29/2012]
(7)  In this section —
“adjustment factor”, in relation to any year of assessment, means the factor ascertained in accordance with the formula
where A
is the higher rate of tax for that year of assessment; and
B
is the lower rate of tax for that year of assessment;
“allowances” means allowances under section 16, 17, 18B, 18C, 19, 19A, 19B, 19C, 19D, 20, 21, 22 or 23 including unabsorbed allowances which arose in any year of assessment before the year of assessment 1994;
“chargeable income of the company subject to tax at a higher rate of tax” means income subject to tax at a higher rate of tax after deducting expenses, donations, allowances or losses allowable under this Act against that income;
“chargeable income of the company subject to tax at a lower rate of tax” means income subject to tax at a lower rate of tax after deducting expenses, donations, allowances or losses allowable under this Act against that income;
“donations” means donations which are deductible including any unabsorbed donations allowable under section 37;
“higher rate of tax” or “lower rate of tax” means the rate of tax under section 43(1)(a) or the concessionary rate of tax in accordance with —
(a)
any order made under section 13(12); or
(b)
section 43A, 43C (in respect of those relating to offshore general insurance business only), 43D (repealed), 43E, 43F (repealed), 43G, 43H (repealed), 43I, 43J, 43K (repealed), 43L (repealed), 43M (repealed), 43N, 43P, 43Q, 43R, 43S (repealed), 43T (repealed), 43U, 43V (repealed), 43W, 43X, 43Y, 43Z, 43ZA, 43ZB, 43ZC, 43ZD, 43ZE, 43ZF, 43ZG or 43ZH, or the regulations made thereunder, as the case may be;
[Act 2 of 2016 wef 01/04/2015]
[Act 34 of 2016 wef 29/12/2016]
“losses” means losses which are deductible under section 37 including unabsorbed losses incurred in respect of any year of assessment before the year of assessment 1994;
“unabsorbed allowances, losses or donations in respect of the income of a company subject to tax at a higher rate of tax” means the balance of such allowances, losses or donations after deducting expenses, donations, allowances or losses allowable under this Act against the income subject to tax at a higher rate of tax;
“unabsorbed allowances, losses or donations in respect of the income of a company subject to tax at a lower rate of tax” means the balance of such allowances, losses or donations after deducting expenses, donations, allowances or losses allowable under this Act against the income subject to tax at a lower rate of tax.
[37/2002; 21/2003; 49/2004; 34/2005; 7/2007; 53/2007; 34/2008; 29/2010; 22/2011; 19/2013]
Group relief for Singapore companies
37C.
—(1)  Subject to the provisions of this section, a transferor company may transfer any qualifying deduction for any year of assessment to a claimant company of the same group which has claimed the qualifying deduction against its assessable income for the same year of assessment.
[37/2002]
(2)  A transfer of a qualifying deduction for any year of assessment shall be made only if the transferor company and the claimant company, for that year of assessment —
(a)
are members of the same group on the last day of the basis period;
(b)
have accounting periods ending on the same day; and
(c)
have made an election under subsection (11).
[37/2002]
(3)  For the purposes of this section, 2 Singapore companies are members of the same group if —
(a)
at least 75% of the total number of issued ordinary shares in one company are beneficially held, directly or indirectly, by the other; or
(b)
at least 75% of the total number of issued ordinary shares in each of the 2 companies are beneficially held, directly or indirectly, by a third Singapore company.
[37/2002; 34/2005]
(4)  Notwithstanding that a Singapore company beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares in another Singapore company, it shall not be treated to have satisfied subsection (3) unless additionally it is beneficially entitled to at least 75% of —
(a)
any residual profits of the other company available for distribution to that company’s equity holders; and
(b)
any residual assets of the other company available for distribution to that company’s equity holders on a winding up.
[37/2002; 34/2005]
(5)  For the purpose of subsection (3), where a Singapore company beneficially owns, directly or indirectly, a fraction of the total number of issued ordinary shares of a second Singapore company which in turn beneficially owns, directly or indirectly, a fraction of the total number of issued ordinary shares of a third Singapore company, the Singapore company shall be deemed to have a beneficial ownership of the number of issued ordinary shares of the third Singapore company equal to such fraction of the total number as results from the multiplication of those 2 fractions; and where the third Singapore company beneficially owns, directly or indirectly, a fraction of the total number of issued ordinary shares of a fourth Singapore company, the Singapore company shall be deemed to have a beneficial ownership of the number of issued ordinary shares of the fourth Singapore company equal to such fraction of the total number as results from the multiplication of those 3 fractions, and so on.
[37/2002; 34/2005]
(6)  A transfer of qualifying deduction may be —
(a)
made by a transferor company to more than one claimant company, provided that the amount of qualifying deduction transferred is fully deducted against the assessable income of the first claimant company before any excess qualifying deduction is transferred and deducted against the assessable income of the second claimant company and so on; or
(b)
claimed by a claimant company from more than one transferor company, provided that the amount of qualifying deduction transferred from the first transferor company is fully deducted against the assessable income of the claimant company before any qualifying deduction transferred from a second transferor company is deducted against the assessable income of the claimant company and so on.
[37/2002]
(7)  Qualifying deductions shall be transferred to a claimant company in accordance with the priority specified in the election made under subsection (11), and in the following order:
(a)
any allowance specified in subsection (14)(a);
(b)
any loss specified in subsection (14)(b); and
(c)
any donation specified in subsection (14)(c).
[37/2002]
(8)  Where, in any year of assessment, a transfer of qualifying deduction cannot be effected in accordance with the order of priority specified by any transferor company or claimant company in its election made under subsection (11), the transfer shall be allowed in such manner as the Comptroller thinks reasonable and proper.
[37/2002]
(9)  Subject to subsection (10), the amount of qualifying deduction that may be transferred to a claimant company from a transferor company for any year of assessment shall be —
(a)
the available assessable income of the claimant company equal to
where A
is the number of days in the continuous period ending on the last day of the basis period for that year of assessment during which the companies are members of the same group or, if the continuous periods of the transferor company and the claimant company are different, the number of days in the shorter of the continuous periods;
B
is the number of days in the basis period of the claimant company for that year of assessment; and
C
is the assessable income of the claimant company for that year of assessment; or
(b)
the available qualifying deduction of the transferor company equal to
where A
has the same meaning as in paragraph (a);
D
is the number of days in the basis period of the transferor company for that year of assessment; and
E
is the amount of qualifying deduction of the transferor company for that year of assessment,
whichever is the lower.
[37/2002]
(10)  Where, for any year of assessment, there are 2 or more —
(a)
claims for any qualifying deduction by a claimant company, the available assessable income of the claimant company shall, for the purpose of subsection (9)(a), be
where A, B and C
have the same meanings as in subsection (9)(a); and
F
is the aggregate of the amounts of qualifying deductions previously claimed from any other transferor company for the same year of assessment, if any;
(b)
transfers of any qualifying deduction by a transferor company, the available qualifying deduction of the transferor company shall, for the purpose of subsection (9)(b), be
where A, D and E
have the same meanings as in subsection (9)(b); and
G
is the aggregate of the amounts of qualifying deductions previously transferred to any other claimant company for the same year of assessment, if any.
[37/2002]
(11)  Every transferor company and every claimant company of the same group shall, at the time of lodgment of their returns of income for any year of assessment or within such further time as the Comptroller may allow, make an irrevocable election to transfer or claim qualifying deductions, as the case may be.
[37/2002]
(12)  An election under subsection (11) shall be accompanied by —
(a)
such particulars as the Comptroller may require; and
(b)
a list of companies, in order of priority, to which qualifying deductions would be transferred or from which such deductions would be claimed, as the case may be.
[37/2002]
(13)  Notwithstanding subsection (11), where at the time of furnishing its return of income under section 62(1) for any year of assessment —
(a)
a company has assessable income, but is subsequently determined by the Comptroller to have any qualifying deduction for that year of assessment; or
(b)
a company has any qualifying deduction, but is subsequently determined by the Comptroller to have assessable income for that year of assessment,
the Comptroller may —
(i)
allow the company to make an election under subsection (11); and
(ii)
allow any company of the same group to include that company in its list of companies submitted previously by it under subsection (11),
within such time and in such manner as the Comptroller may determine.
[37/2002]
(14)  For the purposes of this section, subject to subsection (15) and sections 35, 37 and 37B, qualifying deductions, in relation to a transferor company, for each year of assessment, are —
(a)
any allowance falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 for that year of assessment that is in excess of the transferor company’s income from all sources chargeable to tax for that year of assessment;
(b)
any loss incurred by the transferor company in the basis period for that year of assessment in any trade or business which, if it had been a profit would have been assessable under this Act, and which is not deducted for that year of assessment because of insufficiency of statutory income of the transferor company; and
(c)
any donation made by the transferor company under section 37(3)(b), (c), (d) or (f) in the year preceding that year of assessment that is not deducted for that year of assessment because of insufficiency of statutory income of the transferor company.
[37/2002; 21/2003; 34/2005; 29/2010]
(15)  Notwithstanding subsection (14), the following companies shall not be entitled to transfer the following items of qualifying deductions:
(a)
any company to which section 10E applies, in respect of qualifying deductions under subsection (14)(a) (except in relation to allowances falling under sections 16, 17, 18B and 18C) and (b);
(b)
any company to which section 97D or 97G of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) in force immediately before 28th April 2004 or section 97V of the Economic Expansion Incentives (Relief from Income Tax) Act in force immediately before the date the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Act 2016 is published in the Gazette applies, in respect of qualifying deductions under subsection (14)(b) where the loss is deemed to be a loss incurred from a trade or business for the purposes of any of those sections;
[Act 37 of 2014 wef 27/11/2014]
[Act 11 of 2016 wef 19/04/2016]
(c)
any company, in respect of qualifying deductions under subsection (14) relating to any income that is fully exempt from tax under the provisions of this Act or the Economic Expansion Incentives (Relief from Income Tax) Act;
(d)
any company, in respect of qualifying deductions under subsection (14) relating to any income the tax on which is remitted under the provisions of this Act, unless the Minister otherwise approves;
(e)
any company, in respect of qualifying deductions under subsection (14)(b) relating to any loss arising from any unutilised deduction under section 14Q for any year of assessment up to and including the year of assessment 2012; and
(f)
any qualifying start-up company, in respect of qualifying deductions under subsection (14)(b) relating to any loss incurred by the company for which any cash grant is given under section 37H.
[37/2002; 11/2004; 7/2007; 34/2008; 29/2010; 29/2012]
(16)  Notwithstanding subsections (9) and (10), where the Comptroller discovers that any transfer or claim of qualifying deduction which has been made from or to any company is or has become excessive, he may make an assessment upon the company under section 74 on the amount which, in his opinion, ought to have been charged to tax.
[37/2002]
(17)  Section 37B shall apply, with the necessary modifications, to the transfer of any qualifying deduction from a transferor company to a claimant company, where applicable, and for the purpose of such application, any reference in section 37B(2) and (3) to —
(a)
unabsorbed allowances, losses or donations shall be read as a reference to qualifying deductions;
(b)
corresponding allowances, losses or donations shall be read as a reference to allowances, losses or donations;
(c)
income of a company subject to tax at a higher or lower rate of tax, as the case may be, shall be read as a reference to income of a transferor company subject to tax at a higher or lower rate of tax, respectively; and
(d)
chargeable income of the company shall be read as a reference to chargeable income of a claimant company.
[37/2002]
(18)  For the purposes of this section, the Minister may make regulations to provide generally for giving full effect to or for carrying out the purposes of this section.
[37/2002]
(19)  In this section —
“assessable income”, in relation to a claimant company or transferor company, means assessable income of the company as determined under section 37 after deducting any deduction allowed under section 37G, investment allowance under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act and integrated investment allowance under Part XIIID of that Act;
“claimant company” or “transferor company” means a Singapore company that claims or transfers, respectively, any qualifying deduction under subsection (1) but shall not include a company approved as —
(a)
a technology company under section 94(2) of the Economic Expansion Incentives (Relief from Income Tax) Act in force immediately before 28th April 2004;
[Act 37 of 2014 wef 27/11/2014]
(b)
a venture company under section 97B(2) of the Economic Expansion Incentives (Relief from Income Tax) Act in force immediately before 28th April 2004;
[Act 37 of 2014 wef 27/11/2014]
(c)
a technology investment company under section 97C(2) of the Economic Expansion Incentives (Relief from Income Tax) Act in force immediately before 28th April 2004;
[Act 37 of 2014 wef 27/11/2014]
(d)
an overseas investment company under section 97C(4) of the Economic Expansion Incentives (Relief from Income Tax) Act in force immediately before 28th April 2004; or
[Act 37 of 2014 wef 27/11/2014]
(e)
a start-up company under section 97T(2) of the Economic Expansion Incentives (Relief from Income Tax) Act in force immediately before the date the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Act 2016 is published in the Gazette;
[Act 11 of 2016 wef 19/04/2016]
“commercial loan” means any borrowing which entitles the creditor to any return which is of only —
(a)
a fixed amount or at a fixed rate per cent of the amount of the borrowing; or
(b)
a fixed rate per cent of the profits of the company;
“equity holder”, in relation to a Singapore company, means any holder of ordinary shares in the company or any creditor of the company in respect of any non-commercial loan;
“non-commercial loan” means any borrowing other than a commercial loan;
“ordinary share” means any share other than a treasury share or a share which carries only a right to any dividend which is of —
(a)
a fixed amount or at a fixed rate per cent of the value of the shares; or
(b)
a fixed rate per cent of the profits of the company;
“qualifying start-up company” has the same meaning as in section 37H;
“residual assets”, in relation to a Singapore company, means net assets of the company after distribution made to —
(a)
creditors of the company in respect of commercial loans; and
(b)
holders of shares other than ordinary shares,
and where the company has no residual asset, a notional amount of $100 is deemed to be the residual assets of the company;
“residual profits”, in relation to a Singapore company, means profits of the company after deducting any dividend which is of —
(a)
a fixed amount or at a fixed rate per cent of the value of the shares of the company; or
(b)
a fixed rate per cent of the profits of the company,
but before deducting any return due to any non-commercial loan creditor which is not of —
(i)
a fixed amount or at a fixed rate per cent of the amount of the borrowing; or
(ii)
a fixed rate per cent of the profits of the company,
and where the company has no residual profit, a notional amount of $100 is deemed to be the residual profits of the company;
“Singapore company” means any company incorporated in Singapore.
[37/2002; 11/2004; 48/2004; 34/2005; 34/2008; 2/2013]
Transfer of qualifying deduction between spouses
37D.
—(1)  Subject to the provisions of this section, an individual may transfer any qualifying deduction for any year of assessment to a spouse living with him or her who has claimed the qualifying deduction against her or his assessable income for the same year of assessment.
[49/2004]
(1A)  No transfer may be made under subsection (1) of —
(a)
any allowance made to the individual for the year of assessment 2016 or a subsequent year of assessment;
(b)
any loss incurred by the individual in the basis period for the year of assessment 2016 or a subsequent year of assessment; or
(c)
any donation made by the individual in the year immediately preceding the year of assessment 2016 or a subsequent year of assessment.
[Act 37 of 2014 wef 27/11/2014]
(1B)  No transfer of any qualifying deduction under subsection (1) may be made for the year of assessment 2018 or any subsequent year of assessment.
[Act 37 of 2014 wef 27/11/2014]
(2)  Qualifying deductions shall be transferred to a claimant spouse in the following order:
(a)
any allowance specified in subsection (8)(a);
(b)
any loss specified in subsection (8)(b); and
(c)
any donation specified in subsection (8)(c).
[49/2004]
(3)  For each type of qualifying deduction to be transferred in the order specified in subsection (2), any allowance, loss or donation (as the case may be) arising to the transferor in an earlier year of assessment shall be transferred first before any allowance, loss or donation arising to the transferor in a later year of assessment.
[49/2004]
(4)  The amount of qualifying deduction to be transferred by a transferor to a claimant spouse is the lower of —
(a)
the amount of qualifying deduction available for transfer; and
(b)
the assessable income of the claimant spouse.
[49/2004]
(5)  Any individual transferring or claiming a qualifying deduction under this section shall notify the Comptroller and make an election to transfer or claim qualifying deductions, as the case may be, not later than 30 days from the date of the service of the notice of assessment on the individual or his or her spouse, whichever is the later.
[49/2004]
(6)  An election made by an individual under subsection (5) shall be irrevocable unless the Comptroller otherwise allows and shall be accompanied by such particulars as the Comptroller may require.
[49/2004]
(7)  Where the Comptroller discovers that any transfer or claim of qualifying deduction which has been made from or to any individual is or has become excessive, he may make an assessment upon that individual under section 74 on the amount which, in his opinion, ought to have been charged to tax.
[49/2004]
(8)  For the purposes of this section, subject to sections 35 and 37, qualifying deductions, in relation to an individual, for each year of assessment, are —
(a)
any allowance falling to be made under section 16, 17, 18B, 18C, 19, 19A, 19C, 19D or 20 that is in excess of the individual’s income from all sources chargeable with tax for that year of assessment;
(b)
any loss incurred by the individual in any trade, business, profession or vocation which, if it had been a profit, would have been assessable under this Act, and which is not deducted for that year of assessment because of insufficiency of statutory income of the individual; and
(c)
any donation made by the individual under section 37(3)(b), (c), (e) or (f) that is not deducted for that year of assessment because of insufficiency of statutory income of the individual.
[49/2004; 34/2005; 29/2010]
Carry-back of capital allowances and losses
37E.
—(1)  Subject to the provisions of this section, a person may deduct any qualifying deduction for any year of assessment against his assessable income for the immediate preceding year of assessment.
[34/2005]
(1A)  Notwithstanding subsection (1) but subject to the other provisions of this section, a person may deduct any qualifying deduction for the years of assessment 2009 and 2010 against his assessable income for the 3 years of assessment immediately preceding the year of assessment 2009 or 2010, as the case may be.
[27/2009]
(1B)  Any qualifying deduction under subsection (1A) for any year of assessment shall so far as possible be made against the person’s assessable income for the third year of assessment immediately preceding that year of assessment, with any remaining balance of the qualifying deduction made —
(a)
against his assessable income for the second year of assessment immediately preceding that year of assessment; and
(b)
thereafter against his assessable income for the first year of assessment immediately preceding that year of assessment.
[27/2009]
(1C)  Where in any year of assessment a person is entitled to make more than one deduction under subsection (1A) or under subsections (1) and (1A) against his assessable income for that year of assessment, the assessable income for that year of assessment shall so far as possible be deducted by the amount of qualifying deduction for the earliest year of assessment the person is entitled to so deduct under subsection (1) or (1A), and any remaining balance of the assessable income for the first-mentioned year of assessment shall so far as possible be deducted by the amount of qualifying deduction for the next earliest year of assessment, and so on.
[27/2009]
(2)  Qualifying deductions shall be deducted in the following order:
(a)
any allowance specified in subsection (9)(a); and
(b)
any loss specified in subsection (9)(b).
[34/2005]
(3)  The amount of qualifying deduction to be deducted for any year of assessment is the lower of —
(a)
the amount of qualifying deduction available for deduction for that year of assessment; and
(b)
the assessable income of the person for the immediate preceding year of assessment.
[34/2005]
(3A)  Notwithstanding subsection (3), the amount of qualifying deduction to be deducted for the year of assessment 2009 or 2010 against the assessable income for any of the 3 years of assessment immediately preceding the year of assessment 2009 or 2010, as the case may be, is the lower of —
(a)
an amount equivalent to the difference between the amount of qualifying deduction available for deduction for the year of assessment 2009 or 2010, as the case may be, and the aggregate amount of such qualifying deductions which had already been deducted under subsection (1A); and
(b)
the balance of the assessable income of the person for the year of assessment after such assessable income has been deducted by the qualifying deduction for any year of assessment prior to the year of assessment 2009 or 2010, as the case may be, under subsection (1C).
[27/2009]
(4)  Subject to the provisions of this section, section 37B shall apply, with the necessary modifications, to the deduction of any qualifying deduction by any company for any year of assessment against its assessable income for the immediate preceding year of assessment or any of the 3 immediate preceding years of assessment (as the case may be), where applicable, as if the income for the immediate preceding year of assessment or any of the 3 immediate preceding years of assessment (as the case may be) is income for that year of assessment, and for the purpose of such application, any reference in section 37B(2) and (3) to —
(a)
unabsorbed allowances, losses or donations shall be read as a reference to qualifying deductions;
(b)
corresponding allowances, losses or donations shall be read as a reference to allowances or losses; and
(c)
chargeable income of the company shall be read as a reference to assessable income for the immediate preceding year of assessment or any of the 3 immediate preceding years of assessment (as the case may be) of the company.
[34/2005; 27/2009]
(4A)  For the purposes of applying section 37B to the provisions of this section under subsection (4), the reference to “higher rate of tax” or “lower rate of tax” in section 37B shall be read as a reference to —
(a)
the rate of tax under section 43(1)(a) applicable to the year of assessment for which the assessable income is deducted by any qualifying deduction;
(b)
the concessionary rate of tax applicable to the year of assessment for which any allowance specified in subsection (9)(a) is made to or any loss specified in subsection (9)(b) is incurred by a company; or
(c)
the concessionary rate of tax applicable to the assessable income which is deducted by any qualifying deduction,
as the case may be.
[27/2009]
(5)  The amount of qualifying deduction to be deducted for any year of assessment shall not exceed $100,000; and in the case of a company shall be determined by the formula
where A
is any amount deducted against assessable income subject to tax at the rate of tax specified in section 43(1)(a); and
B
is any amount deducted against assessable income subject to tax at any concessionary rate of tax divided by the adjustment factor for that concessionary rate of tax.
[34/2005]
(5A)  Notwithstanding subsection (5), the amount of qualifying deduction to be deducted for the year of assessment 2009 or 2010 shall not exceed $200,000; and in the case of a company shall be determined by the formula
where A
is any amount deducted against assessable income subject to tax at the rate of tax specified in section 43(1)(a); and
B
is any amount deducted against assessable income subject to tax at any concessionary rate of tax divided by the adjustment factor for that concessionary rate of tax.
[27/2009]
(6)  Any person deducting any qualifying deduction for any year of assessment against his assessable income for the immediate preceding year of assessment or any of the 3 immediate preceding years of assessment (as the case may be) under this section shall notify the Comptroller and make an election to make such deduction —
(a)
in the case of an individual, not later than 30 days from the date of service of the notice of assessment on him; and
(b)
in the case of any other person, not later than the time of lodgment of his return of income for the year of assessment,
or within such further time as the Comptroller may allow.
[34/2005; 27/2009]
(7)  Any election made under subsection (6) shall be irrevocable and shall be accompanied by such particulars as the Comptroller may require.
[34/2005]
(8)  Where the Comptroller discovers that any deduction made under this section against the assessable income of any person for any year of assessment is or has become excessive, he may make an assessment on the person on the amount which, in his opinion, ought to have been charged to tax in that year of assessment within 7 years (if that year of assessment is 2007 or a preceding year of assessment) or 5 years (if that year of assessment is 2008 or a subsequent year of assessment) after the expiration of that year of assessment.
[34/2005; 53/2007]
(8A)  Notwithstanding subsection (8), where the Comptroller discovers that any qualifying deduction for the year of assessment 2010 made under subsection (1A) against the assessable income of any person for the year of assessment 2008 is or has become excessive, he may make an assessment on the person on the amount which, in his opinion, ought to have been charged to tax in the year of assessment 2008, within 6 years after the expiration of that year of assessment.
[27/2009]
(9)  For the purposes of this section, subject to sections 35, 37 and 37B, qualifying deductions, in relation to any person, for each year of assessment, are —
(a)
any allowance falling to be made under section 16, 17, 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 that is in excess of the person’s income from all sources chargeable to tax for that year of assessment and is not transferred under section 37C or 37D; and
(b)
any loss incurred by the person in any trade, business, profession or vocation which is not deducted for that year of assessment because of insufficiency of statutory income of the person and is not transferred under section 37C or 37D.
[34/2005; 29/2010]
(10)  Notwithstanding subsection (9), any loss deemed to be a loss incurred from a trade or business for the purpose of section 97V of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) in force immediately before the date the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Act 2016 is published in the Gazette shall not be deductible.
[34/2005]
[Act 11 of 2016 wef 19/04/2016]
(11)  Notwithstanding subsection (9), any allowance specified in subsection (9)(a) made to a person for any year of assessment shall not be deductible against assessable income for the immediate preceding year of assessment or any one of the 3 immediate preceding years of assessment (as the case may be) if the person did not carry on that trade, business or profession in the basis period for that preceding year of assessment.
[34/2005; 27/2009]
(12)  Notwithstanding subsection (9), any allowance specified in subsection (9)(a) made to or any loss specified in subsection (9)(b) incurred by a company for any year of assessment shall not be deductible against income for the immediate preceding year of assessment or any one of the 3 immediate preceding years of assessment (as the case may be) unless the Comptroller is satisfied that the shareholders of the company on the first day of the year in which the allowances arose or in which the loss was incurred, as the case may be, were substantially the same as the shareholders of the company on the last day of that preceding year of assessment.
[34/2005; 27/2009]
(13)  For the purposes of subsection (12) —
(a)
the shareholders of a company at any date shall not be deemed to be substantially the same as the shareholders at any other date unless, on both those dates, not less than 50% of the total number of issued shares of the company are held by or on behalf of the same persons;
(b)
shares in a company held by or on behalf of another company shall be deemed to be held by the shareholders of the last-mentioned company; and
(c)
shares held by or on behalf of the trustee of the estate of a deceased shareholder or by or on behalf of the person entitled to those shares as beneficiaries under the will or any intestacy of a deceased shareholder shall be deemed to be held by that deceased shareholder.
[34/2005]
(14)  For the purpose of subsection (13)(a), where any part of a share of a shareholder is not fully paid up, there shall be disregarded a proportion equal to
where A
is the amount that has not been paid in respect of the share; and
B
is the total amount payable in respect of the share.
[34/2005]
(15)  The Minister or such person as he may appoint may, where there is a substantial change in the shareholders of a company and he is satisfied that such change is not for the purpose of deriving any tax benefit or obtaining any tax advantage, exempt that company from the provisions of subsection (12).
[34/2005]
(16)  Upon an exemption under subsection (15), any allowance specified in subsection (9)(a) made to or any loss specified in subsection (9)(b) incurred by a company may only be deducted against the profits from the same trade or business of the company in respect of which the allowance was made or the loss was incurred.
[34/2005]
(17)  In this section —
“adjustment factor”, in relation to a concessionary rate of tax, means the factor ascertained in accordance with the formula
where C
is the rate of tax specified in section 43(1)(a); and
D
is the concessionary rate of tax;
“assessable income” means —
(a)
in relation to a company, assessable income of the company as determined under section 37 after deducting any deduction allowed under section 37G, investment allowance under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act, integrated investment allowance under Part XIIID of that Act and any deductions claimed under section 37C;
(b)
in relation to an individual, assessable income of the individual as determined under section 37 after deducting any deductions claimed under section 37D; and
(c)
in relation to any other person, assessable income of the person as determined under section 37;
“concessionary rate of tax” means any rate of tax lower than the rate specified in section 43(1)(a) in accordance with —
(a)
any order made under section 13(12);
[Act 34 of 2016 wef 29/12/2016]
(b)
section 43A, 43C (in respect of those relating to offshore general insurance business only), 43D (repealed), 43E, 43F (repealed), 43G, 43H (repealed), 43I, 43J, 43K (repealed), 43L (repealed), 43N, 43P, 43Q, 43R, 43S (repealed), 43T (repealed), 43U, 43V (repealed), 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
[Act 34 of 2016 wef 29/12/2016]
(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.
[Act 34 of 2016 wef 29/12/2016]
(18)  This section shall not apply to —
(a)
any company to which section 10E applies; or
(b)
any person, in respect of qualifying deductions under subsection (9) relating to any income the tax on which is remitted under the provisions of this Act for any year of assessment unless —
(i)
no such remission would be given to any income in the following year of assessment; or
(ii)
the remission is to effect a deduction for any outgoing or expense incurred by him not otherwise deductible under section 14.
[7/2007]
Carry-back of capital allowances and losses between spouses
37F.
—(1)  Subject to the provisions of this section, an individual may transfer any qualifying deduction for any year of assessment to a spouse living with him or her who has claimed any qualifying deduction under this section against her or his assessable income for the immediate preceding year of assessment.
[34/2005]
(1AA)  No transfer may be made under subsection (1) of —
(a)
any allowance made to the individual for the year of assessment 2016 or a subsequent year of assessment; or
(b)
any loss incurred by the individual in the basis period for the year of assessment 2016 or a subsequent year of assessment.
[Act 37 of 2014 wef 27/11/2014]
(1A)  Notwithstanding subsection (1) but subject to the other provisions of this section, an individual may transfer any qualifying deduction for the years of assessment 2009 and 2010 to a spouse living with him or her who has claimed any qualifying deduction under this section against her or his assessable income for the 3 years of assessment immediately preceding the year of assessment 2009 or 2010, as the case may be.
[27/2009]
(1B)  Any qualifying deduction transferred to a claimant spouse under subsection (1A) for any year of assessment shall so far as possible be made against her or his assessable income for the third year of assessment immediately preceding that year of assessment, with any remaining balance of the qualifying deduction made —
(a)
against her or his assessable income for the second year of assessment immediately preceding that year of assessment; and
(b)
thereafter against her or his assessable income for the first year of assessment immediately preceding that year of assessment.
[27/2009]
(1C)  Where in any year of assessment a claimant spouse is entitled to make more than one deduction under subsection (1A) or under subsections (1) and (1A) against her or his assessable income for that year of assessment, the assessable income for that year of assessment shall so far as possible be deducted by the amount of qualifying deduction for the earliest year of assessment the claimant spouse is entitled to so deduct under subsection (1) or (1A), and any remaining balance of the assessable income for the first-mentioned year of assessment shall so far as possible be deducted by the amount of qualifying deduction for the next earliest year of assessment, and so on.
[27/2009]
(2)  Qualifying deductions shall be transferred to a claimant spouse in the following order:
(a)
any allowance specified in subsection (10)(a); and
(b)
any loss specified in subsection (10)(b).
[34/2005]
(3)  The amount of qualifying deduction for any year of assessment to be transferred by a transferor to a claimant spouse is the lower of —
(a)
the amount of qualifying deduction available for transfer for that year of assessment; and
(b)
the assessable income of the claimant spouse for the immediate preceding year of assessment.
[34/2005]
(3A)  Notwithstanding subsection (3), the amount of qualifying deduction for the year of assessment 2009 or 2010 to be transferred by a transferor to a claimant spouse for any of the 3 years of assessment immediately preceding the year of assessment 2009 or 2010, as the case may be, is the lower of —
(a)
an amount equivalent to the difference between the amount of qualifying deduction available for transfer for the year of assessment 2009 or 2010, as the case may be, and the aggregate amount of such qualifying deductions which had already been transferred under subsection (1A); and
(b)
the balance of the assessable income of the claimant spouse for the year of assessment after such assessable income is deducted by the qualifying deduction for any year of assessment prior to the year of assessment 2009 or 2010, as the case may be, under subsection (1C).
[27/2009]
(4)  The amount of qualifying deduction for any year of assessment to be transferred by a transferor to a claimant spouse shall not exceed an amount equal to
where A
is any amount deducted by the transferor against his or her assessable income for the immediate preceding year of assessment under section 37E.
[34/2005]
(4A)  Notwithstanding subsection (4), the amount of qualifying deduction for the year of assessment 2009 or 2010 to be transferred by a transferor to a claimant spouse shall not exceed an amount equal to
where A
is the aggregate of the amounts deducted by the transferor against his or her assessable income for the 3 years of assessment immediately preceding the year of assessment 2009 or 2010, as the case may be, under section 37E.
[27/2009]
(5)  No transfer shall be allowed under subsection (1) or (1A) in any year of assessment if the transferor has assessable income for the immediate preceding year of assessment or any of the 3 immediate preceding years of assessment (as the case may be) but no claim for relief has been made under section 37E.
[34/2005; 27/2009]
(6)  No transfer shall be allowed under subsection (1) or (1A) in any year of assessment if the claimant spouse has assessable income for the year of assessment but no transfer of any qualifying deduction from the transferor to the claimant spouse has been made under section 37D.
[34/2005; 27/2009]
(7)  Any individual transferring or claiming a qualifying deduction under this section shall notify the Comptroller and make an election to transfer or claim qualifying deductions, as the case may be, not later than 30 days from the date of the service of the notice of assessment on the individual or his or her spouse, whichever is the later.
[34/2005]
(8)  An election made by an individual under subsection (7) shall be irrevocable and shall be accompanied by such particulars as the Comptroller may require.
[34/2005]
(9)  Where the Comptroller discovers that any transfer of qualifying deduction under this section against the assessable income of a claimant spouse for any year of assessment is or has become excessive, he may make an assessment on the claimant spouse on the amount which, in his opinion, ought to have been charged to tax in that year of assessment within 7 years (if that year of assessment is 2007 or a preceding year of assessment) or 5 years (if that year of assessment is 2008 or a subsequent year of assessment) after the expiration of that year of assessment.
[34/2005; 53/2007]
(9A)  Notwithstanding subsection (9), where the Comptroller discovers that any qualifying deduction for the year of assessment 2010 transferred under subsection (1A) and made against the assessable income of the claimant spouse for the year of assessment 2008 is or has become excessive, he may make an assessment on the claimant spouse on the amount which, in his opinion, ought to have been charged to tax in the year of assessment 2008, within 6 years after the expiration of that year of assessment.
[27/2009]
(10)  For the purposes of this section, subject to sections 35 and 37, qualifying deductions, in relation to an individual, for each year of assessment, are —
(a)
any allowance falling to be made under section 16, 17, 18B, 18C, 19, 19A, 19C, 19D or 20 that is in excess of the individual’s income from all sources chargeable to tax for that year of assessment and is not deducted under section 37E or transferred under section 37D; and
(b)
any loss incurred by the individual in any trade, business, profession or vocation which is not deducted for that year of assessment because of insufficiency of statutory income of the individual and is not deducted under section 37E or transferred under section 37D.
[34/2005; 29/2010]
(11)  Notwithstanding subsection (10), any loss deemed to be a loss incurred from a trade or business for the purpose of section 97V of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) shall not be transferable.
[34/2005]
(12)  Notwithstanding subsection (10), any allowance specified in subsection (10)(a) made to a transferor for any year of assessment shall not be transferable if the transferor did not carry on that trade, business or profession in the basis period for the immediate preceding year of assessment or any one of the 3 immediate preceding years of assessment, as the case may be.
[34/2005; 27/2009]
(13)  In this section, “assessable income”, in relation to an individual, means assessable income of the individual as determined under section 37 after deducting any deductions claimed under sections 37D and 37E.
[34/2005]
Deduction for incremental expenditure on research and development
37G.
—(1)  Subject to this section, where any company incurs during the basis period for any year of assessment between the year of assessment 2010 and the year of assessment 2016 (both years inclusive) any incremental qualifying research and development expenditure, then there shall be allowed to that company, on due claim, a deduction against its assessable income computed in accordance with this section.
[34/2008]
(2)  For the purposes of this section, the company shall keep an account to be known as its research and development account.
[34/2008]
(3)  If —
(a)
the company derives any income chargeable to tax under this Act during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2010 (both years inclusive); and
(b)
the amount standing to its research and development account on the last day of that basis period is less than $300,000,
then there shall be credited to the research and development account on the last day of that basis period the lowest of —
(i)
an amount computed in accordance with the specified formula;
(ii)
the difference between $300,000 and the amount standing to the research and development account on the last day of that basis period; and
(iii)
$150,000.
[34/2008; 29/2010]
(4)  For the purposes of subsection (3), the specified formula means —
where A
is the assessable income of the company for the year of assessment;
B
is the amount of deduction allowed against the assessable income of the company under subsection (5) for the year of assessment (if applicable);
C
is the amount of investment allowance deducted under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) against the chargeable income of the company for the year of assessment (if any);
D
is the amount of qualifying deduction transferred to the company under section 37C (if any) and qualifying deduction allowed to the company under section 37E for the year of assessment (if any); and
E
is the amount of income of the company not charged to tax under section 43(6) or (6A) for the year of assessment.
[34/2008]
(5)  Where on the first day of the basis period for any year of assessment between the year of assessment 2010 and the year of assessment 2016 (both years inclusive), the research and development account of the company is in credit, and —
(a)
the company has assessable income for that year of assessment; and
(b)
the company has incurred incremental qualifying research and development expenditure during that basis period,
then there shall be deducted from the assessable income of the company for that year of assessment an amount equal to the lowest of —
(i)
the incremental qualifying research and development expenditure incurred by that company during the basis period;
(ii)
the amount of credit standing in the research and development account as at the first day of the basis period; and
(iii)
the assessable income of the company for that year of assessment.
[34/2008]
(6)  As soon as an amount is deducted against the assessable income of a company under subsection (5), the research and development account shall be debited with such amount.
[34/2008]
(7)  Any deduction under this section shall so far as possible be made against the part of its assessable income that is subject to the highest rate of tax, and any remaining balance of the deduction shall so far as possible be made against the part of its assessable income that is subject to the next highest rate of tax, and so on.
[34/2008]
(8)  For the purpose of this section, the Minister may make regulations to give effect to or for carrying out the purposes of this section.
[34/2008]
(9)  A company to which a deduction has been given under this section shall deliver to the Comptroller a copy of the audited account made up to any date specified by him whenever called upon to do so by notice in writing.
[34/2008]
(9A)  No deduction shall be allowed to a company under this section for any year of assessment if a deduction for that expenditure has been allowed under section 14DA(2) for that year of assessment.
[29/2010; 22/2011]
(10)  In this section, unless the context otherwise requires —
“assessable income”, in relation to a company for any year of assessment, means the remainder of its statutory income for the year of assessment after making the deductions under sections 37 and 37B;
“base qualifying research and development expenditure” means the amount of qualifying research and development expenditure incurred in the base year;
“base year”  —
(a)
in relation to a company incorporated in the basis period relating to the year of assessment 2009 or any subsequent year of assessment, means the basis period in which the company is incorporated; or
(b)
in relation to any other company, means the basis period relating to the year of assessment 2008;
“incremental qualifying research and development expenditure”, in relation to the basis period for any year of assessment, means the excess of qualifying research and development expenditure incurred during the basis period relating to the year of assessment over the base qualifying research and development expenditure;
“qualifying research and development expenditure” means any research and development expenditure which ––
(a)
qualifies for deduction under section 14D;
(b)
is incurred in respect of research and development activities carried out in Singapore; and
(c)
is not funded by any grant or subsidy from the Government or a statutory board.
[34/2008; 29/2010]
Cash grant for research and development expenditure for start-up company
37H.
—(1)  Subject to this section and such conditions as may be prescribed by the Minister by regulations, a qualifying start-up company may apply to the Comptroller for any of its first 3 years of assessment falling between the year of assessment 2009 and the year of assessment 2010 (both years inclusive) for a cash grant of the specified amount, or $20,250, whichever is the lower, if the qualifying start-up company —
(a)
has incurred at least $150,000 of qualifying research and development expenditure in the basis period relating to that year of assessment;
(b)
where the qualifying start-up company has commenced any trade or business before or in the basis period relating to that year of assessment, has incurred any tax adjusted loss in that basis period; and
(c)
carries on research and development in Singapore at the time the application under this section is made.
[34/2008; 29/2010]
(2)  An application made to the Comptroller under subsection (1) shall be —
(a)
made at the time of lodgment by the qualifying start-up company of a return of its income for that year of assessment or within such earlier or extended time as the Comptroller may allow; and
(b)
accompanied by a copy of the audited account of the qualifying start-up company for the basis period relating to that year of assessment, as well as such information and supporting documentation to be given in such form and manner as the Comptroller may specify.
[34/2008]
(3)  The specified amount for any year of assessment under subsection (1) shall be computed in accordance with the formula
where A is —
(a)
where the qualifying start-up company has not commenced any trade or business, the lower of ––
(i)
the sum total of qualifying research and development expenditure incurred by the company in the basis period relating to that year of assessment and any amounts described under section 14DA(1) for that year of assessment; and
(ii)
$225,000; or
(b)
where the qualifying start-up company has commenced any trade or business, the lowest of —
(i)
the tax adjusted loss of the company for the basis period relating to that year of assessment;
(ii)
the sum total of qualifying research and development expenditure incurred by the company in the basis period relating to that year of assessment and any amounts described under section 14DA(1) for that year of assessment; and
(iii)
$225,000.
[34/2008; 22/2011]
(4)  Where any tax, duty, interest or penalty is due under this Act, the Goods and Services Tax Act (Cap. 117A), the Property Tax Act (Cap. 254) or the Stamp Duties Act (Cap. 312) by the qualifying start-up company to the Comptroller of Income Tax, the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, as the case may be, the amount of cash grant payable by the Comptroller to the company shall be reduced by the amount so due.
[34/2008]
(5)  Any amount reduced under subsection (4) shall be deemed to be tax, duty, interest or penalty paid by the qualifying start-up company under the relevant Act and shall (if it is due under an Act other than this Act) be paid by the Comptroller to the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, as the case may be.
[34/2008]
(6)  For the purposes of sections 14D(2) and 37(3)(a), the expenditure and loss incurred by a qualifying start-up company shall be reduced by the amount in respect of which a cash grant has been given to the company under subsection (1).
[34/2008]
(7)  Where a qualifying start-up company has not commenced any trade or business, any amount of expenditure in respect of which a cash grant has not been given to that company under subsection (1) shall not qualify for any cash grant under that subsection in any subsequent year of assessment.
[34/2008]
(8)  Where a company has received an amount under subsection (1) —
(a)
without having satisfied all of the requirements in that subsection; or
(b)
that is in excess of that which may be given to it under this section,
such amount shall be recoverable by the Comptroller from the company as a debt due to the Government.
[34/2008]
(9)  The amount recoverable under subsection (8) shall be payable at the place stated in a notice served by the Comptroller on the company within one month after the service of the notice.
[34/2008]
(10)  The Comptroller may, in his discretion and subject to such terms and conditions, including the imposition of interest, as he may impose, extend the time limit within which payment is to be made.
[34/2008]
(11)  Sections 87(1) and (2), 89(1) to (4) and 90 shall apply to the collection and recovery by the Comptroller of the amount recoverable under subsection (8) and any interest imposed under subsection (10) as they apply to the collection and recovery of tax, and for the purpose of such application, references in section 87(1) to the provisions of this Act relating to the collection and recovery of tax are references to sections 89(1) to (4) and 90.
[34/2008]
(12)  Where the Comptroller has recovered any amount under subsection (8), the amount of the expenditure or loss referred to in subsection (6) shall be increased by an amount determined in accordance with regulations made by the Minister under this subsection, unless disallowed by the Comptroller under subsection (13).
[34/2008]
(13)  The Comptroller may disallow the increase under subsection (12) if he is satisfied that the company has —
(a)
provided the Comptroller with any information or document, in connection with an application under subsection (1), which is false or misleading in a material particular; or
(b)
made use of any fraud, art or contrivance whatsoever or authorised the use of any such fraud, art or contrivance, in connection with an application under subsection (1).
[34/2008]
(14)  In this section —
“first 3 years of assessment”, in relation to a qualifying start-up company, means the year of assessment relating to the basis period during which the company is incorporated in Singapore and the 2 consecutive years of assessment immediately following that year of assessment;
“qualifying research and development expenditure” has the same meaning as in section 37G;
“qualifying start-up company” means any company —
(a)
which is incorporated in Singapore;
(b)
which has any of its first 3 years of assessment falling within the period from the year of assessment 2009 to the year of assessment 2010 (both years inclusive);
(c)
which is resident in Singapore for the year of assessment for which the company makes an application under subsection (1); and
(d)
the total share capital of which is beneficially held directly by no more than 20 shareholders —
(i)
all of whom are individuals throughout the basis period for the year of assessment for which the company makes an application under subsection (1); or
(ii)
at least one of whom is an individual holding at least 10% of the total number of issued ordinary shares of the company throughout the basis period for the year of assessment for which the company makes an application under subsection (1);
“tax adjusted loss”, in relation to a qualifying start-up company, means any loss in its trade or business —
(a)
which is incurred in the basis period referred to in subsection (1)(b);
(b)
which, had it been a profit, would have been assessable under this Act; and
(c)
which is not deducted for the year of assessment to which the basis period relates because of insufficiency of statutory income of the qualifying start-up company.
[34/2008; 29/2010]
Cash payout under Productivity and Innovation Credit Scheme
37I.
—(1)  Subject to this section, where any qualifying person has incurred expenditure —
(a)
during the basis period relating to the year of assessment 2011 or the year of assessment 2012; or
(b)
during any quarter of a basis period relating to the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018,
[Act 37 of 2014 wef 27/11/2014]
for which a deduction or an allowance is allowable or can be made to him under any of the provisions of this Act mentioned in subsection (2A) (as qualified by that subsection), he may, in lieu of one or more of the deductions or allowances or any part thereof, and in respect of —
(i)
the expenditure qualifying for it or them; or
(ii)
any part of such expenditure,
(referred to in this section as the selected expenditure) the total amount of which (together with the cash price of any PIC automation equipment or intellectual property rights in respect of which an election under subsection (4A) is made at the same time) is at least $400, make an irrevocable written election for a cash payout computed in accordance with subsection (3) or (4), as the case may be.
[29/2012]
(2)  The irrevocable written election under subsection (1) shall —
(a)
in respect of the year of assessment 2011 or the year of assessment 2012, be made to the Comptroller by the qualifying person at any time after the end of the basis period for that year of assessment but before the expiration of the time the qualifying person must deliver a return of his income for that year of assessment or within such extended time as the Comptroller may allow;
(b)
in respect of the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, be made to the Comptroller by the qualifying person at any time after the end of the quarter of the basis period for that year of assessment but before the expiration of the time the qualifying person must deliver a return of his income for that year of assessment or within such extended time as the Comptroller may allow;
[Act 37 of 2014 wef 27/11/2014]
[Act 15 of 2016 wef 01/08/2016]
(ba)
if made on or after 1 August 2016, be made using the electronic service, except that the Comptroller may in any particular case or class of cases permit the election to be made in any other manner; and
[Act 15 of 2016 wef 01/08/2016]
(c)
be accompanied by such information and supporting document to be given in such form and manner as the Comptroller may specify.
[29/2012]
(2A)  For the purposes of subsection (1), the provisions of this Act are —
(a)
section 14 in respect of —
(i)
expenditure that falls within the definition of “qualifying training expenditure” under section 14R for which a deduction may be given under that section;
(ii)
expenditure that falls within the definition of “qualifying design expenditure” under section 14S for which a deduction may be given under that section;
(iii)
expenditure on the leasing of a PIC automation equipment under a qualifying lease for which a deduction may be given under section 14T; or
(iv)
expenditure on the licensing from another person of any qualifying intellectual property rights for which a deduction may be given under section 14W;
(b)
section 14A;
(c)
section 14D in respect of expenditure that falls within the definition of “qualifying expenditure” under section 14DA;
(d)
section 14DA;
(e)
section 14R;
(f)
section 14S;
(g)
section 14T;
(ga)
section 14W;
(h)
section 19 or 19A(1), (1B), (2), (2A), (2B), (2BAA) or (10), in respect of expenditure incurred on the provision of any PIC automation equipment (including any expenditure that is treated as expenditure incurred on the provision of PIC automation equipment under section 19A(16A)), other than any equipment acquired —
(i)
under a hire-purchase agreement signed before the basis period for the year of assessment 2012 with a payment period that spans over 2 or more basis periods; or
(ii)
under a hire-purchase agreement signed in the basis period for the year of assessment 2012, the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018;
[Act 37 of 2014 wef 27/11/2014]
(i)
section 19B other than —
(i)
a writing-down allowance made in a case where the requirement under section 19B(2A) is waived;
(ii)
a writing-down allowance made under section 19B(2C);
(iii)
a writing-down allowance made in respect of any intellectual property rights acquired under an IPR instalment agreement signed before the basis period for the year of assessment 2012 with a payment period that spans over 2 or more basis periods; or
(iv)
a writing-down allowance made in respect of any intellectual property rights acquired under an IPR instalment agreement signed in the basis period for the year of assessment 2012, the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018; and
[29/2012; 19/2013]
[Act 37 of 2014 wef 27/11/2014]
(j)
section 37IC.
[Act 37 of 2014 wef 27/11/2014]
(3)  For the year of assessment 2011 and the year of assessment 2012, the amount of cash payout shall be calculated in accordance with the formula
where A is —
(a)
for the year of assessment 2011, the lower of the following:
(i)
the amount of the selected expenditure;
(ii)
$200,000; and
(b)
for the year of assessment 2012, the lower of the following:
(i)
the amount of the selected expenditure;
(ii)
the balance after deducting from $200,000 the lower of the amounts specified in paragraph (a)(i) and (ii).
[22/2011]
(3A)  In subsection (3), the amount under paragraph (a)(ii) shall be substituted with “$100,000” if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2012, and the balance under paragraph (b)(ii) shall be substituted with “$100,000” if he does not carry on any trade, profession or business during the basis period for the year of assessment 2011.
[22/2011]
(4)  For the year of assessment 2013, the year of assessment 2014, the year of assessment 2015 and the year of assessment 2016, the amount of cash payout for each year of assessment shall be
where A is the lower of the following:
(a)
the aggregate amount of selected expenditure for all quarters of the basis period relating to that year of assessment;
(b)
$100,000.
[29/2012]
[Act 37 of 2014 wef 27/11/2014]
[Act 15 of 2016 wef 01/08/2016]
(4AA)  For the year of assessment 2017, the amount of cash payout is —
(a)
if the last day of the basis period for that year of assessment is before 1 August 2016, the amount computed in accordance with subsection (4) (as applied with the necessary modifications); or
(b)
if the last day of the basis period for that year of assessment is on or after 1 August 2016
where A
is the lower of the following:
 
(i)
the aggregate amount of selected expenditure for one or more quarters (or part of such quarter) between the first day of the basis period for that year of assessment and 31 July 2016 (both dates inclusive);
 
(ii)
$100,000; and
B
is the lower of the following:
 
(i)
the aggregate amount of selected expenditure for one or more quarters (or part of such quarter) between 1 August 2016 and the last day of the basis period for that year of assessment (both dates inclusive);
 
(ii)
the balance after deducting the lower of the amounts specified in paragraphs (i) and (ii) of the definition of A from $100,000.
[Act 15 of 2016 wef 01/08/2016]
(4AB)  For the year of assessment 2018, the amount of cash payout is —
(a)
if the first day of the basis period for that year of assessment is before 1 August 2016, the amount computed in accordance with subsection (4AA)(b) (as applied with the necessary modifications); or
(b)
if the first day of the basis period for that year of assessment is on or after 1 August 2016
where B
is the lower of the following:
 
(i)
the aggregate amount of selected expenditure for all quarters of the basis period for that year of assessment;
 
(ii)
$100,000.
[Act 15 of 2016 wef 01/08/2016]
(4A)  Where —
(a)
a qualifying person has, in the basis period relating to the year of assessment 2012, the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, signed a hire-purchase agreement to acquire any PIC automation equipment for the purposes of a trade, profession or business carried on by him, or an IPR instalment agreement to acquire any intellectual property rights for use in his trade or business;
[Act 37 of 2014 wef 27/11/2014]
(b)
allowances may be made to him under section 19, 19A(1), (2), (2A), (2B) or (2BAA) or 19B for capital expenditure to be incurred under the agreement; and
[Act 37 of 2014 wef 27/11/2014]
(c)
the cash price for the equipment or intellectual property rights (together with any selected expenditure referred to in subsection (1) in respect of which an election is made under that subsection at the same time) is at least $400,
he may, in lieu of all those allowances, make an irrevocable written election for a cash payout.
[29/2012]
(4B)  The irrevocable written election under subsection (4A) shall —
(a)
if the hire-purchase agreement or IPR instalment agreement is signed in the basis period for the year of assessment 2012, be made to the Comptroller by the qualifying person at any time after the end of the basis period but before the expiration of the time the qualifying person must deliver a return of his income for that year of assessment or within such extended time as the Comptroller may allow;
(b)
if the hire-purchase agreement or IPR instalment agreement is signed in any quarter of the basis period for the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, be made to the Comptroller by the qualifying person at any time after the end of that quarter but before the expiration of the time the qualifying person must deliver a return of his income for that year of assessment or within such extended time as the Comptroller may allow;
[Act 37 of 2014 wef 27/11/2014]
[Act 15 of 2016 wef 01/08/2016]
(ba)
if made on or after 1 August 2016, be made using the electronic service, except that the Comptroller may in any particular case or class of cases permit the election to be made in any other manner; and
[Act 15 of 2016 wef 01/08/2016]
(c)
be accompanied by such information and supporting documents to be given in such form and manner as the Comptroller may specify.
[29/2012]
(4C)  Where an election under subsection (4A) is made, then subsections (3), (4), (4AA) and (4AB) shall apply with the following modifications:
(a)
a reference to the amount of selected expenditure or the aggregate amount of selected expenditure for a year of assessment, being the year of assessment relating to the basis period in which the agreement is signed, is a reference to the aggregate of —
(i)
the cash price of the PIC automation equipment or intellectual property rights; and
(ii)
the expenditure referred to in subsection (1) incurred in that basis period or all the quarters of that basis period (as the case may be), for which a deduction or an allowance is allowable or may be made to him, and in respect of which an election has been made under that subsection;
(b)
a reference to the amount of selected expenditure or the aggregate amount of selected expenditure for any year of assessment excludes the amount of any capital expenditure made by him under that agreement in the basis period for that year of assessment.
[29/2012]
[Act 15 of 2016 wef 01/08/2016]
(4D)  The maximum amount of cash payout for each equipment that is the subject of a hire-purchase agreement, or any intellectual property rights that are the subject of an IPR instalment agreement, is the amount computed under subsection (3), (4), (4AA) or (4AB) (as modified by subsection (4C)), as the case may be, that is attributable to —
(a)
the cash price of the equipment or rights; or
(b)
such part of the price of the equipment or rights that the qualifying person elects to be used for computing the cash payout for the year of assessment if the selected expenditure or the aggregate amount of selected expenditure for the cash payout is —
(i)
the amount mentioned in subsection (3)(a)(ii) in the case of the year of assessment 2011, or subsection (3)(b)(ii) in the case of the year of assessment 2012;
(ii)
$100,000 in the case of the year of assessment 2013, 2014, 2015 or 2016;
(iii)
$100,000 —
(A)
in the case of the year of assessment 2017, where the last day of the basis period for that year of assessment is before 1 August 2016; or
(B)
in the case of the year of assessment 2018, where the first day of the basis period for that year of assessment is on or after 1 August 2016; or
(iv)
the amount mentioned in paragraph (ii) of the definition of A or paragraph (ii) of the definition of B in subsection (4AA)(b) —
(A)
in the case of the year of assessment 2017, where the last day of the basis period for that year of assessment is on or after 1 August 2016; or
(B)
in the case of the year of assessment 2018, where the first day of the basis period for that year of assessment is before 1 August 2016.
[Act 15 of 2016 wef 01/08/2016]
[Act 15 of 2016 wef 01/08/2016]
(4DA)  Sub-paragraphs (i) to (iv) of subsection (4D)(b) have effect for all cash payouts for the respective years of assessment mentioned in those sub-paragraphs.
[Act 15 of 2016 wef 01/08/2016]
(4DB)  In subsections (4C)(a)(i) and (4D)(a), a reference to the cash price of intellectual property rights is, in a case where the Comptroller has treated the open‑market price mentioned in section 19B(10I) as the amount mentioned in section 19B(1C)(a)(i) in relation to those rights, a reference to the open‑market price.
[Act 34 of 2016 wef 25/03/2016]
(4E)  The cash payout under subsection (4A) for each equipment that is the subject of a hire-purchase agreement, or any intellectual property rights that are the subject of an IPR instalment agreement, shall be made to the qualifying person in the following manner:
(a)
the qualifying person may claim an amount of cash payout for the year of assessment relating to a basis period or a quarter thereof during which he incurred capital expenditure under the agreement for that equipment or those rights;
(b)
the amount of cash payout that may be made to him is the lesser of —
(i)
where A
is the amount of such capital expenditure; and
B
is the percentage in the second column of the following table set out opposite the period in which the agreement is signed in the first column of the table:
 
If the agreement is signed
Percentage
 
In the basis period for the year of assessment 2012
30%
 
In the basis period for the year of assessment 2013, 2014, 2015 or 2016
60%
 
On or before 31 July 2016 in the basis period for the year of assessment 2017 or 2018
60%
 
On or after 1 August 2016 in the basis period for the year of assessment 2017 or 2018
40%
[Act 15 of 2016 wef 01/08/2016]
(ii)
the maximum amount referred to in subsection (4D) after deducting any cash payout made earlier for that equipment or those rights under this subsection;
(c)
no cash payout may be made for that equipment or those rights if the amount referred to in paragraph (b)(ii) is zero;
(d)
each claim shall be made in such form and be accompanied by such information and supporting document relating to the capital expenditure as the Comptroller may specify; and
(e)
for the avoidance of doubt, a claim may be made for any year of assessment after the year of assessment 2018.
[29/2012]
[Act 37 of 2014 wef 27/11/2014]
(5)  For the purposes of subsections (1), (3), (4), (4AA), (4AB) and (4A), an individual carrying on one or more trades, professions or businesses through 2 or more firms (excluding partnerships) must not be granted a cash payout that exceeds the amount computed in accordance with subsection (3), (4), (4AA) or (4AB) (as the case may be).
[Act 15 of 2016 wef 01/08/2016]
(6)  [Deleted by Act 19 of 2013]
(7)  Where a qualifying person has elected for a cash payout in lieu of a deduction or an allowance under section 14A, 19, 19A(1), (1B), (2), (2A), (2B), (2BAA) or (10) or 19B, the election so made shall be treated as having been made on the full amount of the expenditure qualifying for such deduction or allowance and incurred on —
(a)
the grant or registration of each qualifying intellectual property right in each country;
(b)
the provision of each PIC automation equipment; or
(c)
the acquisition of each intellectual property right,
as the case may be, to which the election relates, net of any grant or subsidy from the Government or a statutory board.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
(8)  Notwithstanding subsections (1), (4A) and (7), where a qualifying person has incurred capital expenditure —
(a)
on the provision of any PIC automation equipment for the purpose of leasing such equipment; or
(b)
in acquiring any intellectual property rights in any software for the purpose of licensing all or any part of those rights,
he shall not be allowed to exercise an election under subsection (1) or (4A) in respect of such expenditure.
[22/2011; 29/2012]
(8A)  Where a qualifying person incurs capital expenditure during the basis period for the year of assessment 2016 or a subsequent year of assessment on the provision of any PIC automation equipment, he shall only be allowed to make an election under subsection (1) or (4A) in respect of that expenditure if he proves to the satisfaction of the Comptroller that the PIC automation equipment is in use for the purposes of his trade, profession or business.
[Act 37 of 2014 wef 27/11/2014]
(8B)  The Comptroller may, subject to such conditions as he may impose, waive the application of subsection (8A) if he is satisfied that there is a reasonable cause for the PIC automation equipment not being in use for the purposes of the person’s trade, profession or business.
[Act 37 of 2014 wef 27/11/2014]
(9)  No part of the amount of any expenditure referred to in subsection (7) for which an election is made or treated as having been made under subsection (1) or (4A) shall be eligible for a deduction or an allowance against the income of the qualifying person for any year of assessment.
[29/2012]
(9A)  [Deleted by Act 29 of 2012]
(10)  Where a cash payout has been made under this section in lieu of —
(a)
a deduction under section 14A and the intellectual property rights or the application for the registration or grant of the rights for which the deduction is made is sold, transferred or assigned within one year from the date of filing of the application for the registration or grant of such rights; or
(b)
an allowance under section 19 or 19A(1), (1B), (2), (2A), (2B), (2BAA) or (10) and the PIC automation equipment for which the allowance is made is sold, transferred, assigned or leased out within one year from the provision of such PIC automation equipment,
[Act 37 of 2014 wef 27/11/2014]
the following provisions shall apply:
(i)
the qualifying person shall give notice in writing to the Comptroller of such sale, transfer, assignment or lease in the manner specified by the Comptroller within 30 days from the date of such sale, transfer, assignment or lease;
(ii)
the cash payout in respect of the intellectual property rights, the application for the registration or grant of such rights, or the PIC automation equipment shall be recoverable by the Comptroller from the qualifying person as a debt due to the Government; and
(iii)
in the case of a PIC automation equipment that is the subject of a hire-purchase agreement, no cash payout shall be made to the qualifying person for any capital expenditure under the agreement incurred in the basis period or the quarter thereof (as the case may be) in which the sale, transfer, assignment or lease occurs and for any subsequent basis period or quarter thereof.
[29/2010; 22/2011; 29/2012]
(10A)  The Minister, or such person he may appoint, may waive the application of subsection (10) in respect of an event referred to in paragraph (b) of that subsection in the same circumstances as those referred to in section 19A(2HA).
[29/2010; 22/2011]
(11)  Where a cash payout has been made to a qualifying person pursuant to an election under subsection (1) in lieu of a writing-down allowance under section 19B, and any of the following events occurs within 5 years from the acquisition of the intellectual property rights:
(a)
the intellectual property rights for which the writing-down allowance is made come to an end without being subsequently revived;
(b)
all or any part of the intellectual property rights for which the writing-down allowance is made are sold, transferred or assigned;
(c)
the qualifying person permanently ceases to carry on the trade or business for which the intellectual property rights are used;
(d)
all or any part of the intellectual property rights in any software for which the writing-down allowance is granted are licensed to another,
then the following provisions shall apply:
(i)
the qualifying person shall give notice in writing to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event; and
(ii)
an amount computed in accordance with the following formula shall be recoverable by the Comptroller from the qualifying person as a debt due to the Government:
[29/2010; 22/2011; 29/2012]
(11A)  Where —
(a)
an election has been made under subsection (4A) for a cash payout in lieu of a writing-down allowance under section 19B; and
(b)
any of the events referred to in subsection (11)(a) to (d) occurs within 5 years from the acquisition of the intellectual property rights,
then the following provisions shall apply:
(i)
the qualifying person shall give notice in writing to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(ii)
where any amount of the cash payout has been made to the qualifying person before the occurrence of the event, an amount computed in accordance with the formula in subsection (11)(ii) shall be recoverable by the Comptroller from the qualifying person as a debt due to the Government;
(iii)
for the purposes of paragraph (ii), the reference in the formula to the amount of cash payout is a reference to the total amount of the cash payout that has been made to the qualifying person before the occurrence of the event;
(iv)
the amount of the cash payout that may be made to the qualifying person for the basis period or a quarter thereof (as the case may be) in which the event occurs and thereafter shall, instead of the amount computed in accordance with subsection (4E)(b), be an amount computed in accordance with the following formula:
[29/2012]
(12)  Where any tax, duty, interest or penalty is due under this Act, the Goods and Services Tax Act (Cap. 117A), the Property Tax Act (Cap. 254) or the Stamp Duties Act (Cap. 312) by the qualifying person to the Comptroller of Income Tax, the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, the amount of cash payout made by the Comptroller to the qualifying person shall be reduced by the amount so due.
[29/2010]
(13)  Any amount reduced under subsection (12) shall be deemed to be tax, duty, interest or penalty paid by the qualifying person under the relevant Act and shall (if it is due under an Act other than this Act) be paid by the Comptroller to the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, as the case may be.
[29/2010]
(14)  If an election has been made under subsection (1) or (4A) in respect of an amount of expenditure qualifying for a deduction or an allowance under section 14, 14A(1), 14D, 14DA(1), 19, 19A(1), (1B), (2) or (10) or 19B(1) or (1AA), the amount of expenditure qualifying for the deduction or allowance under that provision shall, notwithstanding anything in that provision, be reduced by the first-mentioned amount.
[22/2011; 29/2012]
[Act 37 of 2014 wef 27/11/2014]
[Act 34 of 2016 wef 25/03/2016]
(14A)  If an election has been made under subsection (1) or (4A) in respect of an amount of expenditure qualifying for a deduction or allowance under section 14A(1A), (1B) or (1BA), 14DA(2), 14R, 14S, 14T, 14W, 19A(2A), (2B) or (2BAA) or 19B(1A), (1B) or (1BAA), the amount of expenditure qualifying for the deduction or allowance under that provision shall, notwithstanding anything in that provision, not exceed the difference between —
(a)
the maximum amount of expenditure in respect of which the deduction or allowance may be allowed or made under that provision for the year of assessment in question; and
(b)
the first-mentioned amount.
[22/2011; 29/2012; 19/2013]
[Act 37 of 2014 wef 27/11/2014]
(15)  Where a qualifying person has received a cash payout under subsection (1) or (4A) —
(a)
in respect of any expenditure that is subsequently found not to qualify for the allowance or deduction under the relevant provision of this Act mentioned in subsection (2A) or (4A);
(b)
without having satisfied all of the requirements in this section (excluding the requirements in subsections (10) and (11)) for the payout; or
(c)
that is in excess of that which may be given to it under this section,
the amount of the cash payout or the excess amount of the cash payout, as the case may be, shall be recoverable by the Comptroller from the qualifying person as a debt due to the Government.
[29/2010; 22/2011; 29/2012]
(16)  The amount to be repaid under subsection (10), (11), (11A) or (15) shall be payable at the place stated in the notice served by the Comptroller on the qualifying person within 30 days after the service of the notice.
[29/2010; 19/2013]
(17)  The Comptroller may, in his discretion and subject to such terms and conditions as he may impose, extend the time limit within which payment under subsection (16) is to be made.
[29/2010]
(18)  Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 shall apply to the collection and recovery by the Comptroller of the amounts recoverable under subsections (10), (11), (11A) and (15) as they apply to the collection and recovery of tax.
[29/2010; 19/2013]
(19)  Unless disallowed by the Comptroller under subsection (20), where the Comptroller has recovered any amount under subsection (15)(b) or (c), the amount of the relevant expenditure mentioned in subsection (14) or (14A) is to be increased by an amount determined in accordance with the formula
where A
is the amount recovered by the Comptroller under subsection (15)(b) or (c); and
B
is the percentage in the second column of the following table if the amount recovered is for a cash payout for —
 
(a)
expenditure incurred;
 
(b)
equipment acquired under a hire-purchase agreement signed; or
 
(c)
intellectual property rights acquired under an IPR instalment agreement signed,
 
in the period set out opposite in the first column of the table:
 
[Act 15 of 2016 wef 01/08/2016]
 
When the expenditure was incurred, or the hire-purchase agreement or IPR instalment agreement was signed
 
Percentage
 
In the basis period for the year of assessment 2011 or 2012
 
30%
 
In the basis period for the year of assessment 2013, 2014, 2015 or 2016
 
60%
 
On or before 31 July 2016 in the basis period for the year of assessment 2017 or 2018
 
60%
 
On or after 1 August 2016 in the basis period for the year of assessment 2017 or 2018
 
40%
(20)  The Comptroller may disallow the increase under subsection (19) if he is satisfied that the qualifying person has —
(a)
provided the Comptroller with any information or document, in connection with an election under subsection (1) or (4A), which is false or misleading in a material particular;
(b)
omitted any material particular from any information or document given in connection with an election under subsection (1) or (4A);
(c)
prepared or maintained or authorised the preparation or maintenance of any false books of account or other records or falsified or authorised the falsification of any books of account or records in connection with an election under subsection (1) or (4A); or
(d)
made use of any fraud, art or contrivance whatsoever or authorised the use of such fraud, art or contrivance, in connection with an election under subsection (1) or (4A).
[29/2010; 29/2012]
(21)  In this section —
“cash price” —
(a)
in relation to any PIC automation equipment that is the subject of a hire-purchase agreement, means the price (including capital expenditure incurred on alterations to an existing building incidental to the installation of the equipment but excluding any finance charges) at which the qualifying person in question might have purchased the equipment for cash at the time of the signing of the agreement; or
(b)
in relation to any intellectual property rights that are the subject of an IPR instalment agreement, means the price at which the qualifying person in question might have purchased those rights for cash at the time of the signing of the agreement;
“central hirer” and “central hiring arrangement” have the same meanings as in section 14R(6);
[Act 37 of 2014 wef 27/11/2014]
“IPR instalment agreement” means an agreement for the purchase of intellectual property rights the payment for which is to be made by instalments;
“local employee”, in relation to a qualifying person who elects for a cash payout under subsection (1) or (4A), means any Singapore citizen or Singapore permanent resident, but excludes —
(a)
a shareholder who is also a director of the qualifying person if the qualifying person is a company within the meaning of section 4 of the Companies Act (Cap. 50); and
(b)
a partner under a contract for service of the qualifying person if the qualifying person is a partnership;
“local person”, in relation to a qualifying person who elects for a cash payout under subsection (1) or (4A), means any citizen or permanent resident of Singapore, but excludes —
(a)
a shareholder who is also a director of the qualifying person if the qualifying person is a company within the meaning of section 4 of the Companies Act (Cap. 50); and
(b)
a partner under a contract for service of the qualifying person if the qualifying person is a partnership;
[Act 37 of 2014 wef 27/11/2014]
“PIC automation equipment” has the same meaning as in section 19A;
“qualifying person” means any company or firm (including a partnership) that —
(a)
carries on a trade, profession or business in Singapore; and
(b)
employs and makes contributions to the Central Provident Fund in respect of not less than 3 local employees based on the payroll for —
(i)
in the case of the basis period for the year of assessment 2011 or the year of assessment 2012, the last month (or such other month as the Comptroller may determine) of the basis period;
[Act 37 of 2014 wef 27/11/2014]
(ii)
in the case of a quarter of the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, the last month of the quarter; and
[Act 37 of 2014 wef 27/11/2014]
(iii)
in the case of a quarter of the basis period, for the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, all 3 months of the quarter;
[Act 37 of 2014 wef 27/11/2014]
“quarter”, in relation to a basis period, means a period of 3 months beginning with —
(a)
the first month of the basis period;
(b)
the 4th month of the basis period;
(c)
the 7th month of the basis period; or
(d)
the 10th month of the basis period,
or any of several non-overlapping periods within the basis period as the Comptroller may specify for the qualifying person;
[29/2010; 22/2011; 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]
(21A)  For the purpose of paragraph (b)(ii) and (iii) of the definition of “qualifying person” in subsection (21), the reference to a local employee of a qualifying person based on the qualifying person’s payroll for any part of the basis period for the year of assessment 2014 or a subsequent year of assessment, includes a reference to —
(a)
a local person —
(i)
who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the qualifying person;
(ii)
who is deployed to work solely for the qualifying person in that part of the basis period;
(iii)
who is on the payroll of the central hirer or the qualifying person for that part of the basis period; and
(iv)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the qualifying person; and
(b)
a local person —
(i)
who, being an employee of another person (referred to in this subsection and subsection (21B) as the employer), is seconded to the qualifying person under a bona fide commercial arrangement to work solely for the qualifying person in that part of the basis period;
(ii)
who is on the payroll of the employer or the qualifying person for that part of the basis period; and
(iii)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the qualifying person,
and the local person shall be treated as employed by the qualifying person for the purpose of paragraph (b) of the definition.
[Act 37 of 2014 wef 27/11/2014]
(21B)  In determining whether the central hirer or employer referred to in subsection (21A) satisfies the definition of “qualifying person” in subsection (21), the person referred to in subsection (21A)(a) or (b) shall not be treated as being employed by the central hirer or the employer based on the payroll of the central hirer or employer for the part of the basis period referred to in subsection (21A).
[Act 37 of 2014 wef 27/11/2014]
(21C)  In subsections (7), (8), (8A), (8B) and (10), a reference to expenditure incurred on the provision of a PIC automation equipment includes a reference to expenditure incurred on the provision of a website for the purposes of a trade, profession or business, and a reference to PIC automation equipment includes a reference to such a website.
[Act 37 of 2014 wef 27/11/2014]
(21D)  To avoid doubt, where the Comptroller has treated the open-market price mentioned in section 19B(10E) as the capital expenditure incurred for the acquisition of intellectual property rights, then the reference in this section to selected expenditure, insofar as it relates to that capital expenditure, is a reference to such open‑market price.
[Act 34 of 2016 wef 25/03/2016]
(22)  The Comptroller may allow an election under subsection (1) or (4A), or both, to be made in respect of 2 or more consecutive quarters of the basis period for the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, and for that purpose —
(a)
the reference in the definition of “qualifying person” in subsection (21) to the last month of a quarter shall be read as a reference to the last month of the combined consecutive quarters or, if the election is in respect of the entire basis period, the last month of the basis period or such other month as the Comptroller may determine;
(aa)
the reference in sub‑paragraph (b)(iii) of the definition of “qualifying person” in subsection (21) to all 3 months of the quarter shall be read as a reference to the last 3 months of the combined consecutive quarters or such other months as the Comptroller may determine or, if the election is in respect of the entire basis period, the last 3 months of the basis period or such other months as the Comptroller may determine;
[Act 37 of 2014 wef 27/11/2014]
(b)
the requirement under subsection (1) or (4A), or both (as the case may be) that the expenditure and cash price for a quarter of a basis period must be at least $400 shall be applied to all the expenditure or cash price, or both (as the case may be), for the combined consecutive quarters for which he intends to make the election; and
(c)
the reference in subsection (2) or (4B), or both (as the case may be), to the end of a quarter shall be read as a reference to the end of the combined consecutive quarters.
[29/2012]
[Act 37 of 2014 wef 27/11/2014]
Productivity and Innovation Credit bonus
37IA.
—(1)  For each of the years of assessment 2013, 2014 and 2015, a person, being a company or firm (including a partnership) (referred to in this section as an eligible person), shall be entitled to be given an amount in cash (referred to in this section as the Productivity and Innovation Credit Scheme bonus or PIC bonus) if the Comptroller is satisfied, based on the return of his income for that year of assessment and other information available to the Comptroller, that —
(a)
the person has incurred during the basis period for the year of assessment PIC expenditure of at least $5,000 in total;
(b)
he is carrying on a trade, profession or business in Singapore; and
(c)
he employed and made contributions to the Central Provident Fund in respect of at least 3 local employees based on the payroll for the last month (or such other month as the Comptroller may determine) of the basis period.
[19/2013]
(2)  The amount of the PIC bonus to be given to the eligible person for any year of assessment shall be the lower of the following:
(a)
the amount of PIC expenditure incurred by him during the basis period for that year of assessment;
(b)
$15,000 less any PIC expenditure incurred by him during the basis period or periods for the other year or years of assessment (whether earlier or later than the first-mentioned basis period) for which he has already been given the PIC bonus.
[19/2013]
(3)  Notwithstanding subsection (1), the eligible person shall be entitled to be given the PIC bonus for the year of assessment 2013, 2014 or 2015 before the expiration of the time he must deliver the return of his income for that year of assessment, if he has made an election under section 37I for a cash payout in respect of PIC expenditure incurred for a period comprising the whole or a part of the basis period for the year of assessment (referred to in this section as the elected period), and the Comptroller is satisfied, based on information given by the person pursuant to the election and other information available to the Comptroller, that —
(a)
the person has incurred PIC expenditure of at least $5,000 in total from the beginning of the basis period to the end of the elected period;
(b)
the person is a qualifying person within the meaning of section 37I in respect of the elected period; and
(c)
the person is carrying on a trade, profession or business in Singapore.
[19/2013]
(4)  The amount of the PIC bonus to be given to the eligible person under subsection (3) shall be the lower of the following:
(a)
an amount that corresponds to the PIC expenditure incurred from the beginning of the basis period to the end of the elected period, less any expenditure incurred in that period for which he has already been given the PIC bonus;
(b)
$15,000 less any PIC expenditure incurred by him during the basis period or periods for the other year or years of assessment (whether earlier or later than the first‑mentioned basis period) for which he has already been given the PIC bonus.
[19/2013]
(5)  Where —
(a)
one or more payments of the PIC bonus for a year of assessment has been made to an eligible person under subsection (3); and
(b)
as of the date the eligible person delivers the return of his income for that year of assessment, he has not been given the maximum amount of the PIC bonus which he may be given under subsection (2) for that year of assessment,
then he shall be entitled to be given the balance of the PIC bonus in respect of any PIC expenditure incurred in the basis period for the year of assessment for which no PIC bonus has been given, if the Comptroller is satisfied, based on the return and other information available to the Comptroller, that the person —
(i)
is carrying on a trade, profession or business in Singapore; and
(ii)
employed and made contributions to the Central Provident Fund in respect of at least 3 local employees based on the payroll for the last month (or such other month as the Comptroller may determine) of the basis period.
[19/2013]
(5A)  For the purpose of subsections (1)(c) and (5)(ii), a reference to a local employee of an eligible person based on the eligible person’s payroll for any part of the basis period for the year of assessment 2014 or a subsequent year of assessment, includes a reference to —
(a)
a local person —
(i)
who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the eligible person;
(ii)
who is deployed to work solely for the eligible person in that part of the basis period;
(iii)
who is on the payroll of the central hirer or the eligible person for that part of the basis period; and
(iv)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the eligible person; and
(b)
a local person —
(i)
who, being an employee of another person (referred to in this subsection and subsection (5B) as the employer), is seconded to the eligible person under a bona fide commercial arrangement to work solely for the eligible person in that part of the basis period;
(ii)
who is on the payroll of the employer or the eligible person for that part of the basis period; and
(iii)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the eligible person,
and the local person shall be treated as employed by the eligible person for the purpose of those provisions.
[Act 37 of 2014 wef 27/11/2014]
(5B)  In determining whether the central hirer or employer referred to in subsection (5A) satisfies subsection (1)(c) or (5)(ii), the person referred to in subsection (5A)(a) or (b) shall not be treated as being employed by the central hirer or the employer based on the payroll of the central hirer or employer for the part of the basis period referred to in subsection (5A).
[Act 37 of 2014 wef 27/11/2014]
(6)  For the purposes of this section, an individual carrying on one or more trades, professions or businesses through 2 or more firms (excluding partnerships) shall not be given a PIC bonus for any year of assessment that exceeds the amount computed in accordance with subsection (2) for that year of assessment.
[19/2013]
(7)  Notwithstanding subsections (1), (3) and (5), no PIC bonus may be given in respect of —
(a)
any qualifying intellectual property registration costs under section 14A relating to any intellectual property rights or any application for the registration or grant of such rights, if the rights or application have or has been sold, transferred or assigned within one year from the date of filing of the application for the registration or grant of those rights;
(b)
any capital expenditure on the provision of any PIC automation equipment —
(i)
if it has been sold, transferred, assigned or leased out within one year from the date of provision; and
(ii)
a waiver under section 19A(2HA) (in the case of subsection (1) or (5)) or 37I(10A) (in the case of subsection (3)) has not been granted in respect of the sale, transfer, assignment or lease; and
(c)
any capital expenditure on the acquisition of any intellectual property rights if any of the following has occurred within one year from the date of acquisition:
(i)
the intellectual property rights have come to an end without being subsequently revived;
(ii)
all or any part of the intellectual property rights have been sold, transferred or assigned;
(iii)
the eligible person has permanently ceased to carry on the trade or business for which the intellectual property rights were used;
(iv)
all or any part of the intellectual property rights in any software have been licensed to another.
[19/2013]
(8)  Where a PIC bonus has been given to an eligible person in respect of —
(a)
qualifying intellectual property registration costs under section 14A relating to any intellectual property rights or any application for the registration or grant of such rights, and the rights or application are or is sold, transferred or assigned within one year from the date of filing of the application for the registration or grant of those rights; or
(b)
capital expenditure on the provision of any PIC automation equipment and that equipment is sold, transferred, assigned or leased out within one year from the date of provision,
then all of the following provisions shall apply:
(i)
the eligible person shall give notice in writing to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(ii)
the PIC bonus given for the PIC expenditure in respect of the application for the registration or grant of intellectual property rights or the PIC automation equipment, shall be recoverable by the Comptroller from the person as a debt due to the Government;
(iii)
where the PIC automation equipment is the subject of a hire-purchase agreement, no PIC bonus shall be given to the person for any PIC expenditure under the agreement incurred in the basis period in which the event occurs and for any subsequent basis period thereof.
[19/2013]
(8A)  For the purposes of subsections (7) and (8), a reference to capital expenditure on the provision of any PIC automation equipment includes a reference to capital expenditure on the provision of a website for the purposes of a trade, profession or business, and a reference to PIC automation equipment includes a reference to such a website.
[Act 37 of 2014 wef 27/11/2014]
(9)  The Minister, or such person as he may appoint, may waive the application of subsection (8) in respect of an event referred to in paragraph (b) of that subsection in the same circumstances as those referred to in section 19A(2HA).
[19/2013]
(10)  Where a PIC bonus has been given to an eligible person in respect of capital expenditure on the acquisition of any intellectual property rights and any of the following occurs within 5 years from the date of acquisition:
(a)
the intellectual property rights come to an end without being subsequently revived;
(b)
all or any part of the intellectual property rights are sold, transferred or assigned;
(c)
the person permanently ceases to carry on the trade or business for which the intellectual property rights are used;
(d)
all or any part of the intellectual property rights in any software are licensed to another,
then both of the following provisions shall apply:
(i)
the person shall give notice in writing to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(ii)
an amount computed in accordance with the following formula shall be recoverable by the Comptroller from the person as a debt due to the Government:
[19/2013]
(11)  Where a PIC bonus has been given to an eligible person in respect of capital expenditure on the acquisition of any intellectual property rights under an IPR instalment agreement and any of the events in subsection (10)(a) to (d) occurs within 5 years from the date of acquisition of the intellectual property rights, then all the following provisions shall apply:
(a)
the person shall give notice in writing to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(b)
where any amount of the PIC bonus has been given to the person before the occurrence of the event, an amount computed in accordance with the formula in subsection (10)(ii) shall be recoverable by the Comptroller from the person as a debt due to the Government;
(c)
for the purpose of paragraph (b), the reference in the formula to the amount of PIC bonus is a reference to the total amount of the PIC bonus that has been given to the person before the occurrence of the event;
(d)
the amount of the PIC bonus that may be given to the person in respect of those intellectual property rights for the basis period or elected period (as the case may be) in which the event occurs and thereafter shall be the part of the PIC bonus that corresponds to the intellectual property rights multiplied by the following:
[19/2013]
(12)  Where any tax, duty, interest or penalty is due under this Act, the Goods and Services Tax Act (Cap. 117A), the Property Tax Act (Cap. 254) or the Stamp Duties Act (Cap. 312) by an eligible person to the Comptroller, the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, the amount of PIC bonus that may be given by the Comptroller to him shall be reduced by the amount so due.
[19/2013]
(13)  Any amount reduced under subsection (12) shall be deemed to be tax, duty, interest or penalty paid by the eligible person under the relevant Act and shall (if it is due under an Act other than this Act) be paid by the Comptroller to the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, as the case may be.
[19/2013]
(14)  Where an eligible person has received a PIC bonus —
(a)
in respect of any expenditure that is subsequently found not to qualify for the deduction or allowance under the relevant PIC provision;
(b)
without having satisfied all of the requirements in this section for the PIC bonus; or
(c)
that is in excess of that which may be given to him under this section,
the amount of the PIC bonus or the excess amount of the PIC bonus, as the case may be, shall be recoverable by the Comptroller from the person as a debt due to the Government.
[19/2013]
(15)  The amounts to be repaid under subsections (8), (10), (11) and (14) shall be payable at the place stated in the notice served by the Comptroller on the eligible person within 30 days after the service of the notice.
[19/2013]
(16)  The Comptroller may, in his discretion and subject to such terms and conditions as he may impose, extend the time limit within which payment under subsection (15) is to be made.
[19/2013]
(17)  Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 shall apply to the collection and recovery by the Comptroller of the amounts recoverable under subsections (8), (10), (11) and (14) as they apply to the collection and recovery of tax.
[19/2013]
(18)  In this section —
“IPR instalment agreement” has the same meaning as in section 37I(21);
“local employee”, in relation to an eligible person, means any Singapore citizen or Singapore permanent resident, but excludes —
(a)
a shareholder who is also a director of the eligible person if the eligible person is a company within the meaning of section 4 of the Companies Act (Cap. 50); and
(b)
a partner under a contract for service of the eligible person if the eligible person is a partnership;
“local person”, in relation to an eligible person, means any citizen or permanent resident of Singapore, but excludes —
(a)
a shareholder who is also a director of the eligible person if the eligible person is a company within the meaning of section 4 of the Companies Act (Cap. 50); and
(b)
a partner under a contract for service of the eligible person if the eligible person is a partnership;
[Act 37 of 2014 wef 27/11/2014]
“PIC automation equipment” has the same meaning as in section 19A(15);
“PIC provision” means any of the provisions of this Act in the second column of the table in the definition of “PIC expenditure”;
“Productivity and Innovation Credit Scheme expenditure” or “PIC expenditure”, in relation to an eligible person who incurs the expenditure, means any of the expenditure in the first column of the following table for which a deduction or an allowance may be allowed or made to him under the provision of this Act that corresponds to it in the second column of the table:
Expenditure
 
Provision of Act
(a)
Qualifying intellectual property registration costs as defined in section 14A
 
Section 14A(1B)
(b)
Qualifying expenditure as defined in section 14DA
 
Section 14DA(2)
(c)
Qualifying training expenditure as defined in section 14R
 
Section 14R(2)
(d)
Qualifying design expenditure as defined in section 14S
 
Section 14S(2)
(e)
Expenditure on the leasing of any PIC automation equipment, or procuring of cloud computing services as defined in section 14T
 
Section 14T(2)
(f)
Expenditure on the licensing from another of any intellectual property rights
 
Section 14W(1)
(g)
Capital expenditure on the provision of any PIC automation equipment (including any expenditure that is treated as expenditure incurred on the provision of PIC automation equipment under section 19A(16A))
 
Section 19A(2B)
(h)
Capital expenditure on acquiring any intellectual property rights
 
Section 19B(1B).
[Act 37 of 2014 wef 27/11/2014]
[19/2013]
Modification of sections 37I and 37IA in their application to partnership
37IB.
—(1)  A reference to a qualifying person in section 37I (including the person who has to satisfy the conditions for a cash payout), and a reference to an eligible person in section 37IA (including the person who has to satisfy the conditions for the PIC bonus) shall in each case, where the person is a partnership, be a reference to the partnership; except that a reference in those sections to any deduction or allowance that may be allowed or made to a qualifying person or an eligible person under a provision of this Act, is a reference to such deduction or allowance that may be allowed or made to all of the partners of the partnership.
[19/2013]
(2)  In subsection (1) —
“cash payout” means a payment under section 37I;
“PIC bonus” means a payment under section 37IA.
[19/2013]
Enhanced deduction or allowance under Productivity and Innovation Credit Plus Scheme
37IC.
—(1)  A person who —
(a)
during the basis period for the year of assessment 2015, 2016, 2017 or 2018, has incurred any expenditure mentioned in the first column of the following table;
(b)
is a qualifying person for that year of assessment within the meaning of the regulations made under subsection (3); and
(c)
has made an application in accordance with subsection (2),
shall be entitled to an enhanced deduction or allowance under the provision in the second column (in the case of the year of assessment 2015) or the third column (in the case of any of the other years of assessment) of the table that corresponds to that expenditure, computed in accordance with the regulations made under subsection (3):
First column
 
Second column
 
Third column
Expenditure
 
Year of assessment 2015
 
Year of assessment 2016, 2017
or 2018
1.
Qualifying intellectual property registration costs as defined in section 14A
 
Section 14A(1B)
 
Section 14A(1BA)
2.
Qualifying expenditure as defined in section 14DA
 
Section 14DA(2)
 
Section 14DA(2)
3.
Qualifying training expenditure as defined in section 14R
 
Section 14R(2)
 
Section 14R(2A)
4.
Qualifying design expenditure as defined in section 14S
 
Section 14S(2)
 
Section 14S(2AA)
5.
Expenditure on the leasing of any PIC automation equipment, or procuring of cloud computing services as defined in section 14T
 
Section 14T(2)
 
Section 14T(2A)
6.
Expenditure on the licensing from another of any qualifying intellectual property rights as defined in section 14W
 
Section 14W(1)
 
Section 14W(4)
7.
Capital expenditure on the provision of any PIC automation equipment
(including any capital expenditure treated as capital expenditure incurred on the provision of PIC automation equipment under section 19A(16A))
 
Section 19A(2B)
 
Section 19A(2BAA)
8.
Capital expenditure on acquiring any intellectual property rights
 
Section 19B(1B)
 
Section 19B(1BAA)
(2)  The application under subsection (1)(c) —
(a)
shall be made to the Comptroller at the time of lodgment by the qualifying person of the return of income for that year of assessment or within such extended time as the Comptroller may allow; and
(b)
shall be accompanied by such information and supporting document, given in such form and manner, as the Comptroller may specify.
(3)  The Minister may make regulations —
(a)
to define a qualifying person for each year of assessment for the purposes of subsection (1);
(b)
to provide for the computation of the amount of the enhanced deduction or allowance under that subsection; and
(c)
to make provisions generally for giving effect to or for carrying out the purposes of this section.
(4)  All regulations made under subsection (3) shall be presented to Parliament as soon as possible after publication in the Gazette.
(5)  To avoid doubt, an enhanced deduction or allowance referred to in subsection (1) is a deduction or allowance under the applicable provision under the second or third column of the table in that subsection, and the provisions of section 14A, 14DA, 14R, 14S, 14T, 14W, 19A or 19B (whichever is applicable) shall apply to the deduction or allowance.
(6)  In this section, “person” means a company or firm (including a partnership).
[Act 37 of 2014 wef 27/11/2014]
Abusive PIC arrangements
37ID.
—(1)  Notwithstanding the provisions of this Act, the Comptroller may disallow an amount referred to in subsection (2) of a claim for —
(a)
a PIC enhanced deduction; or
(b)
a PIC cash payout,
and disallow the payment of an amount referred to in subsection (2) of a PIC bonus based on that claim, if the Comptroller has reasonable grounds to suspect that the claim arises from an abusive PIC arrangement.
(2)  The amount of the PIC enhanced deduction, PIC cash payout or PIC bonus that may be disallowed under subsection (1) is the amount resulting from the PIC arrangement being abusive as defined under subsection (10).
(3)  Notwithstanding the provisions of this Act, the amount referred to in subsection (4) of a PIC cash payout or PIC bonus paid to a person that was based on a claim that arose from an abusive PIC arrangement shall be recoverable by the Comptroller from the person as a debt due to the Government.
(4)  The amount of the PIC cash payout or PIC bonus that is recoverable under subsection (3) is the amount resulting from the PIC arrangement being abusive as defined under subsection (10).
(5)  The amount that is recoverable under subsection (3) shall be payable at the place stated in the notice served by the Comptroller on the person within 30 days after the service of the notice.
(6)  The Comptroller may, in his discretion, and subject to such terms and conditions as he may impose, extend the time within which payment under subsection (3) is to be made.
(7)  Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 shall apply to the collection and recovery by the Comptroller of the amount recoverable under subsection (3) as they apply to the collection and recovery of tax.
(8)  In this section, an arrangement is a PIC arrangement if the obtaining of a PIC cash payout, PIC bonus or PIC enhanced deduction, or a higher amount of a PIC cash payout, PIC bonus or PIC enhanced deduction, was the purpose or one of the purposes of the arrangement (referred to in this section as the relevant purpose).
(9)  In this section, a PIC arrangement is abusive if —
(a)
it consists or makes use of one or more artificial, contrived or fraudulent steps that is intended to achieve the relevant purpose;
(b)
the arrangement results in the consideration paid or payable for the property or services in question being of a greater value than the open market value of the property or services, and there is no bona fide commercial reason for the difference in the values apart from the relevant purpose; or
(c)
in any other case, there is no bona fide commercial reason for entering into the arrangement or a transaction forming part of the arrangement apart from the relevant purpose.
(10)  In this section, the amount of PIC enhanced deduction, PIC cash payout or PIC bonus resulting from a PIC arrangement being abusive is —
(a)
if the arrangement is abusive by reason of subsection (9)(a), the amount that results or has resulted from the use of the artificial, contrived or fraudulent step or steps, excluding any amount the person concerned is entitled to if the step or steps had not been used;
(b)
if the arrangement is abusive by reason of subsection (9)(b), the amount that corresponds to the difference in the values mentioned in that provision; or
(c)
if the arrangement is abusive by reason of subsection (9)(c), the full amount.
Examples
(i)
A enters into a contract for training for his employees. The right to training may be exchanged for goods. Expenditure for the goods is not eligible for a PIC cash payout. A exchanged the right to training for those goods and made a claim for a PIC cash payout in respect of the expenditure. The contract and the exchange together form an abusive PIC arrangement. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the full amount of the payout.
(ii)
A, in order to obtain a higher amount of PIC cash payout, purchases more equipment than he needs for his business. The purchase of the excess equipment is an abusive PIC arrangement. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the amount corresponding to the price paid for the excess equipment.
(iii)
A and B, in order to help each other obtain a PIC cash payout, sell to each other equipment that performs the same function. The sales are abusive PIC arrangements. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the full amount of the payout.
(iv)
A enters into a contract for training for his employees. The contract price for the training includes both the value of the training and the value of other goods to be given to the trainees. Expenditure for those goods is not eligible for a PIC cash payout. The purpose for setting the price for the training in this way is to enable a higher PIC cash payout to be paid to A. The contract is an abusive PIC arrangement. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the amount corresponding to the price for those other goods.
(11)  This section applies only to arrangements made or entered into on or after the date of commencement of section 42 of the Income Tax (Amendment) Act 2014.
(12)  In this section —
“arrangement” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);
“PIC bonus” means a payment under section 37IA;
“PIC cash payout” means a payment under section 37I;
“PIC enhanced deduction” means a deduction or an allowance under section 14A(1B) or (1BA), 14DA(2), 14R(2) or (2A), 14S(2) or (2AA), 14T(2) or (2A), 14W(1) or (4), 19A(2B) or (2BAA), 19B(1B) or (1BAA), or 37IC.
[Act 37 of 2014 wef 27/11/2014]
Promoters of abusive PIC arrangements
37IE.
—(1)  A person who promotes any PIC arrangement knowing or having reasonable grounds to believe that the arrangement is abusive shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 3 years or to both.
(2)  In subsection (1), a person promotes a PIC arrangement if the person —
(a)
designs, facilitates, organises or manages that arrangement or any part of that arrangement; or
(b)
publishes, disseminates or communicates any information, by any means or in any form, for the purpose of inducing or encouraging (whether directly or indirectly) any other person to enter into the arrangement or any transaction forming part of the arrangement.
(3)  In subsection (1), a PIC arrangement is abusive if —
(a)
it consists or makes use of one or more artificial, contrived or fraudulent steps that is intended to assist any person who enters into the arrangement or a transaction forming part of the arrangement to achieve the relevant purpose;
(b)
the arrangement will result in the consideration payable for any property or services being of a greater value than the open market value of the property or services, and there is no bona fide commercial reason for the difference in the values apart from the relevant purpose; or
(c)
in any other case, there is no bona fide commercial reason for a person to enter into the arrangement or a transaction forming part of the arrangement apart from the relevant purpose.
(4)  The examples of abusive PIC arrangements in section 37ID(10) apply for the purposes of subsection (3).
(5)  Where, in any proceedings for an offence under subsection (1), it is proved that the arrangement in question consists or makes use of an artificial, contrived or fraudulent step which is capable of assisting any person who enters into the arrangement or a transaction forming part of the arrangement to achieve the relevant purpose, then it is presumed that the step is intended for the relevant purpose, unless the contrary is proved.
(6)  Where, in any proceedings for an offence under subsection (1), it is proved that —
(a)
the arrangement in question will result or has resulted in the consideration paid or payable for any property or services being of a greater value than the open market value of the property or services; and
(b)
the difference in the values cannot be justified on the basis of any prevailing practice of the trade, profession or business concerned (not being a practice adopted for the purpose of achieving the relevant purpose),
then it is presumed that there is no bona fide commercial reason for the difference in the values apart from the relevant purpose, unless the contrary is proved.
(7)  The Comptroller may compound any offence under subsection (1).
(8)  In this section —
“PIC arrangements”, “PIC cash payout”, “PIC bonus” and “PIC enhanced deduction” have the respective meanings given to them in section 37ID;
“relevant purpose” means the purpose of obtaining a PIC cash payout, PIC bonus or PIC enhanced deduction, or a higher amount of PIC cash payout, PIC bonus or PIC enhanced deduction.
[Act 37 of 2014 wef 27/11/2014]
Penalties for false information, etc., resulting in payment under section 37I or 37IA
37J.
—(1)  Any person who gives to the Comptroller any information under section 37I(2) that is false in any material particular, or who omits any material particular from any information or document given under that provision, shall be guilty of an offence and shall on conviction be punished with a penalty that is equal to the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to him or any other person as a result of the offence, or which would have been made to him or any other person if the offence had not been detected.
[29/2010; 19/2013]
(2)  Any person who without reasonable excuse or through negligence gives to the Comptroller any information under section 37I(2) that is false in any material particular, or omits any material particular from any information or document given under that provision, shall be guilty of an offence and shall on conviction be punished with a penalty that is double the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to him or any other person as a result of the offence, or which would have been made to him or any other person if the offence had not been detected, and shall also be liable to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 3 years or to both.
[29/2010; 19/2013]
(3)  Any person who wilfully with intent to obtain, or to assist another person to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both) which he or that other person is not entitled to —
(a)
gives to the Comptroller any information under section 37I(2) that is false in any material particular or omits any material particular from any information or document given under that provision; or
(b)
gives any false answer, whether verbally or in writing, to any question or request for information asked or made by the Comptroller,
shall be guilty of an offence and shall on conviction be punished with a penalty that is treble the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to him or that other person as a result of the offence, or which would have been made to him or that other person if the offence had not been detected, and shall also be liable to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 3 years or to both.
[29/2010; 19/2013]
(4)  Any person who wilfully with intent to obtain, or to assist another person to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both) which he or that other person is not entitled to —
(a)
prepares or maintains or authorises the preparation or maintenance of any false books of account or other records or falsifies or authorises the falsification of any books of account or records; or
(b)
makes use of any fraud, art or contrivance or authorises the use of such fraud, art or contrivance,
shall be guilty of an offence and shall on conviction be punished with a penalty that is 4 times the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to him or that other person as a result of the offence, or which would have been made to him or that other person if the offence had not been detected, and shall also be liable to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 5 years or to both.
[29/2010; 19/2013]
(4A)  Where an individual has been convicted for —
(a)
3 or more offences under subsection (3) or section 96;
(b)
2 or more offences under subsection (4) or section 96A; or
(c)
one offence under either subsection (3) or section 96, and one offence under either subsection (4) or section 96A,
the imprisonment he shall be liable to shall not be less than 6 months.
[19/2013]
(4B)  Where in any proceedings under subsection (3) it is proved that any information that is false in a material particular is given to the Comptroller under section 37I(2) by or on behalf of any person, the person who gave the information is presumed, unless the contrary is proved, to have given it with intent to obtain, or to assist the person on whose behalf the information is given to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both), as the case may be.
[19/2013]
(4C)  Where in any proceedings under subsection (4) it is proved that any false statement or entry is made in any books of account or other records maintained by or on behalf of any person, the person who made the statement or entry shall be presumed, unless the contrary is proved, to have made that false statement or entry with intent to obtain, or to assist the person on whose behalf the statement or entry is made to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both), as the case may be.
[19/2013]
(5)  The Comptroller may compound any offence under this section other than subsection (4).
[29/2010]
(5A)  In this section, a reference to the amount of cash payout or PIC bonus that has been made to a person as a result of an offence, or which would have been made to the person if the offence had not been detected, excludes an amount of the cash payout or PIC bonus that the person is entitled to.
[Act 37 of 2014 wef 27/11/2014]
(6)  In this section —
“cash payout” means a payment under section 37I;
“PIC bonus” means a payment under section 37IA.
[19/2013]
Deduction for qualifying investments in qualifying start-up companies
37K.
—(1)  Where an individual proposes to make one or more qualifying investments that complies with subsection (4) in a qualifying start-up company or companies, he may apply to the Minister, or such person as he may appoint, between 1st July 2010 and 31st March 2020 (both dates inclusive) to be approved as a qualifying person for the purposes of claiming a deduction under this section in respect of the expenditure incurred by him in making the investments.
[29/2010]
[Act 2 of 2016 wef 11/04/2016]
(2)  Where the Minister or the person appointed by him is satisfied that the individual possesses the necessary experience, skills or expertise to nurture and grow a qualifying start-up company, he may approve, by notice in writing, the individual as a qualifying person, subject to such conditions as he may impose.
[29/2010]
(3)  Where a qualifying person —
(a)
has incurred expenditure in making a qualifying investment that complies with subsection (4) in a qualifying start-up company or companies; and
(b)
has directly and beneficially held the shares or convertible loans which are the subject of the qualifying investment for a continuous period of 2 years from the relevant date,
he shall be allowed on due claim, for the year of assessment relating to the basis period in which the last day of the 2-year period falls, a deduction, computed in accordance with subsection (5), against the remainder of his statutory income (excluding specified income) after making the deduction (if any) under section 37(3)(a).
[29/2010]
(4)  For the purposes of subsection (3), the qualifying investment must be made —
(a)
either —
(i)
during the period between 1st July 2010 and 31st March 2020 (both dates inclusive); or
[Act 2 of 2016 wef 11/04/2016]
(ii)
if the Minister or such person as he may appoint so approves, during the period between 1st March 2010 and 30th June 2010 (both dates inclusive);
(b)
if it is the first qualifying investment made by the qualifying person in the qualifying start-up company since he is approved as such under subsection (2) and paragraph (d) does not apply, on the date of such approval or within one year from that date;
(c)
if it is not the first qualifying investment made by the qualifying person in the qualifying start-up company since he is approved as such under subsection (2) and paragraph (d) does not apply, within one year from the date of the first qualifying investment referred to in paragraph (b) that complies with that paragraph; and
(d)
if approval has been obtained under paragraph (a)(ii) and the qualifying person has made at least one qualifying investment in the qualifying start-up company during the period between 1st March 2010 and 30th June 2010 (both dates inclusive), within one year from the date such qualifying investment or the first of such qualifying investments was made.
[29/2010]
[Act 37 of 2014 wef 27/11/2014]
(5)  The amount of deduction allowable to a qualifying person under subsection (3) shall be ascertained by the formula
where A
is the aggregate amount of expenditure incurred by the qualifying person on the qualifying investment in a qualifying start-up company or companies or $500,000, whichever is less.
[29/2010]
(6)  For the purpose of computing the aggregate amount of expenditure incurred by a qualifying person in respect of a qualifying investment in a qualifying start-up company or companies under subsection (5), no expenditure incurred by the qualifying person in respect of qualifying investment in any one qualifying start-up company shall be included —
(a)
if the total amount of any such expenditure that is incurred on the date of first investment and within one year from that date (but excluding any expenditure incurred on qualifying investment that is disposed of during the relevant holding period) is less than $100,000;
(b)
to the extent that the expenditure, being expenditure incurred before 24 February 2015, is matched by any investment in the company by the company known as SPRING SEEDS Capital Pte Ltd under the SPRING Start-up Enterprise Development Scheme administered by the second‑mentioned company or any other scheme designated by the Minister or such person as he may appoint;
[Act 2 of 2016 wef 11/04/2016]
(c)
if all the shares which are the subject of the qualifying investment are disposed of during the relevant holding period;
(d)
where the loan which is the subject of the qualifying investment is partially or fully repaid during the relevant holding period;
(e)
if all the share capital of the qualifying start-up company is acquired by a person or partnership other than the qualifying person, or the qualifying start-up company merges with or is consolidated with another company or is wound up, at any time during a period of 2 years from the relevant date;
(f)
[Deleted by Act 22 of 2011]
(g)
if the qualifying start-up company is not resident in Singapore for the years of assessment relating to the basis periods falling within the relevant holding period; or
(h)
the qualifying person has acquired more than 50% of the issued share capital, or has provided more than 50% of the debt capital, of the qualifying start-up company at any time during the relevant holding period.
[29/2010; 22/2011]
(7)  For the purpose of computing the aggregate amount of expenditure incurred by a qualifying person in respect of a qualifying investment under subsection (5), where any of the shares which are the subject of the qualifying investment are disposed of during the relevant holding period, no account shall be taken of such expenditure incurred by him in relation to the shares that are disposed.
[29/2010]
(8)  The Minister or such person as he may appoint may, subject to such conditions as he may impose in a particular case, waive the requirement in subsection (6)(c), (d) or (e).
[29/2010; 22/2011]
(9)  Any amount of deduction for any year of assessment computed for a qualifying person in accordance with subsection (5) which is in excess of the remainder of his statutory income (excluding specified income) after making the deduction (if any) under section 37(3)(a) shall not be available as a deduction against his income for any subsequent year of assessment and shall be disregarded.
[29/2010]
(10)  Where —
(a)
a person disposes of, after 2 years from the relevant date, the shares which are the subject of a qualifying investment in respect of which a deduction has been allowed to him in any year of assessment under this section; and
(b)
the gains or profits from the disposal of those shares is chargeable to tax under this Act,
the amount of expenditure for which a deduction is allowed to him under this section in respect of those shares in any year of assessment shall not form part of his costs of investment deductible under section 14 in computing his gains or profits from the disposal which is chargeable to tax.
[29/2010]
(11)  A qualifying person shall maintain and deliver to the Minister or such person as he may appoint, in such form and manner and within such reasonable time as the Minister or person may determine, the relevant records of the qualifying investment made by him in any qualifying start-up company and such other particulars as may be required for the purposes of this section.
[29/2010]
(12)  In this section —
“date of first investment”, in relation to a qualifying investment by a qualifying person in a qualifying start-up company, means —
(a)
unless paragraph (b) applies, the date on which a qualifying investment is first made by the qualifying person in the qualifying start-up company since he was approved as such under subsection (2); or
(b)
if approval has been obtained under subsection (4)(a)(ii) and the qualifying person has made at least one qualifying investment in the qualifying start-up company during the period between 1st March 2010 and 30th June 2010 (both dates inclusive), the date of that qualifying investment or the first of such qualifying investments;
[Act 37 of 2014 wef 27/11/2014]
“qualifying investment”, in relation to a qualifying start-up company, means —
(a)
the acquisition using cash of —
(i)
new shares not being of a preferential nature, issued by the company;
(ii)
new shares of a preferential nature issued by the company which do not fall within sub‑paragraph (iii) and which do not provide for payment of a fixed or guaranteed dividend for the relevant holding period; or
(iii)
new redeemable shares of a preferential nature issued by the company which do not carry a right to redemption during the relevant holding period and which do not provide for payment of a fixed or guaranteed dividend for the relevant holding period,
other than shares which are issued pursuant to a stock option or share award scheme or any conversion of any loan or debt securities; or
[Act 37 of 2014 wef 27/11/2014]
(b)
the provision of convertible loans of cash to the company where there is no provision for interest payment for the relevant holding period or loan repayment during the relevant holding period;
“qualifying start-up company” means a company which is not one limited by guarantee and which —
(a)
on the date of first investment, was incorporated in Singapore for 3 years or less and whose shares are not listed on any stock exchange in Singapore or elsewhere;
(b)
on the date of first investment, does not have any shareholder who is a relative of the qualifying person, except that this requirement may be waived for the company by the Minister or a person appointed by him;
(c)
on the date of first investment, has more than 50% of its total issued share capital beneficially held by no more than 20 individual shareholders (excluding any qualifying person);
(d)
has no more than 25% of its issued share capital or 25% of its debt capital beneficially held by the qualifying person (including any of his relatives) at any time within a period of 2 years prior to the date of first investment; and
(e)
throughout the relevant holding period, does not engage in any activity specified by the Minister or such person as he may appoint for the purposes of this section;
“relative”, in relation to any individual, means —
(a)
his spouse;
(b)
his children, step-children, grandchildren, step-grandchildren and their spouses;
(c)
his parents, including step-parents;
(d)
his grandparents, including step-grandparents;
(e)
his parents-in-law, including step-parents-in-law;
(f)
his brother, step-brother, sister, step-sister and their spouses;
(g)
his spouse’s grandparents, including step-grandparents;
(h)
his spouse’s brother, step-brother, sister, step-sister and their spouses;
(i)
his parent’s brother, step-brother, sister, step-sister and their spouses;
(j)
his parent-in-law’s brother, step-brother, sister, step-sister and their spouses;
(k)
the children of the brother, step-brother, sister or step-sister of his parent or step-parent, including step-children, and their spouses;
(l)
the children of the brother, step-brother, sister or step-sister of his parent-in-law or step-parent-in-law, including step-children, and their spouses;
(m)
the children of his brother, step-brother, sister or step-sister, including step-children, and their spouses; and
(n)
the children of his spouse’s brother, step-brother, sister or step-sister, including step-children, and their spouses;
“relevant date”, in relation to a qualifying person making a qualifying investment in a qualifying start-up company, means the date on which the last qualifying investment is made by the qualifying person in that company within one year from the date of first investment;
“relevant holding period”, in relation to a qualifying person making a qualifying investment in a qualifying start-up company, means the period commencing from the date of first investment in the qualifying start-up company to the end of the 2-year period from the relevant date;
“specified income” means any income of the qualifying person not resident in Singapore which is subject to tax at the rate specified in section 43(3), (3A) or (4)(a).
[29/2010]
(13)  In the definition of “relative” in subsection (12), relationships that may be established by blood may also be established by adoption in accordance with any written law relating to the adoption of children.
[29/2010]
(14)  In this section, a qualifying investment is made when —
(a)
in the case of an acquisition of shares in paragraph (a) of the definition of “qualifying investment” in subsection (12), the consideration for the shares is paid; or
(b)
in the case of a provision of a convertible loan in paragraph (b) of the definition of “qualifying investment” in subsection (12), the loan is disbursed.
[29/2010]
Deduction for acquisition of shares of companies
37L.
—(1)  Subject to this section, where —
(a)
a Singapore company (referred to in this section as the acquiring company);
(b)
any one or more subsidiaries of the Singapore company that is or are wholly owned by the Singapore company, and is incorporated for the primary purpose of acquiring and holding shares in other companies (referred to in this section as the acquiring subsidiary); or
(c)
both the acquiring company and any one or more acquiring subsidiaries,
incurs or incur capital expenditure during the period from 1st April 2010 to 31st March 2020 (both dates inclusive) for any qualifying acquisition of ordinary shares in another company (referred to in this section as the target company), the acquiring company may claim the deductions specified in subsection (1A), in accordance with this section.
[29/2010; 29/2012]
[Act 2 of 2016 wef 01/04/2015]
(1A)  The deductions for the purposes of subsection (1) are as follows:
(a)
a deduction for the capital expenditure referred to in that subsection; and
(b)
a deduction of an amount equivalent to twice the amount of transaction costs incurred for qualifying acquisitions made during the period from 17th February 2012 to 31st March 2020 (both dates inclusive).
[29/2012]
[Act 2 of 2016 wef 01/04/2015]
(2)  Any claim for deduction 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 of the acquiring company in which the capital expenditure is incurred or within such further time as the Comptroller may, in his discretion, allow.
[29/2010; 22/2011]
(3)  For the purposes of subsections (1) and (2), capital expenditure for an acquisition of ordinary shares in a target company shall be treated as being incurred on the date of the acquisition of those shares.
[29/2010]
Qualifying acquisitions
(4)  In this section, a qualifying acquisition of ordinary shares in a target company by an acquiring company or an acquiring subsidiary is any of the following:
(a)
an acquisition made during the period from 1 April 2010 to 31 March 2015 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total more than 50% of the total number of ordinary shares in the target company where, before the date of the acquisition, such total ownership was 50% or less of the total number of ordinary shares in the target company;
[Act 2 of 2016 wef 01/04/2015]
(b)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition referred to in paragraph (a);
(c)
an acquisition made during the period from 1 April 2010 to 31 March 2015 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total 75% or more of the total number of ordinary shares in the target company where —
(i)
before the date of the acquisition, such total ownership was more than 50% but less than 75% of the total number of ordinary shares in the target company; and
(ii)
the date of the acquisition does not fall in the same basis period of the acquiring company as the date of the acquisition referred to in paragraph (a);
[Act 2 of 2016 wef 01/04/2015]
(d)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition referred to in paragraph (c) and is before 1 April 2016,
[Act 2 of 2016 wef 01/04/2015]
provided that at the end of that basis period of the acquiring company, such total ownership is more than 50% (in the case of paragraphs (a) and (b)) or 75% or more (in the case of paragraphs (c) and (d)) of the total number of ordinary shares in the target company.
[29/2010; 22/2011; 29/2012]
(4A)  In this section, and subject to the applicable condition in subsection (4B) being met, each of the following is also a qualifying acquisition of ordinary shares in a target company by an acquiring company or an acquiring subsidiary:
(a)
an acquisition made during the period from 1 April 2015 to 31 March 2020 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total 20% or more but 50% or less of the total number of ordinary shares in the target company, where —
(i)
before the date of the acquisition, such total ownership was less than 20% of the total number of ordinary shares in the target company; and
(ii)
the date of the acquisition does not fall in the same basis period of the acquiring company as the date of the acquisition referred to in paragraph (c);
(b)
any other acquisition made during the period from 1 April 2015 to 31 March 2020 (both dates inclusive) the date of which falls in the same basis period of the acquiring company as that of the acquisition referred to in paragraph (a);
(c)
an acquisition made during the period from 1 April 2015 to 31 March 2020 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total more than 50% of the total number of ordinary shares in the target company where, before the date of the acquisition, such total ownership was 50% or less of the total number of ordinary shares in the target company;
(d)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition referred to in paragraph (c);
(e)
an acquisition made on or after 1 April 2015 but before 1 April 2016 that results in the acquiring company and its acquiring subsidiaries owning together in total 75% or more of the total number of ordinary shares in the target company where —
(i)
before the date of the acquisition, such total ownership was more than 50% but less than 75% of the total number of ordinary shares in the target company;
(ii)
the date of the acquisition does not fall in the same basis period of the acquiring company as the date of the acquisition referred to in paragraph (c); and
(iii)
before 1 April 2015 and not earlier than 12 months before the acquisition, the acquiring company or its acquiring subsidiary had made an acquisition of ordinary shares of any amount in the target company;
(f)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition referred to in paragraph (e) and is before 1 April 2016.
[Act 2 of 2016 wef 01/04/2015]
(4B)  In subsection (4A), the conditions are —
(a)
in the case of paragraphs (a) and (b) of that subsection, at the end of that basis period of the acquiring company, the total ownership of ordinary shares in the target company referred to in paragraph (a) of that subsection is between 20% and 50% (both inclusive);
(b)
in the case of paragraphs (c) and (d) of that subsection, at the end of that basis period of the acquiring company, the total ownership of ordinary shares in the target company referred to in paragraph (c) of that subsection is more than 50%;
(c)
in the case of paragraphs (e) and (f) of that subsection, at the end of that basis period of the acquiring company, the total ownership of ordinary shares in the target company referred to in paragraph (e) of that subsection is 75% or more.
[Act 2 of 2016 wef 01/04/2015]
(5)  An acquiring company may elect for its qualifying acquisitions to be, instead of those referred to in the provisions in the first column of the following table, acquisitions —
(a)
the dates of which fall within a prescribed period; and
(b)
which include an acquisition referred to in the provisions set out opposite in the second column of the table,
and the provisions of this section apply to the acquisitions so elected subject to such modifications as may be prescribed:
Original acquisitions
under:
Elected acquisitions to
include an acquisition
under:
subsection (4)(a) and (b), or subsection (4)(c) and (d)
subsection (4)(a) or (c)
subsection (4A)(c) and (d), or subsection (4A)(e) and (f)
subsection (4A)(c) or (e)
[Act 2 of 2016 wef 01/04/2015]
(5A)  The election under subsection (5) may only be made for acquisitions made during the period from 1 April 2010 to 31 March 2016 (both dates inclusive).
[Act 2 of 2016 wef 01/04/2015]
(6)  The election under subsection (5) shall be made by the acquiring company at the time of lodgment of the return of its income for the year of assessment relating to the basis period of the acquiring company in which the date of the acquisition referred to in subsection (4)(a) or (c) or subsection (4A)(c) or (e), as the case may be, falls, or within such further time as the Comptroller may, in his discretion, allow.
[29/2010; 22/2011]
[Act 2 of 2016 wef 01/04/2015]
Deductions allowable in respect of capital expenditure claimed
(7)  For the purpose of subsection (1) and subject to subsections (11), (11A), (11AB), (11B), (11C) and (19) and the regulations made under subsection (24), deductions in respect of capital expenditure for a qualifying acquisition of ordinary shares in a target company by an acquiring company or an acquiring subsidiary, as the case may be, are to be allowed as follows:
(a)
to the extent the capital expenditure is not contingent consideration or, if it is contingent consideration, is incurred in the same basis period of the acquiring company as that in which the date of the acquisition of the shares falls, the deduction allowed shall be the amount specified in subsection (8) for acquisitions referred to in subsection (4), and the amount specified in subsection (8A) for acquisitions referred to in subsection (4A), for each of 5 successive years of assessment (referred to in this section as the 1st, 2nd, 3rd, 4th and 5th years of assessment, respectively), beginning with the year of assessment relating to the basis period of the acquiring company in which the date of the acquisition of the shares falls; and
[Act 2 of 2016 wef 01/04/2015]
(b)
to the extent the capital expenditure is contingent consideration that is incurred in a basis period of the acquiring company after the basis period of the acquiring company for the 1st year of assessment, the deduction allowed shall be —
(i)
where the contingent consideration is incurred in the basis period of the acquiring company for the 2nd, 3rd or 4th year of assessment, the amount specified in subsection (9) for acquisitions referred to in subsection (4), and the amount specified in subsection (9A) for acquisitions referred to in subsection (4A), for that year of assessment and for each successive year of assessment up to and including the 5th year of assessment; or
[Act 2 of 2016 wef 01/04/2015]
(ii)
where the contingent consideration is incurred in the basis period of the acquiring company for the 5th year of assessment or a subsequent year of assessment, the amount specified in subsection (10) for acquisitions referred to in subsection (4), and the amount specified in subsection (10A) for acquisitions referred to in subsection (4A), for that year of assessment.
[29/2010; 22/2011]
[Act 2 of 2016 wef 01/04/2015]
[Act 34 of 2016 wef 01/04/2016]
(8)  Subject to subsections (13) and (19), the amount referred to in subsection (7)(a) for an acquisition referred to in subsection (4) shall be calculated in accordance with the formula
where A
is the capital expenditure to the extent that it is not contingent consideration or, if it is contingent consideration, is incurred in the same basis period of the acquiring company as that in which the date of the acquisition of the shares falls.
[29/2010; 22/2011]
[Act 2 of 2016 wef 01/04/2015]
(8A)  Subject to subsections (13) and (19), the amount referred to in subsection (7)(a) for an acquisition referred to in subsection (4A) is to be calculated in accordance with the formula
where A
is the capital expenditure to the extent that it is not contingent consideration or, if it is contingent consideration, is incurred in the same basis period of the acquiring company as that in which the date of the acquisition of the shares falls.
[Act 2 of 2016 wef 01/04/2015]
(9)  Subject to subsections (13) and (19), the amount referred to in subsection (7)(b)(i) for an acquisition referred to in subsection (4) shall be calculated in accordance with the formula
where B
is the contingent consideration that is incurred in the basis period of the acquiring company for the 2nd, 3rd or 4th year of assessment, whichever is applicable; and
C
is —
 
(a)
2 (where the contingent consideration is incurred in the basis period of the acquiring company for the 2nd year of assessment);
 
(b)
3 (where the contingent consideration is incurred in the basis period of the acquiring company for the 3rd year of assessment); or
 
(c)
4 (where the contingent consideration is incurred in the basis period of the acquiring company for the 4th year of assessment),
 
whichever is applicable.
[29/2010; 22/2011]
[Act 2 of 2016 wef 01/04/2015]
(9A)  Subject to subsections (13) and (19), the amount referred to in subsection (7)(b)(i) for an acquisition referred to in subsection (4A) is to be calculated in accordance with the formula
where B
is the contingent consideration that is incurred in the basis period of the acquiring company for the 2nd, 3rd or 4th year of assessment, whichever is applicable; and
C
is —
 
(a)
2 (where the contingent consideration is incurred in the basis period of the acquiring company for the 2nd year of assessment);
 
(b)
3 (where the contingent consideration is incurred in the basis period of the acquiring company for the 3rd year of assessment); or
 
(c)
4 (where the contingent consideration is incurred in the basis period of the acquiring company for the 4th year of assessment),
 
whichever is applicable.
[Act 2 of 2016 wef 01/04/2015]
(10)  Subject to subsections (13) and (19), the amount referred to in subsection (7)(b)(ii) for an acquisition referred to in subsection (4) shall be calculated in accordance with the formula
where D
is the contingent consideration that is incurred in the basis period of the acquiring company for the 5th year of assessment or the subsequent year of assessment, whichever is applicable.
[29/2010; 22/2011]
[Act 2 of 2016 wef 01/04/2015]
(10A)  Subject to subsections (13) and (19), the amount referred to in subsection (7)(b)(ii) for an acquisition referred to in subsection (4A) is to be calculated in accordance with the formula
where D
is the contingent consideration that is incurred in the basis period of the acquiring company for the 5th year of assessment or the subsequent year of assessment, whichever is applicable.
[Act 2 of 2016 wef 01/04/2015]
(11)  The following provisions shall apply in determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in one or more target companies whose dates of acquisition fall within one basis period of the acquiring company:
(a)
where the aggregate of the amounts of “A” referred to in subsection (8) in respect of all such qualifying acquisitions exceeds $100 million, the amount by which the aggregate exceeds $100 million shall be disregarded for the purposes of the deduction to be allowed under this section; and
(b)
where the aggregate referred to in paragraph (a) does not exceed $100 million but the aggregate of the following exceeds $100 million:
(i)
the aggregate referred to in paragraph (a); and
(ii)
the aggregate of all contingent consideration in respect of all such qualifying acquisitions incurred in the basis period of the acquiring company for any year of assessment subsequent to the 1st year of assessment and in any earlier year of assessment other than the 1st year of assessment,
the amount by which the aggregate of sub-paragraphs (i) and (ii) exceeds $100 million shall be disregarded for the purposes of the deduction to be allowed under this section.
[29/2010; 22/2011]
(11A)  The following provisions apply for the purpose of determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in one or more target companies whose dates of acquisition fall within one basis period of the acquiring company, and are qualifying acquisitions referred to in subsection (11AA):
(a)
where the sum of the amounts of “A” referred to in subsection (8A) in respect of all such qualifying acquisitions exceeds $20 million, the amount by which the sum exceeds $20 million is to be disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the sum referred to in paragraph (a) does not exceed $20 million but the sum of the following exceeds $20 million:
(i)
the sum referred to in paragraph (a);
(ii)
the sum of all contingent consideration in respect of all such qualifying acquisitions incurred in the basis period of the acquiring company for any year of assessment subsequent to the 1st year of assessment and in any earlier year of assessment other than the 1st year of assessment,
the amount by which the sum of sub‑paragraphs (i) and (ii) exceeds $20 million is to be disregarded for the purposes of the deduction to be allowed under this section.
[Act 2 of 2016 wef 01/04/2015]
[Act 34 of 2016 wef 01/04/2016]
(11AA)  Subsection (11A) applies to the following qualifying acquisitions:
(a)
a qualifying acquisition made before 1 April 2016 except (if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made on or after 1 April 2016) a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) that has the same target company as that of the anchor acquisition;
(b)
if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made before 1 April 2016, a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) made on or after 1 April 2016 that has the same target company as the anchor acquisition.
[Act 34 of 2016 wef 01/04/2016]
(11AB)  The following provisions apply for the purpose of determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in one or more target companies whose dates of acquisition fall within one basis period of the acquiring company, and are qualifying acquisitions mentioned in subsection (11AC):
(a)
where the sum of the amounts of “A” mentioned in subsection (8A) in respect of all such qualifying acquisitions exceeds $40 million, the amount by which the sum exceeds $40 million is to be disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the sum mentioned in paragraph (a) does not exceed $40 million but the sum of the following exceeds $40 million:
(i)
the sum mentioned in paragraph (a);
(ii)
the sum of all contingent consideration in respect of all such qualifying acquisitions incurred in the basis period of the acquiring company for any year of assessment subsequent to the first year of assessment and in any earlier year of assessment other than the first year of assessment,
the amount by which the sum of sub-paragraphs (i) and (ii) exceeds $40 million is to be disregarded for the purposes of the deduction to be allowed under this section.
[Act 34 of 2016 wef 01/04/2016]
(11AC)  Subsection (11AB) applies to the following qualifying acquisitions:
(a)
a qualifying acquisition made on or after 1 April 2016 except (if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made before 1 April 2016) a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) that has the same target company as the anchor acquisition;
(b)
if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made on or after 1 April 2016, a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) made before 1 April 2016 that has the same target company as the anchor acquisition.
[Act 34 of 2016 wef 01/04/2016]
(11B)  Despite subsections (11) and (11A), the following provisions apply in determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in target companies whose dates of acquisition fall within one basis period of the acquiring company, if the qualifying acquisitions in that basis period include at least one acquisition referred to in subsection (4)(a) or (c), and at least one acquisition referred to in subsection (4A)(a), (c) or (e) that is made before 1 April 2016, but does not include any acquisition referred to in subsection (4A)(a) or (c) that is made on or after 1 April 2016:
(a)
where the sum of the following exceeds $5 million:
(i)
the amount determined by the formula “0.05 × A” in subsection (8) in respect of those acquisitions which are acquisitions referred to in subsection (4);
(ii)
the amount determined by the formula “0.25 × A” in subsection (8A) in respect of those acquisitions which are acquisitions referred to in subsection (4A),
the excess is to be disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the sum referred to in paragraph (a) does not exceed $5 million but the sum of the following exceeds $5 million:
(i)
the sum referred to in paragraph (a);
(ii)
the amount determined by the formula “0.05 × B” in subsection (9) in respect of those acquisitions which are acquisitions referred to in subsection (4);
(iii)
the amount determined by the formula “0.25 × B” in subsection (9A) in respect of those acquisitions which are acquisitions referred to in subsection (4A);
(iv)
the amount determined by the formula “0.05 × D” in subsection (10) in respect of those acquisitions which are acquisitions referred to in subsection (4);
(v)
the amount determined by the formula “0.25 × D” in subsection (10A) in respect of those acquisitions which are acquisitions referred to in subsection (4A),
the excess is to be disregarded for the purposes of the deduction to be allowed under this section.
[Act 2 of 2016 wef 01/04/2015]
[Act 34 of 2016 wef 01/04/2016]
(11C)  Despite subsections (11), (11A) and (11AB), the following provisions apply in determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in target companies whose dates of acquisition fall within one basis period of the acquiring company, if the qualifying acquisitions in that basis period include at least one acquisition mentioned in subsection (4)(a) or (c) or subsection (4A)(a), (c) or (e) that is made before 1 April 2016, and at least one acquisition mentioned in subsection (4A)(a) and (c) that is made on or after 1 April 2016:
(a)
where the sum of the following (called in this subsection X) exceeds $5 million:
(i)
the sum of the amounts determined by the following formulae in respect of those acquisitions which are acquisitions mentioned in subsection (4):
(A)
“0.05 × A” in subsection (8);
(B)
“0.05 × B” in subsection (9);
(C)
“0.05 × D” in subsection (10);
(ii)
the sum of the amounts determined by the following formulae in respect of those acquisitions which are acquisitions mentioned in subsection (11AA):
(A)
“0.25 × A” in subsection (8A);
(B)
“0.25 × B” in subsection (9A);
(C)
“0.25 × D” in subsection (10A),
the excess is to be disregarded for the purposes of the deduction to be allowed under this section in respect of those acquisitions;
(b)
where the sum of the amounts (called in this subsection Y) determined by the following formulae in respect of those acquisitions which are acquisitions mentioned in subsection (11AC):
(i)
“0.25 × A” in subsection (8A);
(ii)
“0.25 × B” in subsection (9A);
(iii)
“0.25 × D” in subsection (10A);
exceeds $10 million, the excess is to be disregarded for the purposes of the deduction to be allowed under this section in respect of those acquisitions;
(c)
despite paragraphs (a) and (b), where the sum of X and Y exceeds $10 million, the excess is to be disregarded for the purposes of the deduction to be allowed under this section for all of the acquisitions mentioned in those paragraphs.
[Act 34 of 2016 wef 01/04/2016]
(12)  For the purposes of subsections (8), (8A), (9), (9A), (10), (10A), (11), (11A), (11B) and (11C), the amount of any consideration paid for any qualifying acquisition that comprises shares in the acquiring company, is the market value of the shares in the acquiring company as at the date of the acquisition of the shares and, if it is not possible to determine such value, the net asset value of those shares in the acquiring company at the end of its accounting period immediately before the date of the acquisition of those shares.
[29/2010]
[Act 2 of 2016 wef 01/04/2015]
[Act 34 of 2016 wef 01/04/2016]
(13)  Despite subsections (8), (8A), (9), (9A), (10) and (10A), where any amount of “A” referred to in subsection (8) or (8A), “B” referred to in subsection (9) or (9A), or “D” referred to in subsection (10) or (10A), that is paid by the acquiring company or the acquiring subsidiary, as the case may be, in respect of any qualifying acquisition is greater than the amount which would have been paid if the acquiring company or the acquiring subsidiary, as the case may be, were unrelated to the shareholders in the target company, the first-mentioned amount shall be substituted with the second-mentioned amount, and any question regarding the quantum of the second-mentioned amount shall be determined by the Comptroller.
[29/2010]
[Act 2 of 2016 wef 01/04/2015]
(14)  A deduction under this section to an acquiring company shall be made against the balance of its statutory income after the deductions allowed under sections 37(3), 37B and 37G.
[29/2010]
(15)  Section 14D(4) and (5) shall apply in relation to the deduction to be allowed in this section, 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 (after deducting any amount in respect of which an election for a cash payout has been made under section 37I) is a reference to the deduction to be allowed in this section; and
(b)
a reference to a specified amount of the expenditure or payments in section 14D(4) is a reference to an amount computed in accordance with the following formula:
where E
is the deduction to be allowed in this section;
F
is the rate of tax specified in section 43(1)(a); and
G
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.
[29/2010; 29/2012]
Deductions allowable in respect of transaction costs claimed
(15A)  For the purpose of subsection (1), a deduction in respect of transaction costs for qualifying acquisitions of ordinary shares in a target company shall be subject to the following:
(a)
the deduction in relation to any transaction costs incurred shall be allowed for —
(i)
the year of assessment in which a claim is first made for the deduction allowable in respect of the capital expenditure incurred on the qualifying acquisition to which those transaction costs relate; or
(ii)
the year of assessment which relates to the basis period in which those transaction costs are incurred,
whichever is the later; and
(b)
the deduction shall be subject to a limit of $100,000 in transaction costs incurred in relation to all qualifying acquisitions of ordinary shares in all target companies (whether by the acquiring company, or by one or more of its acquiring subsidiaries, or by a combination of both) for which claims are first made in the year of assessment referred to in paragraph (a)(i) for the deductions allowable in respect of the capital expenditure incurred on those acquisitions.
[29/2012]
Conditions for deductions
(16)  A deduction under this section for a qualifying acquisition (called the subject acquisition) may be made to an acquiring company for any year of assessment only if —
(a)
where the subject acquisition is one referred to in subsection (4)(a) or (c) or (4A)(c) or (e) —
(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition (being a date on or after 17 February 2012), the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C); and
(iv)
the target company, or a subsidiary that is —
(A)
if the date of the subject acquisition is before 17 February 2012, wholly owned by the target company directly; or
(B)
if the date of the subject acquisition is on or after 17 February 2012, wholly owned by the target company whether directly or indirectly,
satisfies the conditions in subsection (16D);
(b)
where the subject acquisition is one referred to in subsection (4)(b) or (d) or (4A)(d) or (f) —
(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition (being a date on or after 17 February 2012), the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C);
(iv)
the target company, or a subsidiary that is —
(A)
if the date of the acquisition is before 17 February 2012, wholly owned by the target company directly; or
(B)
if the date of the acquisition is on or after 17 February 2012, wholly owned by the target company whether directly or indirectly,
satisfies the conditions in subsection (16D); and
(v)
the conditions in paragraph (a) are also satisfied in relation to —
(A)
where the subject acquisition is one referred to in subsection (4)(b), a qualifying acquisition referred to in subsection (4)(a);
(B)
where the subject acquisition is one referred to in subsection (4)(d), a qualifying acquisition referred to in subsection (4)(c);
(C)
where the subject acquisition is one referred to in subsection (4A)(d), a qualifying acquisition referred to in subsection (4A)(c); or
(D)
where the subject acquisition is one referred to in subsection (4A)(f), a qualifying acquisition referred to in subsection (4A)(e);
(c)
where the subject acquisition is one referred to in subsection (4A)(a) —
(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition, the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C);
(iv)
the target company, or a subsidiary that is wholly owned by the target company whether directly or indirectly, satisfies the conditions in subsection (16D); and
(v)
the conditions prescribed under subsection (16E) are satisfied; and
(d)
where the subject acquisition is one referred to in subsection (4A)(b) —
(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition, the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C);
(iv)
the target company, or a subsidiary that is wholly owned by the target company whether directly or indirectly, satisfies the conditions in subsection (16D);
(v)
the conditions prescribed under subsection (16E) are satisfied; and
(vi)
the conditions in paragraph (c) are also satisfied in relation to a qualifying acquisition referred to in subsection (4A)(a).
[Act 2 of 2016 wef 01/04/2015]
(16A)  The conditions in subsection (16)(a)(i), (b)(i), (c)(i) and (d)(i) are —
(a)
the acquiring company is carrying on a trade or business in Singapore on the date of the acquisition of the shares;
(b)
the acquiring company has in its employment at least 3 local employees at all times during the period of 12 months immediately before that date;
(c)
unless otherwise prescribed under subsection (24), the acquiring company is not connected to the target company for at least 2 years immediately before that date; and
(d)
in a case where the acquiring company is a subsidiary of another company within the meaning of section 5 of the Companies Act (Cap. 50), the acquiring company has a Singapore company as its ultimate holding company on that date.
[Act 2 of 2016 wef 01/04/2015]
(16B)  The conditions in subsection (16)(a)(ii), (b)(ii), (c)(ii) and (d)(ii) are —
(a)
the acquiring subsidiary does not carry on a trade or business in Singapore or elsewhere on the date of the acquisition of the shares;
(b)
the acquiring subsidiary does not claim any deduction for any capital expenditure or transaction costs under this section for that year of assessment or any stamp duty relief under section 15A of the Stamp Duties Act (Cap. 312); and
(c)
the acquiring subsidiary is on that date wholly owned by the acquiring company —
(i)
directly, in the case of subsection (16)(a)(ii) or (b)(ii) where the date of the qualifying acquisition is before 17 February 2012; and
(ii)
whether directly or indirectly, in every other case.
[Act 2 of 2016 wef 01/04/2015]
(16C)  The conditions in subsection (16)(a)(iii), (b)(iii), (c)(iii) and (d)(iii) are —
(a)
the intermediate company is wholly owned (whether directly or indirectly) by the acquiring company on the date of the acquisition of the shares;
(b)
the intermediate company is incorporated for the primary purpose of acquiring and holding shares in other companies;
(c)
the intermediate company does not carry on a trade or business in Singapore or elsewhere on that date; and
(d)
the intermediate company does not claim any deduction for any capital expenditure or transaction costs under this section for that year of assessment or any stamp duty relief under section 15A of the Stamp Duties Act.
[Act 2 of 2016 wef 01/04/2015]
(16D)  The conditions in subsection (16)(a)(iv), (b)(iv), (c)(iv) and (d)(iv) are —
(a)
the target company or the subsidiary carries on a trade or business in Singapore or elsewhere on the date of the acquisition of the shares; and
(b)
the target company or the subsidiary has in its employment at least 3 employees at all times during the period of 12 months immediately before that date.
[Act 2 of 2016 wef 01/04/2015]
(16E)  For the purposes of subsection (16)(c)(v) and (d)(v), the Minister may by regulations prescribe such conditions as the Minister considers necessary to ensure that the acquiring company or acquiring subsidiary is not merely a passive shareholder of the target company, including requiring the company or subsidiary to exert significant influence (within the meaning of FRS 28, or SFRS for Small Entities, as amended from time to time) over the target company.
[Act 2 of 2016 wef 01/04/2015]
(16F)  In subsection (16E) —
“FRS 28” means the financial reporting standard known as Financial Reporting Standard 28 (Investments in Associates and Joint Ventures) issued by the Accounting Standards Council under Part III of the Accounting Standards Act (Cap. 2B);
“SFRS for Small Entities” means the financial reporting standard known as Singapore Financial Reporting Standard for Small Entities made by the Accounting Standards Council under Part III of the Accounting Standards Act.
[Act 2 of 2016 wef 01/04/2015]
(17)  No deduction in respect of any qualifying acquisition of ordinary shares in a target company shall be made to the acquiring company for the year of assessment relating to the basis period of the acquiring company in which any of the following events occurs or for any subsequent year:
(a)
where the qualifying acquisition is one referred to in subsection (4) or (4A)(c), (d), (e) or (f), after the date of the acquisition of the shares, the target company issues additional ordinary shares which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to 50% or less;
[Act 2 of 2016 wef 01/04/2015]
(aa)
where the qualifying acquisition is one referred to in subsection (4A)(a) or (b), after the date of the acquisition of the shares, the target company issues additional ordinary shares which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to less than 20%;
[Act 2 of 2016 wef 01/04/2015]
(b)
the acquiring company —
(i)
ceases to carry on a trade or business in Singapore; or
(ii)
ceases to have at least 3 local employees;
(c)
where the qualifying acquisition is one referred to in subsection (4)(a) or (b) or (4A)(c) or (d), the acquiring company or the acquiring subsidiary (as the case may be) divests of its shares in the target company which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to 50% or less, and such divestment occurs in a basis period of the acquiring company other than that for the 1st year of assessment;
[Act 2 of 2016 wef 01/04/2015]
(d)
where the qualifying acquisition is one referred to in subsection (4)(c) or (d) or (4A)(e) or (f), the acquiring company or the acquiring subsidiary (as the case may be) divests of its shares in the target company which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to a percentage below 75%, and such divestment occurs in a basis period of the acquiring company other than that for the 1st year of assessment;
[Act 2 of 2016 wef 01/04/2015]
(da)
where the qualifying acquisition is one referred to in subsection (4A)(a) or (b), the acquiring company or the acquiring subsidiary (as the case may be) divests its shares in the target company which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to any percentage below 20%, and such divestment occurs in a basis period of the acquiring company other than that for the 1st year of assessment;
[Act 2 of 2016 wef 01/04/2015]
(e)
the acquiring company or, if the acquiring company is a subsidiary of another company within the meaning of section 5 of the Companies Act, its ultimate holding company, ceases to be a Singapore company; or
(f)
the acquiring subsidiary and every intermediate company through which the acquiring subsidiary is indirectly owned by the acquiring company —
(i)
carries on any trade or business in Singapore or elsewhere;
(ii)
claims a deduction under this section for capital expenditure or transaction costs incurred or claims any stamp duty relief under section 15A of the Stamp Duties Act; or
(iii)
ceases to be wholly owned by the acquiring company —
(A)
directly, in the case of a qualifying acquisition the date of which is before 17th February 2012; and
(B)
whether directly or indirectly, in the case of a qualifying acquisition the date of which is on or after 17th February 2012.
[29/2010; 22/2011; 29/2012]
(18)  If the Comptroller is satisfied that the shareholders of the acquiring company on the first day of the year of assessment in which the deduction is to be allowed in respect of a qualifying acquisition are not substantially the same as its shareholders on the date of the acquisition of the shares, then no deduction in respect of the qualifying acquisition shall be made to the acquiring company for the year of assessment relating to the basis period of the acquiring company in which the deduction is to be allowed and for any subsequent year of assessment.
[29/2010; 22/2011]
Modifications for groups of companies
(19)  Where the acquiring company or the acquiring subsidiary, as the case may be, and the target company are part of the same group of companies on the date of a qualifying acquisition of ordinary shares in a target company by the acquiring company or the acquiring subsidiary, as the case may be, no deduction shall be made under this section in respect of that qualifying acquisition unless the total number of ordinary shares acquired by the acquiring company or the acquiring subsidiary, as the case may be, results in an increase in the total number of ordinary shares of the target company held on that date by all companies in the group (excluding the target company) and, where there is such an increase —
(a)
a deduction shall only be allowed under this section for; and
(b)
references in subsections (7) to (10A) to any capital expenditure for a qualifying acquisition shall accordingly be read as references to,
[Act 2 of 2016 wef 01/04/2015]
the capital expenditure in respect of the number of such shares that corresponds to such increase.
[29/2010]
(19A)  The Minister or such person as he may appoint may, for any particular qualifying acquisition made on or after 17th February 2012, waive the requirement in subsections (16A)(d) and (17)(e) in relation to the ultimate holding company of the acquiring company, subject to such conditions that the Minister or the person he has appointed may impose.
[29/2012]
[Act 2 of 2016 wef 01/04/2015]
Carry forward of deductions
(20)  Subject to subsection (21), where in any year of assessment full effect cannot, by reason of an insufficiency of gains or profits chargeable for that year of assessment, be given to any deduction falling to be allowed under this section, the balance of the deduction shall be added to, and be deemed to form part of the corresponding deduction, if any, for the next succeeding year of assessment, and if no such corresponding deduction falls to be allowed for that year, shall be deemed to constitute the corresponding deduction for that year, and so on for subsequent years of assessment.
[29/2010]
(21)  No balance shall be added to and be deemed to form part of the corresponding deduction, if any, to be given to an acquiring company under subsection (20) for a year of assessment unless the Comptroller is satisfied that the shareholders of the acquiring company on the last day of the year of assessment in which the deduction was claimed were substantially the same as the shareholders of the acquiring company on the first day of the first-mentioned year of assessment; and such balance shall not be allowed in any subsequent year of assessment.
[29/2010]
Exemption
(22)  The Minister or such person as he may appoint may, where there is a substantial change in the shareholders of a company and he is satisfied that such change is not for the purpose of deriving any tax benefit or obtaining any tax advantage, exempt that company from the provisions of subsections (18) and (21).
[29/2010]
Deductions that ought not to have been allowed
(23)  Notwithstanding section 74(1) and (4), where it appears to the Comptroller that a deduction or any part thereof under this section which has been allowed to any acquiring company in any year of assessment ought not to have been allowed by virtue of —
(a)
the occurrence of any event specified in subsection (17) or (18);
(b)
the failure of the acquiring company or the acquiring subsidiary, as the case may be, to pay the consideration for acquiring the shares of the target company in full within 6 months from the date of the acquisition of the shares or, in the case of consideration that is contingent consideration, within 6 months from the date the contingent consideration is incurred;
(c)
a reduction in the consideration paid in relation to the share acquisition upon satisfaction of indemnity conditions as may be specified in the agreement for the sale of the ordinary shares of the target company; or
(d)
section 33,
the Comptroller may, at any time, for the purposes of making good any loss of tax attributable to the deduction or part thereof, assess the person who has utilised the deduction at such amount or additional amount as according to his judgment ought to have been charged, and this subsection shall also apply with the necessary modifications to any assessment which results in any unabsorbed allowances or losses.
[29/2010]
Regulations
(24)  The Minister may make regulations —
(a)
to provide for the disallowance of or for the adjustments to be made to the amount of any deduction allowed in any year of assessment under this section where the acquiring company or the acquiring subsidiary, as the case may be, divests of any of the ordinary shares it holds in the target company;
(b)
to provide for the application of this section to a business trust, subject to such modifications as may be prescribed, including treating, in prescribed circumstances, a business trust and any company whose shares are trust property thereof as companies within a group of companies, and a holding of units in a business trust as a holding of shares in a company;
(c)
to prescribe such matters as are required or authorised to be prescribed under this section; and
(d)
generally for giving full effect to or for carrying out the purposes of this section.
[29/2010; 29/2012]
Interpretation
(25)  In this section —
“capital expenditure”, in relation to any acquisition of shares, means consideration for the shares acquired whether paid in cash or in shares of the acquiring company or both, but excludes transaction costs (including but not limited to due diligence and valuation costs) and any other similar costs;
“contingent consideration”, in relation to an acquisition of ordinary shares in a target company, means such part of the total consideration for the acquisition that would be incurred only upon the satisfaction of such conditions in respect of the target company as may be specified in the agreement for the acquisition entered into by the acquiring company or the acquiring subsidiary, as the case may be;
“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;
“local employee” means an employee of the acquiring company —
(a)
who is a citizen of Singapore or a Singapore permanent resident; and
(b)
who makes contributions in respect of the income derived from his employment with the acquiring company to the Central Provident Fund which are obligatory under the Central Provident Fund Act (Cap. 36),
but exclude a director as defined in section 4 of the Companies Act;
“Singapore company” means a company which is incorporated in Singapore and resident in Singapore;
“transaction costs” means professional fees that are necessarily incurred for the qualifying acquisition of ordinary shares in the target company —
(a)
including legal fees, accounting or tax advisor’s fees and valuation fees; but
(b)
excluding any professional fees (including the fees referred to in paragraph (a)) incurred in respect of loan arrangements and costs incidental thereto, borrowing costs, and stamp duty and any other taxes, incurred for the qualifying acquisition of ordinary shares in the target company;
“ultimate holding company” has the same meaning as in section 5A of the Companies Act.
[29/2010; 29/2012]
(26)  In this section, the date of acquisition of ordinary shares in a target company is —
(a)
the date on which the agreement for the sale of those shares is entered into by the acquiring company or the acquiring subsidiary, as the case may be; or
(b)
in the absence of an agreement referred to in paragraph (a), the date of the transfer of those shares from the target company to the acquiring company or the acquiring subsidiary, as the case may be.
[29/2010]
(27)  For the purposes of subsections (13) and (16A) —
(a)
a person is related to another if —
(i)
one of them directly or indirectly controls the other; or
(ii)
both of them are under the direct or indirect control of a third person; and
(b)
a company is connected with another if —
(i)
at least 75% of the total number of ordinary shares in one company are beneficially held, directly or indirectly, by the other; or
(ii)
at least 75% of the total number of ordinary shares in each of the 2 companies are beneficially held, directly or indirectly, by a third company.
[29/2010]
[Act 2 of 2016 wef 01/04/2015]
(28)  For the purposes of subsections (18), (21) and (22) —
(a)
the shareholders of the acquiring company at any date shall not be deemed to be substantially the same as the shareholders of that company at any other date unless, on both those dates, not less than 50% of the total number of issued shares of the company are held by or on behalf of the same persons;
(b)
shares in the acquiring company held by or on behalf of another company shall be deemed to be held by the shareholders of the last-mentioned company; and
(c)
shares held by or on behalf of the trustee of the estate of a deceased shareholder or by or on behalf of the person entitled to those shares as beneficiaries under the will or any intestacy of a deceased shareholder shall be deemed to be held by that deceased shareholder.
[29/2010]
(29)  In this section, a reference to capital expenditure and transaction costs excludes any such expenditure and costs to the extent that they are or are to be subsidised by grants or subsidies from the Government or a statutory board.
[29/2012]
Treatment of unabsorbed donations attributable to exempt income
37M.
—(1)  If —
(a)
any donation allowable under this Act for the year of assessment 2012 or any preceding year of assessment (referred to in this section as the attributed donation) is to be deducted from any income of a company under a provision of this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) in determining the amount of its income that is exempt from tax under that provision for that or any subsequent year of assessment; and
(b)
part or all of the attributed donation (referred to in this section as the balance) has yet to be fully deducted in determining the amount of income that is exempt from tax for the year of assessment 2012,
then the following provisions shall apply to the balance:
(i)
subject to paragraphs (iii) to (vii) and subsection (2), the balance shall be deducted from the statutory income of the company for the year of assessment 2013;
(ii)
subject to paragraphs (iii) to (vii) and section 37B, where the deduction under paragraph (i) cannot be made or fully made, the balance shall be deducted from the statutory income of the company for the year of assessment 2014, and so on;
(iii)
any balance not deducted against the statutory income of the company for the fifth year of assessment after the year of assessment relating to the basis period in which the donation was made shall be disregarded;
(iv)
for the purposes of paragraphs (i) and (ii), any donation made on an earlier date shall be deemed to have been deducted first;
(v)
where the part of the balance that may be deducted under paragraph (i) against any type of income in accordance with subsection (2) has been so deducted and a sum remains of that part of the balance after such deduction, a deduction under paragraph (ii) of the sum that so remains, or any sum that remains after one or more applications of this paragraph, shall be made in the following manner:
(A)
the sum shall first be deducted against the same type of income;
(B)
any sum remaining after that deduction shall be deducted against any other type of income in accordance with section 37B;
(vi)
notwithstanding paragraphs (i) and (ii), the balance shall be disregarded if the Comptroller is not satisfied that the shareholders of the company on the last day of the year in which the donation was made, were substantially the same as the shareholders of the company on the first day of the year of assessment in which the balance would otherwise be deductible; and
(vii)
section 37(13) to (17) shall apply, with the necessary modifications, for the purposes of paragraph (vi).
[29/2012; 19/2013]
(2)  The deduction under subsection (1)(i) shall be made in accordance with the following provisions:
(a)
section 37B shall not apply to the deduction;
(b)
if the company only derives normal income for that year of assessment, the balance shall be deducted against the normal income for that year of assessment;
(c)
if the company only derives concessionary income for that year of assessment, the balance shall be deducted against the concessionary income for that year of assessment;
(d)
if the company derives both normal income and concessionary income, or concessionary income that is subject to tax at different concessionary rates of tax, for that year of assessment, the balance shall be deducted against each type of income in such proportion as appears reasonable to the Comptroller in the circumstances;
(e)
if the company only derives income that is exempt from tax for that year of assessment, then section 37B(3) shall, with the necessary modifications, apply for the purpose of making a deduction of the balance under subsection (1)(ii) as if the balance were unabsorbed donation in respect of income of a company subject to tax at the rate of tax specified in section 43(1)(a).
[29/2012]
(3)  In this section —
“concessionary income” means income that is subject to tax at a concessionary rate of tax;
“concessionary rate of tax” has the same meaning as in section 14C in force immediately before the date the Income Tax (Amendment No. 3) Act 2016 is published in the Gazette;
[Act 34 of 2016 wef 29/12/2016]
“normal income” means income that is subject to tax at the rate of tax specified in section 43(1)(a).
[29/2012]