22. Section 14E of the principal Act is amended —
by deleting the words “a manufacturing trade or business, or a trade or business for the provision of any services” in subsection (1)(a) and substituting the words “any trade or business”;
by deleting the word “or” at the end of paragraph (a) of subsection (1), and by inserting immediately thereafter the following paragraph:
a person carrying on any trade or business has incurred during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2013 (both years inclusive) expenditure in undertaking directly by himself, or in paying a research and development organisation to undertake on his behalf, an approved research and development project in Singapore which is not related to that trade or business; or”;
by deleting the words “under section 14 or 14D” in the last line of subsection (1) and substituting the words “under section 14, 14D or 14DA, as the case may be”; and
by inserting, immediately after subsection (3), the following subsections:
“(3A) The total amount of deduction allowed under this section and sections 14, 14D and 14DA in respect of any expenditure incurred by a person for an approved research and development project in Singapore shall not exceed 200% of such expenditure incurred.
(3B) Section 14D(4) and (5) shall apply in relation to the deduction of the expenditure and payments referred to in subsection (1)(aa), as they apply in relation to the deduction of the expenditure and payments referred to in section 14D(1)(aa) and (c), subject to the following modifications:
a reference to the amount of the expenditure or payments is a reference to the amount of deduction that would have been allowed under this section for the expenditure or payments referred to in subsection (1)(aa) but for this subsection;
a reference to a specified amount of the expenditure or payments is a reference to an amount computed in accordance with the following formula:
is the amount of the deduction referred to in paragraph (a);
is the rate of tax specified in section 43(1)(a); and
(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.”.