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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 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THIRD SCHEDULE Repealed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

Legislative History

Comparative Table

Comparative Table

 
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On 19/10/2017, you requested the version in force on 01/01/2008 incorporating all amendments published on or before 01/01/2008.
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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 subsection (2), 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 and House Agents 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]
[29/2010 wef 01/01/2011]
(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, shall be available for deduction against his statutory income for subsequent year of assessment under subsection (3)(a)(i).
[Act 27/2009, wef Y/A 2009 & 2010:2009-ACT-27]
[37/2002; 49/2004; 34/2005]
(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) .
[29/2010 wef 01/03/2010]
[37/2002; 21/2003; 34/2005]
(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 sixth year of assessment from the first year of assessment in which the donation was made shall be disregarded.
[37/2002; 21/2003; 49/2004; 34/2005]
(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.
11(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 or a Hindu joint family 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 or a Hindu joint family, is one 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]
11  Subsection (10A) shall have effect from the year of assessment 2009.
(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]
(19)  For the purposes of subsection (3)(e) —
(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]
Restriction on deduction of trading losses against dividends
37A.
—(1)  Notwithstanding anything in this Act but subject to subsection (2), in computing the assessable income of any company for any year of assessment, no deduction shall be allowed for any loss incurred by that company (referred to in this Act as the loss company) against any dividends received by it from an associated company.
[7/79]
(2)  The Comptroller may allow such deduction if he is satisfied, having regard to all the circumstances of the case, that the object or one of the main objects of the declaration of dividends by the associated company to the loss company is not for the purpose of receiving any benefit or obtaining any advantage in relation to the application of this Act.
(3)  Subsection (1) shall not apply —
(a)
in respect of any loss incurred by the loss company after the end of its accounting period during which the relevant date occurs; and
(b)
in respect of any dividends paid by the associated company out of the profits of the associated company derived after the end of its accounting period during which the relevant date occurs.
(4)  For the purposes of this section —
(a)
“private company” and “public company” have the same meanings as in the Companies Act (Cap. 50);
(b)
“relevant date” means the date when the associated company first became an associated company of the loss company;
(c)
a company shall be deemed to be an associated company of a loss company if —
(i)
in the case of a private company at least 25% of the total number of its issued shares are beneficially owned, directly or indirectly, by the loss company;
(ii)
in the case of a public company at least 50% of the total number of its issued shares are beneficially owned, directly or indirectly, by the loss company;
(d)
any dividends received by the loss company from an associated company, being dividends which are paid by the associated company out of income representing, wholly or in part, dividends paid by another associated company of the loss company to the first-mentioned associated company shall be deemed to be dividends received by the loss company from the second-mentioned associated company; and this provision shall apply notwithstanding any company or companies interposed between the first-mentioned associated company and the second-mentioned associated company;
(e)
where a loss company beneficially owns, directly or indirectly, a fraction of the total number of issued shares of a second company which in turn beneficially owns, directly or indirectly, a fraction of the total number of issued shares of a third company, the loss company shall be deemed to have a beneficial ownership of the number of issued shares of the third company equal to such fraction of the total number as results from the multiplication of those 2 fractions; and where the third company beneficially owns, directly or indirectly, a fraction of the total number of issued shares of a fourth company, the loss company shall be deemed to have a beneficial ownership of the number of issued shares of the fourth company equal to such fraction of the total number as results from the multiplication of those 3 fractions, and so on.
[34/2005]
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.
(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, 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 13H, 43A, 43C (in respect of those relating to offshore general insurance business only), 43D, 43E, 43F, 43G, 43H, 43I, 43J, 43K, 43L (repealed), 43M (repealed), 43N, 43O, 43P, 43Q, 43R, 43S, 43T, 43U, 43V, 43W, 43X, 43Y or 43Z or 43ZD, or the regulations made thereunder, as the case may be;
“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]
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), 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]
(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 and 17) 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 the date of commencement of the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Act 2004 (Act 11 of 2004) or section 97V of the Economic Expansion Incentives (Relief from Income Tax) Act applies, in respect of qualifying deductions under subsection (14)(a) where the loss is deemed to be a loss incurred from a trade or business for the purposes of any of those sections;
(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; and
(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.
[37/2002; 11/2004; 7/2007]
(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 investment allowance under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86);
[Act 34/2008, wef Y/A 2009 & Sub Ys/A:2008-ACT-34]
“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 the date of commencement of the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Act 2004 (Act 11 of 2004);
(b)
a venture company under section 97B(2) of the Economic Expansion Incentives (Relief from Income Tax) Act in force immediately before the date of commencement of the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Act 2004;
(c)
a technology investment company under section 97C(2) of the Economic Expansion Incentives (Relief from Income Tax) Act in force immediately before the date of commencement of the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Act 2004;
(d)
an overseas investment company under section 97C(4) of the Economic Expansion Incentives (Relief from Income Tax) Act in force immediately before the date of commencement of the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Act 2004; or
“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;
“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]
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]
(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, 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]
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]
(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]
(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, where applicable, as if the income for the immediate preceding year of assessment 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 of the company.
[Act 27/2009, wef Y/A 2009 & 2010:2009-ACT-27]
[34/2005]
(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]
(6)  Any person deducting any qualifying deduction for any year of assessment against his assessable income for the immediate preceding year of assessment 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]
(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]
(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, 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]
(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) shall not be deductible.
[34/2005]
(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 if the person did not carry on that trade, business or profession in the basis period for the immediate preceding year of assessment.
[Act 27/2009, wef Y/A 2009 & 2010:2009-ACT-27]
[34/2005]
(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 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 the immediate preceding year of assessment .
[Act 27/2009, wef Y/A 2009 & 2010:2009-ACT-27]
[34/2005]
(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 investment allowance under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) and any deductions claimed under section 37C;
[Act 34/2008, wef Y/A 2009 & Sub Ys/A:2008-ACT-34]
(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); or
(b)
section 13H, 43A, 43C (in respect of those relating to offshore general insurance business only), 43D, 43E, 43F, 43G, 43H, 43I, 43J, 43K, 43L (repealed), 43N, 43O, 43P, 43Q, 43R, 43S, 43T, 43U, 43V, 43W, 43X, 43Y or 43Z, or the regulations made thereunder, as the case may be.
[34/2005; 7/2007; 53/2007]
(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]
(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]
(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]
(5)  No transfer shall be allowed under subsection (1) in any year of assessment if the transferor has assessable income for the immediate preceding year of assessment but no claim for relief has been made under section 37E.
[Act 27/2009, wef Y/A 2009 & 2010:2009-ACT-27]
[34/2005]
(6)  No transfer shall be allowed under subsection (1) 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.
[Act 27/2009, wef Y/A 2009 & 2010:2009-ACT-27]
[34/2005]
(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]
(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, 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]
(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 .
[Act 27/2009, wef Y/A 2009 & 2010:2009-ACT-27]
[34/2005]
(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]