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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THIRD SCHEDULE Repealed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 27/09/2017, you requested the version in force on 27/09/2017 incorporating all amendments published on or before 27/09/2017. The closest version currently available is that of 02/07/2017.
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PART VI
CAPITAL ALLOWANCES
Initial and annual allowances for industrial buildings and structures
16.
—(1)  Where, in or after the basis period for the first year of assessment under this Act, a person incurs capital expenditure on the construction of a building or structure which is to be an industrial building or structure occupied for the purposes of a trade, there shall be made to the person who incurred the expenditure for the year of assessment in the basis period for which the expenditure was incurred an allowance to be known as an “initial allowance” equal to 25% thereof.
[7/79]
(2)  For the purposes of subsection (1) —
(a)
where 2 basis periods overlap, the period common to both shall be deemed to fall in the first basis period only;
(b)
where there is an interval between the end of the basis period for a year of assessment and the commencement of a basis period for the next succeeding year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval shall be deemed to be part of the second basis period; and
(c)
where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the commencement of the basis period for the year in which it is permanently discontinued, the interval shall be deemed to form part of the first basis period.
(3)  Any capital expenditure incurred for the purposes of a trade by a person about to carry on that trade shall be treated for the purposes of subsection (1) as if it had been incurred by that person on the first day on which he does carry on that trade.
(4)  Where any person is, at the end of the basis period for any year of assessment, entitled to an interest in a building or structure which is an industrial building or structure and where that interest is the relevant interest in relation to the capital expenditure incurred before 1st January 2006 on the construction of that building or structure, an allowance, to be known as an “annual allowance”, equal to 3% of the total capital expenditure incurred by that person on the construction of that building or structure shall be made to him for that year of assessment.
[7/79; 7/2007]
(5)  Where at any time in or after the basis period for the first year of assessment under this Act and before 1st January 2006, the interest in a building or structure which is the relevant interest in relation to any capital expenditure incurred before that date on the construction of that building or structure is sold while the building or structure is an industrial building or structure or after it has ceased to be one, the annual allowance, in the years of assessment the basis periods for which end after the time of that sale, shall be computed by reference to the residue of that expenditure immediately after the sale and shall be —
(a)
the fraction of that residue the numerator of which is one and the denominator of which is the number of years of assessment comprised in the period which begins with the first year of assessment for which the buyer is entitled to an annual allowance or would be so entitled if the building or structure had at all material times continued to be an industrial building or structure, and ends with the fiftieth year after that in which the building or structure was first used; or
(b)
3% of that residue,
whichever is the greater, and so on for any subsequent sales.
[7/79; 21/2003; 7/2007]
(6)  In the case referred to in subsection (4), no annual allowance shall be made to any person for any year of assessment after the end of the fiftieth year after that in which the building or structure was first used.
[7/2007]
(6A)  Where any person is, at the end of the basis period for any year of assessment, entitled to an interest in a building or structure which is an industrial building or structure, and that interest is the relevant interest in relation to —
(a)
any capital expenditure incurred by him on or after 1st January 2006 on the construction of that building or structure; or
(b)
a sale or purchase agreement entered into for that building or structure on or after that date, whether or not the building or structure was previously used as an industrial building or structure,
an annual allowance determined under subsection (6B) shall be made to him for that year of assessment.
[7/2007]
(6B)  The annual allowance under subsection (6A) shall be equal to —
(a)
in the case referred to in subsection (6A)(a), 3% of the total capital expenditure incurred by the person on the construction of the building or structure; or
(b)
in the case referred to in subsection (6A)(b), 3% of the capital expenditure incurred by the person on the purchase of the building or structure.
[7/2007]
(7)  For the purposes of application to any industrial building or structure occupied for the purposes of a trade in intensive poultry production and approved by the Minister or such person as he may appoint under section 18(1), the reference to 3% in subsections (4), (5) and (6B) and in sections 17(3)(a) and 18(9) shall be read as a reference to 5%.
[7/79; 21/2003; 7/2007]
(8)  For the purposes of application to any industrial building or structure occupied for the purposes of a hotel on the island of Sentosa and approved by the Minister or such person as he may appoint under section 18(1) —
(a)
the reference to 25% in subsection (1) shall be read as a reference to 20%;
(b)
the reference to 3% in subsections (4), (5) and (6B) and in sections 17(3)(a) and 18(9) shall be read as a reference to 2%; and
(c)
the reference to capital expenditure in subsections (1) and (4) shall not include any capital expenditure incurred before 1st January 1982.
[1/82; 7/2007]
(9)  For the purposes of application to any industrial building or structure used for the purposes of a project for the promotion of the tourist industry (other than a hotel) in Singapore and approved by the Minister or such person as he may appoint under section 18(1)(i) —
(a)
the reference to 25% in subsection (1) shall be read as a reference to 20%;
(b)
the reference to 3% in subsections (4), (5) and (6B) and in sections 17(3)(a) and 18(9) shall be read as a reference to 2%; and
(c)
the reference to capital expenditure in subsections (1), (3) and (4) shall not include any capital expenditure incurred before 1st January 1986.
[1/88; 7/2007]
(10)  Notwithstanding anything in this section and section 17, where a person carrying out a project for the promotion of the tourist industry approved by the Minister or such person as he may appoint under section 18(1)(i) fails to comply with any condition imposed by the Minister, the Minister may revoke the approval and thereupon the Comptroller may at any time within 6 years (if the year of assessment relating to the basis period in which the approval is revoked is 2007 or a preceding year of assessment) or 4 years (if the year of assessment relating to the basis period in which the approval is revoked is 2008 or a subsequent year of assessment) from the date of the revocation make such assessment or additional assessment upon the person as may appear necessary in order to recover any tax which ought to have been paid by that person if any allowances under those sections had not been made to him.
[1/88; 11/94; 7/2007; 53/2007]
(11)  Notwithstanding anything in this section, in no case shall the amount of an annual allowance made to a person for any year of assessment in respect of any expenditure exceed what, apart from the writing off falling to be made by reason of the making of that allowance, would be the residue of that expenditure at the end of his basis period for that year of assessment.
(12)  For the purposes of subsection (1), where a person has incurred capital expenditure before 1st January 2006 on the purchase of an industrial building or structure (including the purchase of a leasehold interest therein of not less than 25 years) which has not previously been used by any person, he shall be deemed to have incurred expenditure on the construction of that industrial building or structure equal to the cost of construction of that industrial building or structure or to the net price paid by him for that industrial building or structure or the interest therein, whichever is less, if —
(a)
the person claiming the initial allowance by virtue of this subsection purchased the industrial building or structure or acquired the leasehold interest therein from the person who constructed that building or structure; and
(b)
no initial allowance has been granted under subsection (1) in respect of that industrial building or structure to the person who constructed that building or structure.
[7/79; 7/2007]
(13)  For the purposes of subsection (1), where a person has incurred capital expenditure on or after 1st January 2006 on the purchase of an industrial building or structure which has not previously been used by any person, he shall be deemed to have incurred expenditure on the construction of that industrial building or structure equal to the capital expenditure incurred by him on the purchase of that industrial building or structure if —
(a)
the person claiming the initial allowance by virtue of this subsection purchased the industrial building or structure from the person who constructed that building or structure; and
(b)
no initial allowance has been granted under subsection (1) in respect of that industrial building or structure to the person who constructed that building or structure.
[7/2007]
(14)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86), where, in the basis period for any year of assessment, the trade, for which purpose the industrial building is used, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment shall be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
[49/2004]
(15)  Subject to section 18B, this section shall not apply to any capital expenditure incurred on or after 23rd February 2010 on the construction or purchase of an industrial building or structure.
[29/2010]
(16)  Subject to subsection (18) and section 18B, no annual allowance shall be made under subsections (4), (5) and (6A) to a person who incurs capital expenditure on or before 22nd February 2010 on the construction or purchase of a building or structure which is not an industrial building or structure on 22nd February 2010 but is an industrial building or structure on or after 23rd February 2010.
[29/2010]
(17)  Section 18(2) and (3) shall apply for the purpose of determining under subsection (16) whether a building or structure is an industrial building or structure on 22nd February 2010.
[29/2010]
(18)  Notwithstanding subsection (16), annual allowances under subsection (6A)(a) shall be made to a person who incurs capital expenditure on or before 22nd February 2010 on a building or structure which is still under construction on 22nd February 2010 and which is to be an industrial building or structure upon completion of that construction, if the person —
(a)
on or before 22nd February 2010 —
(i)
has been granted the option to purchase the land or has entered into a sale and purchase agreement for the land on which the industrial building or structure is to be constructed;
(ii)
has entered into a lease agreement to lease the land on which the industrial building or structure is to be constructed; or
(iii)
has submitted an application to the Government or any statutory board —
(A)
to bid for the purchase therefrom of the land on which the industrial building or structure is to be constructed; or
(B)
to lease therefrom the land on which the industrial building or structure is to be constructed; and
(b)
on or before 31st December 2010, has made an application for planning permission or conservation permission to the competent authority in accordance with the Planning Act (Cap. 232) for the development of the land comprising the construction work.
[29/2010]
Balancing allowances and charges for industrial buildings and structures
17.
—(1)  Where any of the events referred to in subsection (1A) occurs while a building or structure is an industrial building or structure or after it has ceased to be one and —
(a)
any capital expenditure has been incurred on the construction of the building or structure before 1st January 2006; or
(b)
either —
(i)
any capital expenditure has been incurred on the construction of the building or structure on or after 1st January 2006; or
(ii)
a sale and purchase agreement for the building or structure was entered into on or after that date,
then an allowance or a charge, to be known as a “balancing allowance” or a “balancing charge” shall, in the circumstances mentioned in this section, be made to or, as the case may be, on the person entitled to the relevant interest immediately before that event occurs for the year of assessment in the basis period for which that event occurs.
[7/2007]
(1A)  The events referred to in subsection (1) are —
(a)
the relevant interest in the building or structure is sold;
(b)
that interest, being a leasehold interest, comes to an end otherwise than on the person entitled thereto acquiring the interest which is reversionary thereon;
(c)
the building or structure is demolished or destroyed or, without being demolished or destroyed, ceases altogether to be used.
[7/2007]
(2)  In the case referred to in subsection (1)(a), no balancing allowance or balancing charge shall be made to or on any person for any year of assessment by reason of any event occurring after the end of the fiftieth year after that in which the building or structure was first used.
[7/2007]
(3)  No balancing allowance shall be made to any person —
(a)
on the sale of the relevant interest in the building or structure unless the person proves to the satisfaction of the Comptroller that the value of the building or structure to the person is less than —
(i)
in the case referred to in subsection (1)(a), the amount of the capital expenditure incurred on the construction of the building or structure reduced by the amount of any initial and annual allowances made (including an amount of 3% of the capital expenditure for each year in which no initial or annual allowance was made); or
(ii)
in the case referred to in subsection (1)(b), the amount of the capital expenditure incurred by him on the construction or purchase of the building or structure (as the case may be) reduced by the amount of any initial and annual allowances made (including an amount of 3% of the capital expenditure for each year in which no initial or annual allowance was made); or
(b)
where the relevant interest in the building or structure is not sold but the building or structure is or would be redeveloped for any use other than as an industrial building or structure.
[21/2003; 7/2007]
(4)  Where there are no sale, insurance, salvage or compensation moneys, or where the residue of the expenditure immediately before the event exceeds those moneys, a balancing allowance shall be made and the amount thereof shall be the amount of the residue or, as the case may be, of the excess thereof over the moneys.
(5)  If the sale, insurance, salvage or compensation moneys exceed the residue, if any, of the expenditure immediately before the event, a balancing charge shall be made and the amount on which it is made shall be an amount equal to the excess or, where the residue is nil, to the moneys.
(6)  Notwithstanding anything in subsection (5) but subject to subsection (7), in no case shall the amount on which a balancing charge is made on a person exceed the aggregate of the following amounts:
(a)
the amount of the initial allowance, if any, made to him in respect of the expenditure in question; and
(b)
the amount of the annual allowances, if any, made to him in respect of the expenditure in question.
[49/2004]
(7)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86), where, in the basis period for any year of assessment, the trade, for which purpose the industrial building is used, produces income that is exempt from tax as well as income chargeable with tax, and any balancing allowance or balancing charge arises to be made —
(a)
the balancing allowance shall be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances; and
(b)
such proportion of the balancing charge shall be exempt from tax as appears reasonable to the Comptroller in the circumstances.
[49/2004]
(8)  Where allowances have been made under both sections 16 and 18C in respect of any industrial building or structure, then, for the purposes of subsections (4) and (5), the sale, insurance, salvage or compensation moneys in respect of that building or structure shall be such amount of those moneys as the Comptroller determines to be reasonable in the circumstances.
[29/2010]
(9)  Where the relevant interest in a building or structure in respect of which allowances have been made under section 16 is transferred at less than the open-market price, then for the purpose of determining the amount of any balancing charge under subsection (5), the relevant interest in the building or structure shall be treated as if it had been sold for an amount equal to the open‑market price of the building or structure as at the date of transfer.
[29/2010]
Definitions for sections 16, 17 and 18B
18.
—(1)  Subject to this section, in sections 16, 17 and 18B, “industrial building or structure” means a building or structure in use —
(a)
for the purposes of a trade carried on in a mill, factory or other similar premises;
(b)
for the purposes of a transport, dock, water or electricity undertaking;
(c)
for the purposes of a trade which consists in the manufacture of goods or materials or the subjection of goods or materials to any process;
(d)
for the purposes of a trade which consists in the storage of goods or materials which are to be used in the manufacture of other goods or to be subjected, in the course of a trade, to any process;
(e)
for the purposes of a trade which consists of the storage of goods or materials on their arrival in Singapore;
(f)
for the purposes of a trade in intensive poultry production as may be approved on or before 22nd May 2010 by the Minister or such person as he may appoint;
(g)
by a research and development organisation in carrying out research and development activities for any manufacturing trade or business;
(h)
for the purposes of a hotel on the island of Sentosa and approved before 1st September 2007 by the Minister or such person as he may appoint (referred to in this section as a Sentosa hotel);
(i)
for the purposes of a project for the promotion of the tourist industry (other than a hotel) in Singapore and approved on or before 22nd May 2010 by the Minister or such person as he may appoint subject to such conditions as he may impose; or
(j)
for prescribed purposes and where such building or structure has been approved on or before 22nd May 2010 by the Minister or such person as he may appoint subject to such conditions as he may impose,
and includes any building or structure provided by the person carrying on such a trade or undertaking for the welfare of workers employed in that trade or undertaking and in use for that purpose, but does not include a building or structure in respect of which a deduction is prescribed under section 14(1)(h).
[26/73; 28/80; 1/82; 1/88; 3/89; 2/92; 21/2003; 53/2007; 27/2009; 29/2010]
(2)  A building or structure shall not be deemed, by reason only of its falling or having fallen into temporary disuse, to have thereby ceased altogether to be used for one of the purposes specified in subsection (1) if, immediately prior to falling into such temporary disuse, it was in use for such a purpose and if, during the period of such temporary disuse, it is constantly maintained in readiness to be brought back into use for such a purpose.
(3)  If, in the circumstances mentioned in subsection (2), the building or structure at any time during disuse ceases to be ready for use for any of the purposes mentioned in that subsection, or if at any time, for any reason, the disuse of the building or structure can no longer be reasonably regarded as temporary, then and in any such case, the building or structure shall be deemed to have ceased, on the commencement of the period of disuse, to be used for any of the purposes specified in subsection (1).
(4)  Subsection (1) shall apply in relation to a part of a trade or undertaking as it applies to a trade or undertaking.
(5)  Where part only of a trade or undertaking complies with the conditions set out in subsection (1), a building or structure shall not, by virtue of subsection (4), be an industrial building or structure unless it is in use for the purposes of that part of that trade or undertaking.
(6)  Notwithstanding anything in subsection (1), (2), (3), (4) or (5), “industrial building or structure” does not include any building or structure in use as, or as part of, a dwelling-house, retail shop, showroom, hotel (other than a Sentosa hotel) or office or for any purpose ancillary to the purposes of a dwelling-house, retail shop, showroom, hotel (other than a Sentosa hotel) or office.
[1/82]
(7)  Where part of a building or structure is, and part thereof is not, an industrial building or structure, and —
(a)
in a case where capital expenditure is incurred on the construction of the building or structure before 1st January 2006, the capital expenditure incurred on the construction of the second-mentioned part is not more than one-tenth of the total capital expenditure which has been incurred on the construction of the whole building or structure; or
(b)
in a case where —
(i)
capital expenditure is incurred on the construction of the building or structure on or after 1st January 2006; or
(ii)
a sale and purchase agreement was entered into for the building or structure on or after that date,
the capital expenditure incurred on the construction or purchase (as the case may be) of the second-mentioned part is not more than one-tenth of the total capital expenditure which has been incurred on the construction or purchase of the whole building or structure,
then the whole building or structure and every part thereof shall be treated as an industrial building or structure.
[7/2007]
(7A)  Where the Comptroller is satisfied that it is not reasonably practicable to determine the capital expenditure incurred on the second-mentioned part of the building or structure under subsection (7), the whole building or structure and every part thereof may be treated as an industrial building or structure if —
(a)
the floor area of the part of the building or structure that is not an industrial building or structure is not more than one‑tenth of the total floor area of the whole building or structure; or
(b)
the Comptroller is otherwise satisfied that it is just and proper to do so.
[7/2007]
(8)  In this section and sections 16, 17 and 18B —
“capital expenditure”, in relation to the purchase of a building or structure, means the net price paid for the building or structure, but does not include the cost of land as determined to the satisfaction of the Comptroller;
“relevant interest” means —
(a)
in relation to any capital expenditure incurred on the construction of a building or structure, the interest in that building or structure to which the person who incurred the expenditure was entitled when he incurred it; and
(b)
in relation to a sale and purchase agreement for a building or structure, the interest in that building or structure to which the purchaser was entitled when he entered into the agreement;
“residue of expenditure” means —
(a)
in relation to any capital expenditure incurred on the construction of a building or structure before 1st January 2006, the amount of the capital expenditure incurred on such construction reduced by —
(i)
the amount of any initial allowance made;
(ii)
any annual allowance made; and
(iii)
any balancing allowances granted,
and increased by any balancing charges made; or
(b)
in relation to any capital expenditure incurred on the construction or purchase of a building or structure on or after 1st January 2006, the amount of the capital expenditure incurred on such construction or purchase (as the case may be) reduced by —
(i)
the amount of any initial allowance made; and
(ii)
any annual allowance made.
[7/2007; 29/2010]
(9)  For the purpose of computing the residue of expenditure, there shall be written off an amount of 3% of the expenditure in respect of any year in which no initial or annual allowance has been made.
[7/79]
18A.  [Repealed by Act 21 of 2003]
Transitional provisions for capital expenditure incurred on industrial buildings or structures on or after 23rd February 2010
18B.
—(1)  Notwithstanding section 16(15) but subject to subsection (11), where a person incurs on or after 23rd February 2010 capital expenditure on the construction of a building or structure which is to be an industrial building or structure upon the completion of the construction works, other than one referred to in subsection (2), and the person —
(a)
on or before 22nd February 2010 —
(i)
has been granted the option to purchase the land or has entered into a sale and purchase agreement for the land on which the industrial building or structure is to be constructed;
(ii)
has entered into a lease agreement to lease the land on which the industrial building or structure is to be constructed; or
(iii)
has submitted an application to the Government or any statutory board —
(A)
to bid for the purchase therefrom of the land on which the industrial building or structure is to be constructed; or
(B)
to lease therefrom the land on which the industrial building or structure is to be constructed; and
(b)
on or before 31st December 2010, has made an application for planning permission or conservation permission to the competent authority in accordance with the Planning Act (Cap. 232) for the development of the land comprising the construction work,
there shall be made to that person an initial allowance and annual allowances in respect of that capital expenditure computed in accordance with section 16.
[29/2010]
(2)  Notwithstanding section 16(15) but subject to subsection (11), where a person incurs on or after 23rd February 2010 capital expenditure on the construction of a building or structure which is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon completion of the construction works, there shall be made to that person an initial allowance and annual allowances in respect of that capital expenditure computed in accordance with section 16.
[29/2010]
(3)  Notwithstanding section 16(15), where a person —
(a)
on or before 22nd February 2010 —
(i)
has been granted an option to purchase, or has entered into a sale and purchase agreement for, a new building or structure which is to be an industrial building or structure upon the purchase other than one referred to in subsection (4); or
(ii)
has been granted an option to acquire or has entered into an agreement to acquire the leasehold interest in such a building or structure; and
(b)
on or after 23rd February 2010, incurs capital expenditure on the purchase of the building or structure or of the leasehold interest therein,
there shall be made to that person an initial allowance and annual allowances in respect of that capital expenditure computed in accordance with section 16.
[29/2010]
(4)  Notwithstanding section 16(15) but subject to subsection (12), where a person incurs on or after 23rd February 2010 capital expenditure on the purchase of a new building or structure (including the purchase of a leasehold interest therein), and the building or structure is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the purchase or the completion of any renovation or refurbishment works carried out on the building or structure upon the purchase, there shall be made to that person an initial allowance and annual allowances in respect of the capital expenditure, as well as the capital expenditure incurred on such renovation or refurbishment works, both to be computed in accordance with section 16.
[29/2010]
(5)  Notwithstanding section 16(15), where a person —
(a)
on or before 22nd February 2010 —
(i)
has been granted an option to purchase, or has entered into a sale and purchase agreement for, a building or structure (not being a new building or structure) which is to be an industrial building or structure upon the purchase other than one referred to in subsection (6); or
(ii)
has been granted an option to acquire or has entered into an agreement to acquire the leasehold interest in such a building or structure; and
(b)
on or after 23rd February 2010, incurs capital expenditure on the purchase of the building or structure or of the leasehold interest therein,
there shall be made to that person annual allowances in respect of that capital expenditure computed in accordance with section 16.
[29/2010]
(6)  Notwithstanding section 16(15) but subject to subsection (12), where a person incurs on or after 23rd February 2010 capital expenditure on the purchase of a building or structure (not being a new building or structure), or of a leasehold interest therein, and the building or structure is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the purchase or the completion of any renovation or refurbishment works carried out on the building or structure upon the purchase, there shall be made to that person, in accordance with section 16 —
(a)
annual allowances in respect of the capital expenditure; and
(b)
an initial allowance and annual allowances in respect of capital expenditure incurred on such renovation or refurbishment works.
[29/2010]
(7)  Notwithstanding section 16(15) and (16) but subject to subsection (11), where a person —
(a)
on or after 23rd February 2010, incurs capital expenditure on extension works carried out on an existing building or structure that (together with the extension thereto) is to be an industrial building or structure, other than one referred to in subsection (8), upon the completion of the extension works;
(b)
on or before 22nd February 2010, enters into a written agreement for a qualified person to carry out the extension works; and
(c)
on or before 31st December 2010, makes an application for planning permission or conservation permission to the competent authority in accordance with the Planning Act for the development of the land comprising the extension works,
there shall be made to that person, computed in accordance with section 16 —
(i)
an initial allowance and annual allowances in respect of the capital expenditure incurred on the extension works; and
(ii)
where the existing building or structure is not an industrial building or structure on 22nd February 2010, annual allowances in respect of any capital expenditure incurred before 23rd February 2010 on the construction or purchase or the residue of that expenditure, as the case may be, of that building or structure.
[29/2010]
(8)  Notwithstanding section 16(15) and (16) but subject to subsection (11), where a person incurs on or after 23rd February 2010 capital expenditure on extension works to an existing building or structure, not being an industrial building or structure on or at any time before 22nd February 2010, that (together with the extension thereto) is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the completion of the extension works, there shall be made to that person, computed in accordance with section 16 —
(a)
an initial allowance and annual allowances in respect of the capital expenditure; and
(b)
annual allowances in respect of any capital expenditure incurred before 23rd February 2010 on the construction or purchase or the residue of that expenditure, as the case may be, of the existing building or structure.
[29/2010]
(9)  Notwithstanding section 16(15) and (16) but subject to subsection (12), where a person incurs on or after 23rd February 2010 capital expenditure on renovation or refurbishment works on an existing building or structure, and —
(a)
the building or structure is to be an industrial building or structure, other than one referred to in subsection (10), upon the completion of the renovation or refurbishment works; and
(b)
such renovation or refurbishment works are carried out pursuant to a written agreement entered into with a renovation contractor on or before 22nd February 2010,
there shall be made to that person, computed in accordance with section 16 —
(i)
an initial allowance and annual allowances in respect of the capital expenditure incurred on the renovation or refurbishment works; and
(ii)
where the existing building or structure is not an industrial building or structure on 22nd February 2010, annual allowances in respect of the capital expenditure incurred before 23rd February 2010 on the construction or purchase or the residue of that expenditure, as the case may be, of that building or structure.
[29/2010]
(10)  Notwithstanding section 16(15) and (16) but subject to subsection (12), where a person incurs on or after 23rd February 2010 capital expenditure on renovation or refurbishment works on an existing building or structure, not being an industrial building or structure on or at any time before 22nd February 2010, that is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the completion of the renovation or refurbishment works, there shall be made to that person, computed in accordance with section 16 —
(a)
an initial allowance and annual allowances in respect of the capital expenditure; and
(b)
annual allowances in respect of any capital expenditure incurred before 23rd February 2010 on the construction or purchase or the residue of that expenditure, as the case may be, of the existing building or structure.
[29/2010]
(11)  For the purposes of subsections (1), (2), (7) and (8), no allowance shall be made to a person in respect of any capital expenditure incurred on an industrial building or structure after the date of issuance of the temporary occupation permit for that building or structure or the end of the basis period for the year of assessment 2016, whichever is earlier.
[29/2010]
(12)  For the purposes of subsections (4), (6), (9) and (10), no allowance shall be made to a person in respect of any capital expenditure incurred after the completion of the renovation or refurbishment works referred to in those subsections or the end of the basis period for the year of assessment 2016, whichever is the earlier.
[29/2010]
(13)  No allowance shall be made under this section in respect of any capital expenditure incurred on the construction of a building or structure for which an allowance is made under section 18C.
[29/2010]
(14)  In this section —
“new building or structure” means a building or structure which —
(a)
has not previously been used by any person; and
(b)
was purchased by a person from another person who —
(i)
constructed that building or structure; and
(ii)
was not granted an initial allowance in respect of that building or structure under section 16;
“qualified person” means —
(a)
any person who is registered as an architect under the Architects Act (Cap. 12) and who has in force a practising certificate issued under that Act; or
(b)
any person who is registered as a professional engineer under the Professional Engineers Act (Cap. 253) and who has in force a practising certificate issued under that Act.
[29/2010]
Initial and annual allowances for certain buildings and structures
18C.
—(1)  Where any person proposes to incur or has incurred on or after 23rd February 2010 qualifying capital expenditure on the construction or renovation of a building or structure on industrial land for which an application for planning permission or conservation permission is made to the competent authority in accordance with the Planning Act (Cap. 232) on or after 23rd February 2010, he may apply to the Minister or such person as he may appoint, between 1st July 2010 and 30th June 2020 (both dates inclusive) for such construction or renovation to be approved for the purposes of making an allowance under this section in respect of such expenditure incurred by him.
[29/2010]
[Act 37 of 2014 wef 22/02/2014]
(1A)  Where any person proposes to incur or has incurred on or after 22nd February 2014 qualifying capital expenditure on the construction or renovation of a building or structure on port land or airport land, for which an application for planning permission or conservation permission is made on or after that date to the competent authority in accordance with the Planning Act (Cap. 232), the person may apply to the Minister or such person as the Minister may appoint, between 22nd February 2014 and 30th June 2020 (both dates inclusive) for such construction or renovation to be approved for the purposes of making an allowance under this section in respect of such expenditure incurred by that person.
[Act 37 of 2014 wef 22/02/2014]
(2)  Where the Minister or such person as he may appoint, on an application made to him under subsection (1) or (1A) that is a pre‑25 March 2016 application, is satisfied that the construction or renovation of the building or structure on industrial land, port land or airport land (as the case may be) promotes the prescribed intensified use of the land for the purposes of a prescribed trade or business, he may, by notice in writing, approve the construction or renovation for the purposes of this section, which approval shall be subject to such conditions as he may impose, including the particular trade or business for which the building or structure is to be used upon completion of construction or renovation.
[29/2010; 22/2011]
[Act 37 of 2014 wef 22/02/2014]
[Act 34 of 2016 wef 25/03/2016]
(2A)  The Minister or such person as he may appoint may, on application by a person who made an application under subsection (1) or (1A) pursuant to which a construction or renovation of a building or structure is approved under subsection (2), vary a condition of the approval as to the particular trade or business for which the building or structure may be used upon completion of the construction or renovation, if the Minister or the appointed person is satisfied that the ground mentioned in subsection (2) for approving an application under subsection (1) or (1A) continues to be met.
[Act 34 of 2016 wef 25/03/2016]
(2B)  The Minister or such person as he may appoint may, by notice in writing, approve an application made under subsection (1) or (1A) that is a post‑25 March 2016 application if, based on the information provided by the applicant, the Minister or the appointed person is satisfied that —
(a)
on completion of the construction or renovation, at least 80% of the total floor area of the building or structure will be used —
(i)
by —
(A)
a single person who is either the applicant or a person related to the applicant; or
(B)
2 or more persons who satisfy the requirements of relatedness; and
(ii)
for one or more prescribed trades or businesses; and
(b)
the construction or renovation of the building or structure on the land promotes the prescribed intensified use of the land for the purposes of that trade or business or, if there is more than one trade or business, such of those trades or businesses as may be designated in the regulations.
[Act 34 of 2016 wef 25/03/2016]
(2C)  An approval under subsection (2B) is subject to the condition that, upon completion of the construction or renovation, at least 80% of the total floor area of the building or structure will be used —
(a)
by one or more persons specified in the notice mentioned in subsection (2B) who —
(i)
if it will be used by a single person, is either the applicant of the application concerned under subsection (1) or (1A), or a person related to the applicant; or
(ii)
if it will be used by 2 or more persons, satisfy the requirements of relatedness; and
(b)
for one or more trades or businesses specified in the application.
[Act 34 of 2016 wef 25/03/2016]
(2D)  An approval under subsection (2B) may be subject to such other conditions as the Minister or the person appointed under that subsection may impose.
[Act 34 of 2016 wef 25/03/2016]
(2E)  The Minister or such person as he may appoint may, on application by a person who made an application under subsection (1) or (1A) pursuant to which a construction or renovation of a building or structure is approved under subsection (2B) —
(a)
substitute any person or trade or business mentioned in subsection (2C) with any other person or trade or business; or
(b)
add a person or trade or business to the person or trade or business mentioned in subsection (2C),
if the Minister or the person appointed is satisfied that the requirements in subsection (2B)(a) and (b) continue to be met.
[Act 34 of 2016 wef 25/03/2016]
(2F)  Where a trade or business is prescribed by regulations under subsection (11A), then, unless otherwise provided in the regulations, the Minister or person appointed under subsection (2) or (2B), as the case may be, may only —
(a)
approve an application under subsection (2) for a renovation or construction because it promotes the prescribed intensified use of the land for that trade or business; or
(b)
approve an application under subsection (2B) because at least 80% of the total floor area of the building or structure will be used, on completion of the construction or renovation, by a person or persons mentioned in subsection (2B)(a)(i) for that trade or business or for trades or businesses which include that trade or business,
if —
(i)
the application is made on or after a prescribed date; and
(ii)
the application for planning permission or conservation permission for the construction or renovation is made on or after a prescribed date.
[Act 34 of 2016 wef 25/03/2016]
(2G)  In relation to any construction or renovation that is approved pursuant to an application to which subsection (2F) applies, the qualifying capital expenditure for which an allowance may be made under subsections (3) and (4) excludes any expenditure incurred before a prescribed date, unless the regulations under subsection (11A) provide otherwise.
[Act 34 of 2016 wef 25/03/2016]
(2H)  The prescribed date mentioned in subsection (2F)(i) or (ii) or (2G) is, unless otherwise specified in the regulations, the date the trade or business is prescribed by regulations under subsection (11A).
[Act 34 of 2016 wef 25/03/2016]
(2I)  To avoid doubt, a reference in subsections (2F) and (2H) to the prescribing of a trade or business under subsection (11A) is, in the case of an application made under subsection (1) or (1A) before 25 March 2016, a reference to the prescribing of a trade or business under subsection (2) in force immediately before that date.
[Act 34 of 2016 wef 25/03/2016]
(2J)  In relation to any construction or renovation that is approved pursuant to a post‑25 March 2016 application (other than one with only a single specified user and a single specified trade or business), the qualifying capital expenditure for which an allowance may be made under subsections (3) and (4) excludes any expenditure incurred before 25 March 2016.
[Act 34 of 2016 wef 25/03/2016]
(3)  Where in the basis period for any year of assessment the person has incurred any qualifying capital expenditure on the approved construction or approved renovation, as the case may be, there shall be made to the person for the year of assessment in the basis period for which the expenditure was incurred an allowance to be known as an “initial allowance” equal to 25% of the expenditure.
[29/2010]
(4)  Subject to subsections (5), (5AA) and (6), where the person is, at the end of the basis period for any year of assessment, entitled to a relevant interest in the building or structure which is being used for the purposes of the specified trade or business or (as the case may be) trades or businesses, and in respect of which qualifying capital expenditure is incurred, there shall be made to the person for that year of assessment an allowance to be known as an “annual allowance” equal to 5% of the qualifying capital expenditure incurred by him.
[29/2010]
[Act 34 of 2016 wef 25/03/2016]
(5)  Where the construction or renovation is approved pursuant to a pre‑25 March 2016 application, no allowance is to be made under subsection (4) for any year of assessment unless —
(a)
in a case where 2 or more temporary occupation permits are to be issued for the subject of the approved construction or renovation, and one or more of those temporary occupation permits have been issued but not all of them, at least 80% of the total floor area of the subject of each temporary occupation permit that has been issued; or
(b)
in any other case, at least 80% of the total floor area of the subject of the approved construction or renovation,
is used, at the end of the basis period for that year of assessment, by any one person for the purposes of the specified trade or business, and, for the case in paragraph (a), that person is the same person for all the subjects of the temporary occupation permits that have been issued.
[Act 2 of 2016 wef 11/04/2016]
[Act 34 of 2016 wef 25/03/2016]
(5AA)  Where the construction or renovation is approved pursuant to a post‑25 March 2016 application, no allowance is to be made under subsection (4) for any year of assessment unless —
(a)
in a case where 2 or more temporary occupation permits are to be issued for the subject of the approved construction or renovation, but not all of those temporary occupation permits have been issued, at least 80% of the total floor area of the subject of each temporary occupation permit that has been issued; or
(b)
in any other case, at least 80% of the total floor area of the subject of the approved construction or renovation,
is used, at the end of the basis period for that year of assessment —
(i)
for the purposes of the specified trade or business or one or more of the specified trades or businesses; and
(ii)
by —
(A)
one person who is a specified user and is either the applicant of the post‑25 March 2016 application or related to the applicant; or
(B)
2 or more persons who are specified users and satisfy the requirements of relatedness.
[Act 34 of 2016 wef 25/03/2016]
(5A)  In subsections (5) and (5AA), the subject of an approved construction or renovation, or of a temporary occupation permit, is the building or structure, all the buildings or structures, or the part or all the parts of a building or structure, as the case may be, that forms or form the subject matter of the approved construction or renovation, or the temporary occupation permit.
[Act 2 of 2016 wef 11/04/2016]
[Act 34 of 2016 wef 25/03/2016]
(6)  Any annual allowance made to any person under subsection (4) in respect of an approved construction or approved renovation for any year of assessment shall not exceed the amount of qualifying capital expenditure remaining unallowed as at the beginning of the basis period for that year of assessment.
[29/2010]
(7)  For the purposes of this section, qualifying capital expenditure incurred by any person on the approved construction or approved renovation, as the case may be, prior to the commencement of his trade or business shall be deemed to have been incurred by that person on the first day he carries on that trade or business.
[29/2010]
(8)  Where the person fails to comply with the condition in subsection (2C), or any condition imposed under subsection (2) or (2D) in respect of the approved construction or approved renovation, the Minister or such person as he may appoint, may, by notice in writing, revoke the approval granted under that subsection.
[29/2010]
[Act 34 of 2016 wef 25/03/2016]
(9)  Notwithstanding section 74(1) and (4), where an approval has been revoked under subsection (8), the Comptroller may, at any time, for the purpose of making good any loss of tax attributable to such revocation of approval, assess the person who has utilised the allowance made under this section 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]
(10)  Where, in the basis period for any year of assessment, the specified trade or business for which purpose the building or structure is used, produces income that is exempt from tax as well as income chargeable with tax, the allowance for that year of assessment shall be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
[29/2010]
(11)  A person who has incurred qualifying capital expenditure on the approved construction or approved renovation shall maintain and deliver to the Minister or such person he may appoint or the Comptroller, in such form and manner and within such reasonable time as the Minister, the person or the Comptroller may determine, the relevant records of the approved construction or approved renovation, and such other particulars as may be required for the purposes of this section.
[29/2010]
(11A)  The Minister may make regulations prescribing matters required or permitted by this section to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to this section.
[Act 34 of 2016 wef 25/03/2016]
(12)  In this section —
“airport land” means any land zoned for use as an airport under the Master Plan;
[Act 37 of 2014 wef 22/02/2014]
“approved construction or approved renovation” means the construction or renovation, as the case may be, of a building or structure on industrial land, port land or airport land (as the case may be) approved under subsection (2) or (2B);
[Act 37 of 2014 wef 22/02/2014]
[Act 34 of 2016 wef 25/03/2016]
“industrial land” means any land zoned for the purpose of “Business 1” or “Business 2” (other than “Business 1 White” and “Business 2 White”) under the Master Plan, and includes such other land as may be approved by the Minister;
“Master Plan” means the Master Plan as defined in the Planning Act which is effective on the date of the application for planning permission or conservation permission referred to in subsection (1) or (1A), as the case may be ;
[Act 37 of 2014 wef 22/02/2014]
“port land” means any land zoned for use as a port under the Master Plan;
[Act 37 of 2014 wef 22/02/2014]
“post-25 March 2016 application” means an application under subsection (1) or (1A) —
(a)
that is made on or after 25 March 2016; and
(b)
that relates to the construction or renovation of a building or structure for which an application for planning permission or conservation permission is made on or after 25 March 2016;
[Act 34 of 2016 wef 25/03/2016]
“pre-25 March 2016 application” means an application under subsection (1) or (1A) that is not a post‑25 March 2016 application;
[Act 34 of 2016 wef 25/03/2016]
“qualifying capital expenditure” means the following types of capital expenditure:
(a)
costs of feasibility study on the layout of the building or structure;
(b)
design fees of the building or structure;
(c)
costs of preparing plans for obtaining approval for the building or structure;
(d)
piling, construction and renovation costs;
(e)
demolition costs of an existing building or structure for which an allowance was not made under section 16;
(f)
legal and other professional fees in relation to the approved construction or approved renovation; and
(g)
stamp duties payable in respect of title of the building or structure;
[Act 37 of 2014 wef 22/02/2014]
[Act 2 of 2016 wef 11/04/2016]
[Act 34 of 2016 wef 25/03/2016]
“relevant interest”, in relation to any qualifying capital expenditure incurred on an approved construction or approved renovation of a building or structure, means the interest in that building or structure to which the person who incurred the expenditure was entitled when he incurred it;
“specified trade or business” means —
(a)
the trade or business specified in a condition of approval under subsection (2) as one for which the building or structure may be used upon completion of the approved construction or renovation, including one substituted for that trade or business pursuant to a variation under subsection (2A); or
(b)
the trade or business or any of the trades or businesses mentioned in subsection (2C)(b), including one substituted for that trade or business or added under subsection (2E),
as the case may be;
[Act 34 of 2016 wef 25/03/2016]
“specified user” means the person or any of the persons mentioned in subsection (2C), including one substituted for that person or added under subsection (2E);
[Act 34 of 2016 wef 25/03/2016]
“temporary occupation permit” means a temporary occupation permit granted under section 12(3) of the Building Control Act (Cap. 29).
[Act 2 of 2016 wef 11/04/2016]
(13)  In this section, capital expenditure for the renovation or construction of a building or structure or of a part of a building or structure, that is incurred after the date a temporary occupation permit is issued for the building, structure or part of the building or structure (as the case may be) is not qualifying capital expenditure.
[Act 2 of 2016 wef 11/04/2016]
(14)  In this section —
(a)
a reference to a temporary occupation permit issued or to be issued for one or more buildings or structures or one or more parts of a building or structure (called in this paragraph the subject) is, if no temporary occupation permit is issued or to be issued for the subject, a reference to the certificate of statutory completion issued or to be issued under section 12(1) of the Building Control Act for —
(i)
the subject; or
(ii)
a building or structure that includes the subject; and
(b)
a reference to the date of issue of a temporary occupation permit is to be construed accordingly.
[Act 2 of 2016 wef 11/04/2016]
(15)  In this section —
(a)
2 or more persons satisfy the requirements of relatedness if —
(i)
each of them is related to one or more of the others; and
(ii)
either —
(A)
one of them is the applicant of the application under subsection (1) or (1A) and the other or others is or are related to the applicant; or
(B)
all of them are related to the applicant; and
(b)
a person is related to another person if —
(i)
one of those persons beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares of the other person (being a company);
(ii)
one of those persons is entitled, directly or indirectly, to at least 75% of the income of the other person (being a partnership);
(iii)
a third person beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares of each of those persons (being companies);
(iv)
a third person is entitled, directly or indirectly, to at least 75% of the income of each of those persons (being partnerships); or
(v)
a third person beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares of one of those persons (being a company), and is entitled, directly or indirectly, to at least 75% of the income of the other person (being a partnership).
[Act 34 of 2016 wef 25/03/2016]
(16)  A reference to a person in subsections (2B)(a)(i), (2C)(a), (2E)(a) and (b), (5AA)(ii) and (15), and in the definition of “specified user” in subsection (12), includes a partnership.
[Act 34 of 2016 wef 25/03/2016]
Initial and annual allowances for machinery or plant
19.
—(1)  Where a person carrying on a trade, profession or business incurs capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, there shall be made to him, on due claim for the year of assessment in the basis period for which the expenditure is incurred an allowance, to be known as an “initial allowance”, equal to one-fifth of that expenditure or such other allowance as may be prescribed either generally or for any person or class of persons in respect of any machinery or plant or class of machinery or plant.
[7/79]
(1A)  For the purposes of subsection (1), in the case of any trade, profession or business —
(a)
where 2 basis periods overlap, the period common to both shall be deemed to fall in the first basis period only;
(b)
where there is an interval between the end of the basis period for a year of assessment and the commencement of a basis period for the next succeeding year of assessment, then, unless the second-mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval shall be deemed to be part of the second basis period; and
(c)
where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the commencement of the basis period for the year in which it is permanently discontinued, the interval shall be deemed to form part of the first basis period.
(1B)  Any capital expenditure incurred for the purposes of a trade by a person about to carry on that trade shall be treated for the purposes of subsection (1) as if it had been incurred by that person on the first day on which he does carry on that trade.
(2)  Where at the end of the basis period for any year of assessment, a person has in use machinery or plant for the purpose of his trade, profession or business, there shall be made to him, on due claim, in respect of that year of assessment an allowance for depreciation by wear and tear of those assets (to be known as an annual allowance) which shall be calculated in accordance with the following provisions:
(a)
the annual allowance in respect of any machinery or plant shall —
(i)
in the case of an asset, other than an asset acquired under a hire-purchase agreement, be the amount ascertained by dividing the excess of the original cost of the asset over any initial allowance granted under subsection (1) by the number of years of working life of the asset as specified in the Sixth Schedule unless otherwise provided under paragraph (b) or (ba);
(ii)
in the case of an asset acquired under a hire-purchase agreement, be the amount ascertained by dividing the excess of the original cost of the asset over the total amount of initial allowance allowable in respect of the asset under subsection (1) by the number of years of working life of the asset as specified in the Sixth Schedule unless otherwise provided under paragraph (b) or (ba);
(b)
for the purposes of paragraph (a), the number of years of working life of any aircraft acquired between 1st March 1995 and 29th February 2012 (both dates inclusive) shall, if it had been extended under section 19(2)(b) in force immediately before 1st March 2012, be the number of years of its working life as specified in the Sixth Schedule together with the extension;
(ba)
for the purposes of paragraph (a), the number of years of working life of any aircraft acquired on or after 1st March 2012 by an approved aircraft leasing company within the meaning of section 43Y shall, if the company has made an election under subsection (2A), be the number of years of its working life as specified in the Sixth Schedule together with the extension specified by the company under subsection (2A) in accordance with subsection (2B);
(c)
the annual allowance in respect of any asset for any year of assessment shall not exceed the amount of the capital expenditure of the asset still unallowed under this section as at the beginning of the basis period for that year of assessment;
(d)
for the purposes of the Sixth Schedule, where any question arises as to the classification of an asset under any item of that Schedule, the asset shall be treated as falling under such item as the Comptroller considers proper.
[28/80; 32/95; 53/2007; 29/2012]
(2A)  An approved aircraft leasing company which acquired any aircraft on or after 1st March 2012 may, at the time of lodgment of its return of income for the year of assessment relating to the basis period in which the aircraft was acquired, make an irrevocable election to the Comptroller for the number of years of the working life of the aircraft as specified in the Sixth Schedule to be extended by a period specified by the company.
[29/2012]
(2B)  The total of the number of years of the working life of the aircraft specified in the Sixth Schedule and the period specified by the company must not exceed 20 years.
[29/2012]
(3)  Notwithstanding subsection (1) or (2) or section 19A(1) or (1B), in respect of a motor car to which this subsection applies —
(a)
the initial allowance to be made under subsection (1) shall be calculated on an amount equal to the capital expenditure incurred in respect of that motor car or $35,000, whichever is less;
(b)
the annual allowance to be made under subsection (2) or section 19A(1) or (1B) shall be calculated on the basis that the original cost of that motor car is the capital expenditure incurred or $35,000, whichever is less; and
(c)
the aggregate of the initial and annual allowances to be made under this subsection for all relevant years of assessment shall not exceed $35,000.
[37/75; 5/83; 53/2007; 27/2009]
(4)  Subsection (3) shall apply to a motor car which is constructed or adapted for the carriage of not more than 7 passengers (exclusive of the driver) and the weight of which unladen does not exceed 3,000 kilograms and which —
(a)
was registered before 1st April 1998 as a business service passenger vehicle for the purposes of the Road Traffic Act (Cap. 276) but excludes such a motor car which is —
(i)
used principally for instructional purposes; and
(ii)
acquired by a person who carries on the business of providing driving instruction and who holds a driving school licence or driving instructor’s licence issued under that Act; or
(b)
was acquired in the basis period for the year of assessment 2013 or any preceding year of assessment, and is registered outside Singapore and used exclusively outside Singapore.
[32/99; 19/2013]
(5)  No allowance under this section or section 19A shall be made in respect of a motor car which is constructed or adapted for the carriage of not more than 7 passengers (exclusive of the driver) and the weight of which unladen does not exceed 3,000 kilograms except —
(a)
a taxi;
(b)
a motor car registered outside Singapore and used exclusively outside Singapore;
(c)
a private hire car acquired by a person who carries on the business of hiring out cars and which is used by the person principally for hiring;
(d)
a motor car which was registered before 1st April 1998 as a business service passenger vehicle for the purposes of the Road Traffic Act; and
(e)
a motor car registered on or after 1st April 1998 which is used principally for instructional purposes and acquired by a person who carries on the business of providing driving instruction and who holds a driving school licence or driving instructor’s licence issued under the Road Traffic Act.
[32/99; 53/2007]
(5A)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86), where, in the basis period for any year of assessment, the trade, profession or business, for which purpose the machinery or plant is provided, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment shall be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
[49/2004]
(5B)  For the purposes of subsection (2), where, at the end of the basis period for the year of assessment 2009, a person has in use any of the following motor vehicles within the meaning of the Road Traffic Act:
(a)
a motor car;
(b)
a motor cycle;
(c)
a goods vehicle the maximum weight of which laden does not exceed 3,000 kilograms,
in respect of which allowances have been made under this section, there shall be made to him, on due claim for that or any subsequent year of assessment and in lieu of any further annual allowance under this section, an annual allowance of 331/3% in respect of the capital expenditure remaining unallowed under this section in respect of the motor vehicle as at the beginning of the basis period for the year of assessment 2009.
[53/2007]
(6)  In subsection (1), “prescribed” means prescribed by an order made by the Minister.
(7)  Every order made under this section shall be presented to Parliament as soon as possible after publication in the Gazette.
(8)  Subject to subsection (9), this section shall, with the necessary modifications, apply to a person carrying on any trade or business who incurs during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2025 (both years inclusive) capital expenditure on the provision of machinery or plant for any research and development undertaken by him directly in Singapore or by a research and development organisation on his behalf in Singapore, even though the machinery or plant is not for the purposes of that trade or business.
[34/2008; 29/2010]
[Act 37 of 2014 wef 27/11/2014]
(9)  Section 14D(4) and (5) shall apply in relation to the allowance for the capital expenditure referred to in subsection (8) 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) in section 14D(4) is a reference to the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37I;
(b)
a reference to the specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula
where A
is the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37I;
B
is the rate of tax specified in section 43(1)(a); and
C
is —
 
(i)
in a case where the concessionary income derived by the person from the trade or business carried on by him is subject to tax at a single concessionary rate of tax, that rate; or
 
(ii)
in a case where the concessionary income derived by the person from the trade or business carried on by him is subject to tax at 2 or more concessionary rates of tax, the higher or highest of those rates; and
(c)
a reference to “unabsorbed losses” is a reference to “unabsorbed allowances”.
[34/2008; 22/2011; 29/2012]
Allowances of 3 years or 2 years write off for machinery and plant, and 100% write off for computer, prescribed automation equipment and robot, etc.
19A.
—(1)  Notwithstanding section 19, where a person carrying on a trade, profession or business incurs capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, there shall be made to him, on due claim for any year of assessment and in lieu of the allowances provided by section 19, an annual allowance of 331/3% in respect of the capital expenditure incurred.
[53/2007; 27/2009; 29/2010]
(1A)  Any annual allowance under this section in respect of any asset for any year of assessment shall not exceed the amount of the capital expenditure of the asset remaining unallowed as at the beginning of the basis period for that year of assessment.
[53/2007]
(1B)  Notwithstanding subsection (1), where a person carrying on a trade, profession or business incurs, during the basis period relating to the year of assessment 2010 or 2011, capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, he may, in lieu of the allowances provided by subsection (1) or section 19, elect to be entitled for any 2 years of assessment to the following:
(a)
for the year of assessment relating to the basis period in which the capital expenditure was incurred or any subsequent year of assessment (referred to in this subsection as the first year), an allowance of 75% in respect of the capital expenditure incurred; and
(b)
for any year of assessment subsequent to the first year, an allowance of 25% in respect of the capital expenditure incurred.
[27/2009]
(1C)  Where a person carrying on a trade, profession or business enters into a hire-purchase agreement during the basis period relating to the year of assessment 2010 or 2011 in respect of machinery or plant provided for the purposes of that trade, profession or business, subsection (1B) shall apply to each instalment paid by that person under that hire-purchase agreement, whether the instalment is paid during or after the basis period relating to the year of assessment 2010 or 2011.
[27/2009]
(1D)  An election made by a person under subsection (1B) shall be irrevocable.
[27/2009]
(2)  Notwithstanding section 19, where a person proves to the satisfaction of the Comptroller that he has installed a computer or other prescribed automation equipment for the purposes of a trade, business or profession carried on by him, he shall, in lieu of the allowances provided by subsection (1) or (1B) or section 19, be entitled, if he so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that computer or automation equipment.
[15/83; 13/84; 7/85; 27/2009]
(2A)  Where a person proves to the satisfaction of the Comptroller that he has incurred capital expenditure during the basis period for the year of assessment 2011 or the year of assessment 2012 on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business carried on by him, there shall be allowed on due claim, in respect of all his trades, professions and businesses, and in addition to the allowance under section 19 or subsection (1), (1B) or (2) (as the case may be), an allowance computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2011, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
$800,000; and
(b)
for the year of assessment 2012, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $800,000 the lower of the amounts specified in paragraph (a)(i) and (ii).
[22/2011]
(2B)  Subject to section 37IC, where a person proves to the satisfaction of the Comptroller that he has incurred capital expenditure during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015 on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business carried on by him, there shall be allowed on due claim, in respect of all his trades, professions and businesses and in addition to the allowance under section 19 or subsection (1), (1B) or (2) (as the case may be), an allowance computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2013, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2014, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2015, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2BAA)  Subject to section 37IC, where a person proves to the satisfaction of the Comptroller that he has incurred capital expenditure during the basis period for the year of assessment 2016, 2017 or 2018 on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business carried on by him, there shall be allowed on due claim, in respect of all his trades, professions and businesses, and in addition to the allowance under section 19 or subsection (1), (1B) or (2) (as the case may be), an allowance computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2016, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2017, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2018, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[Act 37 of 2014 wef 27/11/2014]
(2BA)  In subsection (2A), the amount under paragraph (a)(ii) shall be substituted with “$400,000” 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 “$400,000” if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2011.
[22/2011]
(2BB)  In subsection (2B) —
(a)
if the person does not carry on any trade, profession or business during the basis period for any one year of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade, profession or business during the basis periods for any 2 years of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
for the avoidance of doubt, no deduction shall be made from the substituted amount in subsection (2B)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2B)(a)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2013, and no deduction shall be made from the substituted amount in subsection (2B)(c)(ii) of the lower of the amounts specified in subsection (2B)(b)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2014.
[22/2011]
(2BC)  In subsection (2BAA) —
(a)
if the person does not carry on any trade, profession or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the person does not carry on any trade, profession or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
to avoid doubt, no deduction shall be made from the substituted amount in subsection (2BAA)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2BAA)(a)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2016, and no deduction shall be made from the substituted amount in subsection (2BAA)(c)(ii) of the lower of the amounts specified in subsection (2BAA)(b)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2017.
[Act 37 of 2014 wef 27/11/2014]
(2C)  Where a person proves to the satisfaction of the Comptroller that he has during or after the basis period for the year of assessment 2011 incurred capital expenditure by way of making one or more instalment payments under a hire-purchase agreement or agreements to acquire one or more PIC automation equipment for the purposes of a trade, business or profession carried on by him, that is or are signed during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), and he makes a claim for an allowance under subsection (2A), (2B) or (2BAA), those subsections shall apply with the following modifications:
(a)
a reference to the capital expenditure incurred on the provision of one or more PIC automation equipment during the basis period for a year of assessment, being the basis period in which the agreement or agreements is or are signed, is a reference to the aggregate of —
(i)
the price or prices (including capital expenditure incurred on alterations to an existing building incidental to the installation of the equipment but excluding any finance charges) at which he might have purchased the equipment or all the equipment that is the subject of the hire-purchase agreement or agreements for cash at the time of the signing of the agreement or agreements; and
(ii)
the capital expenditure incurred on the provision of any other PIC automation equipment for the purposes of his trade, profession or business during that basis period;
(b)
a reference to the capital expenditure incurred on the provision of one or more PIC automation equipment during the basis period for a year of assessment excludes the amount of any instalment paid or deposit made by him under that agreement or any of those agreements during the basis period; and
(c)
the allowance referred to in subsection (2A), (2B) or (2BAA) in respect of each equipment that is the subject of a hire-purchase agreement shall be made to the person for the year of assessment in respect of each basis period during which he paid an instalment or instalments or made a deposit or deposits under the agreement, in the proportion which the total amount of the instalment or instalments paid, and deposit or deposits made, during that basis period for that equipment bears to the total amount of all instalments and deposits under the agreement for that equipment.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
[Act 37 of 2014 wef 27/11/2014]
(2D)  For the purposes of subsections (2A), (2B) and (2BAA), where an individual carrying on a trade, profession or business through 2 or more firms (excluding partnerships) has incurred capital expenditure during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive) on the provision of one or more PIC automation equipment in respect of such firms for the purposes of his trade, profession or business, the allowance that may be allowed to him for that expenditure in respect of all his trades, professions and businesses shall not exceed the amount computed in accordance with subsection (2A), (2B) or (2BAA) (as the case may be) for that year of assessment.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2E)  For the purposes of subsections (2A), (2B) and (2BAA), where a partnership carrying on a trade, profession or business has incurred capital expenditure during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive) on the provision of one or more PIC automation equipment for the purposes of its trade, profession or business, the aggregate of the allowances that may be allowed to all the partners of the partnership for that expenditure in respect of all the trades, professions and businesses of the partnership shall not exceed the amount computed in accordance with subsection (2A), (2B) or (2BAA) (as the case may be) for that year of assessment.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2F)  Notwithstanding subsections (2A), (2B) and (2BAA), where a person has incurred capital expenditure on the provision of any PIC automation equipment for the purpose of leasing such equipment, no allowance under those subsections shall be made to him in respect of such expenditure.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2FA)  Notwithstanding subsections (2A), (2B) and (2BAA), where the PIC automation equipment in question is not prescribed automation equipment under subsection (2), then the allowances claimed under subsections (2A), (2B) and (2BAA) shall be written down in the following manner:
(a)
where the person claiming the allowances elects to claim allowances in respect of such equipment under section 19 —
(i)
one-fifth of the allowances under subsections (2A), (2B) and (2BAA) shall be allowed for the year of assessment for the basis period during which the expenditure is incurred; and
(ii)
the balance of the allowances under subsections (2A), (2B) and (2BAA) shall be written down over the number of years of working life of the equipment as specified in the Sixth Schedule;
(b)
where the person claiming the allowances elects to claim allowances in respect of such equipment under subsection (1) or (1B), the allowances under subsections (2A), (2B) and (2BAA) shall be written down over 3 years in the case of subsection (1), or over 2 years in the case of subsection (1B), in the same proportions as those in which the allowances under subsection (1) or (1B) (as the case may be) may be made to him over that period of years.
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2FB)  To avoid doubt, subsection (2FA) does not apply to a website provided for the purposes of a trade, profession or business.
[Act 37 of 2014 wef 27/11/2014]
(2G)  Notwithstanding subsections (2A), (2B) and (2BAA) —
(a)
where a person who has incurred capital expenditure on the provision of any PIC automation equipment (being also a prescribed automation equipment under subsection (2)) elects to claim allowances in respect of such equipment under section 19 —
(i)
one-fifth of the allowances claimed under subsections (2A), (2B) and (2BAA) shall be allowed for the year of assessment for the basis period during which the expenditure is incurred; and
[Act 37 of 2014 wef 27/11/2014]
(ii)
the balance of the allowances claimed under subsections (2A), (2B) and (2BAA) shall be written down over the number of years of working life of the equipment as specified in the Sixth Schedule;
[Act 37 of 2014 wef 27/11/2014]
(aa)
where a person who has incurred capital expenditure on the provision of any PIC automation equipment (being also a prescribed automation equipment under subsection (2)) elects to claim allowances in respect of such equipment under subsection (1) or (1B), the allowances claimed under subsections (2A), (2B) and (2BAA) shall be written down over 3 years in the case of subsection (1), or over 2 years in the case of subsection (1B), in the same proportions as those in which the allowances under subsection (1) or (1B) (as the case may be) may be made to him over that period of years; and
[Act 37 of 2014 wef 27/11/2014]
(b)
if the person referred to in paragraph (a) or (aa) sells, transfers or assigns the PIC automation equipment after one year from the provision of such equipment, any allowance in respect of such equipment under subsections (2A), (2B) and (2BAA) remaining unallowed at the time of the sale, transfer or assignment shall be allowed to him for the year of assessment relating to the basis period in which the sale, transfer or assignment occurs.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
[Act 37 of 2014 wef 27/11/2014]
(2GA)  The allowances referred to in subsection (2FA)(a)(i) or (b) or (2G)(a)(i) or (aa) (as the case may be), in respect of any equipment that is the subject of a hire-purchase agreement, shall be made to the person for the year of assessment in respect of each basis period during which he paid an instalment or instalments or made a deposit or deposits under the agreement, in the proportion which the total amount of the instalment or instalments paid, and deposit or deposits made, during that basis period for the equipment bears to the total amount of all instalments and deposits under the agreement for that equipment.
[29/2012]
(2H)  Where any allowance has been made to any person under subsection (2A), (2B) or (2BAA) in respect of any PIC automation equipment and the person sells, transfers, assigns or leases the PIC automation equipment within the period of one year from the provision of such equipment —
(a)
no allowance in respect of such equipment shall be made to that person under subsections (2A), (2B) and (2BAA) for the year of assessment relating to the basis period in which the sale, transfer, assignment or lease occurs and for any subsequent year of assessment; and
[Act 37 of 2014 wef 27/11/2014]
(b)
any allowance made under subsection (2A), (2B) or (2BAA) shall be brought to charge as if the allowances were not made, and be deemed as income for the year of assessment relating to the basis period in which the sale, transfer, assignment or lease occurs.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
[Act 37 of 2014 wef 27/11/2014]
(2HA)  The Minister or such person as he appoints may waive the application of subsection (2H)(b) in the following circumstances:
(a)
the capital expenditure incurred on the provision of other PIC automation equipment acquired in the basis period in which the equipment sold, transferred, assigned or leased was acquired, is more than or equal to the amount that applies to the year of assessment to which the basis period relates; or
(b)
the Minister or person appointed by him is satisfied that there is a bona fide commercial reason for the sale, transfer, assignment or lease.
[22/2011]
(2HB)  In subsection (2HA), the amount that applies to a year of assessment is the amount set out in —
(a)
for the year of assessment 2011, subsection (2A)(a)(ii);
(b)
for the year of assessment 2012, subsection (2A)(b)(ii);
(c)
for the year of assessment 2013, subsection (2B)(a)(ii);
(d)
for the year of assessment 2014, subsection (2B)(b)(ii);
(e)
for the year of assessment 2015, subsection (2B)(c)(ii);
[Act 37 of 2014 wef 27/11/2014]
(f)
for the year of assessment 2016, subsection (2BAA)(a)(ii);
[Act 37 of 2014 wef 27/11/2014]
(g)
for the year of assessment 2017, subsection (2BAA)(b)(ii);
[Act 37 of 2014 wef 27/11/2014]
(h)
for the year of assessment 2018, subsection (2BAA)(c)(ii),
[Act 37 of 2014 wef 27/11/2014]
as modified by subsection (2BA), (2BB) or (2BC) (as the case may be).
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2I)  No allowance under subsections (2A), (2B) and (2BAA) shall be made to any person in respect of any amount of capital expenditure incurred on the provision of PIC automation equipment for which an investment allowance has been claimed under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86).
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2IA)  No allowance under subsections (2A), (2B) and (2BAA) shall be made to any person in respect of any amount of capital expenditure incurred on the provision of PIC automation equipment for which an integrated investment allowance has been claimed under Part XIIID of the Economic Expansion Incentives (Relief from Income Tax) Act.
[2/2013]
[Act 37 of 2014 wef 27/11/2014]
(2J)  No allowance under subsections (2A), (2B) and (2BAA) shall be made to any person in respect of any PIC automation equipment —
(a)
[Deleted by Act 2 of 2013]
(b)
for which an allowance under this section or section 19 has been previously made to that person.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
(2K)  No allowance under subsections (2A), (2B) and (2BAA) shall be made to any person in respect of any instalment paid by him under any hire-purchase agreement to acquire any PIC automation equipment that is signed before the basis period for the year of assessment 2011.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
(3)  Notwithstanding section 19, where a person proves to the satisfaction of the Comptroller that he has, for the purposes of a trade, business or profession carried on by him, installed a generator in any office or factory for the supply of electrical power to that office or factory in the event of a disruption in the normal supply of electrical power, he shall, in lieu of the allowances provided by subsection (1) or (1B) or section 19, be entitled, if he so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that generator.
[20/91; 27/2009]
(4)  Notwithstanding section 19, where a person proves to the satisfaction of the Comptroller that he has installed a robot for the purposes of a trade, business or profession carried on by him, he shall, in lieu of the allowances provided by subsection (1) or (1B) or section 19, be entitled, if he so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that robot.
[13/84; 27/2009]
(5)  Notwithstanding section 19, where a person proves to the satisfaction of the Comptroller that he has installed on or after 1st January 1996 any efficient pollution control equipment or device for the purposes of a trade, business or profession carried on by him, he shall, in lieu of the allowances provided by subsection (1) or (1B) or section 19, be entitled, if he so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the efficient pollution control equipment or device.
[28/96; 27/2009]
(6)  Notwithstanding section 19, where a person proves to the satisfaction of the Comptroller that he has installed on or after 1st January 1996 any certified energy-efficient equipment as a replacement for any other equipment, or has installed on or after that date any certified energy-saving equipment, for the purposes of a trade, business or profession carried on by him, he shall, in lieu of the allowances provided by subsection (1) or (1B) or section 19, be entitled, if he so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the certified energy-efficient equipment or certified energy-saving equipment.
[28/96; 31/98; 27/2009]
(7)  Notwithstanding section 19, where a person proves to the satisfaction of the Comptroller that he has, on or after 1st January 1998, installed any new —
(a)
certified low-decibel machine, equipment or system;
(b)
certified effective noise control device which is a distinct entity or an accessory of any new or existing machine, equipment or system; or
(c)
certified effective engineering noise control measure for any existing machine, equipment or process,
for the purposes of a trade, business or profession carried on by him, he shall, in lieu of the allowances provided by subsection (1) or (1B) or section 19, be entitled, if he so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the certified machine, equipment or system, or the certified effective noise control device or measure.
[31/98; 27/2009]
(8)  Notwithstanding section 19, where a person proves to the satisfaction of the Comptroller that he has, on or after 1st January 1998, installed any new —
(a)
certified machine, equipment or system which reduces or eliminates exposure to chemical risk;
(b)
certified effective chemical hazard control device which is a distinct entity or an accessory of any new or existing machine, equipment or process; or
(c)
certified effective chemical hazard control measure for any existing machine, equipment or process,
for the purposes of a trade, business or profession carried on by him, he shall, in lieu of the allowances provided by subsection (1) or (1B) or section 19, be entitled, if he so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the certified machine, equipment or system, or the certified effective chemical hazard control device or measure.
[31/98; 27/2009]
(9)  Notwithstanding section 19, where a person proves to the satisfaction of the Comptroller that he has, for the purposes of a trade, business or profession carried on by him, registered any new vehicle as a replacement for an existing vehicle which used diesel oil as fuel and which was registered before 1st January 1991 and deregistered on or after 27th February 1999, he shall, in lieu of the allowances provided by subsection (1) or (1B) or section 19, be entitled, if he so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that new vehicle.
[53/2007; 27/2009]
(9A)  Notwithstanding section 19, where a person proves to the satisfaction of the Comptroller that he has, for the purposes of a trade, business or profession carried on by him, registered during the period from 15th February 2007 to 14th February 2012 (both dates inclusive) any new vehicle which uses diesel oil as fuel, as a replacement for an existing vehicle which used diesel oil as fuel and which was registered on or after 1st January 1991 but before 1st October 2006, he shall, in lieu of the allowances provided by subsection (1) or (1B) or section 19, be entitled, if he so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that new vehicle.
[53/2007; 27/2009]
[Act 37 of 2014 wef 27/11/2014]
(10)  Notwithstanding section 19, where a person proves to the satisfaction of the Comptroller that he has incurred capital expenditure on the provision of a website for the purposes of a trade, business or profession carried on by him, he shall be entitled to an allowance of 100% in respect of the capital expenditure incurred on the provision of that website, and for this purpose, a website is deemed to be machinery or plant.
[37/2002]
(10A)  Notwithstanding section 19 and subject to subsection (10B), where a person proves to the satisfaction of the Comptroller that he has incurred capital expenditure not exceeding $5,000 on the provision of any item of machinery or plant for the purposes of a trade, profession or business carried on by him, he shall, in lieu of the allowances provided by subsection (1) or (1B) or section 19, be entitled, if he so elects, to an allowance of —
(a)
100% in respect of that capital expenditure; or
(b)
where allowances have been made under subsection (1) or (1B) or section 19 for any previous year of assessment under subsection (10B), the amount of that capital expenditure still unallowed.
[34/2005; 27/2009; 29/2012]
(10B)  The aggregate amount of allowances claimed by any person under subsection (10A) for any year of assessment shall not exceed $30,000; and allowances may be made under subsection (1) or (1B) or section 19 in respect of any capital expenditure still unallowed.
[34/2005; 27/2009]
(10C)  No allowance shall be made under subsection (10A) in respect of any item of machinery or plant which is acquired under a hire-purchase agreement and the original cost of that item of machinery or plant exceeds $5,000.
[34/2005; 29/2012]
(11)  Any claim by a person for allowances in respect of any machinery or plant under this section for any year of assessment shall not be disallowed by reason only that the person has not in use the machinery or plant at the end of the basis period for that year of assessment.
[28/96; 31/98; 37/2002]
(12)  Any claim for allowances under this section shall be made at the time of lodgment of the return of income for the relevant years of assessment or within such further time as the Comptroller may, in his discretion, allow.
(13)  Where any allowance has been claimed and allowed under this section for any year of assessment, no allowances shall be made in any subsequent year of assessment under section 19 in respect of such expenditure.
(13A)  Where the tax relief period of a person to whom a certificate has been issued under Part II of the Economic Expansion Incentives (Relief from Income Tax) Act expires in any basis period ending on or after 1st January 1992 and the person has —
(a)
at the end of the basis period immediately following that basis period, in use machinery or plant in respect of which capital allowances have been made under section 19; and
(b)
before the end of the year of assessment which relates to the basis period referred to in paragraph (a), so elected,
there shall be made to him for a period of 3 years an annual allowance of 331/3% in respect of the capital expenditure remaining unallowed under section 19 in respect of the machinery or plant as at the end of that basis period.
[13/84; 11/94]
(13B)  Where a person to whom a certificate has been issued under the repealed Part IV, VI, VII, XI or XII of the Economic Expansion Incentives (Relief from Income Tax) Act has —
(a)
at the end of the basis period immediately following the expiry of his tax relief period, in use machinery or plant in respect of which capital allowances have been made under section 19; and
(b)
before the end of the year of assessment which relates to that basis period, so elected,
there shall be made to him for a period of 3 years an annual allowance of 331/3% in respect of the capital expenditure remaining unallowed under section 19 in respect of the machinery or plant as at the end of that basis period.
[13/84; 11/94]
(14)  Subject to subsections (10A), (13A) and (13B), where any allowance has been claimed and allowed under section 19 in respect of any expenditure, no allowances shall, except with the approval of the Minister or the Comptroller and subject to such conditions as he may impose, be made in any subsequent year of assessment under this section in respect of the amount of that expenditure remaining unallowed under section 19.
[34/2005]
(14A)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act, where, in the basis period for any year of assessment, the trade, profession or business, for which purpose the machinery or plant is provided, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment shall be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
[49/2004]
(14B)  Subject to subsection (14C), this section shall, with the necessary modifications, apply to a person carrying on any trade or business who incurs during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2025 (both years inclusive) capital expenditure on the provision of machinery or plant for any research and development undertaken by him directly in Singapore or by a research and development organisation on his behalf in Singapore, even though the machinery or plant is not for the purpose of that trade or business.
[34/2008; 29/2010]
[Act 37 of 2014 wef 27/11/2014]
(14C)  Section 14D(4) and (5) shall apply in relation to the allowance for the capital expenditure referred to in subsection (14B) 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) in section 14D(4) is a reference to the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37I;
(b)
a reference to the specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula
where A
is the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37I;
B
is the rate of tax specified in section 43(1)(a); and
C
is —
 
(i)
in a case where the concessionary income derived by the person from the trade or business carried on by him is subject to tax at a single concessionary rate of tax, that rate; or
 
(ii)
in a case where the concessionary income derived by the person from the trade or business carried on by him is subject to tax at 2 or more concessionary rates of tax, the higher or highest of those rates; and
(c)
a reference to “unabsorbed losses” is a reference to “unabsorbed allowances”.
[34/2008; 29/2010; 22/2011; 29/2012]
(15)  In this section —
“automation equipment” means any machinery or plant designed for the automation of functions or services;
“certificate of entitlement” means a permit issued or deemed to be issued under section 10A of the Road Traffic Act (Cap. 276);
“certified effective chemical hazard control device” means —
(a)
any local exhaust ventilation system;
(b)
any fugitive emission control equipment or system; or
(c)
any dilution ventilation system,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified effective chemical hazard control measure” means —
(a)
any enclosed or automated system; or
(b)
any modification to machine, equipment or process,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified effective engineering noise control measure” means —
(a)
any detachable personnel acoustic enclosure;
(b)
any acoustic barrier or shield;
(c)
any acoustic absorption device; or
(d)
any modification to machine, equipment or process,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified effective noise control device” means —
(a)
any acoustic enclosure for machine, equipment or process;
(b)
any acoustic silencer or muffler;
(c)
any vibration absorption, isolation or damping device; or
(d)
any active noise control device,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified energy-efficient equipment” means —
(a)
any air-conditioning system;
(b)
any boiler;
(c)
any water pumping system;
(d)
any washing or dry-cleaning machine system;
(e)
any refrigeration system;
(f)
any lift or escalator; and
(g)
any instant hot water system,
which has been certified by a professional engineer registered under the Professional Engineers Act (Cap. 253) to be more energy-efficient than the equipment which it replaces;
“certified energy-saving equipment” means —
(a)
any solar heating or cooling system;
(b)
any solar energy collection system;
(c)
any heat recovery system;
(d)
any power factor controller;
(e)
any high efficiency electric motor;
(f)
any variable speed drive motor control system;
(g)
any high frequency lighting system;
(h)
any computerised energy management system; and
(i)
any other energy-saving equipment or device,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to be an energy-saving equipment;
“certified low-decibel machine, equipment or system” means —
(a)
any concrete crusher or splitter;
(b)
any plastic granulator or crusher;
(c)
any automatic sawing machine;
(d)
any metal press or stamping machine;
(e)
any machine with active noise control feature; or
(f)
any other machine, equipment or system,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified machine, equipment or system which reduces or eliminates exposure to chemical risk” means —
(a)
any water-based degreasing machine or system;
(b)
any automated bagging or packing machine or system;
(c)
any automated degreasing machine or system; or
(d)
any other machine, equipment or system,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“computer” means any computer used for automatic data processing and includes any part thereof;
“efficient pollution control equipment or device” means any equipment or device for the purposes of preventing, controlling or reducing air pollution or water pollution which satisfies the prescribed criteria;
“existing vehicle” means any goods vehicle or bus using diesel oil as fuel which —
(a)
is not a vehicle registered under the RU index marks;
(b)
is deregistered not later than one year before the last day on which a renewal of registration licence can be issued under the Road Traffic Act in respect of the vehicle; and
(c)
has, unless the vehicle has been exempted from obtaining a certificate of entitlement, at the date of deregistration of the vehicle —
(i)
at least one year remaining in its certificate of entitlement; or
(ii)
a certificate of entitlement which can be renewed after its expiration;
“goods vehicle” means any motor vehicle constructed or adapted for use for the carriage of goods;
“new vehicle” means any new goods vehicle or new bus which —
(a)
is registered within one month before, or within 6 months after, the deregistration of the existing vehicle which uses diesel oil as fuel; and
(b)
bears an index mark which is the same as the index mark of such existing vehicle, and for this purpose, where the new goods vehicle and such existing vehicle have a maximum laden weight exceeding 3.0 metric tons but not exceeding 3.5 metric tons, the new goods vehicle shall be deemed to bear an index mark which is the same as that of such existing vehicle;
“Productivity and Innovation Credit Scheme automation equipment” or “PIC automation equipment”, in relation to any person, means —
(a)
any automation equipment that is prescribed by the Minister for the purposes of subsections (2A), (2B) and (2BAA) and section 14T; or
[Act 37 of 2014 wef 27/11/2014]
(b)
any automation equipment which the Minister or a person appointed by him has approved as PIC automation equipment for the first-mentioned person;
“website” means a collection of programmes, data and images which is accessible over the Internet or any network using a browser or any other form of access.
[15/83; 13/84; 7/85; 1/90; 28/96; 31/98; 32/99; 24/2000; 18/2002; 37/2002; 49/2004; 7/2006; 53/2007; 29/2010; 22/2011]
(16)  In subsections (2A) to (2G) and (2I), a reference to capital expenditure incurred on the provision of PIC automation equipment excludes any such expenditure to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board.
[29/2010; 22/2011; 29/2012]
(16A)  For the purposes of subsections (2B), (2BAA), (2D) and (2E), each reference to capital expenditure incurred in the basis period for the year of assessment 2014 or a subsequent year of assessment, on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business includes a reference to any capital expenditure incurred on the provision of a website for the purposes of a trade, profession or business.
[Act 37 of 2014 wef 27/11/2014]
(16B)  For the purposes of subsections (2F), (2H), (2HA), (2I), (2IA) and (2J) —
(a)
each reference to capital expenditure incurred on the provision of any PIC automation equipment includes a reference to capital expenditure incurred on the provision of a website; and
(b)
each reference to a PIC automation equipment includes a reference to a website.
[Act 37 of 2014 wef 27/11/2014]
(17)  For the purposes of paragraph (b) of the definition of “PIC automation equipment”, the Minister or the person appointed by him may only approve any automation equipment if the Minister or person is satisfied that the equipment fulfils such criteria as may be prescribed by the Minister.
[22/2011]
(18)  Any rules made under paragraph (a) of the definition of “PIC automation equipment”, and any approval given under paragraph (b) of that definition, may be made to have effect for any year of assessment beginning with the year of assessment 2011.
[22/2011]
Writing-down allowances for intellectual property rights
19B.
—(1)  Subject to this section, where a company carrying on a trade or business has incurred on or after 1st November 2003 capital expenditure in acquiring any intellectual property rights for use in that trade or business and the acquisition date of those rights is on or before the last day of the basis period relating to the year of assessment 2016, writing-down allowances in respect of that expenditure shall be made to it during a writing-down period of 5 years beginning with the year of assessment relating to the basis period in which that expenditure is incurred.
[24/2001; 21/2003]
[Act 34 of 2016 wef 25/03/2016]
(1A)  Where a company carrying on a trade or business incurs during the basis period for the year of assessment 2011 or the year of assessment 2012 capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there shall, in addition to the writing-down allowance under subsection (1), be made in respect of all its trades and businesses a writing-down allowance computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2011, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
$800,000; and
(b)
for the year of assessment 2012, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $800,000 the lower of the amounts specified in paragraph (a)(i) and (ii).
[22/2011]
(1AA)  Where —
(a)
a company carrying on a trade or business has incurred capital expenditure in acquiring any intellectual property rights for use in that trade or business; and
(b)
the acquisition date of those rights is on or after the first day of the basis period relating to the year of assessment 2017,
writing-down allowances in respect of that expenditure must be made to it during a writing‑down period of 5 years, 10 years or 15 years (as elected by the company) beginning with the year of assessment relating to the basis period in which that expenditure is incurred.
[Act 34 of 2016 wef 25/03/2016]
(1AB)  The company mentioned in subsection (1AA) must make an irrevocable election to the Comptroller for the writing‑down allowances to be made to it over a writing-down period of 5 years, 10 years or 15 years.
[Act 34 of 2016 wef 25/03/2016]
(1AC)  The election under subsection (1AB) must be made at the time of lodgment of the company’s return of income for the year of assessment relating to —
(a)
if the payment for the intellectual property rights is made by instalments, the basis period in which the first of any deposit or instalment payment for those rights is made; or
(b)
in any other case, the basis period in which the expenditure is incurred.
[Act 34 of 2016 wef 25/03/2016]
(1B)  Subject to section 37IC, where a company carrying on a trade or business incurs during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015 capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there shall, in addition to the writing-down allowance under subsection (1), be made in respect of all its trades and businesses a writing-down allowance computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2013, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2014, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2015, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(1BAA)  Subject to section 37IC, where a company carrying on a trade or business incurs during the basis period for the year of assessment 2016, 2017 or 2018 capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there shall, in addition to the writing‑down allowance under subsection (1) or (1AA), be made in respect of all its trades and businesses, a writing‑down allowance computed in accordance with the following formula:
where A is —
(a)
for the year of assessment 2016, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
$1,200,000;
(b)
for the year of assessment 2017, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and
(c)
for the year of assessment 2018, the lower of the following:
(i)
such capital expenditure incurred during the basis period for that year of assessment;
(ii)
the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).
[Act 37 of 2014 wef 27/11/2014]
[Act 34 of 2016 wef 25/03/2016]
(1BA)  In subsection (1A), the amount under paragraph (a)(ii) shall be substituted with “$400,000” if the company does not carry on any trade or business during the basis period for the year of assessment 2012, and the balance under paragraph (b)(ii) shall be substituted with “$400,000” if the company does not carry on any trade or business during the basis period for the year of assessment 2011.
[22/2011; 29/2012]
(1BB)  In subsection (1B) —
(a)
if the company does not carry on any trade or business during the basis period for any one year of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the company does not carry on any trade or business during the basis periods for any 2 years of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
for the avoidance of doubt, no deduction shall be made from the substituted amount in subsection (1B)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (1B)(a)(i) and (ii) if the company does not carry on any trade or business during the basis period for the year of assessment 2013, and no deduction shall be made from the substituted amount in subsection (1B)(c)(ii) of the lower of the amounts specified in subsection (1B)(b)(i) and (ii) if the company does not carry on any trade or business during the basis period for the year of assessment 2014.
[22/2011; 29/2012]
(1BC)  In subsection (1BAA) —
(a)
if the company does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;
(b)
if the company does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and
(c)
to avoid doubt, no deduction shall be made from the substituted amount in subsection (1BAA)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (1BAA)(a)(i) and (ii) if the company does not carry on any trade or business during the basis period for the year of assessment 2016, and no deduction shall be made from the substituted amount in subsection (1BAA)(c)(ii) of the lower of the amounts specified in subsection (1BAA)(b)(i) and (ii) if the company does not carry on any trade or business during the basis period for the year of assessment 2017.
[Act 37 of 2014 wef 27/11/2014]
(1C)  Where a company proves to the satisfaction of the Comptroller that it has during or after the basis period for the year of assessment 2011 incurred capital expenditure by way of making one or more instalment payments under an agreement or agreements in acquiring one or more intellectual property rights for use in its trade or business, that is or are signed during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), and an allowance is made under subsection (1A), (1B) or (1BAA), those subsections shall apply with the following modifications:
(a)
a reference to the capital expenditure incurred on the acquisition of one or more intellectual property rights during the basis period for a year of assessment, being the basis period in which the agreement or agreements is or are signed, is a reference to the aggregate of —
(i)
the price or prices (excluding any finance charges) at which it might have purchased the right or all the rights that is or are the subject of the agreement or agreements for cash at the time of the signing of the agreement or agreements; and
(ii)
the capital expenditure incurred on the acquisition of any other intellectual property rights for use in its trade or business during that basis period;
(b)
a reference to the capital expenditure incurred on the acquisition of one or more intellectual property rights during the basis period for a year of assessment excludes the amount of any instalment paid or deposit made by it under that agreement or any of those agreements during the basis period; and
(c)
the allowance referred to in subsection (1A), (1B) or (1BAA) in respect of each right that is the subject of an agreement shall be made to the company for the year of assessment in respect of each basis period during which it paid an instalment or instalments, or made a deposit or deposits, under the agreement, in the proportion which the total amount of the instalment or instalments paid (excluding any finance charges), and deposit or deposits made, during that basis period for that right bears to the total amount of all instalments (excluding any finance charges) and deposits under the agreement for that right.
[29/2010]
[Act 37 of 2014 wef 27/11/2014]
[Act 37 of 2014 wef 27/11/2014]
[Act 34 of 2016 wef 25/03/2016]
(1D)  No writing-down allowance under subsections (1A), (1B) and (1BAA) shall be made for any capital expenditure incurred in acquiring any intellectual property rights in any software which are acquired for the purpose of licensing all or any of those rights to another.
[22/2011]
[Act 37 of 2014 wef 27/11/2014]
(1E)  To avoid doubt, the writing-down allowance under subsection (1A), (1B) or (1BAA) is to be made to a company during the applicable writing‑down period in subsection (1) or (1AA).
[Act 34 of 2016 wef 25/03/2016]
(2)  The total writing-down allowance to be made for any year of assessment to a company for capital expenditure incurred in acquiring any intellectual property rights under subsection (1) or (1AA), and under subsection (1A), (1B) or (1BAA), is an amount computed in accordance with the formula
where A
is —
(a)
20% if the writing-down period for that allowance is 5 years;
(b)
10% if the writing-down period for that allowance is 10 years; or
(c)
% if the writing-down period for that allowance is 15 years; and
B
is the sum of —
(a)
the capital expenditure; and
(b)
the writing-down allowance under subsection (1A), (1B) or (1BAA) for that expenditure.
[Act 34 of 2016 wef 25/03/2016]
(2A)  The writing-down allowances to be made to a company under this section shall be allowed only if —
(a)
there is an undertaking by the company that it is an assignee of the intellectual property rights;
[Act 34 of 2016 wef 25/03/2016]
(b)
the claim is made by the company in such manner and subject to such conditions as the Comptroller may require; and
[21/2003]
[Act 34 of 2016 wef 25/03/2016]
(c)
in the case of writing‑down allowances mentioned in subsection (1AA), the company makes the election mentioned in subsection (1AB).
[Act 34 of 2016 wef 25/03/2016]
(2B)  The Minister or such person as he may appoint may in any particular case waive any of the requirements under subsection (2A)(a) and (b) in respect of any intellectual property rights acquired on or after 17th February 2006, subject to such conditions as he may impose.
[7/2007]
[Act 34 of 2016 wef 25/03/2016]
(2C)  Notwithstanding subsections (1), (1AA) and (2), where a company that is an approved media and digital entertainment company carrying on a trade or business has acquired on or after 22nd January 2009 approved intellectual property rights pertaining to films, television programmes, digital animations or games, or other media and digital entertainment contents, for use in that trade or business, writing-down allowances in respect of the capital expenditure incurred in acquiring those rights —
(a)
shall be made to it during a writing-down period of 2 years beginning with the year of assessment relating to the basis period in which that expenditure is incurred; and
(b)
for each such year of assessment shall be an amount equal to 50% of the capital expenditure incurred.
[27/2009]
[Act 34 of 2016 wef 25/03/2016]
(2D)  No writing-down allowances under subsections (1A), (1B) and (1BAA) shall be made in respect of any intellectual property rights in respect of which any of the requirements under subsection (2A)(a) and (b) has been waived under subsection (2B), or any approved intellectual property rights referred to under subsection (2C).
[29/2010]
[Act 37 of 2014 wef 27/11/2014]
[Act 34 of 2016 wef 25/03/2016]
(2E)  Where writing-down allowances have been made to any company under subsection (1A), (1B) or (1BAA) in respect of the acquisition of any intellectual property rights and any of the following events occurs within 5 years, 10 years or 15 years (depending on the writing‑down period for those allowances) from the acquisition of such intellectual property rights:
(a)
the rights come to an end without being subsequently revived;
(b)
the company sells, transfers or assigns all or any part of those rights;
(ba)
the company licenses all or any of those rights (being rights in any software) to another;
(c)
the company permanently ceases to carry on the trade or business,
the following provisions shall apply:
(i)
no writing-down allowance in respect of such intellectual property rights shall be made to that company under subsections (1A), (1B) and (1BAA) for the year of assessment relating to the basis period in which the event occurs and for any subsequent year of assessment; and
[Act 37 of 2014 wef 27/11/2014]
(ii)
if any of those events occurs within the period of one year from the acquisition of the intellectual property rights, any writing-down allowances made under subsection (1A), (1B) or (1BAA) shall be brought to charge as if the allowances were not made, and be deemed as income for the year of assessment relating to the basis period in which the event occurs.
[29/2010; 22/2011]
[Act 37 of 2014 wef 27/11/2014]
[Act 37 of 2014 wef 27/11/2014]
[Act 34 of 2016 wef 25/03/2016]
(3)  Any capital expenditure incurred on the acquisition of any intellectual property rights by a company before the commencement of its trade or business shall be treated for the purpose of this section as if it had been incurred by it on the first day it commences that trade or business.
[24/2001; 21/2003]
(4)  Subject to subsection (4A), where writing-down allowances have been made to any company under subsection (1), (1AA) or (2C) in respect of any intellectual property rights and, before the end of the writing-down period, any of the following events occurs:
(a)
the rights come to an end without being subsequently revived;
(b)
the company sells, transfers or assigns all or any part of those rights;
(c)
the company permanently ceases to carry on the trade or business,
no writing-down allowance in respect of the intellectual property rights shall be made to that company for the year of assessment relating to the basis period in which the event occurs or for any subsequent year of assessment, and, where (on the occurrence of the event referred to in paragraph (b)) the price at which the rights were sold, transferred or assigned exceeds the amount of the writing-down allowances yet to be allowed on the date of the event, there shall be made on the company for the year of assessment relating to the basis period in which the event occurs a charge of an amount equal to the lower of —
(i)
the excess; and
(ii)
the writing-down allowances made under subsections (1), (1AA) and (2C).
[24/2001; 21/2003; 27/2009; 29/2010]
[Act 34 of 2016 wef 25/03/2016]
(4A)  Where parts of any intellectual property right are sold, transferred or assigned by the company at different times and at least one sale, transfer or assignment occurs before the end of the writing-down period, subsection (4) shall apply to each sale, transfer and assignment with the following modifications:
(a)
the reference to the amount of writing-down allowances yet to be allowed for the year of assessment relating to the basis period in which the event occurs, is a reference to an amount ascertained in accordance with the formula
where A
is the amount of writing-down allowances yet to be allowed for the intellectual property right on the date of the first of such sales, transfers or assignments; and
B
is the aggregate of the prices of the parts of that right previously sold, transferred or assigned by the company,
or zero, if the amount ascertained by that formula is less than or equal to zero; and
(b)
the reference to the writing-down allowances made under subsections (1), (1AA) and (2C) is a reference to the balance of such allowances made under subsections (1), (1AA) and (2C) in respect of that right after deducting the total amount of any charges made under this section in respect of that right.
[29/2010]
[Act 34 of 2016 wef 25/03/2016]
(5)  Where a company to whom writing-down allowances have been made under subsections (1), (1AA) and (2C) in respect of any intellectual property rights sells, transfers or assigns all or any part of those rights after the writing-down period, there shall be made on the company for the year of assessment relating to the basis period in which the sale, transfer or assignment occurs, a charge in an amount equal to the price which the rights were sold, transferred or assigned or in an amount equal to the capital expenditure incurred in acquiring the rights, whichever is less.
[24/2001; 21/2003; 27/2009]
[Act 34 of 2016 wef 25/03/2016]
(6)  For the purposes of subsection (5), where there is more than one sale, transfer or assignment of any part of any intellectual property rights, the amount of the capital expenditure incurred in acquiring the intellectual property rights for the year of assessment relating to the basis period in which the sale, transfer or assignment of that part of the rights occurs shall be ascertained in accordance with the formula
where A
is the capital expenditure incurred in acquiring the intellectual property rights; and
B
is the total amount of any charges made under this section in any previous years of assessment in respect of that expenditure.
[24/2001; 21/2003]
(6A)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86), where, in the basis period for any year of assessment, the trade or business, in which the intellectual property rights are used, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment shall be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
[49/2004]
(6B)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act, where, in the basis period for any year of assessment, the trade or business, in which the intellectual property rights are used, produces income that is exempt from tax as well as income chargeable with tax, and any charge under subsection (4) or (5) arises to be made, such proportion of that charge shall be exempt from tax as appears reasonable to the Comptroller in the circumstances.
[49/2004]
(7)  For the purpose of this section, any sale, transfer or assignment of any intellectual property rights which occurs after the date on which the trade or business of a company permanently ceases shall be deemed to have occurred immediately before the cessation.
[24/2001; 21/2003]
(8)  Notwithstanding the repeal of section 19B by the Income Tax (Amendment) Act 2001 (Act 24 of 2001), the repealed section 19B shall continue to apply and have effect to any approved know-how or patent rights for which writing-down allowances had been made before the repeal as if that Act had not been enacted.
[24/2001]
(9)  Notwithstanding the amendment of section 19B by the Income Tax (Amendment) Act 2003 (Act 21 of 2003), section 19B in force immediately before 1st November 2003 shall continue to apply and have effect to any intellectual property rights approved before that date.
[21/2003]
(10)  No writing‑down allowance shall be made —
(a)
under subsection (1) or (1AA) for any capital expenditure incurred in respect of intellectual property rights acquired after the last day of the basis period for the year of assessment 2020; or
[Act 34 of 2016 wef 25/03/2016]
(b)
under subsection (2C) for any capital expenditure incurred in respect of intellectual property rights acquired after the last day of the basis period for the year of assessment 2018.
[Act 37 of 2014 wef 27/11/2014]
(10A)  No writing-down allowance under subsections (1), (1A), (1AA), (1B), (1BAA) and (2C) shall be made for any capital expenditure incurred by a company referred to in subsections (1), (1A), (1AA), (1B), (1BAA) and (2C) in acquiring intellectual property rights from —
(a)
its related party ––
(i)
to whom any deduction has been allowed under section 14, 14D, 14DA, 14E or 14S for any outgoing, expense or payment incurred for any activity which resulted in the creation of the intellectual property; and
(ii)
whose proceeds from the sale, transfer or assignment of those intellectual property rights to the company are not chargeable to tax; or
(b)
its related party who acquired the rights, directly or indirectly, from a related party of the company referred to in paragraph (a).
[34/2008; 27/2009; 29/2010]
[Act 37 of 2014 wef 27/11/2014]
[Act 34 of 2016 wef 25/03/2016]
(10B)  The Minister may by order exempt a company from subsection (10A) in respect of such transaction as may be specified in the order.
[34/2008]
(10C)  No writing-down allowance under subsections (1A), (1B) and (1BAA) shall be made to any company in respect of any amount of capital expenditure incurred on the acquisition of intellectual property rights for which an investment allowance has been claimed under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act.
[29/2010]
[Act 37 of 2014 wef 27/11/2014]
(10D)  No allowance under subsections (1A), (1B) and (1BAA) shall be made to any company in respect of any instalment paid by it under any agreement to acquire any intellectual property right that is signed before the basis period for the year of assessment 2011.
[29/2010]
[Act 37 of 2014 wef 27/11/2014]
(10E)  If, in the case of an acquisition of intellectual property rights —
(a)
whose acquisition date is on or after 25 March 2016; and
(b)
the payment for which is not made by instalments,
the capital expenditure incurred for the acquisition exceeds the open‑market price for those rights, then, for the purpose of determining the amount of writing‑down allowances for that expenditure under subsection (1AA), (1BAA) or (2C), the Comptroller may treat the open‑market price as the amount of that expenditure, and in that event subsection (5) also applies as if the open‑market price were the amount of that expenditure.
[Act 34 of 2016 wef 25/03/2016]
(10F)  In subsection (10E), “open-market price”, for intellectual property rights, means either —
(a)
the price which those rights could have been purchased in the open market on the acquisition date of those rights; or
(b)
if, by reason of the special nature of those rights, it is not possible to determine the price mentioned in paragraph (a), such other value as the Comptroller considers to be a reasonable value for those rights after considering the valuation of those rights by an appropriate valuer and other relevant circumstances.
[Act 34 of 2016 wef 25/03/2016]
(10G)  If, in the case of an acquisition of intellectual property rights —
(a)
whose acquisition date is on or after 25 March 2016; and
(b)
the payment for which is made by instalments,
the total amount of the deposits and instalment payments (excluding any finance charges) made in a basis period exceeds the open‑market price for those rights, then, for the purpose of determining the amount of writing‑down allowances in such a case under subsection (1AA) or (2C), the Comptroller may treat the open‑market price as the amount of such expenditure, and in that event subsection (5) also applies as if the open‑market price were the amount of such expenditure.
[Act 34 of 2016 wef 25/03/2016]
(10H)  In subsection (10G), “open-market price”, for intellectual property rights, means an amount computed by the formula
where C
is the total amount of the deposits and instalment payments (excluding any finance charges) made in the basis period;
D
is the total amount of all the deposits and instalment payments (excluding any finance charges) under the agreement to acquire those rights; and
E
is either —
(a)
the price (excluding any finance charges) which those rights could have been purchased in the open market on their acquisition date; or
(b)
if, by reason of the special nature of those rights, it is not possible to determine the price mentioned in sub-paragraph (a), such other value as the Comptroller considers to be a reasonable value for those rights after considering the valuation of those rights by an appropriate valuer and other relevant circumstances.
[Act 34 of 2016 wef 25/03/2016]
(10I)  If, in the case of an acquisition of intellectual property rights —
(a)
whose acquisition date is on or after 25 March 2016; and
(b)
the payment for which is made by instalments,
the amount mentioned in subsection (1C)(a)(i) exceeds the open‑market price mentioned in subsection (10F), then, for the purpose of determining the amount of writing‑down allowances to be made for any year of assessment under subsection (1BAA), the Comptroller may treat the open-market price mentioned in subsection (10F) as the amount mentioned in subsection (1C)(a)(i).
[Act 34 of 2016 wef 25/03/2016]
(10J)  If —
(a)
intellectual property rights or a part of such rights are or is sold, transferred or assigned on or after 25 March 2016; and
(b)
the rights or part are or is sold, transferred or assigned for less than the open‑market price,
then, for the purpose of determining the amount of any charge under subsection (4), (4A) or (5), the Comptroller may treat the open‑market price as the price at which the rights or part (as the case may be) are or is sold, transferred or assigned.
[Act 34 of 2016 wef 25/03/2016]
(10K)  In subsection (10J), “open-market price”, for intellectual property rights or a part of such rights, means —
(a)
the price which those rights or that part would have fetched if sold, transferred or assigned in the open market at the time of the actual sale, transfer or assignment; or
(b)
if, by reason of the special nature of those rights or part, it is not possible to determine the price mentioned in paragraph (a), such other value as the Comptroller considers to be a reasonable value for those rights or that part after considering the valuation of those rights or that part by an appropriate valuer and other relevant circumstances.
[Act 34 of 2016 wef 25/03/2016]
(11)  In this section —
“appropriate valuer” means a valuer who is independent of any party to the acquisition, sale, transfer or assignment (as the case may be) of the intellectual property rights, and has qualifications and experience that are relevant to the valuation in question;
[Act 34 of 2016 wef 25/03/2016]
“approved” means approved by the Minister or such person as he may appoint, subject to such conditions as he may impose;
“capital expenditure” does not include legal fees, registration fees, stamp duty and other costs related to the acquisition of any intellectual property rights;
“intellectual property rights” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of any patent, copyright, trade mark, registered design, geographical indication, layout-design of integrated circuit, trade secret or information that has commercial value, or the grant of protection of a plant variety;
“media and digital entertainment company” means a company whose principal trade or business is to provide media and digital entertainment in Singapore;
“related party” has the same meaning as in section 13(16).
[24/2001; 21/2003; 34/2008; 23/2009; 27/2009; 29/2010]
(11A)  In the definition of “intellectual property rights” in subsection (11), the expressions “trade secret” and “information that has commercial value”, and any work or subject‑matter to which the expression “copyright” relates, exclude the following:
(a)
information of customers of a trade or business, such as a list of those customers and requirements of those customers, gathered in the course of carrying on that trade or business;
(b)
information on work processes (such as standard operating procedures), other than industrial information, or technique, that is likely to assist in the manufacture or processing of goods or materials;
(c)
compilation of any information as described in paragraph (a) or (b);
(d)
such other matter as the Minister may by regulations prescribe.
[Act 37 of 2014 wef 27/11/2014]
(12)  In subsections (1A), (1B) and (1BAA), a reference to capital expenditure incurred on the acquisition of intellectual property rights excludes any such expenditure to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board.
[29/2010; 29/2012]
[Act 37 of 2014 wef 27/11/2014]
(13)  In this section, for a company, the acquisition date of any intellectual property rights is —
(a)
the date of the signing of the agreement to acquire those rights; or
(b)
if there is no agreement, the date on which those rights are assigned to the company.
[Act 34 of 2016 wef 25/03/2016]
Writing-down allowances for approved cost-sharing agreement for research and development activities
19C.
—(1)  Subject to this section, where a person carrying on a trade or business has incurred expenditure under any cost-sharing agreement entered into and approved on or after 17th February 2006, in respect of research and development activities for the purposes of that trade or business (referred to in this section as the relevant trade or business), he shall, subject to such conditions as may be imposed by the Minister or such person as he may appoint, be entitled to a writing-down allowance of 100% of that expenditure in the year of assessment relating to the basis period in which that expenditure was incurred.
[7/2007]
(1A)  No writing-down allowance shall be made under this section in respect of any expenditure incurred during the basis period for the year of assessment 2012 or any subsequent year of assessment.
[29/2012]
(2)  The Minister or such person as he may appoint may specify the maximum amount of expenditure in respect of which writing‑down allowances are to be made under subsection (1).
[26/93; 7/2007]
(3)  No writing-down allowance shall be made under subsection (1) to any person in respect of any payment or contribution paid by him for the right to become a party to any existing approved cost-sharing agreement.
(4)  Any expenditure incurred by a person under any approved cost-sharing agreement before the commencement of his trade or business shall be treated for the purpose of this section as if it had been incurred by him on the first day he commences that trade or business.
(5)  Where a person to whom writing-down allowances have been made under this section —
(a)
sells, assigns or otherwise disposes of any right under any approved cost-sharing agreement to which he is a party;
(b)
sells, assigns or otherwise disposes of the whole or part of any technology or know-how developed from the research and development activities carried out under any approved cost-sharing agreement to which he is a party;
(c)
receives any consideration from any other person for permitting that other person to become a party to any approved cost-sharing agreement to which he is a party; or
(d)
receives any consideration from the disposal of any machinery, plant or building acquired under any approved cost-sharing agreement to which he is a party,
the amount or value of any consideration shall be treated as a trading receipt of the relevant trade or business for the year of assessment which relates to the basis period in which the event in paragraph (a), (b), (c) or (d) occurs.
[7/2007]
(5A)  For the avoidance of doubt, section 19C(6) in force immediately before 17th February 2006, or subsection (5) of this section (as the case may be), continues to apply to a person to whom writing-down allowances have previously been made under this section in respect of a cost-sharing agreement, and deductions are allowed under section 14D for expenditure incurred or payments made under the same agreement.
[29/2012]
(6)  For the purpose of subsection (5), the amount or value of the consideration to be treated as a trading receipt shall not exceed the amount of writing-down allowance made under this section.
[7/2007]
(7)  Where no writing-down allowances have been made to any person in respect of expenditure incurred by him by virtue of subsection (2) or in respect of any payment or contribution made by him by virtue of subsection (3), the Minister may for the purposes of subsection (5) exempt such part of the amount or value of the consideration as he thinks fit.
(8)  Any event referred to in subsection (5) which occurs after the date on which the relevant trade or business permanently ceases shall be deemed to have occurred immediately before the cessation.
(9)  Where a person to whom writing-down allowances have been made under this section is entitled to royalty or other payments in one lump sum or otherwise for the use of or right to use any technology or know-how developed from the research and development activities carried out under any approved cost-sharing agreement, such royalty or payments shall be deemed to be income derived from Singapore for the year of assessment which relates to the basis period in which the person is entitled to the royalty or payments, as the case may be.
(10)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86), where, in the basis period for any year of assessment, the relevant trade or business produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment shall be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
[49/2004]
(11)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act, where, in the basis period for any year of assessment, the relevant trade or business, produces income that is exempt from tax as well as income chargeable with tax, and an event referred to in subsection (5)(a), (b), (c) or (d) occurs, such proportion of any amount or value of any consideration treated as a trading receipt under that subsection shall be exempt from tax as appears reasonable to the Comptroller in the circumstances.
[49/2004; 7/2007]
(12)  Notwithstanding the provisions of this section, section 19C in force immediately before 17th February 2006 shall continue to apply and have effect in relation to any approved cost-sharing agreement entered into before that date in respect of research and development activities.
[7/2007]
(13)  In this section —
“approved” means approved by the Minister or such person as he may appoint;
“cost-sharing agreement” means any agreement or arrangement made by 2 or more persons to share the expenditure of research and development activities to be carried out under the agreement or arrangement.
Writing-down allowance for IRU
19D.
—(1)  Subject to this section, where a person carrying on a trade, business or profession has incurred capital expenditure during or after the basis period for the year of assessment 2004 for the acquisition of an indefeasible right to use any international telecommunications submarine cable system (referred to in this section as Indefeasible Right of Use or IRU) for the purposes of that trade, business or profession (referred to in this section as the relevant trade, business or profession), writing-down allowances computed in accordance with subsection (3) shall be made to him, on due claim, in respect of that capital expenditure during the writing-down period.
[21/2003]
(2)  The writing-down period in respect of an IRU shall be the number of years for which the IRU is acquired commencing with the year of assessment relating to the basis period in which the capital expenditure for the acquisition of the IRU is incurred.
[21/2003]
(3)  For the purposes of this section, the writing-down allowances in respect of an IRU shall be determined by the formula
where A
is the amount of capital expenditure incurred for the acquisition of the IRU; and
B
is the writing-down period for the IRU.
[21/2003]
(4)  Notwithstanding anything in this section, no writing-down allowance shall be granted to any person under subsection (1) in any year of assessment if the international telecommunications submarine cable system is not in use at the end of the basis period for that year of assessment by that person in the trade, business or profession carried on by him.
[21/2003]
(4A)  No writing‑down allowance is to be made under subsection (1) for any capital expenditure incurred after 31 December 2020.
[Act 2 of 2016 wef 11/04/2016]
(5)  Any capital expenditure incurred for the acquisition of any IRU by a person before the commencement of his trade, business or profession shall be treated for the purpose of this section as if it had been incurred by him on the first day he commences that trade, business or profession.
[21/2003]
(6)  Where writing-down allowances in respect of any IRU have been made to any person under this section and, before or at the end of the writing-down period for the IRU, any of the following events occurs:
(a)
the IRU comes to an end without subsequent renewal by the person;
(b)
the person permanently ceases to carry on the relevant trade, business or profession;
(c)
the person sells, transfers or assigns all the IRU or so much of it as he still owns; or
(d)
the person sells, transfers or assigns part of the IRU and the amount or value of any consideration less any decommissioning cost (referred to in this section as the consideration) for the sale, transfer or assignment is not less than the amount of capital expenditure remaining unallowed for the IRU,
no writing-down allowance in respect of the IRU shall be made to the person for the year of assessment relating to the basis period in which the event occurs or for any subsequent year of assessment.
[21/2003]
(7)  Where an IRU remains with any person after the date on which it permanently ceases to be used by the person for the relevant trade, business or profession, the IRU shall be deemed to have been sold by the person at the open-market price on the date of permanent cessation of use.
[21/2003]
(8)  Where writing-down allowances in respect of any IRU have been made to any person under this section and, before or at the end of the writing-down period for the IRU, any of the following events occurs:
(a)
the IRU comes to an end without subsequent renewal by the person;
(b)
the person permanently ceases to carry on the relevant trade, business or profession; or
(c)
the person sells, transfers or assigns all the IRU or so much of it as he still owns and the consideration for the sale, transfer or assignment is less than the amount of capital expenditure remaining unallowed for the IRU,
there shall be made to the person for the year of assessment relating to the basis period in which the event occurs, a balancing allowance equal to —
(i)
in the case where the amount of capital expenditure remaining unallowed for the IRU exceeds the consideration for the sale, transfer or assignment of the IRU, the excess; or
(ii)
in any other case, the amount of capital expenditure remaining unallowed for the IRU.
[21/2003]
(9)  Where writing-down allowances in respect of any IRU have been made to any person under this section and the person sells, transfers or assigns all or any part of the IRU and the consideration for the sale, transfer or assignment of the IRU exceeds the amount of capital expenditure remaining unallowed for the IRU, if any, there shall be made on the person, a balancing charge, which shall be based on an amount equal to —
(a)
the excess of the consideration for the sale, transfer or assignment of the IRU over the amount of capital expenditure remaining unallowed for the IRU; or
(b)
the consideration for the sale, transfer or assignment of the IRU, where the amount of capital expenditure remaining unallowed for the IRU is nil,
and the balancing charge shall be deemed as income for the year of assessment relating to the basis period in which the sale, transfer or assignment of the IRU occurs.
[21/2003]
(10)  Where writing-down allowances in respect of any IRU have been made to any person under this section and the person sells, transfers or assigns any part of the IRU, and the consideration for the sale, transfer or assignment of the IRU is less than the amount of capital expenditure remaining unallowed for the IRU, the amount of any writing-down allowances made in respect of the IRU for the year of assessment relating to the basis period in which the sale, transfer or assignment of the IRU occurs or any subsequent year of assessment shall be the amount determined by the formula
where C
is the amount of capital expenditure remaining unallowed at the time of the sale, transfer or assignment of the IRU;
D
is the consideration for the sale, transfer or assignment of that part of the IRU; and
E
is the number of complete years of the writing-down period remaining at the beginning of the year of assessment relating to the basis period in which the sale, transfer or assignment of the IRU occurs,
and so on for any subsequent sale, transfer or assignment of the IRU.
[21/2003]
(11)  Notwithstanding subsections (9) and (10), the total amount on which a balancing charge is made in respect of any capital expenditure incurred for the acquisition of an IRU shall not exceed the total writing-down allowances actually made for the IRU in respect of that capital expenditure, less, if a balancing charge has previously been made in respect of that capital expenditure, the amount on which that balancing charge was made.
[21/2003]
(12)  Where the sale, transfer or assignment of all or part of any IRU is made at less than the open-market price, then for the purpose of determining the amount of any balancing allowance or balancing charge, the event shall be treated as if it had given rise to sale, transfer or assignment moneys of an amount equal to the open‑market price of the IRU.
[21/2003]
(13)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86), where, in the basis period for any year of assessment, the relevant trade, business or profession produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment shall be made against each income in that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
[49/2004]
(14)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act, where, in the basis period for any year of assessment, the relevant trade, business or profession produces income that is exempt from tax as well as income chargeable with tax, and any balancing allowance or balancing charge arises to be made —
(a)
the balancing allowance shall be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances; and
(b)
such proportion of the balancing charge shall be exempt from tax as appears reasonable to the Comptroller in the circumstances.
[49/2004]
(15)  In this section —
“capital expenditure” does not include legal fees, registration fees, stamp duty and other costs related to the acquisition of any IRU;
“capital expenditure remaining unallowed”, in relation to any IRU, means the amount of capital expenditure incurred for the acquisition of the IRU less —
(a)
any writing-down allowances made in respect of that capital expenditure for the years of assessment before the year of assessment relating to the basis period in which any event referred to in subsection (6), (8), (9) or (10) occurs; and
(b)
the consideration for any prior sale, transfer or assignment by the person who incurred the capital expenditure of any part of the IRU acquired by the capital expenditure;
“international telecommunications submarine cable system” means an international submarine cable that is laid in the sea and includes its cable landing station and any other equipment ancillary to the submarine cable system;
“open-market price”, in relation to any IRU, means —
(a)
the price which the IRU would have fetched if sold in the open market at the time any event referred to in subsection (6), (8), (9) or (10) occurs; or
(b)
where the Comptroller is satisfied by reason of the special nature of any IRU that it is not practicable to determine the open-market price, such other value as appears to him to be reasonable in the circumstances.
[21/2003]
(16)  For the purposes of this section, any sale, transfer or assignment of any IRU which occurs after the date on which a relevant trade, business or profession permanently ceases shall be deemed to have occurred immediately before the cessation.
[21/2003]
Balancing allowances and charges for machinery or plant
20.
—(1)  Except as provided in this section, where at any time after the setting up and on or before the permanent discontinuance of a trade, profession or business, any event occurs whereby machinery or plant in respect of which allowances under section 19 or 19A have been made to a person carrying on a trade, profession or business —
(a)
ceases to belong to that person (whether on a sale of the machinery or plant or in any other circumstances of any description); or
(b)
while continuing to belong to that person —
(i)
in a case where the machinery or plant which —
(A)
was provided for any research and development undertaken by him directly in Singapore or by a research and development organisation on his behalf in Singapore; and
(B)
was not provided for the purpose of a trade or business carried on by him,
permanently ceases to be used for any research and development undertaken by him directly in Singapore or by a research and development organisation on his behalf in Singapore, and is not used for the purpose of a trade, profession or business carried on by him; or
(ii)
in any other case, permanently ceases to be used for the purpose of a trade, profession or business carried on by him in Singapore (whether by reason of the discontinuance of the trade, profession or business, or discontinuance of use of such machinery or plant in a trade, profession or business which continues to be carried on in Singapore),
an allowance or a charge, to be known as a balancing allowance or a balancing charge, shall in the circumstances mentioned in this section be made to or, as the case may be, on that person for the year of assessment in the basis period for which that event occurs.
[34/2008]
(1A)  Where the property in machinery or plant passes at less than the open-market price, then for the purpose of determining the amount of any balancing allowance or balancing charge the event shall be treated as if it had given rise to sale moneys of an amount equal to the open-market price of the machinery or plant.
(2)  Where machinery or plant continues to belong to that person after the date on which it permanently ceases to be used for the purposes of a trade, profession or business carried on by him in Singapore, or (as the case may be) for the purpose of any research and development undertaken by him directly in Singapore or by a research and development organisation on his behalf in Singapore, it shall be deemed to have been sold on the date of permanent cessation of use at the open-market price on that date.
[34/2008]
(2A)  Where there are no sale, insurance, salvage or compensation moneys or where the amount of the capital expenditure of the person in question on the provision of the machinery or plant still unallowed as at the time of the event exceeds those moneys, a balancing allowance shall be made, and the amount thereof shall be the amount of the expenditure still unallowed as aforesaid or, as the case may be, the excess thereof over those moneys.
(3)  If the sale, insurance, salvage or compensation moneys exceed the amount, if any, of the said expenditure still unallowed as at the time of the event, a balancing charge shall be made, and the amount on which it is made shall be an amount equal to the excess or, where the said amount still unallowed is nil, to those moneys.
(4)  Notwithstanding anything in subsection (3), in no case shall the amount on which a balancing charge is made on a person exceed —
(a)
the aggregate of the initial allowance, if any, and the annual allowances, if any, made to him under section 19 in respect of the expenditure in question; and
(b)
the special allowances, if any, made to him under section 19A in respect of the expenditure in question.
[13/84]
(5)  Notwithstanding anything in this section but subject to subsection (6A), where a balancing allowance or balancing charge falls to be made under subsection (1) in respect of a motor car to which section 19(3) applies, the sum to be taken in lieu of the open‑market price or sale, insurance, salvage or compensation moneys for the purpose of calculating such balancing allowance or charge shall be ascertained in accordance with the formula
where A
is the open-market price or sale, insurance, salvage or compensation moneys in respect of the motor car; and
B
is the capital expenditure incurred in respect of the motor car.
[37/75; 9/80; 5/83; 49/2004]
(6)  Notwithstanding anything in this section, no balancing allowance shall be made in respect of a motor car within the meaning of section 19(4)(a) which is not, for any basis period after the basis period for the year of assessment 1981, registered as a business service passenger vehicle for the purposes of the Road Traffic Act (Cap. 276).
[9/80; 1/98]
(6A)  Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86), where, in the basis period for any year of assessment, the trade, profession or business, for which purpose the machinery or plant is provided, produces income that is exempt from tax as well as income chargeable with tax, and any balancing allowance or balancing charge arises to be made —
(a)
the balancing allowance shall be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances; and
(b)
such proportion of the balancing charge shall be exempt from tax as appears reasonable to the Comptroller in the circumstances.
[49/2004]
(6B)  Section 14D(4) and (5) shall apply in relation to the balancing allowance to be made to a person under subsection (1)(b)(i) as they apply in relation to the deduction of the expenditure and payments referred to in section 14D(1)(aa), (c) and (f), subject to the following modifications:
(a)
a reference to the amount of the expenditure or payments is a reference to the amount of the balancing allowance;
(b)
a reference to unabsorbed losses is a reference to unabsorbed allowances; and
(c)
a reference to a specified amount of the expenditure or payments is a reference to an amount computed in accordance with the following formula:
where A
is the amount of the balancing allowance that could have been made against the income of the person under subsection (1)(b)(i) if the income had been subject to tax at the rate specified in section 43(1)(a);
B
is the rate of tax specified in section 43(1)(a); and
C
is —
 
(i)
in a case where the concessionary income (as defined in section 14D(5)) derived by the person from the trade or business carried on by him is subject to tax at a single concessionary rate of tax, that rate; or
 
(ii)
in a case where the concessionary income derived by the person from the trade or business carried on by him is subject to tax at 2 or more concessionary rates of tax, the higher or highest of those rates.
[34/2008; 29/2012]
(6C)  Notwithstanding anything in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act, where a balancing charge falls to be made on a person under subsection (1)(b)(i), the amount of the charge shall be deemed to be income of that person that is chargeable to tax at the rate of tax specified in section 43(1)(a).
[34/2008]
(7)  In this section, “open-market price”, in relation to any machinery or plant, means the price which the machinery or plant would have fetched if sold in the open market at the time of the event in question; except that where the Comptroller is satisfied by reason of the special nature of any machinery or plant that it is not practicable to determine an open-market price, he may adopt such other value as appears to him to be reasonable in the circumstances.
Replacement of machinery or plant
21.
—(1)  Where machinery or plant in the case of which any of the events mentioned in section 20(1) has occurred is replaced by the owner thereof and a balancing charge falls to be made on him by reason of that event or, but for this section, would have fallen to be made on him by reason thereof, then, if by notice in writing to the Comptroller he so elects, this section shall have effect.
(2)  If the amount on which the charge would have been made is greater than the capital expenditure on providing the new machinery or plant —
(a)
the charge shall be made only on an amount equal to the difference;
(b)
no initial allowance, no balancing allowance and no annual allowance shall be made or allowed in respect of the new machinery or plant or the expenditure on the provision thereof; and
(c)
in considering whether any, and if so what, balancing charge falls to be made in respect of the expenditure on the new machinery or plant, there shall be deemed to have been made in respect of that expenditure an initial allowance equal to the full amount of that expenditure.
(3)  If the capital expenditure on providing the new machinery or plant is equal to or greater than the amount on which the charge would have been made —
(a)
the charge shall not be made;
(b)
the amount of any initial allowance in respect of the said expenditure shall be calculated as if the expenditure had been reduced by the amount on which the charge would have been made;
(c)
in considering what annual allowance is to be made in respect of the new machinery or plant, there shall be left out of account a proportion of the machinery or plant equal to the proportion which the amount on which the charge would have been made bears to the amount of the said expenditure; and
(d)
in considering whether any, and if so what, balancing allowance or balancing charge falls to be made in respect of the new machinery or plant, the initial allowance in respect thereof shall be deemed to have been increased by an amount equal to the amount on which the charge would have been made.
(4)  This section shall not apply to the provision of any new motor car for which no allowance is allowed by virtue of section 19(5).
[32/99]
(5)  For the purpose of this section, where the capital expenditure incurred in providing, in the basis period for the year of assessment 2013 or any preceding year of assessment, a new motor car registered outside Singapore and used exclusively outside Singapore exceeds $35,000, the expenditure incurred shall be deemed to be $35,000.
[19/2013]
Expenditure on machinery or plant
22.  Expenditure on the provision of machinery or plant shall include capital expenditure on alterations to an existing building incidental to the installation of that machinery or plant for the purposes of the trade, profession or business.
Order of set-off of allowances
22A.
—(1)  Where for any year of assessment the allowances consist of allowances a person is entitled to or allowances made to a person under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 for that year of assessment and any previous year of assessment added to and deemed to form part of the corresponding allowance for the year of assessment under section 23(1), the allowances shall be deducted in the following order:
(a)
firstly, any balance of allowance from any previous year of assessment added to and deemed to form part of the corresponding allowance for the year of assessment under section 23(1); and
(b)
secondly, any allowance for that year of assessment falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20.
[21/2003; 29/2010]
(2)  For the purposes of subsection (1)(a), the balance of allowance for the earliest year of assessment shall be deemed to have been deducted first, followed by the balance of allowance for the next earliest year of assessment, and so on.
[21/2003]
Carry forward of allowances
23.
—(1)  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 allowance falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20, then, so long as the person entitled thereto continues to carry on the trade, profession or business in respect of the gains or profits of which the allowance falls to be made, the balance of the allowance shall, subject to subsection (3), be added to, and be deemed to form part of, the corresponding allowance, if any, for the next succeeding year of assessment, and, if no such corresponding allowance falls to be made for that year, shall be deemed to constitute the corresponding allowance for that year, and so on for subsequent years of assessment.
[28/80; 26/93; 37/2002; 21/2003; 29/2010]
(2)  Where any person entitled to the allowances under sections 16, 17, 18B and 18C in respect of a building or structure derives income from the letting of that building or structure, subsection (1) shall, in relation to the allowances under those sections, apply to him so long as he continues to derive such income, whether or not he is carrying on a business in respect of the letting of the building or structure.
[13/84; 29/2010]
(3)  Where any allowance for any year of assessment falling to be made to any person under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 is deducted against income of the person from other sources under section 35(1), 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, the amount of such allowance shall be deducted from the balance in subsection (1).
[21/2003; 49/2004; 34/2005; 27/2009; 29/2010]
(4)  No balance shall be added to and be deemed to form part of the corresponding allowance, if any, to be given to a company under subsection (1) unless the Comptroller is satisfied that the shareholders of the company on the last day of the year in which the allowances arose were substantially the same as the shareholders of the company on the first day of the year of assessment in which such allowances would otherwise be available under this section and such a balance shall not be allowed in any subsequent year of assessment.
[26/73]
(5)  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 (4).
[3/89; 11/94]
(6)  Upon such exemption, the balance of the allowances referred to in subsection (1) may be added to and be deemed to form part of the corresponding allowance to be given to that company under that subsection but only for deduction against the gains or profits derived from the same trade or business in respect of which the allowances would have been made.
[3/89; 11/94]
(7)  For the purpose of subsection (4) —
(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.
[26/73; 34/2005]
(8)  For the purpose of subsection (7), 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]
Special provisions as to certain sales
24.
—(1)  This section, except subsection (5), shall have effect in relation to any sale of any property where the buyer is a body of persons over whom the seller has control, or the seller is a body of persons over whom the buyer has control, or both the seller and buyer are bodies of persons and some other person has control over both of them, and the sale is not one to which section 33 applies.
[34/2005]
(2)  References in subsection (1) to a body of persons include references to a company or a partnership.
(3)  Where the parties to the sale by notice in writing to the Comptroller so elect —
(a)
the like consequences shall ensue for the purposes of sections 16 to 21 as would have ensued if the property had been sold —
(i)
in the case of an industrial building or structure, for a sum equal to the residue of expenditure on the construction or purchase (pursuant to a sale and purchase agreement entered into on or after 1st January 2006) of that building or structure immediately before the sale, computed in accordance with section 17;
(ii)
in the case of machinery or plant, for a sum equal to the amount of the expenditure on the provision thereof still unallowed immediately before the sale, computed in accordance with section 20;
(iii)
in the case of an Indefeasible Right of Use, for a sum equal to the amount of capital expenditure remaining unallowed immediately before the sale, computed in accordance with section 19D;
(b)
notwithstanding anything in section 19, where the sale is a sale of machinery or plant, no initial allowance shall be made to the buyer;
(c)
notwithstanding anything in section 19A, where the sale is a sale of machinery or plant, the special allowances provided under that section shall continue to be available as if no sale had taken place;
(d)
notwithstanding anything in section 19D, where the sale is a sale of an Indefeasible Right of Use, the writing-down allowances provided under that section shall continue to be available as if no sale had taken place; and
(e)
notwithstanding anything in the preceding provisions of this section or in sections 17, 19D and 20, such balancing charge, if any, shall be made on the buyer on any event occurring after the date of the sale as would have fallen to be made on the seller if the seller had continued to own the property and had done all such things and been allowed all such allowances and deductions in connection therewith as were done by or allowed to the buyer.
[13/84; 21/2003; 7/2007]
(4)  No election may be made under subsection (3) unless before the sale in the case of the seller and after the sale in the case of the buyer the property is used in the production of income chargeable under the provisions of this Act and unless the machinery or plant was not leased by the seller to the buyer before the sale.
[13/84]
(4A)  No election may be made under subsection (3) for the sale of an industrial building or structure for which an option to purchase is granted or a sale and purchase agreement is entered into on or after 23rd February 2010, or which is transferred on or after that date.
[29/2010]
(4B)  Subsection (4A) does not apply to a transfer of property to which section 34C(8) and (9) apply.
[29/2010]
(5)  Where a change occurs in a partnership of persons carrying on any trade, business or profession by reason of retirement or death, or the dissolution of the partnership as to one or more of the partners, or the admission of a new partner, and where no election is made under subsection (3), any property of the partnership shall be treated as if the property had been sold —
(a)
to all the remaining partners and new partners of the partnership on the date the change occurs; and
(b)
at the open-market price.
[34/2005]
(6)  In subsection (5), “open-market price” has the same meaning as in section 20(7).
[34/2005]
25.  [Spent]