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Enacting Formula

 
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Amendment of section 14A
12.  Section 14A of the principal Act is amended —
(a)
by deleting subsection (1) and substituting the following subsections:
(1)  Subject to this section, where a person carrying on a trade or business has incurred —
(a)
patenting costs during the period from 1st June 2003 to the last day of the basis period for the year of assessment 2010; or
(b)
qualifying intellectual property registration costs during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2015 (both years inclusive),
for the purposes of that trade or business, there shall be allowed to him a deduction of the amount of such costs.
(1A)  For the purpose of ascertaining the income of any person carrying on a trade or business during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2015 (both years inclusive), there shall be allowed in respect of all his trades and businesses, in addition to any deduction allowed under subsection (1), a deduction of 150% of the lower of the qualifying intellectual property registration costs incurred for the purposes of those trades and businesses during the basis period and $300,000.
(1B)  For the year of assessment 2011 and the year of assessment 2012, instead of the deduction under subsection (1A) in respect of each year of assessment, a person shall be allowed a deduction computed in accordance with the formula
A x 150%,
where A is —
(a)
for the year of assessment 2011, the lower of —
(i)
the qualifying intellectual property registration costs incurred during the basis period for that year of assessment; and
(ii)
$600,000; and
(b)
for the year of assessment 2012, the lower of —
(i)
the qualifying intellectual property registration costs incurred during the basis period for that year of assessment; and
(ii)
the balance after deducting from $600,000 the lower of the amounts specified in paragraph (a)(i) and (ii).
(1C)  For the purposes of subsections (1A) and (1B), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has incurred qualifying intellectual property registration costs during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2015 (both years inclusive) in respect of such firms for the purposes of his trade or business, the deduction that may be allowed to him for those costs in respect of all his trades and businesses shall not exceed the amount computed in accordance with subsection (1A) or, in the case of the year of assessment 2011 and the year of assessment 2012, the amounts computed in accordance with subsection (1B)(a) and (b), respectively.
(1D)  For the purposes of subsections (1A) and (1B), where a partnership carrying on a trade or business has incurred qualifying intellectual property registration costs during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2015 (both years inclusive) for the purposes of its trade or business, the aggregate of the deductions that may be allowed to all the partners of the partnership for those costs in respect of all the trades and businesses of the partnership shall not exceed the amount computed in accordance with subsection (1A) or, in the case of the year of assessment 2011 and the year of assessment 2012, the amounts computed in accordance with subsection (1B)(a) and (b), respectively.”;
(b)
by deleting subsection (2) and substituting the following subsection:
(2)  The claim for deduction under subsection (1), (1A) or (1B) shall be allowed to a person only if —
(a)
there is an undertaking by the person that he would be the proprietor of the patent or registered trade mark, the registered owner of the registered design or the grantee of the plant variety, as the case may be, when the patent is granted, the trade mark or design is registered or the plant variety is granted protection; and
(b)
the claim is made by the person in such manner and subject to such conditions as the Comptroller may require.”;
(c)
by inserting, immediately after the words “patenting costs” wherever they appear in subsections (3), (4) and (5), the words “or qualifying intellectual property registration costs, as the case may be,”;
(d)
by deleting the words “this section” wherever they appear in subsections (4) and (5) and substituting in each case the words “subsection (1)”;
(e)
by inserting, immediately after subsection (5), the following subsection:
(5A)  Where —
(a)
a deduction has been made to any person under subsection (1A) or (1B) in respect of any qualifying intellectual property registration costs; and
(b)
the person sells, transfers or assigns all or any part of the qualifying intellectual property rights or the application for the registration or grant of the qualifying intellectual property rights for which such costs were incurred, within a period of one year from the date of filing of the application,
the deduction allowed under subsection (1A) or (1B) (as the case may be) shall be deemed as income of the person for the year of assessment relating to the basis period in which the sale, transfer or assignment occurs.”;
(f)
by deleting the words “or elsewhere” in paragraph (a) of the definition of “patenting costs” in subsection (6) and substituting the words “or an equivalent registry outside Singapore”;
(g)
by inserting, immediately after the definition of “patenting costs” in subsection (6), the following definitions:
“ “qualifying intellectual property registration costs” means the fees paid to —
(a)
the Registry of Patents, Registry of Trade Marks, Registry of Designs or Registry of Plant Varieties in Singapore or an equivalent registry outside Singapore for the —
(i)
filing of an application for a patent, for registration of a trade mark or design, or for the grant of protection of a plant variety;
(ii)
search and examination report on the application for a patent;
(iii)
examination report on the application for grant of protection of a plant variety; or
(iv)
grant of a patent; and
(b)
any person acting as an agent for —
(i)
applying for any patent, for the registration of a trade mark or design, or for the grant of protection of a plant variety, in Singapore or elsewhere;
(ii)
preparing specifications or other documents for the purposes of the Patents Act (Cap. 221), the Trade Marks Act (Cap. 332), the Registered Designs Act (Cap. 266), the Plant Varieties Protection Act (Cap. 232A) or the intellectual property law of any other country relating to patents, trade marks, designs or plant varieties; or
(iii)
giving advice on the validity or infringement of any patent, registered trade mark, registered design or grant of protection of a plant variety;
“qualifying intellectual property right” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of any patent, registered trade mark or design, or grant of protection of a plant variety;”;
(h)
by inserting, immediately after subsection (6), the following subsection:
(7)  In this section, “patenting costs” and “qualifying intellectual property registration costs” exclude any expenditure to the extent that it is subsidised by grants or subsidies from the Government or a statutory board.”; and
(i)
by deleting the words “patenting costs” in the section heading and substituting the words “costs for protecting intellectual property”.