On 26/05/2013,
you requested for the version in force on 26/05/2013
incorporating all amendments published on or before 26/05/2013.
The closest version currently available is that of 01/01/2008.
14P.
—(1) Where a company transfers, in the basis period for the year of assessment 2007 or any subsequent year of assessment, treasury shares held by it to any person under a stock option scheme or a share award scheme by reason of any office or employment held in Singapore by that person, there shall be allowed a deduction to that company for that year of assessment.
[7/2007]
(2) Subject to subsection (8), the amount of deduction to be allowed to a company under subsection (1) shall be the cost to the company of acquiring the treasury shares transferred to the person less any amount payable by that person for the treasury shares.
[7/2007]
(3) For the purpose of subsection (2), the cost to the company of acquiring the treasury shares transferred to any person shall, at the election of the company, be determined —
(a)
on the basis that treasury shares acquired by the company at an earlier point in time are deemed to be transferred first;
(b)
in accordance with the formula
A | x | C, | |
B |
where | A | is the number of treasury shares transferred by the company to the person; |
B | is the total number of treasury shares held by the company immediately before the transfer to the person; and | |
C | is the total cost of acquiring all the treasury shares held by the company immediately before the transfer to the person; or |
(c)
on the basis of the aggregate cost of all treasury shares transferred to all persons within each regular interval under subsection (1) computed in accordance with the formula
D | |||
________ | x | (G + H), | |
(E + F) |
where | D | is the total number of treasury shares transferred under subsection (1) by the company to all persons within that interval; |
E | is the total number of treasury shares held by the company at the end of the interval immediately preceding that interval; | |
F | is the total number of treasury shares acquired by the company within that interval; | |
G | is the total cost of acquiring all the treasury shares held by the company at the end of the interval immediately preceding that interval; and | |
H | is the total cost of acquiring all the treasury shares by the company within that interval. |
[7/2007]
(4) Any election for determining the cost of acquiring treasury shares under subsection (3) or for the length of any regular interval made by a company shall be irrevocable.
[7/2007]
(5) Where any amount payable by a person for any treasury shares transferred to him exceeds the cost to the company of acquiring the treasury shares transferred as determined under subsection (3), the amount of the excess shall be credited to an account to be kept by the company for the purpose of this section.
[7/2007]
(6) Where there is any balance in the account kept by the company under subsection (5) and any treasury shares are subsequently transferred by the company to any person under subsection (1), the cost to the company of acquiring the treasury shares as determined under subsection (3) shall be reduced —
(a)
where the amount of the balance is equal to or exceeds the amount of the cost, to zero; or
(b)
where the amount of the balance is less than the amount of the cost, by the amount of the balance,
and the amount of the reduction shall be debited to the account.
[7/2007]
(7) For the purpose of this section, a company transfers treasury shares held by it to a person when the person acquires the legal and beneficial interest in the treasury shares.
[7/2007]
(8) Where a holding company transfers treasury shares held by it to any person employed at any time by a subsidiary company of the holding company under a stock option scheme or a share award scheme —
(a)
no deduction shall be allowed to the holding company under subsection (1);
(b)
if any amount is paid or payable by the subsidiary company to the holding company for the transfer of the treasury shares, there shall be allowed to the subsidiary company, on the date of the transfer of the shares or of the payment to the holding company for the shares, whichever is the later, a deduction under subsection (1) for the amount, or an amount equal to the cost to the holding company of acquiring the treasury shares transferred to that person as determined under less any amount payable by that person for the treasury shares, whichever is the less; and
(c)
(8A) For the purpose of subsection (8)(b), the amount equal to the cost to the holding company of acquiring the treasury shares transferred to a person shall be determined —
(a)
in accordance with subsection (3); or
(b)
where the holding company is incorporated outside Singapore and the following conditions are satisfied, on the basis that the treasury shares acquired by the holding company at the latest point in time are deemed to be transferred first:
(i)
the basis is in accordance with the accounting policy of the group of companies of which the holding company is a member;
(ii)
if there are applicable accounting principles which are generally accepted in the country in which the holding company is incorporated, the basis is in accordance with those principles;
(iii)
the basis is consistently adopted by the holding company unless otherwise allowed by the Comptroller; and
(iv)
the Comptroller is satisfied that the basis is not adopted for the purposes of deriving any tax benefit or obtaining any tax advantage.
(9) In this section —
“holding company” and “subsidiary company” have the same meanings as in section 5 of the Companies Act (Cap. 50);
“regular interval”, in relation to a company, means an interval in a number of equal periods where —
(a)
the period of each interval is elected by the company; and
(b)
the aggregate period of all intervals in a basis period would be equal to the basis period.
[7/2007]