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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

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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Print   Link to In-Force Version
On 01/10/2014, you requested the version in force on 01/10/2014 incorporating all amendments published on or before 01/10/2014. The closest version currently available is that of 31/03/2014.
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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, 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]
(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]
(1B)  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]
(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]
(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 2015 (both years inclusive), and an allowance is made under subsection (1A) or (1B), 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) or (1B) 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, and deposit or deposits made, during that basis period for that right bears to the total amount of all instalments and deposits under the agreement for that right.
[29/2010]
(1D)  No writing-down allowance under subsections (1A) and (1B) 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]
(2)  The total writing-down allowances to be made to a company under subsection (1) and subsection (1A) or (1B) for any year of assessment shall be an amount equal to 20% of the aggregate of —
(a)
the capital expenditure incurred by it on the acquisition of the intellectual property rights; and
(b)
the writing-down allowances under subsection (1A) or (1B).
[29/2010]
(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; and
(b)
the claim is made by the company in such manner and subject to such conditions as the Comptroller may require.
[21/2003]
(2B)  The Minister or such person as he may appoint may in any particular case waive the requirement under subsection (2A) in respect of any intellectual property rights acquired on or after 17th February 2006, subject to such conditions as he may impose.
[7/2007]
(2C)  Notwithstanding subsections (1) 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]
(2D)  No writing-down allowances under subsections (1A) and (1B) shall be made in respect of any intellectual property rights in respect of which the requirement under subsection (2A) has been waived under subsection (2B), or any approved intellectual property rights referred to under subsection (2C).
[29/2010]
(2E)  Where writing-down allowances have been made to any company under subsection (1A) or (1B) in respect of the acquisition of any intellectual property rights and any of the following events occurs within 5 years 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) and (1B) for the year of assessment relating to the basis period in which the event occurs and for any subsequent year of assessment; and
(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) or (1B) 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]
(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) 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) and (2C).
[24/2001; 21/2003; 27/2009; 29/2010]
(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) and (2C) is a reference to the balance of such allowances made under subsections (1) 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]
(5)  Where a company to whom writing-down allowances have been made under subsections (1) 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]
(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 under subsections (1), (1A), (1B) and (2C) shall be made 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 2015.
[7/2007; 53/2007; 27/2009; 29/2010]
(10A)  No writing-down allowance under subsections (1), (1A), (1B) and (2C) shall be made for any capital expenditure incurred by a company referred to in subsections (1), (1A), (1B) 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]
(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) and (1B) 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]
(10D)  No allowance under subsections (1A) and (1B) 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]
(11)  In this section —
“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]
(12)  In subsections (1A) and (1B), 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]