On 18/06/2013,
you requested for the version in force on 18/06/2013
incorporating all amendments published on or before 18/06/2013.
The closest version currently available is that of 18/04/2013.
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);
[Act 29 of 2012 wef 01/03/2012]
(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);
[Act 29 of 2012 wef 01/03/2012]
(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;
[Act 29 of 2012 wef 01/03/2012]
(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);
[Act 29 of 2012 wef 01/03/2012]
(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]
(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.
[Act 29 of 2012 wef 01/03/2012]
(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
[Act 29 of 2012 wef 01/03/2012]
*(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 the 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 the less; and
* The words in italics in paragraph (b) shall have effect from the year of assessment 2007.
(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 wef 06/12/2007]
[27/2009 wef 29/12/2009]
* This Subsection will be amended as set out in section 15(b) of the Income Tax (Amendment No. 2) Act 2007 (Act 53 of 2007) from the year of assessment 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)
is registered outside Singapore and used exclusively outside Singapore.
[32/99]
**(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 (Cap. 276); 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]
** The words in italics in subsection (5) shall have effect from the year of assessment 2009.
(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]
* Subsection (5B) shall have effect from the year of assessment 2009.
(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 2015 (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.
[Act 34/2008, wef Y/A 2009 & sub Ys/A]
[29/2010 wef 22/11/2010]
(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”.
[22/2011 wef Y/A 2011 & Sub Ys/A]
[Act 29 of 2012 wef Y/A 2012 & Sub Ys/A]