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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 21/10/2014, you requested the version as published on or before 21/10/2014.
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Deductions allowed
14.
—(1)  For the purpose of ascertaining the income of any person for any period from any source chargeable with tax under this Act (referred to in this Part as the income), there shall be deducted all outgoings and expenses wholly and exclusively incurred during that period by that person in the production of the income, including —
(a)
except as provided in this section —
(i)
any sum payable by way of interest; and
(ii)
any sum payable in lieu of interest or for the reduction thereof, as may be prescribed by regulations (including the restriction of the deduction of the sum in respect of money borrowed before the basis period relating to the year of assessment 2008),
upon any money borrowed by that person where the Comptroller is satisfied that such sum is payable on capital employed in acquiring the income;
(b)
rent payable by any person in respect of any land or building or part thereof occupied by him for the purpose of acquiring the income;
(c)
any expenses incurred for repair of premises, plant, machinery or fixtures employed in acquiring the income or for the renewal, repair or alteration of any implement, utensil or article so employed:
Provided that no deduction shall be made for the cost of renewal of any plant, machinery or fixture, which is the subject of an allowance under section 19 or 19A; or for the cost of reconstruction or rebuilding of any premises, buildings, structures or works of a permanent nature;
(d)
bad debts incurred in any trade, business, profession or vocation, which have become bad during the period for which the income is being ascertained, and doubtful debts to the extent that they are respectively estimated, to the satisfaction of the Comptroller, to have become bad during that period, notwithstanding that those bad or doubtful debts were due and payable before the commencement of that period:
Provided that —
(i)
all sums recovered during that period on account of amounts previously written off or allowed in respect of bad or doubtful debts, other than debts incurred before the commencement of the basis period for the first year of assessment under this Act, shall for the purposes of this Act be treated as receipts of the trade, business, profession or vocation for that period;
(ii)
the debts in respect of which a deduction is claimed were included as a trading receipt in the income of the year within which they were incurred;
(e)
any sum contributed by an employer to an approved pension or provident fund or society or any pension or provident fund constituted outside Singapore in respect of any of his employees engaged in activities relating to the production of the income of the employer, the contribution of which sum by the employer was obligatory by reason of any contract of employment or of any provision in the rules or constitution of the fund or society:
Provided that in the case of any contribution to the Central Provident Fund or any approved pension or provident fund designated by the Minister under section 39(8) —
(i)
a deduction in respect of any such contribution by an employer in respect of an employee for any period —
(A)
commencing on or after 1st July 1993 and before 1st July 1994 shall not exceed 181/2%;
(B)
commencing on or after 1st July 1994 and before 1st January 1999 shall not exceed 20%;
(C)
commencing on or after 1st January 1999 and before 1st April 2000 shall not exceed 10%;
(D)
commencing on or after 1st April 2000 and before 1st January 2001 shall not exceed 12%;
(E)
commencing on or after 1st January 2001 shall not exceed 16%;
(F)
commencing on or after 1st October 2003 shall not exceed 13%;
(G)
commencing on or after 1st July 2007 shall not exceed 141/2%;
(H)
commencing on or after 1st September 2010 shall not exceed 15%;
(I)
commencing on or after 1st March 2011 shall not exceed 151/2%;
(J)
commencing on or after 1st September 2011 shall not exceed 16%,
of the remuneration paid by the employer to the employee for that period, and “remuneration” in this proviso means that part of an employee’s emoluments by reference to which his employer’s contributions are calculated;
(ii)
where any such fund or society is first established and a special contribution is made thereto by the employer whereby persons in his employment whose employment commenced prior to the establishment of the fund or society may qualify for the benefits thereunder in respect of such prior employment, the Comptroller may, when approving the fund or society, authorise such deductions in respect of that special contribution as he thinks fit;
(iii)
no deduction shall be allowed in respect of any sum contributed by an employer for the period on or after 1st January 1999 to the Central Provident Fund in respect of an employee who holds a professional visit pass or a work pass or who would be required to obtain such a pass if he were to work in Singapore:
And provided that no deduction shall be allowed in respect of any contribution or part thereof to a pension or provident fund constituted outside Singapore made in respect of an employee, if the employee has been exempted from tax on such contribution or part thereof under section 13N;
(f)
any sum contributed by an employer in any calendar year before 2013 to the medisave account maintained under the Central Provident Fund Act (Cap. 36) in respect of any of his employees engaged in activities relating to the production of the income of the employer, subject to a maximum deduction of the amount in subsection (1A) for that year for each employee:
Provided that no deduction shall be allowed in respect of any sum contributed by an employer for the period on or after 1st January 1999 to the medisave account maintained under the Central Provident Fund Act in respect of an employee who holds a professional visit pass or a work pass or who would be required to obtain such a pass if he were to work in Singapore;
(fa)
any voluntary contribution in cash made in 2011 or 2012 by a person of a description prescribed by the Minister for the purposes of this paragraph, to the medisave account of a self‑employed individual maintained under the Central Provident Fund Act, subject to a maximum deduction of the amount in subsection (1A) for that year for each individual:
Provided that the amount of voluntary contribution does not exceed the amount allowable under the Central Provident Fund Act and is within the medisave contribution ceiling prevailing at the time the contribution is made;
(fb)
any sum contributed by an employer in 2013 or any subsequent year to the medisave account maintained under the Central Provident Fund Act in respect of any of his employees engaged in activities relating to the production of the income of the employer, up to a maximum deduction of $1,500 for that year for each employee’s medisave account, less any previous contribution made to that medisave account in that year by that employer in his capacity as a person of a prescribed description under paragraph (fc) (if applicable) and that is deductible under that provision:
Provided that no deduction shall be allowed in respect of any sum contributed by an employer to the medisave account maintained under the Central Provident Fund Act in respect of an employee who holds a professional visit pass or a work pass or who would be required to obtain such a pass if he were to work in Singapore;
(fc)
any voluntary contribution in cash made in 2013 or any subsequent year by a person of a description prescribed by the Minister for the purposes of this paragraph, to the medisave account of a self-employed individual maintained under the Central Provident Fund Act, up to a maximum deduction of $1,500 for that year for each individual’s medisave account, less any previous contribution made to that medisave account in that year by the person of the prescribed description in his capacity as an employer under paragraph (fb) (if applicable) and that is deductible under that provision;
(g)
zakat, fitrah or any religious dues, payment of which is made under any written law; and
(h)
where the income is derived from the working of a mine or other source of mineral deposits of a wasting nature, such deductions in respect of capital expenditure as may be prescribed in rules made under section 7.
[37/75; 7/79; 28/80; 5/83; 7/85; 31/86; 1/90; 23/90; 2/92; 26/93; 11/94; 32/95; 1/98; 32/99; 24/2001; 21/2003; 49/2004; 30/2007; 53/2007; 34/2008; 29/2010; 22/2011; 29/2012; 19/2013]
(1A)  For the purposes of subsection (1)(f) and (fa), the maximum amount which may be deducted for contributions made in any year to the medisave account maintained under the Central Provident Fund Act of any individual is $1,500 less —
(a)
any deduction allowed under subsection (1)(f) for any previous contribution made by the same or another employer to that medisave account in that year; and
(b)
any deduction allowed under subsection (1)(fa) for any previous contribution made by the same or another person to that medisave account in that year.
[29/2012]
(2)  Notwithstanding subsection (1), payments made by way of compensation for injuries or death, salaries, wages or similar emoluments or death gratuities to an employee (or his legal representative) who is the husband, wife or child of —
(a)
any employer;
(b)
any partner of the firm in which that employee is employed;
(c)
any individual who by himself or with his spouse or child or all of them have the ability to control, directly or indirectly, the company in which that employee is employed; or
(d)
any individual whose spouse or child or all of them have the ability to control, directly or indirectly, the company in which that employee is employed,
shall be allowed as deductions only to the extent to which, in the opinion of the Comptroller, they are reasonable in amount having regard to the services performed by that employee.
[26/93]
(3)  Notwithstanding subsection (1), where outgoings and expenses falling within that subsection are incurred, whether directly or in the form of reimbursements, in respect of a motor car (whether or not owned by the person incurring the outgoings and expenses) to which this subsection applies, the sum to be allowed as a deduction shall be limited to the amount which bears to such outgoings and expenses the same proportion as $35,000 bears to the capital expenditure incurred by the owner in respect of the motor car, where such capital expenditure exceeds $35,000.
[7/79]
(3A)  Any deduction for the cost of renewal of a motor car to which subsection (3) applies shall not exceed $35,000.
(4)  Subsections (3) and (3A) 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)
[Deleted by Act 19 of 2013]
[32/99; 19/2013]
(5)  Notwithstanding subsection (1), where, in the basis period for any year of assessment, any employer (other than an employer who derives any income from any trade, business, profession or vocation which is wholly or partly exempt from tax or subject to tax at a concessionary rate of tax under this Act or the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86)) incurs medical expenses falling within that subsection in excess of the maximum allowable amount in that basis period, the amount of the excess medical expenses shall not be allowed as deductions.
[26/93; 34/2005; 34/2008]
(6)  Where, in the basis period for any year of assessment, any employer derives any income from any trade, business, profession or vocation which is wholly or partly exempt from tax or subject to tax at a concessionary rate of tax under this Act or the Economic Expansion Incentives (Relief from Income Tax) Act and incurs medical expenses in excess of the maximum allowable amount in that basis period, an amount equal to the excess medical expenses shall be deemed to be income of the employer chargeable to tax at the rate of tax under section 42(1) or 43(1), as the case may be, for that year of assessment.
[26/93; 34/2005; 34/2008]
(6A)  For the purpose of subsections (5) and (6), the maximum allowable amount in the basis period for any year of assessment shall be —
(a)
2% of the total remuneration of the employer’s employees in that basis period in a case where the employer has —
(i)
contributed the specified amount into the medisave accounts maintained under the Central Provident Fund of —
(A)
at least 20% of the number of local employees who are employed by him as at the first day of the basis period for that year of assessment, for every calendar month in that basis period they are employed by the employer; and
(B)
every local employee who commences his employment with him during the basis period for that year of assessment, for the calendar month he commences his employment and every subsequent calendar month in that basis period he is employed by the employer; or
(ii)
incurred expenses in or in connection with the provision of a specified insurance plan to cover, for every calendar month in the basis period for that year of assessment, the cost of medical treatment of at least 50% of the number of local employees who are employed by him as at the first day of that basis period; and
(b)
in any other case, the amount determined in accordance with the formula in subsection (6B).
[34/2005; 34/2008]
(6B)  For the purpose of subsection (6A)(b), the maximum allowable amount in any basis period shall be ascertained —
(a)
where the total amount of expenses incurred by the employer in providing qualifying insurance in that basis period is nil, in accordance with the formula
where A
is the lower of —
 
(i)
the total amount of medical expenses incurred by the employer for his employees in that basis period (excluding the total amount of general contributions made by the employer); and
 
(ii)
1% of the total remuneration of his employees in that basis period; and
B
is the lower of —
 
(i)
the total amount of general contributions made by the employer in that basis period; and
 
(ii)
the difference between 2% of the total remuneration of his employees in that basis period and A; and
(b)
where the total amount of expenses incurred by the employer in providing qualifying insurance in that basis period is not nil, in accordance with the formula
where C
is the lower of —
 
(i)
the total amount of expenses incurred by the employer in providing riders for his employees in that basis period; and
 
(ii)
1% of the total remuneration of his employees in that basis period; and
D
is the lower of —
 
(i)
the total amount of medical expenses incurred by the employer for his employees in that basis period (excluding the total amount of expenses incurred by the employer in providing riders for his employees); and
 
(ii)
the difference between 2% of the total remuneration of his employees in that basis period and C.
[34/2008]
(6C)  For the purpose of subsection (6B), a reference to expenses incurred by an employer in providing qualifying insurance excludes any reimbursement in cash by the employer of the employee for payment by the employee of premiums on such qualifying insurance.
[34/2008]
(7)  The references to medical expenses in subsections (5), (6) and (6B) shall be read as references to medical expenses which would, but for subsection (5), be allowable as deductions under this Act.
[26/93; 34/2008]
(8)  In this section —
“co-payment” means the part of the amount of any claim, after deducting the deductible, which a person insured under the MediShield Scheme or an integrated medical insurance plan has to bear under the Scheme or plan;
“deductible” means the amount of any claim which a person insured under the MediShield Scheme or an integrated medical insurance plan has to bear before the insurer becomes liable to make payment under the Scheme or plan;
“general contribution” means any contribution falling within subsection (1)(f) which is not —
(a)
a contribution falling within subsection (6A)(a)(i); or
(b)
a sum paid by an employer to the medisave account maintained under the Central Provident Fund Act in respect of any of his employees as reimbursement of the employee for premiums paid or payable by the employee on a qualifying insurance;
“gross rate of pay” has the same meaning as in section 2 of the Employment Act (Cap. 91);
“integrated medical insurance plan” has the same meaning as in the regulations made under section 77(1)(k) of the Central Provident Fund Act;
“local employee” means a full-time or part-time employee who is a citizen or permanent resident of Singapore;
“medical expenses” means expenses incurred in or in connection with the provision of medical treatment and includes —
(a)
expenses incurred in or in connection with the provision of maternity health care, natal care, and preventive and therapeutic treatment;
(b)
expenses incurred in or in connection with the provision of a medical clinic by the employer;
(c)
cash allowance in lieu of medical expenses;
(d)
expenses incurred in or in connection with the provision of insurance against the cost of medical treatment; and
(e)
contributions which are deductible under subsection (1)(f);
“medical treatment” includes all forms of treatment for, and procedures for diagnosing, any physical or mental ailment, infirmity or defect;
“MediShield Scheme” means the MediShield Scheme established and maintained under section 53 of the Central Provident Fund Act;
“part-time employee” has the same meaning as in section 66A of the Employment Act;
“qualifying insurance”, in relation to any basis period of an employer, means medical insurance under the MediShield Scheme or an integrated medical insurance plan that is provided by an employer to employees to cover the cost of medical treatment of —
(a)
at least 20% of the number of local employees who are employed by the employer as at the first day of the basis period; and
(b)
every local employee who commences his employment with the employer during the basis period,
for every calendar month or part thereof in the basis period that the employees are employed by the employer;
“remuneration” means any wage, salary, leave pay, fee, commission, bonus, gratuity, allowance, other emoluments paid in cash by or on behalf of an employer and contributions to any approved pension or provident fund by any employer which are allowable as deductions under this Act, but does not include any director’s fee, medical expense, cash allowance in lieu of medical expenses and benefit-in-kind;
“rider” means any insurance under which the insurer of the rider is liable to pay in full or in part the deductible or co-payment relating to the MediShield Scheme or an integrated medical insurance plan;
“specified amount”, in relation to any calendar month, means —
(a)
in the case of a full-time employee who falls under subsection (6A)(a)(i), an amount equal to at least 1% of the employee’s gross rate of pay for the calendar month, subject to a minimum contribution of $16 per calendar month;
(b)
in the case of a part-time employee who falls under subsection (6A)(a)(i), an amount equal to at least 1% of the employee’s gross rate of pay for the calendar month;
“specified insurance plan” means a medical insurance plan sponsored by an employer that —
(a)
confers hospitalisation benefits during the period of employment of an employee and up to a period of 12 months immediately after the employee leaves his employment for any reason; and
(b)
treats the employee as being continuously insured when he is employed by another employer who provides him with an insurance plan that confers the hospitalisation benefits described in paragraph (a).
[26/93; 32/95; 34/2005; 34/2008]