On 19/05/2013,
you requested for the version in force on 19/05/2013
incorporating all amendments published on or before 19/05/2013.
The closest version currently available is that of 01/01/2008.
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%,
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;
[Act 34/2008, wef Y/A 2009 & Sub Ys/A:2008-ACT-34]
(f)
any sum contributed by an employer in any calendar year 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 and which is not deemed to be the income of the employee under section 10C(4), subject to a maximum deduction of $1,500 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 (Cap. 36) 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;
(g)
zakat, fitrah or any religious dues, payment of which is made under any written law;
(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]
(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 bear 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)
is registered outside Singapore and used exclusively outside Singapore.
[32/99]
(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 specified percentage of the total remuneration of his employees in that basis period, the amount of the excess medical expenses shall not be allowed as deductions.
[Act 34/2008, wef Y/A 2008 & Sub Ys/A:2008-ACT-34]
[26/93; 34/2005]
(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 specified percentage of the total remuneration of his employees 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.
[Act 34/2008, wef Y/A 2008 & Sub Ys/A:2008-ACT-34]
[26/93; 34/2005]
(6A) For the purpose of subsections (5) and (6), the specified percentage for any year of assessment shall be —
(a)
2% in the case of an employer who 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)
1% in any other case.
[34/2005]
(6B) Subsection (6A) shall apply to the year of assessment relating to the basis period which commenced on or after 1st April 2004 and any subsequent year of assessment.
[34/2005]
(7) The references to medical expenses in subsections (5) and (6) shall be read as references to medical expenses which would, but for subsection (5), be allowable as deductions under this Act.
[Act 34/2008, wef Y/A 2008 & Sub Ys/A:2008-ACT-34]
[26/93]
(8) In this section —
“gross rate of pay” has the same meaning as in section 2 of the Employment Act (Cap. 91);
“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;
“part-time employee” has the same meaning as in section 66A of the Employment Act;
“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;
“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]