Writing-down allowances for approved cost-sharing agreement for research and development activities
19C.—(1)  Subject to this section, where a person carrying on a trade or business has incurred expenditure under any approved cost-sharing agreement in respect of research and development activities for the purposes of that trade or business (referred to in this section as the relevant trade or business), writing-down allowances in respect of that expenditure shall be made to him during a writing-down period of 5 years, or such shorter period as may be approved, beginning with the year of assessment relating to the basis period in which that expenditure is incurred, subject to such conditions as may be imposed by the Minister or such person as he may appoint.
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(2)  The Minister may specify the maximum amount of expenditure in respect of which writing-down allowances are to be made under subsection (1).
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(3)  No writing-down allowance shall be made under subsection (1) to any person in respect of any payment or contribution paid by him for the right to become a party to any existing approved cost-sharing agreement.
(4)  The writing-down allowance to be made to a person under this section for any year of assessment in respect of any expenditure incurred by him shall be the amount of that expenditure allowable under this section divided by 5 or the number of years approved under subsection (1), as the case may be.
(5)  Any expenditure incurred by a person under any approved cost-sharing agreement before the commencement of his trade or business shall be treated for the purpose of this section as if it had been incurred by him on the first day he commences that trade or business.
(6)  Where a person to whom writing-down allowances have been made under this section —
(a)sells, assigns or otherwise disposes of any right under any approved cost-sharing agreement to which he is a party;
(b)sells, assigns or otherwise disposes of the whole or part of any technology or know-how developed from the research and development activities carried out under any approved cost-sharing agreement to which he is a party;
(c)receives any consideration from any other person for permitting that other person to become a party to any approved cost-sharing agreement to which he is a party; or
(d)receives any consideration from the disposal of any machinery, plant or building acquired under any approved cost-sharing agreement to which he is a party,
the amount or value of any consideration therefor shall, so far as it is not chargeable to tax as a revenue or income receipt, be treated for all purposes as a trading receipt of the relevant trade or business for the year of assessment which relates to the basis period in which the event in paragraph (a), (b), (c) or (d) occurs.
(7)  For the purpose of subsection (6), in relation to any consideration referred to in subsection (6) (d), the amount or value of the consideration to be treated as a trading receipt shall not exceed the amount of expenditure allowable under this section in respect of the machinery, plant or building.
(8)  Where no writing-down allowances have been made to any person in respect of expenditure incurred by him by virtue of subsection (2) or in respect of any payment or contribution made by him by virtue of subsection (3), the Minister may for the purposes of subsection (6) exempt such part of the amount or value of the consideration as he thinks fit.
(9)  Where a person to whom writing-down allowances have been made under this section in respect of any approved cost-sharing agreement ceases to carry on the relevant trade or business, an allowance equal to the amount of the expenditure incurred under that agreement remaining unallowed shall be made to him in computing his income for the year of assessment which relates to the basis period in which the cessation occurs.
(10)  Any event referred to in subsection (6) which occurs after the date on which the relevant trade or business permanently ceases shall be deemed to have occurred immediately before the cessation.
(11)  Where a person to whom writing-down allowances have been made under this section is entitled to royalty or other payments in one lump sum or otherwise for the use of or right to use any technology or know-how developed from the research and development activities carried out under any approved cost-sharing agreement, such royalty or payments shall be deemed to be income derived from Singapore for the year of assessment which relates to the basis period in which the person is entitled to the royalty or payments, as the case may be.
(12)  In this section —
“approved” means approved by the Minister or such person as he may appoint;
“cost-sharing agreement” means any agreement or arrangement made by 2 or more persons to share the expenditure of research and development activities to be carried out under the agreement or arrangement.