PART 5 | DEDUCTIONS AGAINST INCOME |
14.—(1) For the purpose of ascertaining the income of any person for any period from any source chargeable with tax under this Act (called in this Part the income), there are to 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 the person 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 may 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; |
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| | (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 Comptroller’s satisfaction, to have become bad during that period, even if those bad or doubtful debts were due and payable before the commencement of that period:| (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, are for the purposes of this Act 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; |
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| | (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 the employer’s 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 1 September 2010 must not exceed 15%; | | (B) | commencing on or after 1 March 2011 must not exceed 15½%; | | (C) | commencing on or after 1 September 2011 must not exceed 16%; | | (D) | commencing on or after 1 January 2015 must not exceed 17%, |
| 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 or her 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 the employer’s 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 the Comptroller thinks fit; | | (iii) | no deduction is allowed in respect of any sum contributed by an employer for the period on or after 1 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 the employee were to work in Singapore: |
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| And provided that no deduction is 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 13K; |
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| | (f) | [Deleted by Act 32 of 2019] | | (fa) | [Deleted by Act 32 of 2019] | | (fb) | any sum contributed by an employer in 2013 or any subsequent year to the medisave account maintained under the Central Provident Fund Act 1953 in respect of any of the employer’s employees engaged in activities relating to the production of the income of the employer, up to a maximum deduction for each employee’s medisave account, of —| (i) | $1,500 per year (for contributions made before 2018); or | | (ii) | $2,730 per year (for contributions made in 2018 and in each subsequent year), |
| less any previous contribution that is made to the same medisave account in the same year by the employer in the employer’s capacity as a person of a prescribed description under paragraph (fc) (if applicable), and that is deductible under that provision: |
| Provided that no deduction is allowed in respect of any sum contributed by an employer to the medisave account maintained under the Central Provident Fund Act 1953 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 the employee were to work in Singapore; |
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| | (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 1953, up to a maximum deduction for each individual’s medisave account, of —| (i) | $1,500 per year (for contributions made before 2018); or | | (ii) | $2,730 per year (for contributions made in 2018 and in each subsequent year), |
| less any previous contribution that is made to the same medisave account in the same year by the person of the prescribed description in the person’s 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. [37/2014; 39/2017; 32/2019] |
| (1A) [Deleted by Act 32 of 2019] |
(2) Despite 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 or her 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 herself or with his or her 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, |
| are allowed as deductions only to the extent to which, in the Comptroller’s opinion, they are reasonable in amount having regard to the services performed by that employee. |
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| (3) Despite 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 is 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. |
| (3A) Any deduction for the cost of renewal of a motor car to which subsection (3) applies must not exceed $35,000. |
(4) Subsections (3) and (3A) 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 was registered before 1 April 1998 as a business service passenger vehicle for the purposes of the Road Traffic Act 1961, but excludes such a motor car which is —| (a) | used principally for instructional purposes; and | | (b) | 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. |
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| (5) Despite 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 1967) 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 is not allowed as deductions. |
| (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 1967 and incurs medical expenses in excess of the maximum allowable amount in that basis period, an amount equal to the excess medical expenses is 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. |
(6A) For the purpose of subsections (5) and (6), the maximum allowable amount in the basis period for any year of assessment is —| (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 the employer 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 or her employment with the employer during the basis period for that year of assessment, for the calendar month the employee commences his or her employment and every subsequent calendar month in that basis period he or she 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 the employer 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). |
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(6B) For the purpose of subsection (6A)(b), the maximum allowable amount in any basis period is to 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 | | | | (i) | the total amount of medical expenses incurred by the employer for the employer’s employees in that basis period (excluding the total amount of general contributions made by the employer); and |
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| | | (ii) | 1% of the total remuneration of the employer’s employees in that basis period; and |
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| | | | | (i) | the total amount of general contributions made by the employer in that basis period; and |
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| | | (ii) | the difference between 2% of the total remuneration of the employer’s employees in that basis period and A; and |
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| | (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 | | | | (i) | the total amount of expenses incurred by the employer in providing riders for the employer’s employees in that basis period; and |
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| | | (ii) | 1% of the total remuneration of the employer’s employees in that basis period; and |
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| | | | | (i) | the total amount of medical expenses incurred by the employer for the employer’s employees in that basis period (excluding the total amount of expenses incurred by the employer in providing riders for the employer’s employees); and |
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| | | (ii) | the difference between 2% of the total remuneration of the employer’s employees in that basis period and C. |
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| (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. |
| (7) The references to medical expenses in subsections (5), (6) and (6B) are references to medical expenses which would, but for subsection (5), be allowable as deductions under this Act. |
(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 Life 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 Life 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)(fb) 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 1953 in respect of any of the employer’s employees as reimbursement of the employee for premiums paid or payable by the employee on a qualifying insurance; |
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| “gross rate of pay” has the meaning given by section 2 of the Employment Act 1968; |
| “integrated medical insurance plan” has the same meaning as in the regulations made under section 34(2)(j) of the MediShield Life Scheme Act 2015 or section 77(1)(k) of the Central Provident Fund Act 1953; |
| “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)(fb); |
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| “medical treatment” includes all forms of treatment for, and procedures for diagnosing, any physical or mental ailment, infirmity or defect; |
| “MediShield Life Scheme” means the MediShield Life Scheme referred to in section 3 of the MediShield Life Scheme Act 2015 and includes the MediShield Scheme established and maintained under section 53 of the Central Provident Fund Act 1953 as in force immediately before 1 November 2015; |
| “part‑time employee” has the meaning given by section 66A of the Employment Act 1968; |
“qualifying insurance”, in relation to any basis period of an employer, means medical insurance under the MediShield Life 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 or her 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; |
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| “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 Life 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; |
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“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 or her employment for any reason; and | | (b) | treats the employee as being continuously insured when he or she is employed by another employer who provides him or her with an insurance plan that confers the hospitalisation benefits described in paragraph (a). [4/2015; 34/2016; 32/2019] |
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| Deduction for costs for protecting intellectual property |
14A.—(1) Subject to this section, where a person carrying on a trade or business has incurred —| (a) | patenting costs during the period from 1 June 2003 to the last day of the basis period for the year of assessment 2010 (both dates inclusive); or | | (b) | qualifying intellectual property registration costs during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2028 (both years inclusive), |
| for the purposes of that trade or business, there is allowed to the person a deduction of the amount of such costs. |
[37/2014; 45/2018] [Act 30 of 2023 wef 30/10/2023] (1A) Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2011 or the year of assessment 2012, there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under subsection (1), a deduction for qualifying intellectual property registration costs incurred for the purposes of those trades and businesses, computed in accordance with the formula| (a) | for the year of assessment 2011, the lower of the following:| (i) | such costs 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 costs 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). |
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(1B) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under subsection (1), a deduction for qualifying intellectual property registration costs incurred for the purposes of those trades and businesses, computed in accordance with the formula| (a) | for the year of assessment 2013, the lower of the following:| (i) | such costs 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 costs 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 costs 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). [37/2014] |
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(1BA) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under subsection (1), a deduction for qualifying intellectual property registration costs incurred for the purposes of those trades and businesses, computed in accordance with the formula| (a) | for the year of assessment 2016, the lower of the following:| (i) | such costs incurred during the basis period for that year of assessment; | | (ii) | $1,200,000; |
| | (b) | for the year of assessment 2017, the lower of the following:| (i) | such costs 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 2018, the lower of the following:| (i) | such costs 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). [37/2014] |
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| (1BB) Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for any year of assessment between the years of assessment 2019 and 2023 (both years inclusive), there is to be allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under subsection (1), a deduction of the amount of qualifying intellectual property registration costs incurred during the basis period for the purposes of those trades and businesses, up to $100,000. [45/2018] [Act 30 of 2023 wef 30/10/2023] |
(1BC) Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under subsection (1), a deduction for qualifying intellectual property registration costs incurred during that basis period for the purposes of those trades and businesses, computed in accordance with the formula| where A is the lower of the following: |
| (a) | the qualifying intellectual property registration costs incurred during that basis period; | | (b) | $400,000. [Act 30 of 2023 wef 30/10/2023] |
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| (1C) In subsection (1A), the amount under paragraph (a)(ii) is substituted with “$400,000” if the person 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) is substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011. |
(1D) In subsection (1B) —| (a) | if the person 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 are each substituted with “$800,000”; | | (b) | if the person 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 is substituted with “$400,000”; and | | (c) | to avoid doubt, no deduction may 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 person does not carry on any trade or business during the basis period for the year of assessment 2013, and no deduction may 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 person does not carry on any trade or business during the basis period for the year of assessment 2014. |
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(1DA) In subsection (1BA) —| (a) | if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment are each substituted with “$800,000”; | | (b) | if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment is substituted with “$400,000”; and | | (c) | to avoid doubt, no deduction may be made from the substituted amount in subsection (1BA)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (1BA)(a)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2016, and no deduction may be made from the substituted amount in subsection (1BA)(c)(ii) of the lower of the amounts specified in subsection (1BA)(b)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2017. [37/2014] |
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| (1E) For the purposes of subsections (1A), (1B), (1BA), (1BB) and (1BC), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the years of assessment 2011 and 2028 (both years inclusive), incurred qualifying intellectual property registration costs in respect of such firms for the purposes of the individual’s trade or business, the deduction that may be allowed to the individual for those costs in respect of all of the individual’s trades and businesses must not exceed the amount computed in accordance with subsection (1A), (1B), (1BA), (1BB) or (1BC) (as the case may be) for that year of assessment. [45/2018] [Act 30 of 2023 wef 30/10/2023] |
| (1F) For the purposes of subsections (1A), (1B), (1BA), (1BB) and (1BC), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the years of assessment 2011 and 2028 (both years inclusive), incurred qualifying intellectual property registration costs for the purposes of the partnership’s trade or business, the aggregate of the deductions that may be allowed to all the partners of the partnership for those costs in respect of all of the trades and businesses of the partnership must not exceed the amount computed in accordance with subsection (1A), (1B), (1BA), (1BB) or (1BC) (as the case may be) for that year of assessment. [45/2018] [Act 30 of 2023 wef 30/10/2023] |
(2) The claim for deduction under subsection (1), (1A), (1B), (1BA), (1BB) or (1BC) is allowed to a person only if —| (a) | there is an undertaking by the person that the person would be the proprietor of the patent or registered trade mark, the registered owner of the registered design or the grantee of the plant variety (as the case may be) when the patent is granted, the trade mark or design is registered or the plant variety is granted protection; and | | (b) | the claim is made by the person in such manner and subject to such conditions as the Comptroller may require. [37/2014; 45/2018] [Act 30 of 2023 wef 30/10/2023] |
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| (3) For the purposes of this section, any patenting costs or qualifying intellectual property registration costs (as the case may be) incurred by a person prior to the commencement of that person’s trade or business are deemed to have been incurred by that person on the first day that person carries on that trade or business but a deduction for these is subject to section 14X. [34/2016] |
| (4) Where a person to whom a deduction for patenting costs or qualifying intellectual property registration costs (as the case may be) has been allowed under subsection (1) sells, transfers or assigns in the basis period for any year of assessment all or any part of the rights for which such patenting costs or qualifying intellectual property registration costs (as the case may be) were incurred, the person is deemed to have derived an amount of income for that year of assessment equal to the price at which the rights were sold, transferred or assigned or the deduction which has been allowed under subsection (1), whichever is less. |
| (5) For the purposes of subsection (4), where there is more than one sale, transfer or assignment of any part of the rights for which such patenting costs or qualifying intellectual property registration costs (as the case may be) were incurred, the total amount deemed as income must not exceed the total amount of deduction previously allowed under subsection (1). |
(5A) Where —| (a) | a deduction has been made to any person under subsection (1A), (1B), (1BA), (1BB) or (1BC) in respect of any qualifying intellectual property registration costs; and [Act 30 of 2023 wef 30/10/2023] | | (b) | the person sells, transfers or assigns all or any part of the qualifying intellectual property rights or the application for the registration or grant of the qualifying intellectual property rights for which such costs were incurred, within a period of one year from the date of filing of the application, |
| the deduction allowed under subsection (1A), (1B), (1BA), (1BB) or (1BC) (as the case may be) is deemed as income of the person for the year of assessment relating to the basis period in which the sale, transfer or assignment occurs. |
[37/2014; 45/2018] [Act 30 of 2023 wef 30/10/2023] |
(6) In this section —“patenting costs” means the fees paid to —| (a) | the Registry of Patents in Singapore or an equivalent registry outside Singapore for the —| (i) | filing of a patent; | | (ii) | search and examination report on the application for a patent; or | | (iii) | grant of a patent; and |
| | (b) | any registered patent agent for —| (i) | applying for any patent in Singapore or elsewhere; | | (ii) | preparing specifications or other documents for the purposes of the Patents Act 1994 or the patents law of any other country; or | | (iii) | giving advice on the validity or infringement of the patent; |
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“qualifying intellectual property registration costs” means the fees paid to —| (a) | the Registry of Patents, Registry of Trade Marks, Registry of Designs or Registry of Plant Varieties in Singapore or an equivalent registry outside Singapore for the —| (i) | filing of an application for a patent, for the registration of a trade mark or design, or for the grant of protection of a plant variety; | | (ii) | search and examination report on the application for a patent; | | (iii) | examination report on the application for grant of protection of a plant variety; or | | (iv) | grant of a patent; and |
| | (b) | any person acting as an agent for —| (i) | applying for any patent, for the registration of a trade mark or design, or for the grant of protection of a plant variety, in Singapore or elsewhere; | | (ii) | preparing specifications or other documents for the purposes of the Patents Act 1994, the Trade Marks Act 1998, the Registered Designs Act 2000, the Plant Varieties Protection Act 2004 or the intellectual property law of any other country relating to patents, trade marks, designs or plant varieties; or | | (iii) | giving advice on the validity or infringement of any patent, registered trade mark, registered design or grant of protection of a plant variety; |
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| “qualifying intellectual property right” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of any patent, registered trade mark or design, or grant of protection of a plant variety; |
| “registered patent agent” has the meaning given by the Patents Act 1994. |
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| (7) In this section, “patenting costs” and “qualifying intellectual property registration costs” exclude any expenditure to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board. |
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| Further deduction for expenses relating to approved trade fairs, exhibitions or trade missions, maintenance of overseas trade office, or electronic commerce |
14B.—(1) Subject to this section, where the Comptroller is satisfied that the expenses specified in subsection (2) have been incurred by an approved firm or company resident in or having a permanent establishment in Singapore for the primary purpose of —| (a) | promoting the trading of goods or the provision of services; or | | (b) | the provision of services in connection with the use of any right under a master franchise or master intellectual property licence where the firm or company is the holder of the franchise or licence, |
| there is allowed a further deduction of the amount of such expenses in addition to the amount allowed under section 14. |
(2) The expenses referred to in subsection (1) are —| (a) | expenses in establishing, maintaining or otherwise participating in —| (i) | a trade fair, trade exhibition, trade mission or trade promotion activity held or conducted outside Singapore; or | | (ii) | an approved trade fair or trade exhibition held in Singapore; |
| | (aa) | any of the following expenses incurred on or after 1 April 2020 that are approved for the firm or company:| (i) | expenses to secure a spot to speak at a trade mission or trade promotion activity mentioned in paragraph (a)(i); | | (ii) | expenses for the transportation of any sample for use at a trade mission or trade promotion activity mentioned in paragraph (a)(i); | | (iii) | expenses to engage a consultant (not being a related party of the approved firm or company or an officer or employee of such related party) to organise a business networking event during a trade mission or trade promotion activity mentioned in paragraph (a)(i); |
| | (ab) | expenses incurred on or after 17 February 2021 —| (i) | in establishing, maintaining or otherwise participating in an approved trade fair or trade exhibition held or conducted (whether wholly or partly) by means of teleconference, videoconferencing or any other electronic means of communications; or | | (ii) | for the transportation of any sample to any potential client outside of Singapore, following the potential client’s attendance at or participation in the approved trade fair or trade exhibition; |
| | (ac) | any of the following expenses incurred on or after 15 February 2023 that are approved for the firm or company for the purposes of enabling the firm or company to trade goods, or provide services to persons, in a foreign country using an electronic marketplace:| (i) | expenses incurred on the creation and maintenance of an account with the electronic marketplace; | | (ii) | expenses incurred on the listing of the goods to be traded or services to be provided on the electronic marketplace; | | (iii) | expenses incurred for any promotion campaign using the electronic marketplace, including the design and creation of the materials for the promotion campaign; | | (iv) | expenses incurred to engage a person (not being an officer or employee or a related party of the approved firm or company, or an officer or employee of such related party) to provide advisory service to the firm or company in connection with the use of the electronic marketplace; [Act 30 of 2023 wef 15/02/2023] |
| | (b) | expenses in maintaining an approved overseas trade office; or | | (c) | market development expenditure for the carrying out of any approved marketing project. [41/2020; 27/2021] |
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| (2A) For the purposes of subsection (1) and subject to subsection (2B), the firm or company need not be an approved firm or approved company to be allowed a deduction under subsection (1) in respect of expenses mentioned in subsection (2)(a) that are incurred at any time between 1 April 2012 and 16 February 2021 (both dates inclusive) for the primary purpose of promoting the trading of goods or the provision of services. [45/2018; 41/2020; 27/2021] |
(2AA) For the purposes of subsection (1) and subject to subsection (2B), the firm or company need not be an approved firm or approved company to be allowed a deduction under subsection (1) in respect of any of the following expenses incurred during the period between 17 February 2021 and 31 December 2025 (both dates inclusive) for the primary purpose of promoting the trading of goods or the provision of services:| (a) | such expenses in subsection (2)(a) as are prescribed by rules made under section 7; | | (b) | such expenses in subsection (2)(ab) as are prescribed by rules made under section 7. [27/2021] |
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| (2AB) Despite subsection (1) but subject to subsection (2B), where the Comptroller is satisfied that any expenses mentioned in subsection (2AC) have been incurred by a firm or company resident in or having a permanent establishment in Singapore during the period between 17 February 2021 and 31 December 2025 (both dates inclusive) for the primary purpose of promoting the trading of goods or the provision of services, there is to be allowed a further deduction of the amount of such expenses in addition to the amount allowed under section 14. [27/2021] |
(2AC) The expenses mentioned in subsection (2AB) are the following types of expenses that fall within descriptions prescribed by rules made under section 7, to the extent that such expenses do not fall within subsection (1):| (a) | expenses incurred in the design of packaging; | | (b) | expenses incurred in obtaining any approved certification of goods and services; | | (c) | expenses incurred in any advertisement placed in any media or on any promotion campaign carried out overseas. [27/2021] |
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| (2AD) Rules made for the purposes of subsections (2AA) and (2AC) may be made to take effect from (and including) 17 February 2021. [27/2021] |
(2B) The amount of the expenses for which the deduction may be allowed under subsections (2A), (2AA) and (2AB) (whichever is applicable), after adding the expenditure for which a deduction is allowed to the firm or company under section 14H(1A), must not exceed —| (a) | for a year of assessment before the year of assessment 2019 — $100,000; or | | (b) | for the year of assessment 2019 or a subsequent year of assessment — $150,000. [45/2018; 27/2021] |
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| (3) The Minister or an authorised body may specify the maximum amount of expenditure (or any item thereof) to be allowed under subsection (1), other than expenses that are the subject of a claim for deduction under subsections (2A), (2AA) and (2AB) (whichever is applicable). [27/2021] [Act 41 of 2020 wef 12/04/2024] |
(4) No deduction is allowed under this section in respect of —| (a) | any expenses which are not allowed as deductions under section 14; | | (b) | travelling, accommodation and subsistence expenses or allowances for —| (i) | more than 2 employees taking part in the trade fair, trade exhibition, trade mission or trade promotion activity, being one held or conducted overseas; or | | (ii) | more than the approved number of employees taking part in the approved marketing project; |
| | (c) | any expenses relating to an approved overseas trade office —| (i) | which are incurred in the establishment of the approved overseas trade office; | | (ii) | by way of remuneration, travelling, accommodation and subsistence expenses or allowances for more than the approved number of employees of the approved overseas trade office; | | (iii) | which are specifically excluded as a condition for the approval of the overseas trade office under this section; | | (iv) | which are incurred after the end of the approved number of years from the date of establishment of the approved overseas trade office; or | | (v) | which are incurred by a firm or company having a permanent establishment subject to tax in the country in which the approved trade office is established; |
| | (d) | any expenses incurred during the basis period for a year of assessment by a firm or company if —| (i) | any part of its income for that year of assessment is exempt or partly exempt from tax under section 13A, 13E, 13P or 13S; | | (ii) | any part of its income for that year of assessment is subject to tax at a concessionary rate of tax under section 43C, 43D, 43E, 43G, 43I, 43J, 43L, 43P, 43Q, 43R, 43U, 43V or 43X, or the regulations made under any of those sections; or | | (iii) | it is given tax relief under Part 2, 3 or 4 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 for that year of assessment, or is given an investment allowance under Part 8 of that Act for that year of assessment; or |
| | (e) | any expenses to the extent they are or are to be subsidised by a grant or subsidy from the Government or a statutory board. [2/2016; 45/2018] |
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| (4A) Despite subsection (4), the Minister or an authorised body may, in any particular case, subject to such conditions precedent and conditions subsequent as the Minister or authorised body may impose, allow a deduction of any expenses referred to in subsection (4)(c)(v) provided that they are not also expenses referred to in subsection (4)(c)(i), (ii), (iii) or (iv). [2/2016] [Act 41 of 2020 wef 12/04/2024] |
| (5) Despite subsection (4), the Minister or an authorised body may, in any particular case, and subject to such conditions precedent and conditions subsequent as the Minister or authorised body may impose, allow a deduction of any expenses referred to in subsection (4)(d). [2/2016] [Act 41 of 2020 wef 12/04/2024] |
| (6) If the firm or company fails to comply with a condition subsequent imposed under subsection (4A) or (5), the deduction allowed to the firm or company under that subsection is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the non‑compliance. [2/2016] |
| (7) In relation to a deduction under this section, a condition is a condition subsequent if or to the extent that it can only be satisfied after the deduction is allowed, and a condition is a condition precedent if or to the extent that it is not a condition subsequent; and accordingly a condition may, depending on the circumstances, be either a condition precedent or a condition subsequent. [2/2016] |
| (8) [Deleted by Act 19 of 2013] |
| (9) [Deleted by Act 19 of 2013] |
| (10) Despite anything in this section, where it appears to the Comptroller that in any year of assessment any further deduction which has been allowed under this section or section 14E ought not to have been so allowed, the Comptroller may, within the year of assessment or within 4 years after the expiry of that year of assessment, make such assessment or additional assessment upon the firm or company as may be necessary in order to make good any loss of tax. [41/2020] |
(11) In this section —| “approved” means approved by the Minister or an authorised body; [Act 41 of 2020 wef 12/04/2024] |
“electronic marketplace” means a medium that —| (a) | allows a person to trade goods or provide services to any other person by electronic means; and | | (b) | is operated by electronic means, |
| but not any medium that is solely for processing any payment for any trading of goods or provision of services; |
[Act 30 of 2023 wef 15/02/2023] |
| “foreign country” means any country outside Singapore; [Act 30 of 2023 wef 15/02/2023] |
“market development expenditure” means —| (a) | approved expenses directly attributable to the carrying out of market research or obtaining of market information, including any feasibility study; | | (b) | expenses in respect of advertisements placed in approved media; | | (c) | expenses incurred on approved promotion campaigns; | | (d) | approved expenses incurred in the design of packaging, or in the certification of goods or services where such certification is carried out by an approved person; or | | (e) | approved expenses incurred on or after 1 April 2020 for the engagement of a consultant (not being a related party of the approved firm or company or an officer or employee of such related party) —| (i) | to identify a suitable person to promote the trading of any goods, or the provision of any services, in a country outside Singapore; or | | (ii) | to build up a business network in a country outside Singapore; |
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| “master franchise” means any agreement under which the franchisor authorises or permits the franchisee to use in Singapore or overseas a business system owned or controlled by the franchisor, including the sub‑franchising of the business system; |
| “master intellectual property licence” means any licence under which the licensor authorises or permits the licensee to use in Singapore or overseas the rights under a patent, copyright, trade mark, design or know‑how, including the sub‑licensing of the same. [Act 33 of 2022 wef 04/11/2022] |
| [Deleted by Act 33 of 2022 wef 04/11/2022] |
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| (12) No approval may be granted under this section after 31 December 2025. [34/2016; 41/2020] [Act 30 of 2023 wef 15/02/2023] |
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| Expenditure on research and development |
14C.—(1) For the purpose of ascertaining the income of any person carrying on any trade or business and subject to subsection (4), the following expenditure incurred (other than any amount which is allowable as a deduction under section 14) by that person is allowed as a deduction:| (a) | expenditure incurred on research and development undertaken directly by that person and related to that trade or business (except to the extent that it is capital expenditure on plant, machinery, land or buildings or on alterations, additions or extensions to buildings or in the acquisition of rights in or arising out of research and development); | | (aa) | expenditure incurred during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2028 (both years inclusive) on research and development undertaken in Singapore directly by that person and not related to that trade or business (except to the extent that it is capital expenditure on plant, machinery, land or buildings or on alterations, additions or extensions to buildings or in the acquisition of rights in or arising out of research and development); [Act 30 of 2023 wef 30/10/2023] | | (b) | payments made by that person to a research and development organisation for undertaking on that person’s behalf in Singapore research and development related to that trade or business; | | (ba) | payments made by that person to a research and development organisation for undertaking on that person’s behalf, partly in Singapore and partly outside Singapore, research and development related to that trade or business; | | (c) | payments made during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2028 (both years inclusive) by that person to a research and development organisation for undertaking on that person’s behalf in Singapore research and development not related to that trade or business; [Act 30 of 2023 wef 30/10/2023] | | (d) | payments made by that person to a research and development organisation for undertaking on that person’s behalf outside Singapore research and development related to that trade or business; | | (e) | payments made by that person under any cost-sharing agreement during the basis period for a year of assessment between the years of assessment 2012 and 2017 (both years inclusive), in respect of research and development that is related to that trade or business, regardless of who undertakes the research and development so long as it is undertaken wholly or partly for that person or on that person’s behalf; | | (f) | payments made by that person during the basis period for any year of assessment between the year of assessment 2012 and the year of assessment 2017 (both years inclusive), under any cost‑sharing agreement in respect of research and development that is undertaken in Singapore and is not related to that trade or business, regardless of who undertakes the research and development so long as it is undertaken wholly or partly for that person or on that person’s behalf; | | (g) | payments made by that person under any cost‑sharing agreement during the basis period for the year of assessment 2018 or a subsequent year of assessment in respect of any research and development, regardless of who undertakes the research and development so long as it is undertaken wholly or partly for the person or on the person’s behalf. [37/2014; 39/2017] |
| (1A) The expenditure or payment referred to in subsection (1) does not include any such expenditure or payment to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board. |
| (2) For the purposes of this section, any expenditure incurred by a person prior to the commencement of that person’s trade or business is deemed to have been incurred by that person on the first day on which that person carries on that trade or business but a deduction for this is subject to section 14X. [34/2016] |
| (2A) Subsection (2) does not apply to any expenditure if a deduction has already been allowed for that expenditure under subsection (1) in a previous year of assessment. [45/2018] |
(3) For the purposes of subsection (1)(ba) or (d), a claim for deduction is allowed to a person only if —| (a) | there is an undertaking by the person that any benefit which may arise from the conduct of the research and development must accrue to the person; and | | (b) | the claim is made by the person in such manner and subject to such conditions as the Comptroller may require. |
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(3A) For the purposes of subsection (1)(e) or (g) in respect of research and development that is undertaken wholly or partly outside Singapore, a claim for deduction is allowed to a person only if —| (a) | there is an undertaking by the person that any benefit which may arise from the conduct of the research and development must accrue, wholly or partly, to the person; and | | (b) | the claim is made by the person in such manner and subject to such conditions as the Comptroller may require. [39/2017] |
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(4) The deduction of the expenditure and payments referred to in subsection (1)(aa), (c) and (f) must be made in accordance with the following provisions:| (a) | if the person derives from the trade or business carried on by the person both normal income and concessionary income, 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 37G or 37R) must so far as possible be deducted against the normal income, and any remaining balance of the amount is treated as part of the unabsorbed losses in respect of the normal income to be deducted against the concessionary income in accordance with section 37A; [Act 30 of 2023 wef 30/10/2023] | | (b) | if the concessionary income referred to in paragraph (a) is subject to tax at 2 or more concessionary rates of tax, the deduction under section 37A of the remaining balance referred to in that paragraph must so far as possible be made against the part of the concessionary income that is subject to tax at the higher or highest concessionary rate of tax, and the deduction under section 37A of any remaining balance must so far as possible be made against the part of the concessionary income that is subject to tax at the lower or next lowest concessionary rate of tax, and so on; | | (c) | if the person derives from the trade or business only concessionary income which is subject to tax at a single concessionary rate of tax, a specified amount of the expenditure or payments must be deducted against the concessionary income; | | (d) | if the person derives from the trade or business only concessionary income which is subject to tax at 2 or more concessionary rates of tax, a specified amount of the expenditure or payments must so far as possible be deducted against the part of the concessionary income that is subject to the higher or highest concessionary rate of tax, and any remaining balance of the specified amount is treated as part of the unabsorbed losses in respect of that part of the concessionary income that is subject to the higher or highest concessionary rate of tax, to be deducted in accordance with section 37A against the rest of the concessionary income; | | (e) | if the rest of the concessionary income referred to in paragraph (d) is subject to tax at 2 or more concessionary rates of tax, then paragraph (b) applies, with the necessary modifications, to the last mentioned deduction in paragraph (d). |
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| (4A) Where a person to whom deductions have been allowed for payments referred to in subsection (1)(e), (f) or (g) becomes entitled to any 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 conducted under the cost‑sharing agreement, such royalty or payments are deemed to be income of that person that is derived from Singapore for the year of assessment which relates to the basis period in which that person becomes entitled to the royalty or payments. [39/2017] |
(5) In this section —| “concessionary income” means income that is subject to tax at a concessionary rate of tax; |
“concessionary rate of tax” means the rate of tax in accordance with —| (a) | any order made under section 13(12); | | (b) | section 43C, 43D, 43E, 43F, 43G, 43H, 43I, 43J, 43K, 43L, 43M, 43N, 43O, 43P, 43Q, 43R, 43S, 43T, 43U, 43V, 43W or 43X, or the regulations made under any of those sections, as the case may be; or | | (c) | section 21(9) or (13) or 23(1)(b) (as the case may be) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967; |
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| “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; |
| “normal income” means income that is subject to tax at the rate of tax specified in section 43(1)(a); |
“specified amount”, in relation to any expenditure or payments, means an amount computed in accordance with the formula | | is 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 37G or 37R); |
| | | is the rate of tax specified in section 43(1)(a); and |
| | | | | (a) | in a case where the concessionary income derived by the person from the trade or business carried on by the person is subject to tax at a single concessionary rate of tax, that rate; or |
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| | | (b) | in a case where the concessionary income derived by the person from the trade or business carried on by the person is subject to tax at 2 or more concessionary rates of tax, the higher or highest of those rates. |
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[34/2016; 39/2017; 45/2018; 27/2021] [Act 30 of 2023 wef 30/10/2023] |
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(6) In this section —| (a) | a reference to a payment made by a person under a cost‑sharing agreement is a reference to the expenditure that is allocated to the person for the person to bear under the cost‑sharing agreement, and the time the payment for any part of the expenditure becomes payable by the person or (if no such payment is needed) the time of the allocation, is treated as the time the payment is made; and | | (b) | a reference to a payment made by a person under a cost‑sharing agreement excludes any payment for the right to be a party to the cost‑sharing agreement. [39/2017] |
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| (7) Subsection (6) is deemed to have effect for the year of assessment 2012 and every subsequent year of assessment. [14D [39/2017] |
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| Enhanced deduction for qualifying expenditure on research and development |
14D.—(1) Subject to this section, for the purpose of ascertaining the income of a person carrying on any trade or business during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2028 (both years inclusive), there is allowed in respect of all of the person’s trades and businesses, in addition to the deductions allowed under section 14C, a deduction for expenditure or payments for research and development undertaken by the person, of an amount computed in accordance with the formula |
| | is the amount of qualifying expenditure incurred during the basis period on any local research and development undertaken directly by the person, including on that part undertaken in Singapore of any mixed research and development undertaken directly by that person, but excluding any capital expenditure on plant, machinery, land or buildings or on alterations, additions or extensions to buildings or in the acquisition of rights in or arising out of research and development; |
| | | is the aggregate of the following: |
| | | (a) | the amount referred to in subsection (2A) of payments made during the basis period by the person to a research and development organisation for undertaking local research and development on the person’s behalf, including for that part undertaken in Singapore of any mixed research and development that is undertaken by a research and development organisation on the person’s behalf; |
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| | | (b) | the amount in one of the following sub‑paragraphs, whichever is applicable: |
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| | | (i) | in the case of a year of assessment between the years of assessment 2012 and 2017 (both years inclusive), the amount in subsection (2A) of payments made during the basis period by the person under a cost‑sharing agreement — |
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| | | (A) | for any local research and development; or |
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| | | (B) | for such part of any mixed research and development that is undertaken in Singapore, |
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| | | | regardless of who undertakes the research and development so long as it is undertaken wholly or partly for the person or on the person’s behalf; |
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| | | (ii) | in the case of a year of assessment between the years of assessment 2018 and 2028 (both years inclusive), if the person makes any payment during the basis period under a cost‑sharing agreement, the sum of certain expenditure and payments (up to the amount in subsection (2AA)) that a party to the agreement (whether or not that person) has agreed to bear, and for which a deduction has not previously been allowed to the firstmentioned person under this sub‑paragraph, namely — |
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| | | (A) | qualifying expenditure incurred by that person in undertaking a local research and development, or such part of a mixed research and development that is undertaken in Singapore; and |
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| | | (B) | the amount mentioned in subsection (2AB) of payments made by that person to a research and development organisation for undertaking a local research and development, or a part of a mixed research and development in Singapore, on that person’s behalf; and |
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| | | | | (a) | for a year of assessment between the years of assessment 2009 and 2018 (both years inclusive) — 50%; or |
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| | | (b) | for a year of assessment between the years of assessment 2019 and 2028 (both years inclusive) — 150%. |
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[37/2014; 39/2017; 45/2018] [Act 30 of 2023 wef 30/10/2023] (1A) Subject to this section and section 37R, for the purpose of ascertaining the income of a person carrying on any trade or business during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), there is allowed in respect of all of the person’s trades and businesses, in addition to the deductions allowed under subsection (1) and section 14C, a deduction for expenditure or payments for research and development undertaken by the person, of an amount computed in accordance with the formula| (a) | T is the lower of the following:| (i) | the aggregate of U and V; | | (ii) | $400,000; and |
| | (b) | U and V have the meanings given by subsection (1). [Act 30 of 2023 wef 30/10/2023] |
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(2) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on any trade or business during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), there is allowed in respect of all of the person’s trades and businesses, in addition to the deductions allowed under subsection (1) and section 14C, a deduction for expenditure or payments for research and development undertaken by the person, of —| (a) | an amount computed in accordance with the formula | | (b) | if the aggregate of U, V, W and X exceeds the specified amount for the year of assessment, an amount computed in accordance with the formula |
| | have the meanings given by subsection (1); |
| | | is the amount of qualifying expenditure incurred during the basis period on any foreign research and development undertaken directly by the person, including on that part undertaken outside Singapore of any mixed research and development undertaken directly by that person, but excluding any capital expenditure on plant, machinery, land or buildings or on alterations, additions or extensions to buildings or in the acquisition of rights in or arising out of research and development; |
| | | is the aggregate of the following: |
| | | (a) | the amount referred to in subsection (2A) of payments made during the basis period by the person to a research and development organisation for undertaking any foreign research and development on the person’s behalf, including for that part undertaken outside Singapore of any mixed research and development that is undertaken by a research and development organisation on the person’s behalf; |
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| | | (b) | subject to subsection (2AD), the amount referred to in subsection (2A) of payments made during the basis period (being the basis period for any year of assessment between the year of assessment 2012 and the year of assessment 2018 (both years inclusive)) by the person under a cost‑sharing agreement — |
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| | | (i) | for any foreign research and development; or |
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| | | (ii) | for that part of any mixed research and development that is undertaken outside Singapore, |
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| | | | regardless of who undertakes the research and development so long as it is undertaken wholly or partly for the person or on the person’s behalf; |
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| | | is the whole or any part of the sum of U and V which the person has elected for inclusion in the computation of the deduction under this paragraph, which when aggregated with Z does not exceed the specified amount; and |
| | | is the whole or any part of the sum of W and X which the person has elected for inclusion in the computation of the deduction under this paragraph, which when aggregated with Y does not exceed the specified amount. |
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[37/2014; 39/2017] |
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(2A) The amount of any of the payments in paragraphs (a) and (b)(i) of the definition of V in subsection (1), and paragraphs (a) and (b) of the definition of X in subsection (2) is —| (a) | if more than 60% of all the payments made during the basis period to the research and development organisation or under the cost‑sharing agreement to which the definition applies are qualifying expenditure, the actual amount of the qualifying expenditure; or | | (b) | in all other cases, 60% of all such payments, |
| and where there is more than one research and development organisation or cost‑sharing agreement, the aggregate of all the amounts computed in this manner of the payments to every organisation or under every agreement. |
[39/2017] |
| (2AA) The amount mentioned in paragraph (b)(ii) of the definition of V in subsection (1) is the amount of the payments made during the basis period by the person under the cost‑sharing agreement. [39/2017] |
(2AB) In paragraph (b)(ii)(B) of the definition of V in subsection (1), the amount is the higher of the following:| (a) | the part of those payments made to the research and development organisation that are qualifying expenditure; | | (b) | 60% (or such other percentage as may be prescribed by rules made under section 7) of the sum of all of the payments made to the research and development organisation. [39/2017] |
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(2AC) For the purposes of paragraph (b)(ii) of the definition of V in subsection (1) (read with subsections (2AA) and (2AB)), where there is more than one cost‑sharing agreement or research and development organisation —| (a) | first, calculate each amount in those provisions relating to a cost‑sharing agreement or research and development organisation for every agreement or organisation; and | | (b) | then, add up all amounts calculated under paragraph (a). [39/2017] |
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(2AD) The amount mentioned in paragraph (b) of the definition of X in subsection (2)(b) is, in the case of the year of assessment 2018, subject to a maximum amount computed in accordance with the formula A – B, where —| (a) | A is the amount of the payments made during the basis period by the person under the cost‑sharing agreement; and | | (b) | B is the amount computed under paragraph (b)(ii) of the definition of V in subsection (1) in relation to the same cost‑sharing agreement that qualifies for the deduction under subsection (1). [39/2017] |
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(2B) In subsections (1) and (2) —| “foreign research and development” means research and development that is undertaken outside Singapore, and that is related to the trade or business of the firstmentioned person in subsection (1); |
| “local research and development” means research and development that is undertaken in Singapore; |
| “mixed research and development” means research and development that is undertaken partly in Singapore and partly outside Singapore, and that is related to the trade or business of the firstmentioned person in subsection (1), (1A) or (2), as the case may be. [Act 30 of 2023 wef 30/10/2023] |
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| (3) The election under subsection (2)(b) must be made at the time of lodgment of the return of income for the year of assessment or within such further time as the Comptroller may allow. |
(4) The specified amount referred to in subsection (2)(b) is —| (a) | for the year of assessment 2011, $800,000; | | (b) | for the year of assessment 2012, the balance after deducting from $800,000 the subsection (2) amount for the year of assessment 2011; | | (c) | for the year of assessment 2013, $1,200,000; | | (d) | for the year of assessment 2014, the balance after deducting from $1,200,000 the subsection (2) amount for the year of assessment 2013; | | (e) | for the year of assessment 2015, the balance after deducting from $1,200,000 the subsection (2) amount for the year of assessment 2013 and the subsection (2) amount for the year of assessment 2014; | | (f) | for the year of assessment 2016, $1,200,000; | | (g) | for the year of assessment 2017, the balance after deducting from $1,200,000 the subsection (2) amount for the year of assessment 2016; or | | (h) | for the year of assessment 2018, the balance after deducting from $1,200,000 the subsection (2) amount for the year of assessment 2016 and the subsection (2) amount for the year of assessment 2017. [37/2014] |
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(5) In subsection (4) —| (a) | the amount under paragraph (a) of that subsection is substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2012; | | (b) | the balance under paragraph (b) of that subsection is substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011; | | (c) | if the person 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 are each substituted with “$800,000”; | | (d) | if the person 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 is substituted with “$400,000”; | | (da) | if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment are each substituted with “$800,000”; | | (db) | if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment is substituted with “$400,000”; | | (e) | to avoid doubt, no deduction may be made from the substituted amount in subsection (4)(d) or (e) of the subsection (2) amount for the year of assessment 2013 if the person does not carry on any trade or business during the basis period for that year of assessment, and no deduction may be made from the substituted amount in subsection (4)(e) of the subsection (2) amount for the year of assessment 2014 if the person does not carry on any trade or business during the basis period for that year of assessment; and | | (f) | to avoid doubt, no deduction may be made from the substituted amount in subsection (4)(g) or (h) of the subsection (2) amount for the year of assessment 2016 if the person does not carry on any trade or business during the basis period for that year of assessment, and no deduction may be made from the substituted amount in subsection (4)(h) of the subsection (2) amount for the year of assessment 2017 if the person does not carry on any trade or business during the basis period for that year of assessment. [37/2014] |
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(6) For the purposes of subsections (4) and (5), “subsection (2) amount”, in relation to a year of assessment, means —| (a) | if the deduction allowed under subsection (2) for that year of assessment is the amount referred to in subsection (2)(a), the aggregate of U, V, W and X referred to in that subsection; or | | (b) | if the deduction allowed under subsection (2) for that year of assessment is the amount referred to in subsection (2)(b), the aggregate of Y and Z referred to in that subsection. |
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| (6A) For the purpose of subsection (1A), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), incurred qualifying expenditure or made payments in respect of such firms entitling the individual to a deduction under subsection (1A), the deduction that may be allowed to the individual for those expenditure or payments in respect of all of the individual’s trades and businesses must not exceed the amount computed in accordance with subsection (1A) for that year of assessment. [Act 30 of 2023 wef 30/10/2023] |
| (6B) For the purpose of subsection (1A), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), incurred qualifying expenditure or made payments entitling the partners of the partnership to a deduction under subsection (1A), the aggregate of the deductions that may be allowed to all the partners of the partnership for those expenditure or payments in respect of all of the trades and businesses of the partnership must not exceed the amount computed in accordance with subsection (1A) for that year of assessment. [Act 30 of 2023 wef 30/10/2023] |
| (7) For the purpose of subsection (2)(b), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred qualifying expenditure or made payments in respect of such firms entitling him or her to a deduction under subsection (2), the deduction that may be allowed to him or her for those expenditure or payments in respect of all of his or her trades and businesses must not exceed the amount computed in accordance with subsection (2)(b) for that year of assessment. [37/2014] |
| (8) For the purpose of subsection (2)(b), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred qualifying expenditure or made payments entitling the partners of the partnership to a deduction under subsection (2), the aggregate of the deductions that may be allowed to all the partners of the partnership for the expenditure or payments in respect of all of the trades and businesses of the partnership must not exceed the amount computed in accordance with subsection (2)(b) for that year of assessment. [37/2014] |
(9) Section 14C(4) and (5) applies in relation to the deduction for expenditure and payments for which a deduction is allowed under subsection (1), (1A) or (2) for research and development that is not related to the trade or business carried on by the person, as it applies in relation to the deduction for the expenditure and payments referred to in section 14C(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 37G or 37R) in section 14C(4) is a reference to the remaining amount of the deduction under subsection (1), (1A) or (2) (as the case may be) after deducting the amount of the deduction under that subsection that corresponds to the qualifying expenditure or payments in respect of which an election for a cash payout has been made under section 37G or 37R; [Act 30 of 2023 wef 30/10/2023] | | (b) | a reference to the specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula | | is the remaining amount of the deduction under subsection (1), (1A) or (2) (as the case may be) after deducting the amount of the deduction under that subsection that corresponds to the qualifying expenditure or payments in respect of which an election for a cash payout has been made under section 37G or 37R; |
| | | is the rate of tax specified in section 43(1)(a); and |
| | | | | (i) | in a case where the concessionary income derived by the person from the trade or business carried on by the person is subject to tax at a single concessionary rate of tax, that rate; or |
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| | | (ii) | in a case where the concessionary income derived by the person from the trade or business carried on by the person is subject to tax at 2 or more concessionary rates of tax, the higher or highest of those rates. |
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[Act 30 of 2023 wef 30/10/2023] |
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| (10) No deduction is allowed to a company under subsection (2) for any year of assessment if a deduction for any expenditure has been allowed under section 37F for that year of assessment. |
(11) In this section —| “consumables” means any materials or items used in the research and development which, upon such use, are consumed or transformed in such a manner that they are no longer useable in their original form, but does not include utilities; |
| “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; |
“qualifying expenditure” means any expenditure attributable to the research and development that is incurred on —| (a) | staff costs; | | (b) | consumables; or | | (c) | such other matter as the Minister may prescribe by regulations; |
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“staff costs” means any salary, wages and other benefits paid or granted in respect of employment (excluding director’s fees), whether in money or otherwise, to any employee for carrying out the research and development, and includes —| (a) | expenses incurred for training or certifying the employee for the purpose of carrying out the research and development; and | | (b) | such other expenses as may be prescribed. |
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(12) In this section —| (a) | a reference to a person undertaking research and development includes —| (i) | a reference to a research and development organisation undertaking research and development on the person’s behalf; and | | (ii) | for any year of assessment between the year of assessment 2012 and the year of assessment 2028 (both years inclusive), a reference to any person undertaking research and development under a cost‑sharing agreement of which the firstmentioned person is a party, so long as the research and development is undertaken wholly or partly for the firstmentioned person or on the firstmentioned person’s behalf; and [Act 30 of 2023 wef 30/10/2023] |
| | (b) | a reference to any expenditure or payment excludes any such expenditure or payment to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board. [37/2014] |
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(13) In this section —| (a) | a reference to a payment made by a person under a cost‑sharing agreement is a reference to the expenditure that is allocated to the person for the person to bear under the cost‑sharing agreement, and the time the payment for any part of the expenditure becomes payable or (if no such payment is needed) the time of the allocation, is treated as the time the payment is made; and | | (b) | a reference to a payment made by a person under a cost‑sharing agreement excludes any payment for the right to be a party to the cost‑sharing agreement. [39/2017] |
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| (14) Subsection (13) is deemed to have effect for every year of assessment to which each provision of this section containing the reference mentioned in subsection (13) applies. [14DA [39/2017] |
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| Further deduction for expenditure on research and development project |
14E.—(1) Subject to this section, where the Comptroller is satisfied that —| (a) | a person carrying on any trade or business has incurred expenditure in undertaking directly by the person, or in paying a research and development organisation to undertake on the person’s behalf, an approved research and development project in Singapore which is related to that trade or business; | | (aa) | a person carrying on any trade or business has incurred during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2020 (both years inclusive) expenditure in undertaking directly by the person, or in paying a research and development organisation to undertake on the person’s behalf, an approved research and development project in Singapore which is not related to that trade or business; or | | (b) | a research and development organisation has incurred expenditure in undertaking an approved research and development project in Singapore and no deduction under this section has been allowed to another person in respect of any expenditure for that project or for another project of which that project forms a part, |
| there is allowed to that person or research and development organisation a further deduction of the amount of such expenditure in addition to the deduction allowed under section 14, 14C or 14D, as the case may be. |
[37/2014] (2) The Minister or such person as the Minister may appoint may —| (a) | specify the maximum amount of the expenditure (or any item thereof) incurred to be allowed under subsection (1); | | (b) | impose such conditions as the Minister or appointed person thinks fit when approving the research and development project; and | | (c) | specify the period or periods for which deduction is to be allowed under this section. |
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| (3) No deduction is allowed under this section in respect of any expenditure which is not allowed under section 14 or 14C. |
| (3A) The total amount of deduction allowed under this section for any expenditure incurred by a person for an approved research and development project in Singapore must not, after adding the total amount of deductions allowed under sections 14, 14C and 14D for the same expenditure, result in the total amount of deductions for that expenditure exceeding 200% of that expenditure; and if it so exceeds then no deduction is allowed under this section for that expenditure. [45/2018] |
| (3AA) No deduction is allowed to any person under this section in respect of any expenditure for which a deduction has been allowed under section 14D(2). |
(3B) Section 14C(4) and (5) applies in relation to the deduction of the expenditure and payments referred to in subsection (1)(aa), as it applies in relation to the deduction of the expenditure and payments referred to in section 14C(1)(aa), (c) and (f), subject to the following modifications:| (a) | a reference to the amount of the expenditure or payments is a reference to the amount of deduction that would have been allowed under this section for the expenditure or payments referred to in subsection (1)(aa) but for this subsection; | | (b) | a reference to a specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula | | is the amount of the deduction referred to in paragraph (a); |
| | | is the rate of tax specified in section 43(1)(a); and |
| | | | | (i) | in a case where the concessionary income (as defined in section 14C(5)) derived by the person from the trade or business carried on by the person is subject to tax at a single concessionary rate of tax, that rate; or |
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| | | (ii) | in a case where the concessionary income derived by the person from the trade or business carried on by the person is subject to tax at 2 or more concessionary rates of tax, the higher or highest of those rates. |
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| (3C) No research and development project may be approved under this section after 31 March 2020. [37/2014] |
| (4) In this section, “approved” means approved by the Minister or such person as the Minister may appoint. |
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| Deduction for expenditure incurred on qualifying innovation projects |
14EA.—(1) Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), there is allowed in respect of all of the person’s trades and businesses, a deduction for qualifying expenditure incurred for a qualifying innovation project undertaken for the purpose of any of those trades and businesses, computed in accordance with the formula| where A is the lower of the following: |
| (a) | the qualifying expenditure incurred during the basis period for that year of assessment; | | (b) | $50,000. |
(2) Subsection (1) does not apply if —| (a) | a trade or business of the person involves the carrying out of one or more relevant activities on behalf of another person; and | | (b) | the qualifying innovation project is undertaken in the course of carrying on that trade or business. |
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| (3) No deduction is allowed to a person under this section in respect of any expenditure for which a deduction or an allowance is given or made under section 14, 14A, 14C, 14D, 14U or 19B, as the case may be. |
| (4) Where the qualifying expenditure incurred by a person is also eligible for a deduction under section 14C or 14D and that person makes a claim for a deduction under this section, no deduction under section 14C or 14D is allowed to that person in respect of the whole or any part of the qualifying expenditure. |
(5) For the purpose of subsection (1), a claim for deduction is allowed to a person only if —| (a) | there is an undertaking by the person that the expenditure is not incurred in the circumstances mentioned in subsection (2)(a) and (b); and | | (b) | the claim is made in such manner and subject to such conditions as the Comptroller may require. |
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| (6) For the purpose of subsection (1), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), incurred qualifying expenditure in respect of those firms for the purposes of the individual’s trade or business, the deduction that may be allowed to the individual for that expenditure in respect of all of the individual’s trades and businesses must not exceed the amount computed in accordance with subsection (1) for that year of assessment. |
| (7) For the purposes of subsection (1), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), incurred qualifying expenditure for the purposes of the partnership’s trade or business, the aggregate of the deductions that may be allowed to all the partners of the partnership for that expenditure in respect of all of the trades and businesses of the partnership must not exceed the amount computed in accordance with subsection (1) for that year of assessment. |
| (8) For the purposes of this section, any qualifying expenditure incurred by a person prior to the commencement of that person’s trade or business is treated as having been incurred by that person on the first day that the person carries on that trade or business, but a deduction for such expenditure is subject to section 14X. |
(9) In this section —| “approved educational or research institution” means any institution approved by the Minister for the purpose of this section, that provides education or carries out research and development; |
| “qualifying expenditure” means any payment made by a person to an approved educational or research institution for the purpose of undertaking a qualifying innovation project with the person; |
“qualifying innovation project” means a project that —| (a) | is undertaken by a person with an approved educational or research institution; | | (b) | predominantly involves the carrying out of one or more relevant activities; and | | (c) | is certified by the approved educational or research institution as a project that predominantly involves the carrying out of one or more relevant activities; |
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“relevant activity” means an activity falling within any of the following categories of activities, being categories specified in the document “Oslo Manual 2018 — Guidelines for Collecting, Reporting and Using Data on Innovation” published by the Organisation for Economic Co-operation and Development on 22 October 2018:| (a) | research and experimental development activities; | | (b) | engineering, design and other creative work activities; | | (c) | intellectual property-related activities; | | (d) | software development and database activities. |
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| (10) A reference in this section to qualifying expenditure excludes any expenditure to the extent that it is or is to be subsidised by any grant or subsidy from the Government or a statutory board. [Act 30 of 2023 wef 30/10/2023] |
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| Expenditure on building modifications for benefit of disabled employees |
14F.—(1) Subject to subsections (2) and (3), where any person being the owner or lessee of any premises and carrying on a trade, business or profession at those premises has incurred approved expenditure on any addition or alteration to those premises for the purpose of facilitating the mobility or work of any disabled employee, there is, in ascertaining the income of that person for the basis period during which the expenditure was incurred, allowed as a deduction an amount equal to that expenditure.| (2) Where any person has been allowed a deduction under subsection (1), no deduction is allowed under any other provision of this Act in respect of the expenditure for which the deduction was allowed. |
| (3) Where a person has been allowed a deduction or deductions under this section amounting to $100,000, whether for one or more years of assessment, no further deduction is allowed to that person under this section. |
| (4) In this section, “approved” means approved by the Minister or such person as the Minister may appoint. |
| (5) No approval may be granted under this section after 14 February 2023. [Act 30 of 2023 wef 15/02/2023] [14H |
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| Provisions by banks and qualifying finance companies for doubtful debts and diminution in value of investments |
14G.—(1) Subject to this section, for the purpose of ascertaining the income for the basis period for any year of assessment of a bank or qualifying finance company, there is allowed as a deduction an amount in respect of the provision for doubtful debts arising from its loans and the provision for diminution in the value of its investments in securities, made in that basis period.(2) Where in the basis period for any year of assessment —| (a) | any amount of the provisions is written back, that amount is treated as having been allowed as a deduction under this section and is deemed to be a trading receipt of the bank or qualifying finance company for that basis period except as provided in subsection (2CA); [Act 30 of 2023 wef 30/10/2023] | | (b) | the bank or qualifying finance company permanently ceases to carry on business in Singapore, any provisions in the account of the bank or qualifying finance company as at the date of the cessation are deemed to be a trading receipt of the bank or qualifying finance company for that basis period. |
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| (2A) If, for a basis period beginning on or after 1 January 2018, the relevant amount for the bank or qualifying finance company is a negative amount, then, for the purpose of subsection (1), the bank or qualifying finance company is treated as having made in that basis period provisions for doubtful debts arising from its loans and for the diminution in the value of its investments in securities, of an amount equal to that amount expressed as a positive amount. [45/2018] |
| (2B) If, for a basis period beginning on or after 1 January 2018, the relevant amount for the bank or qualifying finance company is a positive amount, then, for the purpose of subsection (2)(a), the bank or qualifying finance company is treated as having written back in that basis period an amount of its provisions that is equal to that amount. [45/2018] |
(2C) The relevant amount for the bank or qualifying finance company in subsections (2A) and (2B) is an amount computed using the formula A + B + C, where —| (a) | A is —| (i) | if a loss is recognised, in accordance with FRS 109 or SFRS(I) 9 (as the case may be), in the profit and loss account of the bank or qualifying finance company for that basis period in respect of its loans that are not credit‑impaired, owing to any provisions made for expected credit losses arising from those loans, the amount of that loss expressed as a negative amount; or | | (ii) | if a gain is recognised, in accordance with FRS 109 or SFRS(I) 9 (as the case may be), in the profit and loss account of the bank or qualifying finance company for that basis period in respect of its loans that are not credit‑impaired, owing to a write‑back of any provisions made for expected credit losses arising from those loans, the amount of that gain expressed as a positive amount; |
| | (b) | B is —| (i) | if a loss is recognised, in accordance with FRS 109 or SFRS(I) 9 (as the case may be), in the profit and loss account of the bank or qualifying finance company for that basis period in respect of its investments in securities that are not credit‑impaired, owing to any provisions made for expected credit losses arising from those securities, the amount of that loss expressed as a negative amount; or | | (ii) | if a gain is recognised, in accordance with FRS 109 or SFRS(I) 9 (as the case may be), in the profit and loss account of the bank or qualifying finance company for that basis period in respect of its investments in securities that are not credit‑impaired, owing to a write‑back of any provisions made for expected credit losses arising from those securities, the amount of that gain expressed as a positive amount; and |
| | (c) | C is —| (i) | if an MAS notice mentioned in subsection (6A) requires the bank or qualifying finance company to make for that basis period an amount of allowance for loans or investments in securities that are not credit‑impaired, and that amount is recognised in the retained earnings account of the bank or qualifying finance company as required by that MAS notice, that amount expressed as a negative amount; or | | (ii) | if an MAS notice mentioned in subsection (6A) requires the bank or qualifying finance company to reverse an amount of any allowance mentioned in sub‑paragraph (i) for a basis period, and that amount is recognised in the retained earnings account of the bank or qualifying finance company as required by that MAS notice, that amount expressed as a positive amount. [45/2018] |
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(2CA) Subject to subsection (2CB), subsection (2)(a) does not apply to the following provisions and allowance written back by a bank or qualifying finance company in the basis period for the year of assessment 2022 or any subsequent year of assessment:| (a) | a provision made for expected credit losses of any of the following loans that are not credit-impaired, being losses that were recognised in accordance with FRS 109 or SFRS(I) 9 (as the case may be) in the basis period for the year of assessment 2021 or any preceding year of assessment:| (i) | a loan to and placement with any financial institution in Singapore or any other country; | | (ii) | a loan to the Government or the government of any other country; | | (iii) | a loan to and placement with the Monetary Authority of Singapore or the central bank or other monetary authority of any other country; | | (iv) | a loan to any statutory body or corporation guaranteed by the Government or the government of any other country; | | (v) | such other loan or advance as may be prescribed by rules made under section 7; |
| | (b) | a provision made for expected credit losses of securities issued or guaranteed by the Government or the government of any country that are not credit-impaired, being losses that were recognised in accordance with FRS 109 or SFRS(I) 9 (as the case may be) in the basis period for the year of assessment 2021 or any preceding year of assessment; | | (c) | an allowance for any loan mentioned in paragraph (a)(i) to (v) or any investment in securities mentioned in paragraph (b) where the loan or securities are not credit-impaired, being allowances that were recognised in the retained earnings account of the bank or qualifying finance company as required by an MAS notice in the basis period for the year of assessment 2021 or any preceding year of assessment. [Act 30 of 2023 wef 30/10/2023] |
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| (2CB) Subsection (2CA) applies only if the bank or qualifying finance company is able to directly identify, to the satisfaction of the Comptroller, the amount of the provision or allowance mentioned in paragraph (a), (b) or (c) of that subsection that was written back in the basis period for the year of assessment concerned. [Act 30 of 2023 wef 30/10/2023] |
(2D) For the purpose of subsection (2)(b), if the bank or qualifying finance company permanently ceases to carry on business in Singapore in a basis period beginning on or after 1 January 2018, then the amount that is deemed as its trading receipts for that basis period is the sum of —| (a) | any provisions in its expected credit loss allowance account in respect of loans and securities that are not credit‑impaired at the date of the cessation; and | | (b) | any provisions at that date in the reserve account that it is required to maintain by an MAS notice. [45/2018] |
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(2E) Where, in any basis period that begins on a day before 1 January 2018 —| (a) | the bank or qualifying finance company prepares or maintains financial accounts in accordance with FRS 109 or SFRS(I) 9 (as the case may be), even though it is only required to do so in a later basis period; and | | (b) | the relevant amount for it is a negative amount, |
| then, for the purpose of subsection (1), the bank or qualifying finance company is treated as having made in that basis period provisions for doubtful debts arising from its loans and for the diminution in the value of its investments in securities, of an amount equal to that amount expressed as a positive amount. |
[45/2018] |
(2F) Where, in any basis period that begins on a day before 1 January 2018 —| (a) | the bank or qualifying finance company prepares or maintains financial accounts in accordance with FRS 109 or SFRS(I) 9 (as the case may be), even though it is only required to do so in a later basis period; and | | (b) | the relevant amount for it is a positive amount, |
| then, for the purpose of subsection (2)(a), the bank or qualifying finance company is treated as having written back in that basis period an amount of its provisions that is equal to that amount. |
[45/2018] |
| (2G) The relevant amount for the bank or qualifying finance company in subsections (2E) and (2F) is an amount computed using the formula A + B, where A and B have the meanings given by subsection (2C). [45/2018] |
| (2H) The Minister may make regulations to provide for any transitional matter in connection with the application of subsections (2A) to (2G) to a bank or qualifying finance company for the year in which it first becomes a qualifying person within the meaning of section 34AA, including substituting a provision in place of subsection (5). [45/2018] |
| (3) The total amount deemed as trading receipts under subsection (2), (2B), (2D), (2F) or (4A)(f) must not exceed the total amount of all deductions previously allowed under this section. [45/2018] |
| (4) Where in a scheme of amalgamation involving 2 or more banks or finance companies whereby the whole or substantially the whole of the undertaking of any bank or finance company is transferred to another bank or finance company, the Minister may, if he or she thinks fit and on such conditions as he or she may impose, by order declare that any provisions in the account of the transferor bank or transferor finance company which have been transferred to the transferee bank or transferee finance company are not deemed under subsection (2)(b) to be a trading receipt of the transferor bank or transferor finance company; and the provisions so declared are for the purposes of this section treated as having been allowed to the transferee bank or transferee finance company as a deduction under this section. |
(4A) Where —| (a) | loans or securities are transferred by a bank or qualifying finance company (called in this subsection the transferor) to another person (called in this subsection the transferee); | | (b) | the transfer is not pursuant to a scheme of amalgamation; | | (c) | provision for doubtful debts arising from those loans, or provision for diminution in the value of investments in those securities, is also transferred by the transferor to the transferee; and | | (d) | a deduction of an amount in respect of that provision was previously allowed under this section to the transferor, |
| (e) | in a case where both the transferor and the transferee are in the business of lending money on the date of the transfer, the deduction previously allowed to the transferor is treated, for the purposes of this section, as having been allowed to the transferee under this section; and | | (f) | in any other case, the provision is treated as a trading receipt of the transferor for the basis period in which the date of transfer falls. [39/2017; 45/2018] |
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(5) Subject to subsection (6), the total amount of the provisions to be allowed as a deduction under this section for any year of assessment must not exceed the lowest of —| (a) | 25% of the qualifying profits for the basis period for that year of assessment; | | (b) | 1/2% of the prescribed value of the loans and investments in securities in the basis period for that year of assessment; and | | (c) | 3% of the prescribed value of the loans and investments in securities in the basis period for that year of assessment, less the total amount of all deductions previously allowed under this section which have not been deemed to be trading receipts under subsections (2), (2B), (2D), (2F) and (4A)(f). [45/2018] |
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(6) No deduction is allowed for any year of assessment —| (a) | where there are no qualifying profits in the basis period for that year of assessment; or | | (b) | where the total amount of all deductions previously allowed under this section, which have not been deemed to be trading receipts under subsections (2), (2B), (2D), (2F) and (4A)(f), is in excess of 3% of the prescribed value of the loans and investments in securities for the relevant basis period for that year of assessment. [45/2018] |
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| (6AA) Subsections (5) and (6) do not apply to any bank or qualifying finance company for the years of assessment 2021 and 2022. [41/2020] |
(6AB) For the purposes of subsections (5) and (6) —| (a) | a reference to a loan is to a loan that has been disbursed by the bank or qualifying finance company, but does not include —| (i) | a loan to and placement with any financial institution in Singapore or any other country; | | (ii) | a loan to the Government or the government of any other country; | | (iii) | a loan to and placement with the Monetary Authority of Singapore or the central bank or other monetary authority of any other country; | | (iv) | a loan to any statutory body or corporation guaranteed by the Government or the government of any other country; or | | (v) | such other loan or advance as may be prescribed by rules made under section 7; and |
| | (b) | a reference to securities does not include securities issued or guaranteed by the Government or the government of any other country. [27/2021] |
|
| (6A) The provisions in this section apply to any allowance made by a bank or qualifying finance company for loans or securities as required by an MAS notice, as they apply in relation to a provision for doubtful debts arising from loans, or for diminution in the value of investments in securities, of the bank or qualifying finance company. [45/2018] |
| (6B) No deduction is allowed under subsection (1) starting from the year of assessment for a basis period that begins on or after 1 January 2029. [45/2018] [Act 30 of 2023 wef 30/10/2023] |
(7) In this section —| “bank” means a bank or merchant bank licensed under the Banking Act 1970; |
| [Deleted by Act 30 of 2023 wef 30/10/2023] |
| “credit‑impaired” and “expected credit loss” have the same meanings as in FRS 109 or SFRS(I) 9, as the case may be; |
| “FRS 109” and “SFRS(I) 9” have the meanings given by section 34AA(15); |
| “loan” means any loan, advance or credit facility made or granted by a bank or qualifying finance company, including an overdraft; |
“MAS notice” means a notice or direction of the Monetary Authority of Singapore given under —| (a) | section 55 of the Banking Act 1970; | | (b) | section 55 of the Banking Act 1970 as applied by section 55ZJ of that Act; or | | (c) | section 30 of the Finance Companies Act 1967; |
|
| “Monetary Authority of Singapore” means the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act 1970; |
| “prescribed value of loans and investments in securities”, in relation to the basis period for any year of assessment, means the value (ascertained in such manner as the Comptroller may determine) of the loans and investments in securities (excluding any loan or investment in respect of which any deduction has been allowed under any other section of this Act) as at the last day of each month in that basis period added together and divided by the number of months in that basis period; |
| “provisions” means the provision for doubtful debts arising from the loans of a bank or qualifying finance company and the provision for diminution in the value of its investments in securities; |
| “qualifying finance company” means a company licensed under the Finance Companies Act 1967 to carry on financing business; |
| “qualifying profit” means the net profit (excluding any extraordinary gain which is not subject to tax) as shown in the audited accounts of the bank or qualifying finance company before deducting provision for taxation, tax paid, any extraordinary loss not allowed as a deduction, provision for doubtful debts arising from loans and provision for diminution in value of investments in securities; |
| “securities” means debentures, bonds or notes. [14I [39/2017; 45/2018; 1/2020; 27/2021] |
|
|
| Further or double deduction for overseas investment development expenditure |
14H.—(1) Where the Comptroller is satisfied that any investment development expenditure for the carrying out of an approved investment project overseas has been incurred by an approved firm or company resident in Singapore and carrying on business in Singapore, there is to be allowed —| (a) | where such expenditure is allowable as a deduction under section 14, a further deduction of the amount of such expenditure in addition to the deduction allowed under that section; or | | (b) | where such expenditure is not allowable as a deduction under section 14, a deduction equal to twice the amount of such expenditure. |
(1A) For the purposes of subsection (1) and subject to subsection (1B), the firm or company —| (a) | need not be an approved firm or approved company to be allowed a deduction under subsection (1) in respect of the following expenditure that is directly attributable to the carrying out of any study to identify investment overseas:| (i) | where the expenditure is incurred during the period between 1 April 2012 and 16 February 2021 (both dates inclusive) — any investment development expenditure; | | (ii) | where the expenditure is incurred during the period between 17 February 2021 and 31 December 2025 (both dates inclusive) — such investment development expenditure as is prescribed by rules made under section 7; and |
| | (b) | need not seek approval for the investment project to which the expenditure relates. [45/2018; 41/2020; 27/2021] |
|
| (1AA) Rules made for the purposes of subsection (1A)(a)(ii) may be made to take effect from (and including) 17 February 2021. [27/2021] |
(1B) The amount of the expenditure for which the deduction may be allowed under subsection (1A), after adding the expenditure for which a deduction is allowed to the firm or company under section 14B(2A), must not exceed —| (a) | for a year of assessment before the year of assessment 2019 — $100,000; or | | (b) | for the year of assessment 2019 or a subsequent year of assessment — $150,000. [45/2018] |
|
(2) The Minister or an authorised body may —| (a) | specify the maximum amount of investment development expenditure for the carrying out of an approved investment project overseas (or any item thereof) to be allowed under subsection (1), other than expenditure that is the subject of a claim for deduction under subsection (1A); and | | (b) | impose such conditions as the Minister or authorised body thinks fit when approving the investment project for which the deduction is to be allowed under this section. [Act 41 of 2020 wef 12/04/2024] |
|
(2A) The sum of —| (a) | the amount of expenditure allowed as a deduction or a further deduction to a firm or company under subsection (1); and | | (b) | any amount of expenditure allowed as a deduction or a further deduction to the firm or company under section 14I(1), |
| must not exceed $1 million for each year of assessment. |
[2/2016] |
(3) No deduction is allowed under this section in respect of —| (a) | travelling, accommodation and subsistence expenses or allowances for —| (i) | more than 2 employees taking part in any study to identify investment overseas; or | | (ii) | more than the approved number of employees taking part in any feasibility or due diligence study on any approved investment overseas; |
| | (b) | any expenditure incurred during the basis period for a year of assessment by a firm or company if —| (i) | any part of its income for that year of assessment is exempt or partly exempt from tax under section 13A, 13E, 13P or 13S; | | (ii) | any part of its income for that year of assessment is subject to tax at a concessionary rate of tax under section 43C, 43D, 43E, 43G, 43I, 43J, 43L, 43P, 43Q, 43R, 43U, 43V or 43X, or the regulations made under any of those sections; or | | (iii) | it is given tax relief under Part 2, 3 or 4 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 for that year of assessment, or is given an investment allowance under Part 8 of that Act for that year of assessment; or |
| | (c) | any expenditure to the extent it is or is to be subsidised by a grant or subsidy from the Government or a statutory board. [2/2016; 45/2018] |
|
| (4) Despite subsection (3), the Minister or an authorised body may, in any particular case, and subject to such conditions precedent and conditions subsequent as the Minister or authorised body may impose, allow a deduction of any expenditure referred to in subsection (3)(b). [2/2016] [Act 41 of 2020 wef 12/04/2024] |
| (5) If the firm or company fails to comply with a condition subsequent imposed under subsection (4), the deduction allowed to the firm or company under that subsection is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the non‑compliance. [2/2016] |
| (5A) In relation to a deduction under this section, a condition is a condition subsequent if or to the extent that it can only be satisfied after the deduction is allowed, and a condition is a condition precedent if or to the extent that it is not a condition subsequent; and accordingly a condition may, depending on the circumstances, be either a condition precedent or a condition subsequent. [2/2016] |
| (6) Section 14B(10) applies, with the necessary modifications, to any firm or company to which a deduction is allowed under subsection (1). |
(7) In this section —| “approved” means approved by the Minister or an authorised body; [Act 41 of 2020 wef 12/04/2024] |
“investment development expenditure” means —| (a) | expenses directly attributable to the carrying out of —| (i) | any study to identify investment overseas; and | | (ii) | any feasibility or due diligence study on any approved investment overseas; and |
| | (b) | expenses incurred on or after 17 February 2021 for the transportation of any sample for use in any study carried out overseas to identify investment overseas. [27/2021] |
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| (8) No approval may be granted under this section after 31 December 2025. [14K [34/2016; 41/2020] |
|
| Further or double deduction for salary expenditure for employees posted overseas |
14I.—(1) Where the Comptroller is satisfied that —| (a) | an approved firm or company resident and carrying on business in Singapore has incurred, at any time between 1 July 2015 and 31 December 2025 (both dates inclusive), salary expenditure specified for it under subsection (7) for its employees posted to an overseas establishment of the firm or company; and | | (b) | the firm or company has satisfied the conditions precedent imposed under subsection (6) for a deduction under this section, |
| then there is to be allowed to the firm or company — |
| (c) | where such expenditure is allowable as a deduction under section 14, a further deduction of the amount of such expenditure in addition to the deduction allowed under that section; or | | (d) | where such expenditure is not allowable as a deduction under section 14, a deduction equal to twice the amount of such expenditure. [2/2016; 41/2020] |
(2) No deduction is to be allowed under subsection (1) for salary expenditure that is incurred more than 3 years after either of the following dates:| (a) | the date the overseas establishment is incorporated, established or formed; | | (b) | if the overseas establishment (being a company) is an overseas establishment of the approved firm or company as a result of any shareholding of the approved firm or company in the establishment, but the firm or company did not hold any shares in the overseas establishment on the date of the establishment’s incorporation, the earliest date on which the firm or company acquires any shares in the overseas establishment. [2/2016] |
|
| (3) Subject to subsection (4), the amount of salary expenditure allowed as a deduction for a year of assessment under subsection (1) must not exceed the amount specified for the firm or company under subsection (8). [2/2016] |
(4) The sum of —| (a) | the amount of expenditure allowed as a deduction or a further deduction to a firm or company under subsection (1); and | | (b) | any amount of expenditure allowed as a deduction or a further deduction to the firm or company under section 14H(1), |
| must not exceed $1 million for each year of assessment. |
[2/2016] |
| (5) The Minister or an authorised body may approve a firm or company for the purposes of claiming a deduction under subsection (1). [2/2016] [Act 41 of 2020 wef 12/04/2024] |
| (6) When approving a firm or company under subsection (5), the Minister or authorised body may impose conditions precedent and conditions subsequent for a deduction under this section. [2/2016] [Act 41 of 2020 wef 12/04/2024] |
(7) When approving a firm or company under subsection (5), the Minister or authorised body must specify the salary expenditure for which the firm or company may be allowed the deduction by reference to —| (a) | the employees for whom the expenditure is incurred; | | (b) | the overseas establishment in which they work; | | (c) | the work which they carry out in the overseas establishment; and | | (d) | the period in which the expenditure is incurred. [2/2016] [Act 41 of 2020 wef 12/04/2024] |
|
| (8) When approving a firm or company under subsection (5), the Minister or authorised body may also specify the maximum amount of expenditure for which the deduction is allowed. [2/2016] [Act 41 of 2020 wef 12/04/2024] |
| (9) No approval may be granted under subsection (5) after 31 December 2025. [2/2016; 41/2020] |
(10) No deduction may be allowed under subsection (1) in respect of —| (a) | any expenditure incurred during the basis period for a year of assessment by a firm or company if —| (i) | any part of its income for that year of assessment is exempt or partly exempt from tax under section 13A, 13E, 13P or 13S; | | (ii) | any part of its income for that year of assessment is subject to tax at a concessionary rate of tax under section 43C, 43D, 43E, 43G, 43I, 43J, 43L, 43P, 43Q, 43R, 43U, 43V or 43X, or the regulations made under any of those sections; or | | (iii) | it is given tax relief under Part 2, 3 or 4 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 for that year of assessment, or is given an investment allowance under Part 8 of that Act for that year of assessment; or |
| | (b) | any expenditure to the extent it is or is to be subsidised by a grant or subsidy from the Government or a statutory board. [2/2016; 45/2018] |
|
| (11) Despite subsection (10), the Minister or an authorised body may, in any particular case, subject to such conditions precedent and conditions subsequent as the Minister or authorised body may impose, allow a deduction of any expenditure referred to in subsection (10)(a). [2/2016] [Act 41 of 2020 wef 12/04/2024] |
| (12) A firm or company is not entitled to a deduction under subsection (1) for any salary expenditure if and to the extent that an overseas establishment of the firm or company has been allowed at any time a deduction for it under any law relating to income tax or tax of a similar character of a country outside Singapore. [2/2016] |
| (13) Despite anything in this section, where it appears to the Comptroller that in any year of assessment any deduction which has been allowed under this section ought not to have been allowed, the Comptroller may, within the year of assessment or within 4 years after the expiry of that year of assessment, make such assessment or additional assessment upon the firm or company as may be necessary to make good any loss of tax. [2/2016] |
| (14) If a condition subsequent imposed under subsection (6) is not complied with in respect of any deduction allowed to a firm or company under subsection (1) or part of such deduction, the deduction or part of the deduction is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the non‑compliance. [2/2016] |
| (15) If a condition subsequent imposed under subsection (11) is not complied with, the deduction allowed to the firm or company under that subsection is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the non‑compliance. [2/2016] |
| (16) Where a firm or company has been allowed a deduction under subsection (1) even though it is not entitled to it or a part of it by reason of subsection (12), the deduction or part of the deduction is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the facts by reason of which the firm or company is not entitled to the deduction or part of it. [2/2016] |
| (17) If, at any time after a firm or company has been allowed a deduction under subsection (1) for any salary expenditure, the firm or company is reimbursed for any amount of the expenditure, the amount of the deduction that corresponds to the expenditure reimbursed is treated as the firm’s or company’s income for the year of assessment in which the Comptroller discovers the reimbursement. [2/2016] |
(18) In this section —“overseas establishment”, in relation to an approved firm or company, means any of the following:| (a) | a branch, representative office, or subsidiary of the firm or company that is established, formed or incorporated in a country outside Singapore; | | (b) | a partnership of which the firm or company is a partner, that is established or formed in a country outside Singapore; | | (c) | such other entity as the Minister or authorised body approves as an overseas establishment of the firm or company at the time of the approval of the firm or company under subsection (5); [Act 41 of 2020 wef 12/04/2024] |
|
| “salary expenditure”, in relation to an employee of a firm or company, means expenditure comprising wages and salary for the employee, but excludes any bonus, commission, gratuity, leave pay, perquisite, allowance, or any other payment (whether in cash or kind) prescribed under section 7. [2/2016] |
|
(19) In this section, a firm or company is treated as having incurred salary expenditure for its employees posted to an overseas establishment of the firm or company, if —| (a) | it directly incurs that amount of expenditure for which it is not reimbursed; or | | (b) | the overseas establishment directly incurs that amount of expenditure and the firm or company is liable to reimburse the overseas establishment for it, and the incurring of the expenditure and of the liability both occur —| (i) | when the firm or company is an approved firm or company resident and carrying on business in Singapore; and | | (ii) | in the period between 1 July 2015 and 31 December 2025 (both dates inclusive). [2/2016; 41/2020] |
|
|
| (20) In a case referred to in subsection (19)(b), the date on which salary expenditure is treated as incurred for the purposes of subsection (2) is the later of the date it is incurred by the overseas establishment and the date the firm or company incurs the liability to reimburse the overseas establishment. [2/2016] |
| (21) In relation to a deduction under this section, a condition is a condition subsequent if or to the extent that it can only be satisfied after the deduction is allowed, and a condition is a condition precedent if or to the extent that it is not a condition subsequent; and accordingly a condition may, depending on the circumstances, be either a condition precedent or a condition subsequent. [14KA [2/2016] |
|
| Deduction for upfront land premium |
14J.—(1) Where the Comptroller is satisfied that an upfront land premium has been paid by a lessee to a relevant body in respect of a designated lease for the construction or use of a building or structure for the purposes of carrying on any qualifying activity in that building or structure, there is, subject to this section, allowed to the lessee, for each year of assessment in the basis period for which the qualifying activity is carried on, a deduction of an amount of such expenditure ascertained by the formula | | is the amount of upfront land premium paid; and |
| | | is the number of years of the term of the designated lease for which the upfront land premium was paid. |
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|
(2) Where an assignee has incurred any expenditure in acquiring the remaining term of a designated lease for the construction or use of a building or structure for the purposes of carrying on any qualifying activity, there is, subject to this section, allowed to the assignee, for each year of assessment in the basis period for which the qualifying activity is carried on, a deduction of an amount of such expenditure ascertained by the formula | | | | (a) | the residual expenditure immediately after the assignment; or |
|
| | | (b) | the upfront land premium at the time of the assignment as determined by the relevant body for the remaining term of the designated lease, |
|
| | | whichever is the lower; and |
| | | is the remaining number of years (excluding any part of a year) of the term of the designated lease for which the upfront land premium was paid. |
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| (3) Subsection (2) applies, with the necessary modifications, to any subsequent assignment of the remaining term of the designated lease. |
(4) The total amount of deductions to be allowed —| (a) | to a lessee under subsection (1), must not exceed the amount of the upfront land premium paid by the lessee to the relevant body in respect of the designated lease; and | | (b) | to an assignee under subsection (2) or (3) (as the case may be) must not exceed the amount of C as ascertained in the formula in subsection (2). |
|
| (5) Where more than one‑tenth of the total built‑up area of a building or structure constructed on any industrial land under a designated lease is not in use for any qualifying activity, no deduction under subsection (1), (2) or (3) is allowed in respect of such part of the building or structure which is not in use for any qualifying activity. |
| (6) No deduction is allowed under this section to any person for any year of assessment if the building or structure constructed on any industrial land under a designated lease is not in use for any qualifying activity at the end of the basis period for that year of assessment. |
(7) The following provisions apply where a designated lease is assigned:| (a) | where the consideration received by the assignor for the remaining term of the designated lease is less than the residual expenditure immediately before the assignment, the difference is allowed as a deduction to the assignor for the year of assessment in the basis period in which the assignor assigns the remaining term of the designated lease; | | (b) | where the consideration received by the assignor for the remaining term of the designated lease is more than the residual expenditure immediately before the assignment, the difference is deemed to be income subject to tax under section 10(1)(g) and is included as income of the assignor for the year of assessment in the basis period in which the assignor assigns the remaining term of the designated lease. |
|
| (8) The amount deemed to be income of an assignor for the purposes of subsection (7)(b) must not exceed the total amount of deduction allowed to the assignor under subsection (1), (2) or (3), as the case may be. |
(9) In this section —“designated lease” means any lease in respect of any industrial land granted to a lessee by a relevant body —| (a) | for a period of 30 years or less during the period from 1 January 1998 to the last day of the basis period for the year of assessment 2003 of the lessee (both dates inclusive); or | | (b) | for a period of 60 years or less on or after the first day of the basis period for the year of assessment 2004 of the lessee and before 28 February 2013, |
| and includes an assignment of such a lease; |
|
| “industrial land” means any land permitted to be used for industrial purposes under the Planning Act 1998; |
“qualifying activity” means —| (a) | any activity in respect of any of the purposes referred to in section 18(1) other than the activities for purposes referred to in section 18(1)(h) and (i); | | (b) | any activity in respect of any prescribed purposes under section 18(1)(j) other than any activity relating to postal services or to the organisation or management of exhibitions and conferences; and | | (c) | any activity relating to the examination of motor vehicles for the purposes of section 90 of the Road Traffic Act 1961 and the rules made under that Act; |
|
“relevant body” means —| (a) | the Housing and Development Board constituted under the Housing and Development Act 1959; or | | (b) | the Jurong Town Corporation constituted under the Jurong Town Corporation Act 1968; |
|
“residual expenditure”, in relation to an assignment of a designated lease, is the amount of expenditure available for deduction to the assignor reduced by —| (a) | the amount of any deduction allowed to the assignor under this section; and | | (b) | the amount of any deduction not allowed to the assignor under subsection (5) or (6), |
| and increased by any amount deemed to be income of the assignor under subsection (7)(b); |
|
| “upfront land premium”, in relation to a designated lease, means the lump sum payment paid by a lessee to a relevant body at the commencement of the term of the designated lease. [14N [37/2014] |
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|
| Deduction for special reserve of approved general insurer |
14K.—(1) The Minister may by regulations provide that, for the purpose of ascertaining the income of a general insurer approved by the Minister or such person as the Minister may appoint from carrying on the business of insuring and reinsuring offshore risks, there is to be allowed for a period of 10 years a deduction for the prescribed amount of special reserves set aside by the approved general insurer for prescribed offshore risks.(2) Regulations made under subsection (1) may provide for —| (a) | any amount transferred to the special reserve on an earlier date to be deemed to have been transferred out of the special reserve first; | | (b) | the circumstances in which any amount which has been allowed as deduction under this section may be deemed as trading receipt for any basis period; | | (c) | the adjustment of any amount deemed as trading receipt for any basis period in respect of any amount which has been allowed as deduction under this section; and | | (d) | generally for giving full effect to or for carrying out the purposes of this section. |
|
(3) In this section —| “insurer” has the meaning given by section 43C; |
| “offshore risk” has the meaning given by section 26. [14O |
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| Deduction for treasury shares transferred under employee equity‑based remuneration scheme |
14L.—(1) Where a company transfers, in the basis period for the year of assessment 2007 or any subsequent year of assessment, treasury shares held by it to any person under a stock option scheme or a share award scheme by reason of any office or employment held in Singapore by that person, there is allowed a deduction to that company for that year of assessment.| (2) Subject to subsection (8), the amount of deduction to be allowed to a company under subsection (1) is the cost to the company of acquiring the treasury shares transferred to the person less any amount payable by that person for the treasury shares. |
| (3) For the purpose of subsection (2), the cost to the company of acquiring the treasury shares is determined by any of the methods referred to in subsection (4), being (if the company has previously been allowed a deduction under this section) the method consistently adopted by it when ascertaining its cost of acquiring shares under this section. |
(4) The methods referred to in subsection (3) are as follows:| (a) | on the basis that the treasury shares acquired by the company at an earlier point in time are deemed to be transferred first; | | (b) | on the basis of the formula | | is the number of the treasury shares transferred; |
| | | is the total number of treasury shares held by the company immediately before the transfer; and |
| | | is the total cost to the company of acquiring the treasury shares held by it immediately before the transfer; |
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| | (c) | on the basis of the aggregate cost of all treasury shares transferred under subsection (1) within every regular interval in the basis period during which the transfer in question occurred, where the cost of all treasury shares so transferred within a regular interval is ascertained by the formula | | is the total number of treasury shares transferred under subsection (1) within that interval; |
| | | is the total number of treasury shares held by the company at the end of the period equal in length to the regular interval immediately preceding that interval; |
| | | is the total number of treasury shares acquired by the company within that interval; |
| | | is the total cost to the company of acquiring the treasury shares held by it at the end of the period equal in length to the regular interval immediately preceding that interval; and |
| | | is the total cost to the company of acquiring treasury shares within that interval. |
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| (5) Where any amount payable by a person for any treasury shares transferred to the person exceeds the cost to the company of acquiring the treasury shares transferred as determined under subsection (3), the amount of the excess must be credited to an account to be kept by the company for the purpose of this section. |
(6) Where there is any balance in the account kept by the company under subsection (5) and any treasury shares are subsequently transferred by the company to any person under subsection (1), the cost to the company of acquiring the treasury shares as determined under subsection (3) is reduced —| (a) | where the amount of the balance is equal to or exceeds the amount of the cost, to zero; or | | (b) | where the amount of the balance is less than the amount of the cost, by the amount of the balance, |
| and the amount of the reduction must be debited to the account. |
|
| (7) For the purpose of this section, a company transfers treasury shares held by it to a person when the person acquires the legal and beneficial interest in the treasury shares. |
(8) Where a holding company transfers treasury shares held by it to any person employed at any time by a subsidiary of the holding company under a stock option scheme or a share award scheme —| (a) | no deduction is allowed to the holding company under subsection (1); | | (b) | if any amount is paid or payable by the subsidiary to the holding company for the transfer of the treasury shares, there is allowed to the subsidiary for the year of assessment which relates to the basis period in which the shares are transferred or in which the payment to the holding company for the shares becomes due and payable (whichever is the later), a deduction under subsection (1) of the lower of —| (i) | the amount, less any amount paid or payable by the person for the treasury shares, to the extent the amount so paid or payable has not been deducted from the firstmentioned amount; and | | (ii) | an amount equal to the cost to the holding company of acquiring the treasury shares transferred to that person as determined under subsection (8A) less any amount paid or payable by the person for the treasury shares; and [Act 33 of 2022 wef 04/11/2022] |
| | (c) | subsections (5) and (6) do not apply to a company to which this subsection applies. [Act 33 of 2022 wef 04/11/2022] |
|
(8A) For the purpose of subsection (8)(b), the amount equal to the cost to the holding company of acquiring the treasury shares transferred to a person is determined —| (a) | in accordance with subsection (3); or | | (b) | where the holding company is incorporated outside Singapore and the following conditions are satisfied, on the basis that the treasury shares acquired by the holding company at the latest point in time are deemed to be transferred first:| (i) | the basis is in accordance with the accounting policy of the group of companies of which the holding company is a member; | | (ii) | if there are applicable accounting principles which are generally accepted in the country in which the holding company is incorporated, the basis is in accordance with those principles; | | (iii) | the basis is consistently adopted by the holding company unless otherwise allowed by the Comptroller; and | | (iv) | the Comptroller is satisfied that the basis is not adopted for the purposes of deriving any tax benefit or obtaining any tax advantage. |
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|
(9) In this section —| [Deleted by Act 33 of 2022 wef 04/11/2022] |
“regular interval”, in relation to a basis period, means one of a number of equal periods within the basis period —| (a) | where the aggregate of all of those equal periods is equal to the basis period; and | | (b) | where the duration of each equal period —| (i) | in a case where the company has previously been allowed a deduction under this section, is the one previously adopted by the company for the purpose of this section; or | | (ii) | in any other case, is any duration adopted by the company for the purpose of this section. [14P |
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| Deduction for shares transferred by special purpose vehicle under employee equity‑based remuneration scheme |
14M.—(1) Where —| (a) | a special purpose vehicle has acquired treasury shares or previously issued shares in a company and, in the basis period for the year of assessment 2012 or any subsequent year of assessment, transfers those shares to any person under a stock option scheme or a share award scheme by reason of any office or employment held in Singapore by that person in the company; and | | (b) | payment by the company for the shares transferred to the person has become due and payable, |
| then the company is allowed a deduction for the relevant year of assessment of an amount referred to in subsection (2). |
(2) The amount of deduction under subsection (1) is —| (a) | where the transferred shares are previously issued shares, the lower of the following:| (i) | the amount paid or payable by the company for the shares, less any amount paid or payable by the person for the shares, to the extent the amount so paid or payable has not been deducted from the firstmentioned amount; | | (ii) | the cost to the special purpose vehicle of acquiring the shares, less any amount paid or payable by the person for the shares; or |
| | (b) | where the transferred shares are treasury shares, either —| (i) | the lowest of the following:| (A) | the amount paid or payable by the company to the special purpose vehicle for the shares, less any amount paid or payable by the person for the shares, to the extent the amount so paid or payable has not been deducted from the firstmentioned amount; | | (B) | the cost to the special purpose vehicle of acquiring the shares, less any amount paid or payable by the person for the shares to the extent the amount so paid or payable has not been deducted from the amount paid or payable by the special purpose vehicle to the company for those shares; | | (C) | the cost to the company of acquiring the shares, less any amount paid or payable by the person for the shares; or |
| | (ii) | where the amounts referred to in sub‑paragraph (i)(A) and (B) are both nil, the cost to the company of acquiring the shares less any amount paid or payable by the person for the shares. |
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| (3) For the purposes of subsection (2)(a)(ii) and (b)(i)(B), the cost to the special purpose vehicle of acquiring the transferred shares is determined by any of the methods referred to in subsection (4), being (if the company has previously been allowed a deduction under this section for a transfer of shares by the special purpose vehicle) the method that is consistently adopted by the special purpose vehicle when ascertaining its cost of acquiring transferred shares under this section. |
(4) The methods referred to in subsection (3) are as follows:| (a) | on the basis that the company’s shares acquired by the special purpose vehicle at an earlier point in time are deemed to be transferred first; | | (b) | on the basis of the formula | | is the number of the transferred shares; |
| | | is the total number of the company’s shares held by the special purpose vehicle immediately before the transfer; and |
| | | is the total cost to the special purpose vehicle of acquiring the company’s shares held by it immediately before the transfer; |
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| | (c) | on the basis of the aggregate cost of all of the company’s shares transferred by the special purpose vehicle under subsection (1) within every regular interval in the basis period during which the transfer in question occurred, where the cost of all shares so transferred within a regular interval is ascertained by the formula | | is the total number of the company’s shares transferred by the special purpose vehicle under subsection (1) within that interval; |
| | | is the total number of the company’s shares held by the special purpose vehicle at the end of the period equal in length to the regular interval immediately preceding that interval; |
| | | is the total number of the company’s shares acquired by the special purpose vehicle within that interval; |
| | | is the total cost to the special purpose vehicle of acquiring the company’s shares held by it at the end of the period equal in length to the regular interval immediately preceding that interval; and |
| | | is the total cost to the special purpose vehicle of acquiring the company’s shares within that interval. |
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| (5) For the purpose of subsection (2)(b)(i)(C) and (ii), the cost to the company of acquiring the transferred shares is determined by any of the methods referred to in section 14L(4) as modified in accordance with subsection (6), being (if the company has previously been allowed a deduction under this section) the method that is consistently adopted by the company when ascertaining its cost of acquiring transferred shares under this section. |
| (6) The methods referred to in section 14L(4) apply for the purposes of subsection (5) as if a reference to the transfer under section 14L were a reference to the transfer of the treasury shares by the company to the special purpose vehicle. |
(7) Where —| (a) | a special purpose vehicle has acquired treasury shares or previously issued shares in the holding company of another company (called in this section the subsidiary company) and, in the basis period for the year of assessment 2012 or any subsequent year of assessment, transfers those shares to a person under a stock option scheme or a share award scheme by reason of any office or employment held in Singapore by that person in the subsidiary company; and | | (b) | payment by the subsidiary company for the shares transferred to the person has become due and payable, |
| then the subsidiary company is allowed a deduction for the relevant year of assessment of an amount referred to in subsection (8). |
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(8) The amount of deduction under subsection (7) is —| (a) | where the transferred shares are previously issued shares, the lower of the following:| (i) | the amount paid or payable by the subsidiary company for the shares, less any amount paid or payable by the person for the shares, to the extent the amount so paid or payable has not been deducted from the firstmentioned amount; | | (ii) | the cost to the special purpose vehicle of acquiring the shares, less any amount paid or payable by the person for the shares; or |
| | (b) | where the transferred shares are treasury shares, either —| (i) | the lowest of the following:| (A) | the amount paid or payable by the subsidiary company for the shares, less any amount paid or payable by the person for the shares, to the extent the amount so paid or payable has not been deducted from the firstmentioned amount; | | (B) | the cost to the special purpose vehicle of acquiring the shares, less any amount paid or payable by the person for the shares to the extent the amount so paid or payable has not been deducted from the amount paid or payable by the special purpose vehicle to the holding company for those shares; | | (C) | the cost to the holding company of acquiring the shares, as determined in accordance with section 14L(8A), less any amount paid or payable by the person for the shares; or |
| | (ii) | where the amount referred to in sub‑paragraph (i)(B) is nil, the lower of the amounts referred to in sub‑paragraph (i)(A) and (C). |
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| (9) For the purpose of subsection (8), the cost to the special purpose vehicle of acquiring the transferred shares is determined by any of the methods referred to in subsection (4) as modified in accordance with subsection (10), being (if the subsidiary company has previously been allowed a deduction under this section for a transfer of shares by the special purpose vehicle) the method that is consistently adopted by the special purpose vehicle when ascertaining its cost of acquiring shares under this section. |
(10) The methods referred to in subsection (4) apply for the purposes of subsection (9) as if —| (a) | a reference to the company is a reference to the holding company; and | | (b) | a reference to subsection (1) is a reference to subsection (7). |
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| (11) For the purposes of this section, shares are transferred to a person when both the legal and beneficial interests in the shares are so transferred. |
| (12) No deduction is allowed to a company under this section if a deduction has already been allowed to the company under any other provision of this Act in respect of the transferred shares. |
(13) In this section —| “group of companies” means 2 or more companies each of which is either a holding company or subsidiary of the other or any of the others; |
| [Deleted by Act 33 of 2022 wef 04/11/2022] |
“previously issued shares”, in relation to a company, means shares previously issued by the company and acquired by the special purpose vehicle —| (a) | on a stock exchange in Singapore or elsewhere; or | | (b) | from a person other than the company which issued the shares; |
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“regular interval”, in relation to a basis period, means one of a number of equal periods within the basis period —| (a) | where the aggregate of all of those equal periods is equal to the basis period; and | | (b) | where the duration of each equal period —| (i) | in a case where the company or subsidiary company has previously been allowed a deduction under this section for a transfer of shares by the special purpose vehicle, is the one previously adopted by the special purpose vehicle for the purpose of this section; or | | (ii) | in any other case, is any duration adopted by the special purpose vehicle for the purpose of this section; |
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“relevant year of assessment” means the year of assessment which relates to the basis period in which the later of the following occurs:| (a) | the transfer of the shares under subsection (1) or (7) (as the case may be) to the person under a stock option scheme or a share award scheme by reason of any office or employment held in Singapore by that person in the company or subsidiary company, as the case may be; | | (b) | the payment by the company or subsidiary company (as the case may be) for the shares so transferred becomes due and payable; |
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“special purpose vehicle” means a trustee of a trust (when acting in such capacity) that is set up solely for the administration of a stock option scheme or share award scheme under which —| (a) | in the case of subsection (1), either —| (i) | shares in the company referred to in that subsection are to be used for the remuneration of a person by reason of any office or employment held by that person in the company; or | | (ii) | shares in one company within a group of companies to which the company referred to in that subsection belongs, are to be used for the remuneration of a person by reason of any office or employment held by that person in a company within the same group of companies; or |
| | (b) | in the case of subsection (7), shares in one company within a group of companies to which both the holding company and subsidiary company referred to in that subsection belong, are to be used for the remuneration of a person by reason of any office or employment held by that person in a company within the same group of companies. [14PA |
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| Deduction for renovation or refurbishment expenditure |
14N.—(1) Subject to this section, where any person carrying on a trade, profession or business has incurred on or after 16 February 2008 expenditure on any renovation or refurbishment works for the purposes of that trade, profession or business (called in this section renovation or refurbishment expenditure), the person may claim a deduction in respect of the renovation or refurbishment expenditure in accordance with this section.| (2) Any claim for renovation or refurbishment expenditure under this section must be made at the time of lodgment of the return of income for the year of assessment relating to the basis period in which the expenditure is incurred or within such further time as the Comptroller may allow. |
| (3) For the purposes of subsection (1) and subject to subsections (7), (8), (8A) and (9), a deduction is allowed for one‑third of the renovation or refurbishment expenditure for the basis period in which the expenditure was incurred and the balance is to be allowed by 2 equal deductions, one for each of the basis periods for the next 2 succeeding years of assessment. |
| (3A) Despite subsection (3), for the purposes of subsection (1) and subject to subsections (7), (8), (8A) and (9), where the renovation or refurbishment expenditure is incurred during the basis period relating to the year of assessment 2021, 2022 or 2024, a deduction is allowed for that year of assessment for the full amount of the renovation or refurbishment expenditure so incurred, unless a person elects for the deduction to be allowed in accordance with subsection (3). [41/2020; 27/2021] [Act 30 of 2023 wef 30/10/2023] |
| (3B) An election made by a person under subsection (3A) is irrevocable. |
| (4) For the purposes of this section, any renovation or refurbishment expenditure incurred by any person prior to the commencement of that person’s trade, profession or business is deemed to have been incurred by that person on the first day that person carries on that trade, profession or business but the deduction for this is subject to section 14X. [34/2016] |
| (5) Where it appears to the Comptroller that a deduction under this section which has been allowed to any person in any year of assessment ought not to have been allowed by virtue of subsection (9)(a), there is deemed to be income of the person chargeable to tax, for the year of assessment in which the Comptroller discovers the incorrect claim, an amount equal to such deduction. |
| (6) [Deleted by Act 32 of 2019] |
(7) A person is not entitled to —| (a) | a deduction for renovation or refurbishment expenditure under this section where a deduction or an allowance for that expenditure is allowed under any other provision of this Act; | | (b) | a deduction for renovation or refurbishment expenditure under this section in any basis period subsequent to the basis period in which the person permanently ceases the trade, profession or business for which purpose the expenditure was incurred; or | | (c) | [Deleted by Act 32 of 2019] | | (d) | [Deleted by Act 32 of 2019] | | (e) | [Deleted by Act 32 of 2019] | | (f) | a deduction for any amount of renovation or refurbishment expenditure incurred by a person during a specified period that begins with the basis period for the year of assessment 2013 or any subsequent year of assessment that is in excess of $300,000 of such expenditure. [32/2019] |
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| (8) In subsection (7)(f), “specified period” means a period of 3 consecutive basis periods beginning with the basis period for the year of assessment in which a deduction is first allowed to the person under this section, or any successive period of 3 consecutive basis periods. [32/2019] |
(8A) Subsection (7)(f) applies for the purpose of determining the total amount of the deductions to be allowed to all the partners of a partnership carrying on a trade, profession or business, for the renovation or refurbishment expenditure incurred by the partnership, as if —| (a) | references in those provisions to an amount of renovation or refurbishment expenditure incurred by a person were references to an amount of such expenditure incurred by the partnership; and | | (b) | references in those provisions to a specified period were references to a period of 3 consecutive basis periods beginning with the basis period for the year of assessment in which a deduction is first allowed to any partner of the partnership under this section for the renovation or refurbishment expenditure incurred by the partnership, or any successive period of 3 consecutive basis periods. [32/2019] |
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(9) No deduction is allowed to a person under this section for any renovation or refurbishment expenditure relating to —| (a) | unless otherwise approved by the Minister or such person as the Minister may appoint, any renovation or refurbishment works, the plans of which require the approval of the Commissioner of Building Control under the Building Control Act 1989; | | (b) | any designer or professional fees; | | (c) | any antique; | | (d) | any type of fine art, including any painting, drawing, print, calligraphy, mosaic, sculpture, pottery or art installation; | | (da) | any works carried out in relation to a place of residence provided or to be provided by the person to the person’s employees, where the expenditure is incurred on or after 18 December 2012; or | | (e) | such other item as may be prescribed by the Minister by regulations. [14Q |
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| Deduction for qualifying training expenditure for years of assessment 2011 to 2018 |
14O.—(1) Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2011 or the year of assessment 2012, there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction under section 14, a deduction for qualifying training expenditure incurred for the purposes of those trades and businesses computed in accordance with the formula| (a) | for the year of assessment 2011, the lower of the following:| (i) | such 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 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). |
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(2) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under section 14, a deduction for qualifying training expenditure incurred for the purposes of those trades and businesses computed in accordance with the formula| (a) | for the year of assessment 2013, the lower of the following:| (i) | such 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 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 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). [37/2014] |
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(2A) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under section 14, a deduction for qualifying training expenditure incurred for the purposes of those trades and businesses computed in accordance with the formula| (a) | for the year of assessment 2016, the lower of the following:| (i) | such expenditure incurred during the basis period for that year of assessment; | | (ii) | $1,200,000; |
| | (b) | for the year of assessment 2017, the lower of the following:| (i) | such 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 2018, the lower of the following:| (i) | such 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). [37/2014] |
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| (3) No deduction is allowed to a person under this section in respect of any expenditure which is not allowed as a deduction under section 14. |
| (4) In subsection (1), the amount under paragraph (a)(ii) is substituted with “$400,000” if the person 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) is substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011. |
(5) In subsection (2) —| (a) | if the person 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 are each substituted with “$800,000”; | | (b) | if the person 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 is substituted with “$400,000”; and | | (c) | to avoid doubt, no deduction may be made from the substituted amount in subsection (2)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2)(a)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2013, and no deduction may be made from the substituted amount in subsection (2)(c)(ii) of the lower of the amounts specified in subsection (2)(b)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2014. |
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(5AA) In subsection (2A) —| (a) | if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment are each substituted with “$800,000”; | | (b) | if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraphs of that subsection applicable to the remaining year of assessment is substituted with “$400,000”; and | | (c) | to avoid doubt, no deduction may be made from the substituted amount in subsection (2A)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2A)(a)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2016, and no deduction may be made from the substituted amount in subsection (2A)(c)(ii) of the lower of the amounts specified in subsection (2A)(b)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2017. [37/2014] |
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| (5A) For the purposes of subsections (1), (2) and (2A), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred qualifying training expenditure in respect of such firms for the purposes of his or her trade or business, the deduction that may be allowed to him or her for that expenditure in respect of all of his or her trades and businesses must not exceed the amount computed in accordance with subsection (1), (2) or (2A) (as the case may be) for that year of assessment. [37/2014] |
| (5B) For the purposes of subsections (1), (2) and (2A), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred qualifying training expenditure for the purposes of its trade or business, the aggregate of the deductions that may be allowed to all the partners of the partnership for that expenditure in respect of all of the trades and businesses of the partnership must not exceed the amount computed in accordance with subsection (1), (2) or (2A) (as the case may be) for that year of assessment. [37/2014] |
(6) In this section —“accredited”, in relation to a course, means accredited —| (a) | by the Singapore Workforce Development Agency before 4 October 2016; or | | (b) | by the SkillsFuture Singapore Agency on or after that date; |
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| “central hirer”, in relation to a central hiring arrangement for a group of related parties, means the person who carries out hiring functions for those parties under the arrangement; |
| “central hiring arrangement” means an arrangement for a group of related parties entered into for a bona fide commercial reason, where the hiring functions of the parties in the group are carried out by a single person; |
“employee”, for the purposes of the year of assessment 2012 and subsequent years of assessment, and in relation to a person carrying on a trade or business (called in this definition the first person), includes an individual within such class of individuals as may be prescribed —| (a) | who is either —| (i) | engaged by the first person (whether as agent, independent contractor or otherwise) to carry on that trade or business; or | | (ii) | engaged by another person (whether as agent, independent contractor or otherwise) to carry on that trade or business, where that other person also engages the first person (whether as agent, independent contractor or otherwise) both to carry on that trade or business and to oversee the individual in carrying on that trade or business; or |
| | (b) | to whom the first person leases property, in the course of such trade or business, to enable the individual to provide a service to any person; |
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“employee”, for the purposes of the year of assessment 2014 and subsequent years of assessment, and in relation to a person carrying on a trade or business (called in this definition the first person), includes —| (a) | an individual —| (i) | who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the first person, and who is deployed to work solely for the first person; and | | (ii) | whose salary and other remuneration (including training expenditure incurred in respect of the individual) is borne, directly or indirectly, by the first person and not claimed by the central hirer as a deduction against the central hirer’s own income; and |
| | (b) | an individual —| (i) | being an employee of another person, who is seconded to the first person under a bona fide commercial arrangement to work solely for the first person; and | | (ii) | whose salary and other remuneration (including training expenditure in respect of the individual) is borne, directly or indirectly, by the first person and not claimed by the other person as a deduction against the other person’s own income; |
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“qualifying training expenditure” means —| (a) | any training expenditure incurred directly in providing for employees —| (i) | a Workforce Skills Qualification (WSQ) training course which is accredited and conducted by a WSQ in‑house training provider; | | (ii) | a course approved by the Institute of Technical Education (ITE) under the ITE Approved Training Centre scheme; | | (iii) | on‑the‑job training by an on‑the‑job training centre which is certified by the ITE; or | | (iv) | for the purposes of the year of assessment 2012 and subsequent years of assessment, any other in‑house training course, |
| and includes any salary and other remuneration paid to in‑house trainers for conducting such courses and training (based on the hours spent in conducting the courses and training), but excludes salaries and other remuneration or payments of any employee attending or providing administrative support for the courses and imputed overheads like rental and the cost of utilities; |
| | (b) | course fees for employees paid (whether directly or in the form of reimbursement) to an external training provider, including —| (i) | registration or enrolment fees; | | (ii) | examination fees; | | (iii) | tuition fees; and | | (iv) | aptitude test fees; and |
| | (c) | rental of training facilities for any course or training referred to in paragraph (a) or (b), expenditure for meals and refreshments provided during any such course or training, and expenditure for training materials and stationery used for any such course or training, |
| but excludes any accommodation, travelling or transportation expenditure incurred in respect of employees attending or conducting the course or training, or, for the purposes of the year of assessment 2012 and subsequent years of assessment, any expenditure to the extent that it is recovered or recoverable from the employee. |
[Act 33 of 2022 wef 04/11/2022] |
| [Deleted by Act 33 of 2022 wef 04/11/2022] |
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| (7) Any expenditure incurred during any basis period for a training course referred to in paragraph (a)(iv) of the definition of “qualifying training expenditure” in subsection (6), including the rental of training facilities for the course, expenditure for meals and refreshments provided during the course, and expenditure for training materials and stationery used for the course, that is in excess of $10,000 must be disregarded for the purposes of the computation of a deduction under subsection (1), (2) or (2A). [37/2014] |
| (8) For the purposes of the year of assessment 2011 and subsequent years of assessment, a reference in this section to qualifying training expenditure excludes any expenditure to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board. [14R [Act 30 of 2023 wef 30/10/2023] |
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| Deduction for qualifying design expenditure |
14P.—(1) Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2011 or the year of assessment 2012, there are allowed, in respect of all of the person’s trades and businesses, the following deductions for qualifying design expenditure incurred for the purposes of those trades and businesses during each basis period:| (a) | where such expenditure is allowable as a deduction under section 14, a deduction of 300% of A, in addition to the deduction allowed under that section; and | | (b) | where such expenditure is not allowable as a deduction under section 14, a deduction of 400% of A, |
| (c) | for the year of assessment 2011, the lower of the following:| (i) | such expenditure incurred during the basis period for that year of assessment; | | (ii) | $800,000; and |
| | (d) | for the year of assessment 2012, the lower of the following:| (i) | such 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 (c)(i) and (ii). |
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(2) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, there are allowed, in respect of all of the person’s trades and businesses, the following deductions for qualifying design expenditure incurred for the purposes of those trades and businesses during the basis period:| (a) | where such expenditure is allowable as a deduction under section 14, a deduction of 300% of A, in addition to the deduction allowed under that section; and | | (b) | where such expenditure is not allowable as a deduction under section 14, a deduction of 400% of A, |
| (c) | for the year of assessment 2013, the lower of the following:| (i) | such expenditure incurred during the basis period for that year of assessment; | | (ii) | $1,200,000; |
| | (d) | for the year of assessment 2014, the lower of the following:| (i) | such 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 (c)(i) and (ii); and |
| | (e) | for the year of assessment 2015, the lower of the following:| (i) | such 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 (c)(i) and (ii), and the lower of the amounts specified in paragraph (d)(i) and (ii). [37/2014] |
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(2AA) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there are allowed, in respect of all of the person’s trades and businesses, the following deductions for qualifying design expenditure incurred for the purposes of those trades and businesses during the basis period:| (a) | where such expenditure is allowable as a deduction under section 14, a deduction of 300% of A, in addition to the deduction allowed under that section; and | | (b) | where such expenditure is not allowable as a deduction under section 14, a deduction of 400% of A, |
| (c) | for the year of assessment 2016, the lower of the following:| (i) | such expenditure incurred during the basis period for that year of assessment; | | (ii) | $1,200,000; |
| | (d) | for the year of assessment 2017, the lower of the following:| (i) | such 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 (c)(i) and (ii); and |
| | (e) | for the year of assessment 2018, the lower of the following:| (i) | such 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 (c)(i) and (ii), and the lower of the amounts specified in paragraph (d)(i) and (ii). [37/2014] |
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| (2A) In subsection (1), the amount under paragraph (c)(ii) is substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2012, and the balance under paragraph (d)(ii) is substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011. |
(2B) In subsection (2) —| (a) | if the person 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 are each substituted with “$800,000”; | | (b) | if the person 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 is substituted with “$400,000”; and | | (c) | to avoid doubt, no deduction may be made from the substituted amount in subsection (2)(d)(ii) or (e)(ii) of the lower of the amounts specified in subsection (2)(c)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2013, and no deduction may be made from the substituted amount in subsection (2)(e)(ii) of the lower of the amounts specified in subsection (2)(d)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2014. |
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(2C) In subsection (2AA) —| (a) | if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment are each substituted with “$800,000”; | | (b) | if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraphs of that subsection applicable to the remaining year of assessment is substituted with “$400,000”; and | | (c) | to avoid doubt, no deduction may be made from the substituted amount in subsection (2AA)(d)(ii) and (e)(ii) of the lower of the amounts specified in subsection (2AA)(c)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2016, and no deduction may be made from the substituted amount in subsection (2AA)(e)(ii) of the lower of the amounts specified in subsection (2AA)(d)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2017. [37/2014] |
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| (3) For the purposes of subsections (1), (2) and (2AA), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has incurred qualifying design expenditure during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive) in respect of such firms for the purposes of his or her trade or business, the deduction that may be allowed to him or her for that expenditure in respect of all of his or her trades and businesses must not exceed the amount computed in accordance with subsection (1), (2) or (2AA) (as the case may be) for that year of assessment. [37/2014] |
| (4) For the purposes of subsections (1), (2) and (2AA), where a partnership carrying on a trade or business has incurred qualifying design expenditure during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive) for the purposes of its trade or business, the aggregate of the deductions that may be allowed to all the partners of the partnership for that expenditure in respect of all of the trades and businesses of the partnership must not exceed the amount computed in accordance with subsection (1), (2) or (2AA) (as the case may be) for that year of assessment. [37/2014] |
| (5) For the purpose of this section, any expenditure incurred by a person prior to the commencement of that person’s trade or business is deemed to have been incurred by that person on the first day on which that person carries on that trade or business but a deduction for this is subject to section 14X. [34/2016] |
(6) In this section —| “approved design service provider” means any person who provides design consultancy services for any trade or business, and who is approved by the Minister or such person as the Minister may appoint; |
| “industrial or product design” means the professional specifications of creating and developing concepts or specifications that improve or enhance the functions, value or appearance of physical products, taking into account users’ needs, marketability and production; |
| “qualified designer” means an individual with a design‑related tertiary academic qualification of at least a diploma that is approved by such person as the Minister may appoint; |
“qualifying design expenditure” means —| (a) | expenditure incurred by the person on the staff costs of in‑house qualified designers which are attributable to an industrial or product design project approved under subsection (7) and undertaken primarily in Singapore and directly by that person; and | | (b) | where an approved design service provider has been engaged by the person to undertake primarily in Singapore for the trade or business in question an industrial or product design project approved under subsection (7) —| (i) | where more than 60% of all payments made by the person to the approved design service provider for the project are staff costs, the actual amount of staff costs; or | | (ii) | in all other cases, 60% of those payments, |
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| but does not include any expenditure or payment to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board; |
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| “staff costs” means any salary, wages and other benefits whether in the form of money or otherwise (but excluding directors’ fees), paid or granted in respect of the employment of any qualified designer which are attributable to the industrial or product design project. |
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| (7) The Minister or such person as the Minister may appoint may approve an industrial or product design project for the purposes of the definition of “qualifying design expenditure” under subsection (6), and may in granting the approval impose such conditions as the Minister or appointed person thinks fit. |
(7A) For the purpose of the definition of “qualifying design expenditure” in subsection (6), an industrial or product design project is undertaken primarily in Singapore if at least 3 of the following 5 design phases of the project are carried out wholly in Singapore:| (a) | design research; | | (b) | idea generation; | | (c) | concept development; | | (d) | technical development; | | (e) | communication. |
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| (8) Where a person fails to comply with any condition imposed under subsection (7), the aggregate of deductions allowed to the person under this section is deemed to be the person’s income for the year of assessment in which the Comptroller discovers such non‑compliance. [14S |
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| Deduction for expenditure on leasing of PIC automation equipment under qualifying lease |
14Q.—(1) Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2011 or the year of assessment 2012, there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction under section 14, a deduction for the expenditure incurred for the purposes of those trades and businesses on the leasing of one or more PIC automation equipment under a qualifying lease or leases, computed in accordance with the formula| (a) | for the year of assessment 2011, the lower of the following:| (i) | such 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 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). |
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(2) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under section 14, a deduction for the expenditure incurred for the purposes of those trades and businesses on the leasing of one or more PIC automation equipment under a qualifying lease or leases, computed in accordance with the formula| (a) | for the year of assessment 2013, the lower of the following:| (i) | such 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 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 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). [37/2014] |
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(2A) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under section 14, a deduction for the expenditure incurred for the purposes of those trades or businesses on the leasing of one or more PIC automation equipment under a qualifying lease or leases, computed in accordance with the formula| (a) | for the year of assessment 2016, the lower of the following:| (i) | such expenditure incurred during the basis period for that year of assessment; | | (ii) | $1,200,000; |
| | (b) | for the year of assessment 2017, the lower of the following:| (i) | such 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 2018, the lower of the following:| (i) | such 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). [37/2014] |
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(3) No deduction is allowed to a person under this section in respect of —| (a) | any expenditure which is not allowed as a deduction under section 14; or | | (b) | any expenditure incurred during the basis period for a year of assessment on the leasing of any PIC automation equipment under a qualifying lease where —| (i) | the equipment is sub‑leased to another person during that basis period; or | | (ii) | an allowance has been previously made to that person under section 19 or 19A in respect of the equipment. |
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(4) Where a person has incurred expenditure on both the leasing under a qualifying lease and the provision of one or more PIC automation equipment during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2015 (both years inclusive), the aggregate of the deduction under subsection (1) or (2) and the allowance under section 19A(2A) or (2B) in respect of all such expenditure must not exceed —| (a) | in the case of the year of assessment 2011, 300% of the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | $800,000; |
| | (b) | in the case of the year of assessment 2012, 300% of the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | the balance after deducting from $800,000 the lower of the amounts specified in paragraph (a)(i) and (ii); |
| | (c) | in the case of the year of assessment 2013, 300% of the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | $1,200,000; |
| | (d) | in the case of the year of assessment 2014, 300% of the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (c)(i) and (ii); and |
| | (e) | in the case of the year of assessment 2015, 300% of the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (c)(i) and (ii), and the lower of the amounts specified in paragraph (d)(i) and (ii). |
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(4A) Where a person has incurred expenditure on both the leasing under a qualifying lease and the provision of one or more PIC automation equipment during the basis period for any year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the aggregate of the deduction under subsection (2A) and the allowance under section 19A(2BAA) in respect of all such expenditure must not exceed —| (a) | in the case of the year of assessment 2016, 300% of the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | $1,200,000; |
| | (b) | in the case of the year of assessment 2017, 300% of the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and |
| | (c) | in the case of the year of assessment 2018, 300% of the lower of the following:| (i) | the aggregate of all such expenditure; | | (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). [37/2014] |
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| (5) In subsections (1) and (4), the amounts under subsections (1)(a)(ii) and (4)(a)(ii) are each substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2012, and the balances under subsections (1)(b)(ii) and (4)(b)(ii) are each substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011. |
(6) In subsections (2) and (4) —| (a) | if the person 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 those subsections applicable to the other 2 years of assessment are each substituted with “$800,000”; | | (b) | if the person 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 references to “$1,200,000” in the paragraphs of those subsections applicable to the remaining year of assessment are each substituted with “$400,000”; and | | (c) | to avoid doubt —| (i) | if the person does not carry on any trade or business during the basis period for the year of assessment 2013, no deduction may be made from the substituted amount in subsection (2)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2)(a)(i) and (ii), or from the substituted amount in subsection (4)(d)(ii) or (e)(ii) of the lower of the amounts specified in subsection (4)(c)(i) and (ii); and | | (ii) | if the person does not carry on any trade or business during the basis period for the year of assessment 2014, no deduction may be made from the substituted amount in subsection (2)(c)(ii) of the lower of the amounts specified in subsection (2)(b)(i) and (ii), or from the substituted amount in subsection (4)(e)(ii) of the lower of the amounts specified in subsection (4)(d)(i) and (ii). |
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(6AA) In subsections (2A) and (4A) —| (a) | if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the other 2 years of assessment are each substituted with “$800,000”; | | (b) | if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the remaining year of assessment are each substituted with “$400,000”; and | | (c) | to avoid doubt —| (i) | if the person does not carry on any trade or business during the basis period for the year of assessment 2016, no deduction may be made from the substituted amount in subsection (2A)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2A)(a)(i) and (ii), or from the substituted amount in subsection (4A)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (4A)(a)(i) and (ii); and | | (ii) | if the person does not carry on any trade or business during the basis period for the year of assessment 2017, no deduction may be made from the substituted amount in subsection (2A)(c)(ii) of the lower of the amounts specified in subsection (2A)(b)(i) and (ii), or from the substituted amount in subsection (4A)(c)(ii) of the lower of the amounts specified in subsection (4A)(b)(i) and (ii). [37/2014] |
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| (6A) For the purposes of subsections (1), (2), (2A), (4) and (4A), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred expenditure on the leasing of one or more PIC automation equipment under a qualifying lease or leases and (if applicable) the provision of one or more PIC automation equipment, in respect of such firms for the purposes of his or her trade or business, the deductions and allowances that may be allowed to him or her for that expenditure in respect of all of his or her trades and businesses must not exceed the amount computed in accordance with subsection (1), (2), (2A), (4) or (4A) (as the case may be) for that year of assessment. [37/2014] |
| (6B) For the purposes of subsections (1), (2), (2A), (4) and (4A), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), incurred expenditure on the leasing of one or more PIC automation equipment under a qualifying lease or leases and (if applicable) the provision of one or more PIC automation equipment, for the purposes of its trade or business, the aggregate of the deductions and allowances that may be allowed to all the partners of the partnership for that expenditure in respect of all of the trades and businesses of the partnership must not exceed the amount computed in accordance with subsection (1), (2), (2A), (4) or (4A) (as the case may be) for that year of assessment. [37/2014] |
| (6C) This section applies to expenditure incurred on procuring cloud computing services as it applies to expenditure incurred on the leasing of PIC automation equipment under a qualifying lease and, accordingly, a reference in this section (other than subsection (3)(b)) to the leasing of any PIC automation equipment under a qualifying lease includes a reference to procuring cloud computing services. |
(7) In this section —| “cloud computing” means a model for delivering information technology services under which shared resources or software, or both, are provided to computers and other devices over a network such as the Internet; |
| “cloud computing service” means any information technology service delivered by means of cloud computing; |
| “finance lease” has the meaning given by section 10C; |
| “operating lease” means a lease of any machinery or plant, other than a finance lease; |
| “PIC automation equipment” has the meaning given by section 19A(15); |
“qualifying lease” means —| (a) | any operating lease; or | | (b) | any finance lease other than a lease of PIC automation equipment which has been treated as though it had been sold pursuant to regulations made under section 10C(1). [37/2014] |
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| (8) In this section, a reference to expenditure incurred on the leasing of PIC automation equipment under a qualifying lease or the provision of PIC automation equipment 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. [14T |
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| Deduction for expenses incurred before first dollar of income from trade, business, profession or vocation |
14R.—(1) Subject to section 14X, a person who —| (a) | derives the first dollar of income from a trade, business, profession or vocation in an applicable basis period; and | | (b) | incurs a previous expense for which the person would have been allowed a deduction or further deduction under a provision of this Part if the person had commenced the trade, business, profession or vocation by the time it is incurred, |
| is allowed the deduction or further deduction for the previous expense under and in accordance with that provision. |
[34/2016] (2) For the purposes of subsection (1) —| (a) | a previous expense is any outgoing or expense incurred for the purpose of that trade, business, profession or vocation at any time before the date the person derives that first dollar of income, but no earlier than 12 months before the first day of the applicable basis period (called in this section the first day); | | (b) | the person is deemed to have commenced the person’s trade, business, profession or vocation on the first day; and | | (c) | any previous expense incurred by the person before the first day but no earlier than 12 months before that day is deemed to have been incurred by the person on that day. |
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(3) To avoid doubt —| (a) | subsection (1) is subject to any other requirement to be satisfied under the relevant provision of this Part before the deduction or further deduction may be allowed; and | | (b) | a deduction or further deduction that may be or has been allowed by virtue of subsection (1) is considered for the purposes of this Act as one that may be or has been allowed under the relevant provision of this Part. |
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| (4) Subsection (1) does not apply to the business of making investments carried out by a company or trustee of a property trust, to which section 10D applies. |
| (5) Subsection (1) is without prejudice to any provision of this Part allowing the deduction or further deduction of any expense or outgoing incurred at an earlier point in time. |
(6) In this section —| (a) | a reference to an applicable basis period is a reference to the basis period for the year of assessment 2012 or a subsequent year of assessment; and | | (b) | a reference to a provision of this Part includes a reference to regulations made under a provision of this Part, but excludes this section. [14U |
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| Deduction for amortisation of intangible asset created under public‑private partnership arrangement |
14S.—(1) Where —| (a) | a person provides services under a public‑private partnership arrangement —| (i) | that is the subject of a contract entered into between the Government or any approved statutory body and any person; and | | (ii) | to which INT FRS 112 or SFRS(I) INT 12 applies; |
| | (b) | section 10E(1A) or (1C) applies to the person in respect of those services; | | (c) | the person recognises in the person’s financial statements, prepared in accordance with INT FRS 112 or SFRS(I) INT 12 (as the case may be), an intangible asset as having been created in the course of providing the services; and | | (d) | in accordance with FRS 38 or SFRS(I) 1‑38 (as the case may be), amortisation of the asset is recognised in the person’s financial statements for the basis period for the year of assessment 2012 or any subsequent year of assessment, |
| then the amount of the amortisation that is recognised in the person’s financial statements as an expense in accordance with FRS 38 or SFRS(I) 1‑38 (as the case may be), is allowed to the person as a deduction against an amount that is deemed as income derived by that person for that basis period under section 10E(1A) or (1C). |
[32/2019] (2) In this section —“FRS 38” and “SFRS(I) 1‑38” mean the financial reporting standards known respectively as —| (a) | Financial Reporting Standard 38 (Intangible Assets); and | | (b) | Singapore Financial Reporting Standard (International) 1‑38 (Intangible Assets), |
| that are made by the Accounting Standards Committee under Part 3 of the Accounting Standards Act 2007, as amended from time to time; |
[Act 36 of 2022 wef 01/04/2023] |
| “INT FRS 112” and “SFRS(I) INT 12” have the meanings given by section 10E(2). [14V [32/2019] |
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| Deduction for expenditure on licensing intellectual property rights |
14T.—(1) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, 2014 or 2015, there is allowed, in respect of all of the person’s trades and businesses and in addition to the deduction allowed under section 14 or 14C (as the case may be), a deduction for expenditure incurred during the basis period for the purposes of those trades and businesses on the licensing from another person of any qualifying intellectual property rights that is computed in accordance with the formula| (a) | for the year of assessment 2013, the lower of the following:| (i) | such 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 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 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). [37/2014] |
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(2) Despite anything in this section or section 19B, where a person has, during the basis period for any year of assessment between the years of assessment 2013 and 2015 (both years inclusive), incurred both expenditure on the licensing from another person of any qualifying intellectual property rights and expenditure on the acquisition of any intellectual property rights, the aggregate of the expenditure which may be given a deduction under subsection (1) and the expenditure which may be given an allowance under section 19B(1B) must not exceed —| (a) | in the case of the year of assessment 2013, the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | $1,200,000; |
| | (b) | in the case of the year of assessment 2014, the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and |
| | (c) | in the case of the year of assessment 2015, the lower of the following:| (i) | the aggregate of all such expenditure; | | (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). |
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(3) In subsections (1) and (2) —| (a) | if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2013 and 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the other 2 years of assessment are each substituted with “$800,000”; | | (b) | if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2013 and 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the remaining year of assessment are each substituted with “$400,000”; and | | (c) | to avoid doubt —| (i) | if the person does not carry on any trade or business during the basis period for the year of assessment 2013, no deduction may be made from the substituted amount in subsection (1)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (1)(a)(i) and (ii), or from the substituted amount in subsection (2)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2)(a)(i) and (ii); and | | (ii) | if the person does not carry on any trade or business during the basis period for the year of assessment 2014, no deduction may be made from the substituted amount in subsection (1)(c)(ii) of the lower of the amounts specified in subsection (1)(b)(i) and (ii), or from the substituted amount in subsection (2)(c)(ii) of the lower of the amounts specified in subsection (2)(b)(i) and (ii). |
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(4) Subject to this section and section 37J, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under section 14 or 14C (as the case may be), a deduction for expenditure incurred during the basis period for the purposes of those trades and businesses on the licensing from another person of any qualifying intellectual property rights that is computed in accordance with the formula| (a) | for the year of assessment 2016, the lower of the following:| (i) | such expenditure incurred during the basis period for that year of assessment; | | (ii) | $1,200,000; |
| | (b) | for the year of assessment 2017, the lower of the following:| (i) | such 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 2018, the lower of the following:| (i) | such 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). [37/2014] |
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(4A) Despite anything in this section or section 19B, where a person has, during the basis period for any year of assessment between the years of assessment 2016 and 2018 (both years inclusive), incurred both expenditure on the licensing from another person of any qualifying intellectual property rights and expenditure on the acquisition of any intellectual property rights, the aggregate of the expenditure which may be given a deduction under subsection (4) and the expenditure which may be given an allowance under section 19B(1BAA) must not exceed —| (a) | in the case of the year of assessment 2016, the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | $1,200,000; |
| | (b) | in the case of the year of assessment 2017, the lower of the following:| (i) | the aggregate of all such expenditure; | | (ii) | the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and |
| | (c) | in the case of the year of assessment 2018, the lower of the following:| (i) | the aggregate of all such expenditure; | | (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). [37/2014] |
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(4B) In subsections (4) and (4A) —| (a) | if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the other 2 years of assessment are each substituted with “$800,000”; | | (b) | if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of those subsections applicable to the remaining year of assessment are each substituted with “$400,000”; and | | (c) | to avoid doubt —| (i) | if the person does not carry on any trade or business during the basis period for the year of assessment 2016, no deduction may be made from the substituted amount in subsection (4)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (4)(a)(i) and (ii), or from the substituted amount in subsection (4A)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (4A)(a)(i) and (ii); and | | (ii) | if the person does not carry on any trade or business during the basis period for the year of assessment 2017, no deduction may be made from the substituted amount in subsection (4)(c)(ii) of the lower of the amounts specified in subsection (4)(b)(i) and (ii), or from the substituted amount in subsection (4A)(c)(ii) of the lower of the amounts specified in subsection (4A)(b)(i) and (ii). [37/2014] |
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| (4C) For the purposes of subsections (1) and (4), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the years of assessment 2013 and 2018 (both years inclusive), incurred expenditure on the licensing from another person of any qualifying intellectual property rights in respect of such firms for the purposes of his or her trade or business, the deductions that may be allowed to him or her for that expenditure in respect of all of his or her trades and businesses must not exceed the amount computed in accordance with subsection (1) or (4) (as the case may be) for that year of assessment. [37/2014] |
| (5) For the purposes of subsections (1), (2), (4) and (4A), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the years of assessment 2013 and 2018 (both years inclusive), incurred expenditure on the licensing from another person of any qualifying intellectual property rights and (if applicable) the acquisition of any intellectual property rights, for the purposes of its trade or business, the aggregate of the deductions and allowances that may be allowed to all the partners of the partnership for that expenditure in respect of all of the trades and businesses of the partnership must not exceed the amount computed in accordance with subsection (1), (2), (4) or (4A) (as the case may be) for that year of assessment. [37/2014] |
(6) No deduction is allowed under this section in respect of —| (a) | any expenditure which is not allowed as a deduction under section 14 or 14C, as the case may be; | | (b) | any expenditure incurred by a person on licensing from its related party carrying on any trade or business in Singapore, of any qualifying intellectual property rights, where such rights were acquired or developed (in whole or in part) by the related party during the basis period relating to the year of assessment 2011 or any subsequent year of assessment; or | | (c) | any qualifying intellectual property rights for which a writing‑down allowance has been previously made to that person under section 19B. |
|
| (7) The Minister may by order exempt a person from subsection (6)(b) in respect of such transaction as may be specified in the order. |
(8) In this section —| “intellectual property rights” has the meaning given by section 19B(11); |
“qualifying intellectual property rights” means intellectual property rights but excludes the right to do or authorise the doing of anything which would, but for that right, be an infringement of —| (a) | any trade mark; or | | (b) | any rights to the use of software. [Act 33 of 2022 wef 04/11/2022] |
|
| [Deleted by Act 33 of 2022 wef 04/11/2022] |
|
| (9) In this section, a reference to expenditure incurred on the licensing from another person of qualifying intellectual property rights or 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. |
(10) In this section, a reference to expenditure incurred on the licensing from another person of qualifying intellectual property rights means the licence fees and excludes —| (a) | expenditure for the transfer of ownership of any of those rights; and | | (b) | legal fees and other costs related to the licensing of such rights. [14W |
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| Enhanced deduction for expenditure on licensing intellectual property rights |
| 14U.—(1) Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for any year of assessment between the years of assessment 2019 and 2028 (both years inclusive), there is to be allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under section 14 or 14C (as the case may be), a deduction of the amount of the expenditure incurred during the basis period for the purposes of those trades and businesses on the licensing from another person of any qualifying intellectual property rights, up to $100,000. [45/2018] [Act 30 of 2023 wef 30/10/2023] (1A) For the purpose of ascertaining the income of a person —| (a) | who is a qualifying person for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive); and | | (b) | who carries on a trade or business during the basis period for that year of assessment, |
| there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under section 14 or 14C (as the case may be) and in lieu of subsection (1), a deduction for expenditure incurred during that basis period for the purposes of those trades and businesses on the licensing from another person of any qualifying intellectual property rights, computed in accordance with the formula |
| where A is the lower of the following: |
| (a) | the expenditure incurred during that basis period; | | (b) | $400,000. [Act 30 of 2023 wef 30/10/2023] |
|
(1B) Despite subsection (1A) and section 19B, where the qualifying person has, during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), incurred both —| (a) | expenditure on the licensing from another person of any qualifying intellectual property rights; and | | (b) | expenditure on the acquisition of any intellectual property rights, |
| the total of the expenditure which may be given a deduction under subsection (1A) and the expenditure which may be given an allowance under section 19B(1AD), must not exceed $400,000 for that year of assessment. |
[Act 30 of 2023 wef 30/10/2023] |
(1C) In this section, a person is a qualifying person for a year of assessment if —| (a) | where the person is a company that is not part of a group — the person derives less than $500 million in gross revenue from all of its trades and businesses in the basis period for that year of assessment; | | (b) | where the person is a company that is part of a group — all the entities in the group derive a total of less than $500 million in gross revenue from all of the entities’ trades and businesses in that basis period; | | (c) | where the person is an individual proprietor — the person derives less than $500 million in gross revenue in that basis period from all of the person’s trades and businesses that are carried on through one or more individual proprietorships; | | (d) | where the person is a partner of a partnership, and either the partnership is under the control of a single partner who is an individual or no single partner has control over the partnership — the partnership derives less than $500 million in gross revenue from all of the partnership’s trades and businesses in that basis period; or | | (e) | where the person is a partner of a partnership, and the partnership is under the control of a single partner that is a company — the partnership, the company and all other entities in the group of which the partnership and the company are parts derive a total of less than $500 million in gross revenue from all of their trades and businesses in that basis period. [Act 30 of 2023 wef 30/10/2023] |
|
| (1D) In subsection (1C)(d) and (e), whether or not a partnership is under the control of a partner is determined in accordance with FRS 110. [Act 30 of 2023 wef 30/10/2023] |
(1E) In subsections (1C) and (1D) —| “FRS 110” means the financial reporting standard known as Financial Reporting Standard 110 (Consolidated Financial Statements) that is treated as made by the Accounting Standards Committee under Part 3 of the Accounting Standards Act 2007, as amended from time to time; |
| “group” means a group of entities (whether incorporated or registered in Singapore or elsewhere) comprising a parent and its subsidiaries within the meaning of FRS 110. [Act 30 of 2023 wef 30/10/2023] |
|
| (2) For the purposes of subsections (1) and (1A), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the years of assessment 2019 and 2028 (both years inclusive), incurred expenditure on the licensing from another person of any qualifying intellectual property rights in respect of such firms for the purposes of the individual’s trade or business, the deductions that may be allowed to the individual for that expenditure in respect of all of the individual’s trades and businesses must not exceed the maximum amount mentioned in subsection (1), or the amount computed in accordance with subsection (1A) as qualified by subsection (1B), as the case may be. [45/2018] [Act 30 of 2023 wef 30/10/2023] |
| (3) For the purposes of subsections (1) and (1A), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the years of assessment 2019 and 2028 (both years inclusive), incurred expenditure on the licensing from another person of any qualifying intellectual property rights for the purposes of the partnership’s trade or business, the deductions that may be allowed to all the partners of the partnership for that expenditure in respect of all of the trades and businesses of the partnership must not exceed the maximum amount mentioned in subsection (1), or the amount computed in accordance with subsection (1A) as qualified by subsection (1B), as the case may be. [45/2018] [Act 30 of 2023 wef 30/10/2023] |
(4) No deduction may be allowed to a person under this section in respect of —| (a) | any expenditure that is not allowed as a deduction under section 14 or 14C, as the case may be; | | (b) | any expenditure incurred by that person on licensing from its related party, of any qualifying intellectual property rights, where such rights were acquired or developed (in whole or in part) by the related party; or | | (c) | any qualifying intellectual property rights for which a writing‑down allowance has been previously made to that person under section 19B. [45/2018] |
|
| (5) The Minister may by order exempt a person from subsection (4)(b) in respect of such transaction as may be specified in the order. [45/2018] |
| (6) In this section, “qualifying intellectual property rights” has the meaning given by section 14T(8). [45/2018] [Act 33 of 2022 wef 04/11/2022] |
| (7) In this section, a reference to expenditure incurred on the licensing from another person of qualifying 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. [45/2018] |
(8) In this section —“expenditure incurred on the licensing from another person of qualifying intellectual property rights” means the licence fees but excludes —| (a) | expenditure for the transfer of ownership of any of those rights; and | | (b) | legal fees and other costs related to the licensing of such rights; |
|
| “individual proprietor” has the meaning given by section 2(1) of the Business Names Registration Act 2014. [Act 30 of 2023 wef 30/10/2023] [14WA [45/2018] |
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| Deduction for expenditure incurred to comply with statutory and regulatory requirements |
14V.—(1) For the purpose of ascertaining the income of any person for the basis period for the year of assessment 2014 or any subsequent year of assessment, the following expenditure, not being capital expenditure, incurred during the basis period by that person is allowed as a deduction for that year of assessment, if the Comptroller is satisfied that the expenditure is incurred for the purpose of the business that is carried on in the production of the income:| (a) | expenditure incurred for the purpose of compliance by that person with any written law of Singapore or another country; | | (b) | expenditure incurred for the purpose of compliance by that person with any code, standard, rule, requirement or other document issued by the Government, a public authority established by or under any public Act, or by the government or a public authority of another country, or by a securities exchange; | | (c) | expenditure incurred —| (i) | to study the impact of any proposed law referred to in paragraph (a) or proposed document referred to in paragraph (b); | | (ii) | to prevent or to detect any non‑compliance with any law referred to in paragraph (a) or document referred to in paragraph (b); | | (iii) | to voluntarily comply with a requirement of any law referred to in paragraph (a) or document referred to in paragraph (b), even though the person does not need to comply with the requirement. [37/2014] |
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(2) No deduction is allowed under this section for —| (a) | any expenditure which is deductible under any other provision of this Act; or | | (b) | any fine or penalty imposed or security deposit forfeited for a breach of a requirement of any law referred to in subsection (1)(a) or document referred to in subsection (1)(b), including any sum paid to compound any offence. [14X [37/2014] |
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| Deduction for expenditure incurred by individual in deriving passive rental income in Singapore |
| 14W.—(1) This section applies for the purpose of ascertaining an individual’s income for the basis period for the year of assessment 2016 or a subsequent year of assessment from the letting of a residential property or a part of a residential property in Singapore (not being an excluded property for that basis period), that is chargeable to tax under section 10(1)(f) (called in this section rental income). [2/2016] (2) Despite any other provisions in this Part, if there are any outgoings or expenses deductible against the rental income under any provision of this Part apart from section 14(1)(a), then there is to be deducted, in lieu of those outgoings or expenses, an amount of expenses computed in accordance with the formula | | is 15% or such other percentage as may be prescribed under section 7; and |
| | | is the gross amount of the rental income from the residential property derived in the basis period for that year of assessment. |
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|
[2/2016] |
(3) This section does not apply to —| (a) | an individual who has made an election under subsection (4) for this section not to apply to the individual’s rental income derived in the basis period for the year of assessment in question; | | (b) | any rental income derived by an individual through a partnership; and | | (c) | any rental income derived by an individual acting in the capacity of a trustee of a trust. [2/2016] |
|
| (4) An individual may, in such form and manner and within such time as the Comptroller may determine, make an election to the Comptroller for this section not to apply to all of the individual’s rental income derived in the basis period for a particular year of assessment. [2/2016] |
| (5) If an individual derives rental income, other than income referred to in subsection (3)(b) or (c), from more than one residential property (not being excluded properties for the basis period) in a basis period, the individual may not make an election under subsection (4) in respect of only one or some of those properties. [2/2016] |
(6) In this section —| “excluded property”, in relation to a basis period, means a residential property which, at any time during the period rental income is derived from the property by the individual in question, is permitted under the Planning Act 1998 to be used whether wholly or in part for any purpose that is not a residential purpose; |
“residential property” means —| (a) | any detached house, semi‑detached house or terrace house; or | | (b) | any part of a building (such as a flat or a condominium unit) constructed or adapted for human habitation, |
| that has a single annual value ascribed to it in the Valuation List prepared under section 10 of the Property Tax Act 1960, and is permitted under the Planning Act 1998 to be used for a residential purpose, and includes such other premises as may be prescribed as residential property, but (to avoid doubt) excludes premises that are so permitted for use as a dormitory. |
[2/2016] |
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(7) In this section, a property or part of a property is permitted under the Planning Act 1998 to be used for a particular purpose if —| (a) | it is permitted by a written permission granted under section 14 of that Act to be used for that purpose; | | (b) | it is authorised by a notification under section 21(6) of that Act to be used for that purpose; or | | (c) | such use (being an existing use of the property or part and not being the subject of a written permission granted under section 14 of that Act or a notification under section 21(6) of that Act) was a use to which the building or part was put on 1 February 1960, and the building or part has not been put to any other use since that date. [14Y [2/2016] |
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| Attribution of deductible expenses incurred before commencement of trade, etc. |
14X.—(1) This section applies where —| (a) | a person derives the first dollar of income from a trade, business, profession or vocation in a basis period; | | (b) | the person incurs an expense —| (i) | before the date the person derives the first dollar of income mentioned in paragraph (a); but | | (ii) | on or after 25 March 2016; and |
| | (c) | for the purpose of ascertaining the person’s income from that trade, business, profession or vocation in that basis period, a deduction may be allowed under a provision of this Part for that expense by reason of section 14R. [34/2016] |
(2) This section also applies where —| (a) | a person commences a trade, business or profession in a basis period; | | (b) | the person incurs an expense —| (i) | before the date the person commences the trade, business or profession; but | | (ii) | on or after 25 March 2016; and |
| | (c) | for the purpose of ascertaining the person’s income from that trade, business or profession in that basis period, a deduction may be allowed under section 14A, 14C, 14EA, 14N or 14P by reason of section 14A(3), 14C(2), 14EA(8), 14N(4) or 14P(5), as the case may be. [34/2016] [Act 30 of 2023 wef 30/10/2023] |
|
(3) Where the person’s income from that trade, business, profession or vocation (as the case may be) in that basis period comprises any 2 or all of the following:| (a) | normal income; | | (b) | concessionary income; | | (c) | exempt income, |
| the deduction for the expense is to be allowed in the following manner: |
| (d) | where the Comptroller is of the opinion that —| (i) | where the expense is one mentioned in subsection (1) — it is incurred in the production of the normal income only; or | | (ii) | where the expense is one mentioned in subsection (1) or (2) and is incurred before the commencement of the trade, business, profession or vocation — it would have been incurred in the production of the normal income had it been incurred after such commencement, |
| the expense is to be deducted against the normal income; |
| | (e) | where the Comptroller is of the opinion that —| (i) | where the expense is one mentioned in subsection (1) — it is incurred in the production of the concessionary income only; or | | (ii) | where the expense is one mentioned in subsection (1) or (2) and is incurred before the commencement of the trade, business, profession or vocation — it would have been incurred in the production of the concessionary income had it been incurred after such commencement, |
| the expense is to be deducted against the concessionary income; |
| | (f) | where the Comptroller is of the opinion that —| (i) | where the expense is one mentioned in subsection (1) — it is incurred in the production of the exempt income only; or | | (ii) | where the expense is one mentioned in subsection (1) or (2) and is incurred before the commencement of the trade, business, profession or vocation — it would have been incurred in the production of the exempt income had it been incurred after such commencement, |
| the expense is to be deducted against the exempt income; |
| | (g) | in any other case, the expense is to be deducted against the normal income, concessionary income and exempt income (whichever is applicable), in the respective proportions that such part of the normal income, concessionary income and exempt income bear to such part of the total income from that trade, business, profession or vocation in the same basis period, as the Comptroller considers reasonable. [34/2016] |
|
| (4) Where the person’s income from that trade, business, profession or vocation in that basis period comprises only concessionary income or only exempt income, the expense is to be deducted against that income. [34/2016] |
(5) In this section —| “concessionary income” means income that is subject to a concessionary rate of tax as defined in section 14C(5); |
| “exempt income” means income that is exempt from tax under this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967; |
| “normal income” means income that is subject to tax at the rate of tax in section 42(1) or 43(1), as the case may be. [14Z [34/2016] |
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| Further or double deduction for qualifying expenditure on issue of debentures and making available debentures for secondary trading |
14Y.—(1) Where the Comptroller is satisfied that qualifying expenditure in connection with —| (a) | an issue of post‑seasoning debentures offered in reliance on an exemption under the Post‑seasoning Debentures Regulations within 5 years starting from the date of issue of the corresponding seasoned debentures, being a date falling within the period between 19 May 2016 and 18 May 2021 (both dates inclusive); | | (aa) | an issue of qualifying debentures (other than post‑seasoning debentures mentioned in paragraph (a)) during the period between 19 May 2016 and 18 May 2021 (both dates inclusive); or | | (b) | making available potential seasoned debentures for secondary trading within 5 years starting from the date of their issue (being a date falling within the period between 19 May 2016 and 18 May 2021 (both dates inclusive)), |
| has been incurred on or after 19 May 2016 by a person carrying on a trade or business in Singapore, that person is to be allowed — |
| (c) | where the expenditure is allowable as a deduction under section 14, a further deduction of the amount of such expenditure; or | | (d) | where the expenditure is not allowable as a deduction under section 14, a deduction equal to twice the amount of such expenditure. [34/2016; 27/2021] |
(1A) Where the Comptroller is satisfied that qualifying expenditure has been incurred on or after 19 May 2021 by a person carrying on a trade or business in Singapore in connection with —| (a) | an issue of post‑seasoning debentures offered in reliance on an exemption under the Post‑seasoning Debentures Regulations within 5 years starting from the date of issue of the corresponding seasoned debentures that is a date falling within the period between 19 May 2021 and 31 December 2026 (both dates inclusive), being post‑seasoning debentures that are credit‑rated as at the date they are issued; | | (b) | an issue of qualifying debentures (other than post‑seasoning debentures mentioned in paragraph (a)) during the period between 19 May 2021 and 31 December 2026 (both dates inclusive), being debentures that are credit‑rated as at the date they are issued; or | | (c) | making available potential seasoned debentures for secondary trading within 5 years starting from the date of their issue that is a date falling within the period between 19 May 2021 and 31 December 2026 (both dates inclusive), being debentures that are credit‑rated as at the date they are so made available, |
| that person is to be allowed — |
| (d) | where the expenditure is allowable as a deduction under section 14 — a further deduction of the amount of the expenditure; or | | (e) | where the expenditure is not allowable as a deduction under section 14 — a deduction equal to twice the amount of the expenditure. [27/2021] |
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(2) The maximum amount of qualifying expenditure that may be allowed a deduction under this section is —| (a) | subject to paragraphs (b) and (c), $500,000 for each issue of qualifying debentures or making available of potential seasoned debentures for secondary trading; | | (b) | subject to paragraph (c), $500,000 for both the issue of potential seasoned debentures and the making available of the same debentures for secondary trading; and | | (c) | $1,000,000 per person, irrespective of the number of times the person issues qualifying debentures or makes available potential seasoned debentures for secondary trading. [34/2016] |
|
| (3) It is a condition for allowing a deduction to a person under this section in respect of an issue of potential seasoned debentures, that they are made available for secondary trading within a period of one year starting from the date of their issue (called in this section the window period). [34/2016] |
| (4) If the condition in subsection (3) is not satisfied, the total deductions under this section already allowed to the person in respect of that issue are treated as the person’s income for the year of assessment relating to the basis period in which the first day after the end of the window period falls. [34/2016] |
| (5) Subsections (3) and (4) do not affect the right of the person to be allowed a deduction under this section in relation to making available the potential seasoned debentures for secondary trading after the window period, except that the deduction may only be allowed in the year of assessment relating to the basis period in which those debentures are so made available. [34/2016] |
(6) In this section —| “credit‑rated”, in relation to qualifying debentures, means qualifying debentures that are given at least one credit rating by Fitch Ratings, Moody’s, or Standard & Poor (S&P) Global; |
| “offering document” means a prospectus, an offer circular, an information memorandum, a pricing supplement or any other document issued to investors in connection with an offer of debentures; |
| “post‑seasoning debenture”, “retail investor” and “seasoned debenture” have the meanings given to those expressions in the Post‑seasoning Debentures Regulations; |
| “Post‑seasoning Debentures Regulations” means the Securities and Futures (Offers of Investments) (Exemption for Offers of Post‑seasoning Debentures) Regulations 2016; |
| “potential seasoned debentures” means debentures the offering documents for the offer of which include a statement to the effect that the debentures are intended to be made available on a securities exchange for trading by retail investors; |
“product highlights sheet” —| (a) | in relation to an offer of straight debentures, has the meaning given to it in the Straight Debentures Regulations; or | | (b) | in relation to an offer of post‑seasoning debentures, has the meaning given to it in the Post‑seasoning Debentures Regulations; |
|
“qualifying debentures” means —| (a) | potential seasoned debentures; | | (b) | post‑seasoning debentures offered in reliance on an exemption under the Post‑seasoning Debentures Regulations; or | | (c) | straight debentures offered in reliance on an exemption under the Straight Debentures Regulations; |
|
“qualifying expenditure” means —| (a) | in relation to an issue of potential seasoned debentures, any of the following that are incurred in connection with the issue, and for the purpose of allowing the debentures to be made available for secondary trading, or for the purpose of the subsequent issue of post‑seasoning debentures:| (i) | professional fees for conducting due diligence; | | (ii) | origination, underwriting and distribution fees; | | (iii) | advertising and marketing expenses; |
| | (b) | in relation to the making available of potential seasoned debentures for secondary trading, any of the expenditure mentioned in paragraph (a)(i), (ii) and (iii) that are incurred in connection with making available the debentures for secondary trading; or | | (c) | in relation to an issue of post‑seasoning debentures or straight debentures, any of the following that are incurred in connection with the issue:| (i) | professional fees for conducting due diligence; | | (ii) | professional fees for the drafting and preparation of, and the printing costs of —| (A) | the product highlights sheet for the offer pertaining to the issue, in the case of an issue of post‑seasoning debentures; or | | (B) | the product highlights sheet and simplified disclosure document for the offer pertaining to the issue, in the case of an issue of straight debentures; |
| | (iii) | origination, underwriting and distribution fees; | | (iv) | advertising and marketing expenses, |
|
| but excludes trustee fees, agency fees and Central Depository fees; |
|
| “securities exchange” has the meaning given by section 2(1) of the Securities and Futures Act 2001; |
| “simplified disclosure document” and “straight debenture” have the meanings given to those expressions in the Straight Debentures Regulations; |
| “Straight Debentures Regulations” means the Securities and Futures (Offers of Investments) (Exemption for Offers of Straight Debentures) Regulations 2016. [34/2016; 27/2021] |
|
| (7) In this section, a person makes available potential seasoned debentures for secondary trading if the person makes them available on a securities exchange for trading by retail investors. [14ZA [34/2016] |
|
| Deduction for expenditure for services or secondment to institutions of a public character |
14Z.—(1) Subject to this section, where the Comptroller is satisfied that a qualifying person has incurred, during the period between 1 July 2016 and 31 December 2026 (both dates inclusive), qualifying expenditure in respect of —| (a) | the provision during that period by a qualifying employee of the qualifying person, of services for the purpose of meeting needs in Singapore and that satisfy subsection (2) to an IPC; or [Act 30 of 2023 wef 30/10/2023] | | (b) | the secondment during that period of a qualifying employee of the qualifying person to an IPC to provide services for the purpose of meeting needs in Singapore, |
| then there is to be allowed to the qualifying person a deduction in accordance with subsection (1A) or (1B), as the case may be. |
[32/2019; 27/2021] [Act 30 of 2023 wef 30/10/2023] (1A) Where the qualifying expenditure is salary expenditure, the deduction that the qualifying person is to be allowed is as follows:| (a) | where —| (i) | the expenditure is allowable as a deduction under section 14; and | | (ii) | the qualifying person did not opt in the declaration under subsection (6) to compute the expenditure at the prescribed hourly rate, |
| a further deduction equal to 150% of the endorsed amount of the expenditure in addition to the deduction allowed under section 14; |
| | (b) | where —| (i) | the expenditure is allowable as a deduction under section 14; and | | (ii) | the qualifying person opted in the declaration under subsection (6) to compute the expenditure at the prescribed hourly rate, |
| a further deduction equal to 150% of the computed salary amount in addition to the deduction allowed under section 14; |
| | (c) | where —| (i) | the expenditure is not allowable as a deduction under section 14; and | | (ii) | the qualifying person did not opt in the declaration under subsection (6) to compute the expenditure at the prescribed hourly rate, |
| a deduction equal to 250% of the endorsed amount of the expenditure; |
| | (d) | where —| (i) | the expenditure is not allowable as a deduction under section 14; and | | (ii) | the qualifying person opted in the declaration under subsection (6) to compute the expenditure at the prescribed hourly rate, |
| a deduction equal to 250% of the computed salary amount. |
[32/2019] |
|
(1B) Where the qualifying expenditure is not salary expenditure, the deduction that the qualifying person is to be allowed is as follows:| (a) | where the expenditure is allowable as a deduction under section 14 — a further deduction equal to 150% of the endorsed amount of the expenditure in addition to the deduction allowed under that section; | | (b) | where the expenditure is not allowable as a deduction under section 14 — a deduction equal to 250% of the endorsed amount of the expenditure. [32/2019] |
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(2) The services mentioned in subsection (1)(a) must be —| (a) | the subject of an arrangement between the qualifying person and the IPC; and | | (b) | provided on the instruction or request of the qualifying person. [34/2016] |
|
| (3) The maximum amount of qualifying expenditure for which a qualifying person may be allowed the deduction under subsection (1) is $250,000 for each year of assessment. [34/2016] |
(4) The maximum amount of qualifying expenditure for which deductions may be allowed under subsection (1) in relation to each IPC is —| (a) | $25,000 for the period between 1 July 2016 and 31 December 2016 (both dates inclusive); | | (b) | $50,000 for each of the calendar years between 2017 and 2023 (both years inclusive); and | | (c) | $100,000 for each of the calendar years between 2024 and 2026 (both years inclusive), |
| and this is irrespective of the number of qualifying persons claiming the deduction. |
[Act 30 of 2023 wef 30/10/2023] |
(5) Where 2 or more qualifying persons —| (a) | incur qualifying expenditure in relation to one IPC in a period or calendar year which in total exceeds the maximum amount for that period or calendar year under subsection (4); and | | (b) | claim a deduction under subsection (1) for such expenditure, |
| the deduction is to be allowed for such part or parts of the expenditure incurred by such person or persons that the IPC specifies to the Comptroller. |
[34/2016] |
(5A) Where a qualifying person opted in a declaration under subsection (6) to compute any salary expenditure at the prescribed hourly rate, then the computed salary amount —| (a) | is treated as the amount of that expenditure incurred by the qualifying person for the purposes of subsections (3) and (5); and | | (b) | is to be used in computing the maximum amount of qualifying expenditure for which deductions may be allowed in relation to the IPC in question for the purposes of subsection (4). [32/2019] |
|
(6) A deduction under subsection (1) may only be allowed for any qualifying expenditure if —| (a) | before the date the services are first provided to the IPC in the basis period or the date of commencement of the secondment (as the case may be), the qualifying person makes a declaration, duly endorsed by the IPC and in a form determined by the Minister, regarding —| (i) | the nature of the services which the person has arranged with the IPC to be provided to the IPC, or the nature of the secondment, as the case may be; and | | (ii) | the expected expenditure; |
| | (b) | within such time as the Comptroller may specify, the IPC submits to the Comptroller a declaration by the qualifying person, in a form determined by the Minister, regarding —| (i) | the services provided to the IPC or the secondment to the IPC, as the case may be; and | | (ii) | the relevant details specified in subsection (6A); and |
| | (c) | the claim for the deduction is made in the manner determined by the Comptroller. [34/2016; 32/2019] |
|
(6A) In subsection (6)(b)(ii), the relevant details are —| (a) | where —| (i) | the qualifying expenditure is salary expenditure; and | | (ii) | the qualifying person opted in the declaration under subsection (6) to compute the expenditure at the prescribed hourly rate, |
| the actual number of hours for which the services were provided, as well as the number of those hours (which may be the same number or a smaller number of hours) endorsed by the IPC for the deduction under subsection (1); or |
| | (b) | in all other cases, the amount of the actual qualifying expenditure incurred, as well as the part of that amount (which may be the full amount or a part of it) endorsed by the IPC for the deduction under subsection (1). [32/2019] |
|
| (7) A deduction is not allowed under subsection (1) for any expenditure to the extent that it is or is to be subsidised by a grant or subsidy from the Government or a statutory board. [34/2016] |
| (8) A deduction is not allowed under subsection (1) in relation to the provision of any service or any secondment if there is any agreement or understanding (whether oral or in writing and whether express or implied) that the IPC will confer a benefit of any kind on the qualifying person in return for the provision of the service or the secondment. [34/2016] |
| (9) A deduction is not allowed under subsection (1) for any expenditure incurred on any activity that is or is to be subsidised, fully or partially, by a matching grant under the Share as One Programme administered by the National Council of Social Services. [34/2016] |
| (10) The Comptroller may disallow in whole or in part a claim for a deduction under subsection (1) if the Comptroller is not satisfied that the endorsed amount of the expenditure or the endorsed number of hours (as the case may be) is reasonable having regard to the period and nature of the services provided or the period and nature of the secondment (as the case may be), and other relevant circumstances. [34/2016; 32/2019] |
| (11) If, at any time after a qualifying person has been allowed a deduction under subsection (1) for any qualifying expenditure, the person is reimbursed for any amount of the expenditure, the amount of the deduction that corresponds to the expenditure reimbursed is treated as the person’s income for the year of assessment in which the Comptroller discovers the reimbursement. [34/2016] |
(11A) Where —| (a) | the qualifying expenditure mentioned in subsection (11) is salary expenditure; and | | (b) | the computed salary amount of that expenditure was used to compute the amount of deduction allowed to the qualifying person, |
| then, for the purpose of that subsection, the amount of the deduction that corresponds to the expenditure reimbursed is to be computed using the formula |
| (c) | A is the amount of the reimbursement; | | (d) | B is the amount of the actual salary expenditure; | | (e) | C is the prescribed hourly rate used in computing the computed salary amount; and | | (f) | D is the endorsed number of hours used in computing the computed salary amount. [32/2019] |
|
(12) In this section —| “central hirer”, in relation to a central hiring arrangement for a group of related parties, means the person who carries out hiring functions for those parties under the arrangement; |
| “central hiring arrangement” means an arrangement for a group of related parties entered into for a bona fide commercial reason, where the hiring functions of the parties in the group are carried out by a single person; |
“computed salary amount”, in relation to any salary expenditure for the provision of any services by a qualifying employee, means an amount computed using the formula A × B, where —| (a) | A is the endorsed number of hours for those services; and | | (b) | B is the prescribed hourly rate for those services; |
|
“employee”, in relation to a qualifying person, includes an individual —| (a) | who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the qualifying person, and who is deployed to work solely for the qualifying person; and | | (b) | whose salary and other remuneration is borne, directly or indirectly, by the qualifying person and not claimed by the central hirer as a deduction against the central hirer’s own income; |
|
| “endorsed amount”, in relation to any expenditure, means the amount of the expenditure endorsed by an IPC under subsection (6A)(b); |
| “endorsed number of hours”, in relation to any services, means the number of hours for which those services are provided, as endorsed by an IPC under subsection (6A)(a); |
| “IPC” means an institution of a public character as defined in section 2(1); |
| “prescribed hourly rate”, in relation to the provision of any services by a qualifying employee, means the rate prescribed by rules made under section 7 for those services; |
“qualifying employee”, in relation to a qualifying person, means an employee who, at the time of provision of the services or during the secondment (as the case may be), is under a contract of service with the qualifying person or (if the employee is engaged under a central hiring arrangement) the central hirer, but excludes —| (a) | where the qualifying person is a partnership, a partner of the partnership; and | | (b) | where the qualifying person is a company, a shareholder of the company who is also a director of the company; |
|
“qualifying expenditure” —| (a) | in relation to the provision of services by a qualifying employee of a qualifying person to an IPC, means the sum of —| (i) | the amount of the salary expenditure incurred by the qualifying person for —| (A) | the period during which the employee provided those services that falls within the employee’s working hours; or | | (B) | if the period during which the employee provided those services does not fall within the employee’s working hours, the period of the time off in lieu given to the employee; and |
| | (ii) | the amount of the expenditure (not being capital expenditure) incurred by the qualifying person that was necessary for the provision of the services, excluding any private or domestic expense; and |
| | (b) | in relation to the secondment of a qualifying employee of the qualifying person to an IPC, means the sum of —| (i) | the amount of the salary expenditure incurred by the qualifying person for the period of the secondment; and | | (ii) | the amount of the expenditure (not being capital expenditure) incurred by the qualifying person that was necessary for the provision of services by the qualifying employee to the IPC during the period of the secondment, excluding any private or domestic expense; |
|
|
“qualifying person” means —| (a) | any company or firm (including a partnership) that carries on a trade, profession or business in Singapore; | | (b) | a body of persons (whether corporate or unincorporate) that carries on a club or a similar institution and receives from its members (within the meaning of section 11) less than half of its gross receipts on revenue account (including entrance fees and subscriptions); or | | (c) | a body of persons (whether corporate or unincorporate) that carries on a trade or professional association in such circumstances that more than half its receipts by way of entrance fees and subscriptions are from Singapore members (within the meaning of section 11) who claim or would be entitled to claim such sums as allowable deductions for the purposes of section 14; |
|
| [Deleted by Act 33 of 2022 wef 04/11/2022] |
| “salary expenditure”, in relation to an employee, means expenditure comprising wages and salary for the employee, but excludes any sum contributed to the Central Provident Fund in respect of the employee, or any bonus, commission, gratuity, leave pay, perquisite, allowance, or any other payment (whether in cash or kind) prescribed by rules made under section 7. [34/2016; 32/2019] |
|
(13) In this section, a qualifying person is treated as having incurred any expenditure, if —| (a) | it directly incurs that expenditure for which it is not reimbursed; or | | (b) | another person directly incurs that expenditure and the qualifying person is liable to reimburse the other person for it, and the incurring of the expenditure and of the liability both occur in the period between 1 July 2016 and 31 December 2026 (both dates inclusive). [14ZB [34/2016; 32/2019; 27/2021] [Act 30 of 2023 wef 30/10/2023] |
|
|
| Deduction for expenditure incurred in deriving income from driving chauffeured private hire car or taxi |
| 14ZA.—(1) Subsection (2) applies for the purpose of ascertaining an individual’s income from driving a chauffeured private hire car or taxi for an authorised purpose that is chargeable to tax under section 10(1)(a) (called in this section specified income), for the basis period for the year of assessment 2019 or a subsequent year of assessment. [45/2018] (2) Despite any other provisions in this Part, if there are any outgoings or expenses that are deductible against the specified income derived in the basis period, then there is to be deducted, in lieu of those outgoings or expenses, an amount computed in accordance with the formula A × B, where —| (a) | A is 60% or such other percentage as may be prescribed by rules made under section 7; and | | (b) | B is the gross amount of the specified income derived in the basis period. [45/2018] |
|
(3) However, subsection (2) —| (a) | only applies if, at the time the specified income is derived, the individual —| (i) | holds a vocational licence granted under section 110 of the Road Traffic Act 1961 authorising the individual to drive; or | | (ii) | is otherwise permitted under that Act to drive, |
| a chauffeured private hire car or taxi, as the case may be; and |
| | (b) | does not apply if the individual has made an election under subsection (5) to disapply subsection (2) to the individual’s specified income derived in the basis period. [45/2018] |
|
| (4) Subsection (2) also does not apply to any specified income derived by an individual as a partner in a partnership. [45/2018] |
| (5) An individual may, in such form and manner and within such time as the Comptroller may determine, make an election to the Comptroller to disapply subsection (2) to all of the individual’s specified income derived in the basis period for a particular year of assessment. [45/2018] |
| (6) If an individual derives specified income (other than income mentioned in subsection (4)) from driving more than one vehicle in a basis period, the individual may not make an election under subsection (5) in respect of only one or some of those vehicles. [45/2018] |
(7) Where an individual makes an election under subsection (5) to disapply subsection (2) to all of the individual’s specified income derived in the basis period for a particular year of assessment, then (despite anything in this Act) —| (a) | any outgoings or expenses incurred in that basis period and deductible against the specified income under any provision of this Part, that is in excess of the specified income, is not available as a deduction against any other income of the individual for that year of assessment; and | | (b) | section 37 or 37D applies with the necessary modifications to such excess, except that the excess may only be deducted against the individual’s specified income that is derived in the basis period for a subsequent or preceding year of assessment, as the case may be. [45/2018] |
|
(8) In this section —“authorised purpose” means —| (a) | the carriage of passengers; or | | (b) | the collection, conveyance and delivery, for reward, of any cargo not incidental to the carriage of any passenger in a motor vehicle, and any goods, article, food or baggage which is unaccompanied by any passenger travelling in the motor vehicle must be treated as cargo, but only if such collection, conveyance and delivery is approved by the Registrar pursuant to rules made under the Road Traffic Act 1961; |
|
“chauffeured private hire car” means a motor car that —| (a) | does not ply for hire on any road; | | (b) | is hired, or made available for hire, under a contract (express or implied) for use as a whole with a driver for the purpose of conveying the hirer, and one or more passengers (if any), in that car; and | | (c) | in respect of which a licence is issued under Part 5 of the Road Traffic Act 1961 for its use as a chauffeured private hire car; |
|
| “Registrar” has the meaning given by section 2(1) of the Road Traffic Act 1961. [14ZC [45/2018] |
|
|
| Deduction for expenditure incurred by individual in deriving commission |
| 14ZB.—(1) This section applies for the purpose of ascertaining, for the basis period for the year of assessment 2020 or a subsequent year of assessment, a qualifying individual’s income by way of commission that is derived from carrying on one or more trades, businesses, professions or vocations that are prescribed by rules made under section 7 (called in this section a prescribed activity or activities), in respect of which there are outgoings or expenses that are deductible under this Part. [32/2019] (2) Despite any other provision in this Part, there is to be deducted, in lieu of those outgoings or expenses, an amount computed in accordance with the formula A × B, where —| (a) | A is 25% or such other percentage as may be prescribed by rules made under section 7; and | | (b) | B is the gross amount of the individual’s commission derived from carrying on a prescribed activity or (if the individual carries on more than one prescribed activity in the basis period) all of those prescribed activities in the basis period, being commission in respect of which there are outgoings or expenses that are deductible under this Part. [32/2019] |
|
| (3) However, subsection (2) does not apply to an individual who has made an election under subsection (4) to disapply subsection (2) to the individual’s commission derived from carrying on a prescribed activity or prescribed activities in the basis period. [32/2019] |
| (4) An individual may, in such form and manner and within such time as the Comptroller may determine, make an election to the Comptroller to disapply subsection (2) to the individual’s commission derived from carrying on a prescribed activity or prescribed activities in the basis period for a particular year of assessment. [32/2019] |
| (5) If the individual derived commission from carrying on more than one prescribed activity in the basis period in respect of which there are outgoings or expenses that are deductible under this Part, the individual may not make an election under subsection (4) in respect of only one or some of those prescribed activities. [32/2019] |
(6) In this section —“commission” means commission that is chargeable to tax under section 10(1)(a), and includes such other payment as may be prescribed by rules made under section 7, but excludes any commission —| (a) | that is derived by the individual concerned as a partner of a partnership; or | | (b) | that is prescribed by rules made under section 7 as not commission; |
|
“qualifying individual”, in relation to any basis period, means an individual who satisfies all of the following conditions:| (a) | the individual is resident in Singapore in the year of assessment relating to the basis period; | | (b) | the individual derived commission from a prescribed activity or prescribed activities in the basis period, being commission in respect of which there are outgoings or expenses that are deductible under this Part, and the total amount of such commission does not exceed $50,000 or such amount as may be prescribed by rules made under section 7; | | (c) | such other conditions as may be prescribed by rules made under section 7. [14ZD [32/2019] |
|
|
|
| Deduction for payments made to drivers of chauffeured private hire cars and taxis |
14ZC.—(1) Each provision in the first column of the following table applies for the purpose of ascertaining the income of a Tenth Schedule entity for the basis period for each year of assessment set out opposite that provision in the second column of the table: | |
|---|
| | | | | Subsection (2A)(b) and (c) |
| | 2022 or a subsequent year of assessment |
| | | 2023 or a subsequent year of assessment |
|
|
[27/2021] [Act 30 of 2023 wef 30/10/2023] (2) Despite any other provision in this Part, the following expenditure incurred by a Tenth Schedule entity during the period between 1 January 2020 and 31 December 2020 (both dates inclusive) is allowed as a deduction for the relevant year of assessment:| (a) | the value of any benefit given to a self‑employed individual who drives a chauffeured private hire car or taxi, that is given in connection with an amount received by the Tenth Schedule entity out of a payment made by the Government to the Special Relief Fund under the public scheme known as the Point‑to‑Point Support Package; | | (b) | any monetary payment given by a Tenth Schedule entity to an individual who drives a chauffeured private hire car or taxi, that the Comptroller is satisfied is given to mitigate the individual’s loss of income arising from a COVID‑19 event. [41/2020] |
|
(2A) Despite any other provision in this Part, the following expenditure incurred by a Tenth Schedule entity is allowed as a deduction for the relevant year of assessment:| (a) | any monetary payment given during the period between 1 January 2021 and 31 December 2021 (both dates inclusive) by the Tenth Schedule entity to an individual who drives a chauffeured private hire car or taxi, that the Comptroller is satisfied is given to mitigate the individual’s loss of income arising from a COVID‑19 event; | | (b) | the value of any benefit given on or after 1 January 2021 to an individual who drives a chauffeured private hire car or taxi, that is given in connection with an amount received by the Tenth Schedule entity out of a payment made by the Government from a fund established by the Government known as the COVID‑19 Driver Relief Fund; | | (c) | any monetary payment given on or after 1 January 2021 by the Tenth Schedule entity to an individual who drives a chauffeured private hire car or taxi that is a petrol car or petrol‑electric car, that is given in connection with an amount received by the Tenth Schedule entity out of a payment made on behalf of the Government (known as the Additional Petrol Duty Rebate), that is part of the Budget Statement of the Government dated 16 February 2021; [Act 30 of 2023 wef 30/10/2023] | | (d) | the value of any benefit given on or after 1 August 2022 by the Tenth Schedule entity to an individual who drives a chauffeured private hire car or taxi, that is given in connection with an amount received by the Tenth Schedule entity out of a payment made by or on behalf of the Government, pursuant to any other public scheme, or out of any fund, established by or on behalf of the Government for the benefit (whether exclusively or otherwise) of individuals who drive chauffeured private hire cars or taxis. [27/2021] [Act 30 of 2023 wef 30/10/2023] |
|
| (2B) Despite any other provision in this Part, any monetary payment given by a person (other than an individual) who paid a tax under section 11 of the Road Traffic Act 1961 for a vehicle that is a petrol car or petrol‑electric car, to an individual who drives that vehicle as a chauffeured private hire car or taxi, in connection with an amount given to the person as a rebate against that tax on or after 1 August 2021, is allowed as a deduction against the income of the person for the basis period for the year of assessment 2022 or a subsequent year of assessment. [27/2021] |
(3) In this section —| “chauffeured private hire car” has the meaning given to that term by section 14ZA(8); |
| “COVID‑19 event” and “monetary payment” have the meanings given by section 13X(6); |
| “petrol car” means a motor car which uses petrol as its source of power; |
| “petrol‑electric car” means a motor car which uses either or both petrol and electricity as its source of power; |
| “Tenth Schedule entity” means an entity set out in the Tenth Schedule. [14ZE [41/2020; 27/2021] |
|
|
| Deduction for payments made to lessees or licensees to mitigate impact of COVID‑19 event |
14ZD.—(1) Each provision in the first column of the following table applies for the purpose of ascertaining the income of a person set out opposite that provision in the second column of the table, for the basis period for each year of assessment set out opposite that income in the third column of the table: | | | | |
|---|
| | | Income derived by a person in the period between 1 January 2020 and 31 December 2020 (both dates inclusive) from the leasing or licensing of any immovable property in relation to which a remission of property tax is given by the Property Tax (Non‑Residential Properties) (Remission) Order 2020 |
| | | | | | Income derived by a person (being the lessor or licensor of a prescribed property) in the period between 1 January 2021 and 31 December 2021 (both dates inclusive) from the leasing or licensing of the prescribed property |
| | |
|
[27/2021] (2) Despite any other provision in this Part, the following (whichever is applicable) is allowed as a deduction against that income for the relevant year of assessment:| (a) | the amount in the form of monetary payments of any benefit (as defined in the COVID‑19 (Temporary Measures) (Transfer of Benefit of Property Tax Remission) Regulations 2020) of the reduction in property tax as a result of the remission that the person (being the owner of the property) is required under section 29(2) of the COVID‑19 (Temporary Measures) Act 2020 to pass on to a lessee or licensee of the property in 2020; | | (b) | the amount in the form of monetary payments that the person mentioned in paragraph (a) has passed on or has agreed to pass on to the lessee or licensee of the property in the year 2020, and by reason of which the person is exempt from section 29(2) of the COVID‑19 (Temporary Measures) Act 2020 under regulation 13(2) of the COVID‑19 (Temporary Measures) (Transfer of Benefit of Property Tax Remission) Regulations 2020; | | (c) | the amount of any other monetary payments that the person makes in the year 2020 to the person’s lessee or licensee of that property, but only if the Comptroller is satisfied that the payments are intended to provide relief to the lessee or licensee from any economic hardship arising from a COVID‑19 event; | | (d) | the total of the amounts in paragraphs (a), (b) and (c). [41/2020] |
|
(2A) Despite any other provision in this Part, the amount of any monetary payment made by the person in the year 2021 to the person’s lessee or licensee of the prescribed property, is allowed as a deduction against that income for the relevant year of assessment, if —| (a) | the payment is made pursuant to an undertaking given by the person to his, her or its lessor or licensor, to provide relief to the lessee or licensee from any economic hardship arising from a COVID‑19 event; or | | (b) | the Comptroller is satisfied that the payment is intended to provide relief to the lessee or licensee from any economic hardship arising from a COVID‑19 event. [27/2021] |
|
| (3) The total amount of deduction allowable under this section in relation to each lessee or licensee for each year of assessment must not exceed the total amount of rent or licence fee payable under the relevant lease agreement or licence agreement between the person and the lessee or licensee for the period between 1 January and 31 December (both dates inclusive) of the year 2020 or 2021 (whichever is applicable), or a part of that period, and falling within the basis period for that year of assessment, after taking into account any waiver or reduction of the rent or licence fee for that period. [41/2020; 27/2021] |
| (4) In this section, “COVID‑19 event”, “monetary payment”, “owner” and “prescribed property”, in relation to immovable property, have the meanings given by section 13X(6). [14ZF [41/2020; 27/2021] |
|
| Deduction for expenditure incurred in obtaining or granting, etc., leases of immovable properties |
| 14ZE.—(1) Subject to subsections (3), (4) and (5), for the purpose of ascertaining the income of a person from the carrying on of a trade or business during the basis period for the year of assessment 2022 or any subsequent year of assessment, there is to be allowed a deduction for any expenditure incurred by the person during that basis period for the purpose of obtaining a lease, or renewing or extending a lease, of an immovable property that is used by the person for the purpose of the person’s trade or business. [27/2021] | (2) Subject to subsections (4) and (5), for the purpose of ascertaining the rental income derived by a person from an immovable property that is chargeable to tax under section 10(1)(f) during the basis period for the year of assessment 2022 or any subsequent year of assessment, there is to be allowed a deduction for any expenditure incurred by the person during that basis period for the purpose of granting the lease, or renewing or extending the lease, of the immovable property. [27/2021] |
| (3) No deduction may be allowed under subsection (1) to a company or trustee of a property trust in the business of letting immovable properties in which the company or trustee has a proprietary interest (other than as a legal owner) and would receive consideration if the proprietary interest is disposed of or transferred, whether in whole or in part. [27/2021] |
(4) In subsections (1) and (2), expenditure incurred to obtain, grant, renew or extend a lease —| (a) | means any commission, legal fees, stamp duty, advertising expenses and such other expenditure as may be prescribed by rules made under section 7; but | | (b) | excludes any outgoing or expense that is allowed as a deduction under section 14. [27/2021] |
|
(5) No deduction may be allowed under subsection (1) or (2) to a person in respect of —| (a) | any lease, or any renewal or extension of a lease, for a term that (excluding any option for the renewal or extension of the lease) exceeds 3 years; | | (b) | any acquisition, grant, novation, transfer or assignment (however described) of a lease because of any acquisition, sale, transfer or restructuring of any business; or | | (c) | a lease under an arrangement where the immovable property is sold by, and leased back to, the seller of the immovable property. [14ZG [27/2021] |
|
|
| Deduction for expenditure incurred on immovable property while vacant |
| 14ZF.—(1) This section applies where an immovable property used by a person to derive rental income chargeable to tax under section 10(1)(f), in the basis period for the year of assessment 2022 or a subsequent year of assessment, is vacant during any part of the basis period. [27/2021] (2) Subject to subsection (3), for the purpose of ascertaining the rental income derived during the basis period by the person from the immovable property that is chargeable to tax under section 10(1)(f), there is to be allowed a deduction for —| (a) | any expenditure incurred by the person for the repair, insurance, maintenance or upkeep of the immovable property while it is vacant during that basis period; and | | (b) | any amount paid during that basis period in respect of property tax charged on that immovable property. [27/2021] |
|
| (3) A deduction under subsection (2) is allowed to a person only if the Comptroller is satisfied that the person has made reasonable efforts in the circumstances to procure a lessee for the immovable property while it is vacant during the basis period. [14ZH [27/2021] |
|
| Deduction for qualifying training expenditure for years of assessment 2024 to 2028 |
14ZG.—(1) Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), there is allowed in respect of all of the person’s trades and businesses, in addition to the deduction under section 14, a deduction for qualifying training expenditure incurred for the purposes of those trades and businesses computed in accordance with the formula| where A is the lower of the following: |
| (a) | the qualifying training expenditure incurred during the basis period for that year of assessment; | | (b) | $400,000. |
| (2) No deduction is allowed to a person under this section in respect of any expenditure that is not allowed a deduction under section 14. |
| (3) For the purposes of subsection (1), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), incurred qualifying training expenditure in respect of such firms for the purposes of the individual’s trade or business, the deduction that may be allowed to the individual for that expenditure in respect of all of the individual’s trades and businesses must not exceed the amount computed in accordance with subsection (1) for that year of assessment. |
| (4) For the purposes of subsection (1), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), incurred qualifying training expenditure for the purposes of the partnership’s trade or business, the aggregate of the deductions that may be allowed to all the partners of the partnership for that expenditure in respect of all of the trades and businesses of the partnership must not exceed the amount computed in accordance with subsection (1) for that year of assessment. |
(5) In this section —| “central hirer”, in relation to a central hiring arrangement for a group of related parties, means the person that carries out the hiring functions for those parties under the arrangement; |
| “central hiring arrangement” means an arrangement for a group of related parties entered into for a bona fide commercial reason, where the hiring functions of the parties in the group are carried out by a single person; |
“eligible course” means a course that is attended by an employee of a person carrying on a trade or business and that is —| (a) | eligible for funding by the SkillsFuture Singapore Agency; and | | (b) | specified on a prescribed Internet website on the date of commencement of the course; |
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“employee”, in relation to a person carrying on a trade or business (called in this definition the first person), includes —| (a) | an individual —| (i) | who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the first person, and who is deployed to work solely for the first person; and | | (ii) | whose salary and other remuneration (including training expenditure incurred in respect of the individual) is borne, directly or indirectly, by the first person and not claimed by the central hirer as a deduction against the central hirer’s own income; and |
| | (b) | an individual, being an employee of another person that is a related party of the first person —| (i) | who is seconded to a position of the first person under a bona fide commercial arrangement to work solely for the first person; and | | (ii) | whose salary and other remuneration (including training expenditure in respect of the individual) is borne, directly or indirectly, by the first person and not claimed by the other person as a deduction against the other person’s own income; |
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| “qualifying training expenditure”, in relation to a person carrying on a trade or business, means any course fee, certification fee and assessment fee approved by the SkillsFuture Singapore Agency for an eligible course for the purpose of this section, and that is paid (whether directly or in the form of a reimbursement of the employee for any payment made) by the person to a provider of the eligible course; |
| “SkillsFuture Singapore Agency” means the SkillsFuture Singapore Agency established by section 3 of the SkillsFuture Singapore Agency Act 2016. |
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| (6) A reference in this section to qualifying training expenditure excludes any expenditure to the extent that it is or is to be subsidised by any grant or subsidy from the Government or a statutory board (including the SkillsFuture Singapore Agency). [Act 30 of 2023 wef 30/10/2023] |
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| Deduction for expenditure incurred in deriving income from providing delivery services |
14ZH.—(1) This section applies for the purpose of ascertaining, for the basis period for the year of assessment 2024 or a subsequent year of assessment, a qualifying individual’s income from performing delivery services by prescribed means, that is chargeable to tax under section 10(1)(a) and in respect of which there are outgoings or expenses that are deductible under this Part.(2) In this section, a qualifying individual’s income from performing delivery services does not include —| (a) | any income from delivery services not performed personally by the qualifying individual; and | | (b) | any income from delivery services performed by the qualifying individual as an employee of another person. |
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(3) Despite any other provision in this Part, there is to be deducted from a qualifying individual’s income for a basis period from performing delivery services by one or more prescribed means, in lieu of the outgoings or expenses that are deductible under this Part, the total of each sum computed by the formula A × B in relation to each of those prescribed means (or a combination thereof), where —| (a) | A is the prescribed percentage for the prescribed means or combination of prescribed means; and | | (b) | B is the individual’s gross income for the basis period from performing delivery services by the prescribed means or combination of prescribed means. |
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| (4) Subsection (3) does not apply if the qualifying individual’s gross income from performing delivery services by prescribed means exceeds $50,000 for the basis period. |
| (5) Subsection (3) does not apply to a qualifying individual who has made an election under subsection (6) to disapply subsection (3) for the basis period. |
| (6) A qualifying individual may, in such form and manner and within such time as the Comptroller may determine, make an election to the Comptroller to disapply subsection (3) to the individual’s income from performing delivery services by prescribed means that is derived in the basis period for a particular year of assessment. |
(7) In this section —| “delivery services” means the collection, conveyance and delivery, for reward, of any cargo not incidental to the carriage of any passenger; |
“prescribed means”, in relation to the performance of delivery services, means such performance —| (a) | on foot; | | (b) | by public transport; | | (c) | by the use of a bicycle (whether power-assisted or not); | | (d) | by the use of a motorised personal mobility device; | | (e) | by the use of a motor cycle; or | | (f) | by the use of a van; |
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| “prescribed percentage”, in relation to a prescribed means or combination of prescribed means, means the percentage prescribed in rules made under section 7 that applies to the prescribed means or combination of prescribed means; |
| “qualifying individual”, in relation to any basis period, means an individual who performs delivery services by prescribed means only. [Act 30 of 2023 wef 30/10/2023] |
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15.—(1) Despite the provisions of this Act, for the purpose of ascertaining the income of any person, no deduction is allowed in respect of —| (a) | domestic or private expenses except as provided in section 14(1)(g); | | (b) | any disbursements or expenses not being money wholly and exclusively laid out or expended for the purpose of acquiring the income; | | (c) | any capital withdrawn or any sum employed or intended to be employed as capital except as provided in section 14(1)(h); | | (d) | any capital employed in improvements other than improvements effected in the replanting of a plantation; | | (e) | any sum recoverable under an insurance or contract of indemnity; | | (f) | rent or cost of repairs to any premises or part of premises not paid or incurred for the purpose of producing the income; | | (g) | any amount paid or payable in respect of income tax in Singapore, or in respect of any tax on income (by whatever name called) in any country outside Singapore; | | (h) | any amount paid or payable in respect of goods and services tax by the person if the person, being required to be registered under the Goods and Services Tax Act 1993, has failed to do so, or if the person is entitled under that Act to credit that amount of tax as an input tax; | | (i) | any payment to any provident, savings, widows’ and orphans’ or other society or fund, including the Supplementary Retirement Scheme, except —| (i) | such payment made by an employer on behalf of the employer’s employee to the Central Provident Fund that is obligatory under the Central Provident Fund Act 1953; | | (ii) | such payment made by an employer on behalf of the employer’s employee to the retirement account or special account of that employee in accordance with section 18 of the Central Provident Fund Act 1953; | | (iii) | such payment made by an employer on behalf of the employer’s employee to the SRS account of that employee up to the amount of the SRS contribution cap applicable to that employee as determined in accordance with regulations made under section 10G(11); and | | (iv) | such payments as are allowed under section 14(1)(e), (fb) and (fc); |
| | (j) | any sum referred to in section 12(6) payable by any person outside Singapore to another person outside Singapore except where the sum is exempt from tax, or tax has been deducted and accounted for under section 45; | | (k) | any outgoings and expenses, whether directly or in the form of reimbursements, and any claim for the cost of renewal incurred on or after 1 April 1998 in respect of a motor car (whether owned by the person or any other person) 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 —| (i) | a taxi, but subject to subsection (2D); | | (ii) | a motor car registered outside Singapore and used exclusively outside Singapore; | | (iii) | a private hire car if the person is carrying on the business of hiring out cars and the private hire car is used by the person principally for hiring; | | (iv) | a motor car which was registered before 1 April 1998 as a business service passenger vehicle for the purposes of the Road Traffic Act 1961; | | (v) | a motor car registered on or after 1 April 1998 which is used principally for instructional purposes if the person is carrying on the business of providing driving instruction and holds a driving school licence or driving instructor’s licence issued under the Road Traffic Act 1961; | | (vi) | a chauffeured private hire car used by the person (being an individual who holds a vocational licence granted under section 110 of the Road Traffic Act 1961 authorising the individual to drive, or who is otherwise permitted under that Act to drive, a chauffeured private hire car) other than as an employee of another, but subject to subsection (2E); and | | (vii) | a chauffeured private hire car used principally by the person (not being an individual mentioned in sub‑paragraph (vi)) to carry on the business of providing chauffeur services, but subject to subsection (2F); |
| | (l) | any outgoings and expenses incurred in respect of any designated unit trust within the meaning of section 35(14) if the person is a unit holder of such trust; | | (m) | any amount of output tax paid or payable under the Goods and Services Tax Act 1993 which is borne by the person if the person is registered as a taxable person under that Act, but not any amount of output tax paid or payable on a reverse charge supply under section 14(2) of that Act, to the extent that credit of such amount as input tax is not allowed under that Act; | | (n) | [Deleted by Act 37 of 2014] | | (o) | [Deleted by Act 19 of 2013] | | (p) | any outgoings and expenses, whether directly or in the form of reimbursements, incurred in respect of any right or benefit granted to any person to acquire shares on or after 1 January 2002 in any company, if the right or benefit is not granted by reason of any office or employment held in Singapore by the person; or | | (q) | any outgoings and expenses, whether directly or in the form of reimbursements, incurred by any company in respect of any right or benefit granted to any person, by reason of any office or employment held in Singapore by that person, to acquire shares (other than treasury shares, or shares in respect of which the company is allowed a deduction under section 14M(7)) of a holding company of that company. [37/2014; 45/2018; 52/2018; 32/2019; 41/2020] |
| (2) Subsection (1)(b) and (d) does not apply to any expenditure which qualifies for deduction under section 14A, 14C, 14D, 14E, 14EA, 14F, 14G, 14H, 14I, 14J, 14K, 14L, 14M, 14N, 14P, 14S, 14T or 14U. [2/2016; 39/2017; 41/2020] [Act 30 of 2023 wef 30/10/2023] |
| (2A) Subsection (1)(b) does not apply to any expenditure which qualifies for deduction under section 14V or 14Z. [37/2014; 34/2016] |
| (2B) Subsection (1)(b) and (c) does not apply to any expenditure which qualifies for deduction under section 14Y. [34/2016] |
| (2C) Besides subsection (1)(b) and (d) (which is disapplied under subsection (2)), the other paragraphs of subsection (1) also do not apply to expenditure which qualifies for deduction under section 14C(1)(g). [39/2017] |
(2D) For the purposes of subsection (1)(k)(i) —| (a) | outgoings and expenses incurred on or after 12 November 2018 are only deductible if they are attributable to the use of the taxi for an authorised purpose; and | | (b) | the cost of renewal in respect of the taxi incurred on or after that date is only deductible if the person is one to whom an allowance under section 19 may be made in respect of the taxi by reason of that person being one mentioned in section 19(5)(a)(i), (ii) or (iii). [45/2018] |
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(2E) Subsection (1)(k)(vi) —| (a) | only applies to outgoings and expenses incurred in the basis period for the year of assessment 2019 or a subsequent year of assessment and that are attributable to the use of the chauffeured private hire car for an authorised purpose; and | | (b) | does not apply to the cost of renewal in respect of the car. [45/2018] |
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| (2F) Subsection (1)(k)(vii) only applies to outgoings and expenses, and the cost of renewal in respect of the chauffeured private hire car, incurred in the basis period for the year of assessment 2021 or a subsequent year of assessment. [41/2020] |
| (2G) Subsection (1)(b) and (c) does not apply to any expenditure that qualifies for deduction under section 14ZE. [27/2021] |
| (2H) Subsection (1)(b) and (f) does not apply to any expenditure that qualifies for deduction under section 14ZF. [27/2021] |
| (3) [Deleted by Act 33 of 2022 wef 04/11/2022] |
| (4) In this section, “authorised purpose” and “chauffeured private hire car” have the meanings given by section 14ZA(8). [45/2018] |
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| Limit on deduction allowed for leasing or licensing expenditure in 2020 |
| 15A.—(1) No deduction is allowed in respect of expenditure incurred in the year 2020 by a person on leasing or licensing any immovable property in relation to which a remission of property tax is given by the Property Tax (Non‑Residential Properties) (Remission) Order 2020, of an amount described in subsection (2). [41/2020] (2) The amount mentioned in subsection (1) is any of the following, as applicable:| (a) | the amount in the form of monetary payments of any benefit (as defined in the COVID‑19 (Temporary Measures) (Transfer of Benefit of Property Tax Remission) Regulations 2020) of the reduction in property tax as a result of the remission that the owner of the immovable property is required under section 29(2) of the COVID‑19 (Temporary Measures) Act 2020 to pass on to the person in the year 2020; | | (b) | the amount in the form of monetary payments that the owner of the immovable property has passed on or has agreed to pass on to the person in the year 2020, and by reason of which the owner is exempt from section 29(2) of the COVID‑19 (Temporary Measures) Act 2020 under regulation 13(2) of the COVID‑19 (Temporary Measures) (Transfer of Benefit of Property Tax Remission) Regulations 2020; | | (c) | the amount of any other monetary payments received or receivable by the person from the person’s lessor or licensor in the year 2020, but only if the Comptroller is satisfied that the payments are intended by the lessor or licensor to provide relief to the person from any economic hardship arising from a COVID‑19 event; | | (d) | the total of the amounts in paragraphs (a), (b) and (c). [41/2020] |
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| (3) In this section, “COVID‑19 event”, “monetary payment” and “owner”, in relation to immovable property, have the meanings given by section 13X(6). [41/2020] |
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| Limit on deduction allowed for leasing or licensing expenditure in 2021 |
| 15B.—(1) No deduction is allowed in respect of any expenditure incurred in the year 2021 by a person who is a lessee or licensee of any prescribed property on the leasing or licensing of that property, of an amount described in subsection (2). [27/2021] (2) The amount mentioned in subsection (1) is the amount of any monetary payment received or receivable by the person from the person’s lessor or licensor in the year 2021, which —| (a) | is made by the lessor or licensor pursuant to an undertaking given by the lessor or licensor to his, her or its lessor or licensor, to provide relief to the person from any economic hardship arising from a COVID‑19 event; or | | (b) | the Comptroller is satisfied is intended by the lessor or licensor to provide relief to the person from any economic hardship arising from a COVID‑19 event. [27/2021] |
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| (3) In this section, “COVID‑19 event”, “monetary payment” and “prescribed property” have the meanings given by section 13X(6). [27/2021] |
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