Division 1 — Specific Modifications and
Exceptions to the Act
Modification or exception to section 13A of Act (Exemption of shipping profits)
4.—(1)  Where —
(a)an amalgamated company is a shipping enterprise; and
(b)all of the amalgamating companies that are shipping enterprises have elected under section 13A(13) of the Act for their respective incomes derived or deemed to be derived from the operation of all of their respective Singapore ships to be taxed at the rate prescribed by section 43(1)(a) of the Act,
then the income of the amalgamated company that is derived or deemed to be derived from the operation of all its Singapore ships shall be taxed at the rate prescribed by section 43(1)(a) of the Act as if the amalgamated company had made an election under section 13A(13) of the Act for the same.
(2)  Where —
(a)an amalgamated company is a shipping enterprise; and
(b)one or more, but not all, of the amalgamating companies that are shipping enterprises have elected under section 13A(13) of the Act for their respective incomes derived or deemed to be derived from the operation of all of their respective Singapore ships to be taxed at the rate prescribed by section 43(1)(a) of the Act,
then the exemption under section 13A of the Act of the income of the amalgamated company derived or deemed to be derived by the amalgamated company from the operation of all of its Singapore ships shall not be affected by any such election made by any amalgamating company.
(3)  If the amalgamated company wishes for its income that is derived or deemed to be derived from the operation of all its Singapore ships to be taxed at the rate prescribed by section 43(1)(a) of the Act, the amalgamated company shall make an election for the same under section 13A(13) of the Act no later than the time it furnishes a return of income to the Comptroller for the year of assessment relating to the basis period in which the date of amalgamation falls.
Modification or exception to section 13J of Act (Equity remuneration incentive scheme (start-ups))
5.  Where all the amalgamating companies cease to exist on the date of amalgamation, then the amalgamated company shall not be a qualifying company for the purposes of section 13J of the Act (notwithstanding the definition of “qualifying company” in subsection (7) of that section) unless ––
(a)the amalgamated company is a company incorporated in Singapore which, at the time of the grant to its employees of any right or benefit to acquire its shares —
(i)carries on business in Singapore;
(ii)has been incorporated for 3 years or less;
(iii)has its total share capital beneficially held directly by no more than 20 shareholders —
(A)all of whom are individuals; or
(B)at least one of whom is an individual holding at least 10% of the total number of issued ordinary shares of the qualifying company; and
(iv)has gross assets the market value of which does not exceed $100 million; and
(b)at the time of the grant by the amalgamated company to its employees of any right or benefit to acquire its shares, at least one of the amalgamating companies would have been incorporated for 3 years or less, had the amalgamation not taken place.
[S 170/2022 wef 31/12/2021]
Modifications to section 13W of Act (Exemption of gains or profits from disposal of ordinary shares)
5A.—(1)  The application of section 13W of the Act to any gains or profits derived by the amalgamated company from the disposal of ordinary shares in another company (referred to in this regulation as the investee company), being ordinary shares transferred to the amalgamated company by any of the amalgamating companies (referred to in this regulation as the transferor company) on the date of amalgamation, shall be subject to the modifications set out in this regulation.
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(2)  In determining, for the purpose of section 13W(1)(b) of the Act, whether the amalgamated company has, at all times during a continuous period of at least 24 months ending on the date immediately prior to the date of disposal of the shares, legally and beneficially owned at least 20% of the ordinary shares in the investee company, the legal and beneficial ownership of the transferor company of the ordinary shares in the investee company shall be treated as that of the amalgamated company, and section 13W(4) of the Act shall apply accordingly.
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(3)  The reference in section 13W(3) of the Act to outgoings and expenses wholly and exclusively incurred by the divesting company in the production of the gains or profits from the disposal of shares, including the expenses referred to in paragraphs (a) to (f) of that provision, include a reference to outgoings and expenses wholly and exclusively incurred by the transferor company in relation to the acquisition of the shares disposed of, including the expenses referred to in paragraphs (a) to (f) of that provision as they relate to such acquisition (with the reference in those paragraphs to money borrowed by the divesting company substituted with a reference to money borrowed by the transferor company).
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(4)  For the purpose of section 13W(5) of the Act, the reference to an amount referred to in section 13W(6) of the Act which is attributable to any of the shares disposed of and which has been allowed as a deduction to the divesting company for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of, includes a reference to any such amount which is attributable to any of the shares disposed of and which has been allowed as a deduction to the transferor company for any year of assessment up to and including the year of assessment which relates to the basis period in which the date of amalgamation falls.
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(5)  For the purpose of section 13W(7) of the Act, the reference to any write‑back for a diminution in the value of the shares, or profit recognised in accordance with FRS 39, SFRS for Small Entities, FRS 109 or SFRS(I) 9 (as the case may be), which is attributable to any of the shares disposed of, and which has been charged to tax as income of the divesting company for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of, includes a reference to such write‑back or profit which is attributable to any of the shares disposed of and which has been charged to tax as income of the transferor company for any year of assessment up to and including the year of assessment which relates to the basis period in which the date of amalgamation falls.
[S 694/2013 wef 01/06/2012]
[S 56/2020 wef 12/11/2018]
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Modifications to provisions of Act in relation to Productivity and Innovation Credit Scheme
5B.—(1)  Where the date of amalgamation falls within the basis period for the year of assessment 2011, the amount of any PIC expenditure under a PIC provision incurred by the amalgamated company during the basis periods for the years of assessment 2011 and 2012 for which a deduction or allowance may be allowed or made to it under that PIC provision for those years of assessment shall be determined as follows:
(a)for the year of assessment 2011, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2011; and
(ii)an amount computed in accordance with the formula:
where X1
is the aggregate of every amount of PIC expenditure under that PIC provision incurred by an amalgamating company during the basis period for the year of assessment 2011 for which a deduction or allowance is allowed or made to that company under that PIC provision, including any such expenditure for which a cash payout is granted to that company under section 37G of the Act;
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(b)for the year of assessment 2012, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2012; and
(ii)the balance after deducting from $800,000 the aggregate of —
(A)X1 referred to in sub‑paragraph (a)(ii); and
(B)the lower of the amounts specified in sub‑paragraph (a)(i) and (ii).
(2)  Where the date of amalgamation falls within the basis period for the year of assessment 2012, the amount of any PIC expenditure under a PIC provision incurred by the amalgamated company during the basis period for that year of assessment for which a deduction or allowance may be allowed or made to it under that PIC provision for that year of assessment shall be the lower of —
(a)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2012; and
(b)an amount computed in accordance with the formula:
where X2
is the aggregate of every amount of PIC expenditure under that PIC provision incurred by an amalgamating company during the basis period for the year of assessment 2011 or 2012, for which a deduction or allowance is allowed or made to that company under that PIC provision, including any such expenditure for which a cash payout is granted to that company under section 37G of the Act.
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(3)  Where the date of amalgamation falls within the basis period for the year of assessment 2013, the amount of any PIC expenditure under a PIC provision incurred by the amalgamated company during the basis periods for the years of assessment 2013, 2014 and 2015 for which a deduction or allowance may be allowed or made to it under that PIC provision for those years of assessment shall be determined as follows:
(a)for the year of assessment 2013, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2013; and
(ii)an amount computed in accordance with the formula:
where X3
is the aggregate of every amount of PIC expenditure under that PIC provision incurred by an amalgamating company during the basis period for the year of assessment 2013 for which a deduction or allowance is allowed or made to that company under that PIC provision, including any such expenditure for which a cash payout is granted to that company under section 37G of the Act;
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(b)for the year of assessment 2014, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2014; and
(ii)the balance after deducting from $1,200,000 the aggregate of —
(A)X3 referred to in sub‑paragraph (a)(ii); and
(B)the lower of the amounts specified in sub‑paragraph (a)(i) and (ii);
(c)for the year of assessment 2015, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2015; and
(ii)the balance after deducting from $1,200,000 the aggregate of —
(A)X3 referred to in sub‑paragraph (a)(ii);
(B)the lower of the amounts specified in sub‑paragraph (a)(i) and (ii); and
(C)the lower of the amounts specified in sub‑paragraph (b)(i) and (ii).
(4)  Where the date of amalgamation falls within the basis period for the year of assessment 2014, the amount of any PIC expenditure under a PIC provision incurred by the amalgamated company during the basis periods for the years of assessment 2014 and 2015 for which a deduction or allowance may be allowed or made to it under that PIC provision for those years of assessment shall be determined as follows:
(a)for the year of assessment 2014, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2014; and
(ii)an amount computed in accordance with the formula:
where X4
is the aggregate of every amount of PIC expenditure under that PIC provision incurred by an amalgamating company during the basis period for the year of assessment 2013 or 2014 for which a deduction or allowance is allowed or made to that company under that PIC provision, including any such expenditure for which a cash payout is granted to that company under section 37G of the Act;
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(b)for the year of assessment 2015, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2015; and
(ii)the balance after deducting from $1,200,000 the aggregate of —
(A)X4 referred to in sub‑paragraph (a)(ii); and
(B)the lower of the amounts specified in sub‑paragraph (a)(i) and (ii).
(5)  Where the date of amalgamation falls within the basis period in the year of assessment 2015, the amount of any PIC expenditure under a PIC provision incurred by the amalgamated company during the basis period for that year of assessment for which a deduction or allowance may be allowed or made to it under that PIC provision for that year of assessment shall be the lower of —
(a)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2015; and
(b)an amount computed in accordance with the formula:
where X5
is the aggregate of every amount of PIC expenditure under that PIC provision incurred by an amalgamating company during the basis period for the year of assessment 2013, 2014 or 2015, for which a deduction or allowance is allowed or made to that company under that PIC provision, including any such expenditure for which a cash payout is granted to that company under section 37G of the Act.
[S 170/2022 wef 31/12/2021]
(5A)  Where the date of amalgamation falls within the basis period for the year of assessment 2016, the amount of any PIC expenditure under a PIC provision incurred by the amalgamated company during the basis periods for the years of assessment 2016, 2017 and 2018 for which a deduction or an allowance may be allowed or made to it under that PIC provision for those years of assessment is determined as follows:
(a)for the year of assessment 2016, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2016; and
(ii)an amount computed in accordance with the formula $1,200,000 – X6, where X6 is the total of every amount of PIC expenditure under that PIC provision incurred by an amalgamating company during the basis period for the year of assessment 2016 for which a deduction or an allowance is allowed or made to that company under that PIC provision, including any such expenditure for which a cash payout is granted to that company under section 37G of the Act;
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(b)for the year of assessment 2017, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2017; and
(ii)the balance after deducting from $1,200,000 the total of —
(A)X6 mentioned in sub‑paragraph (a)(ii); and
(B)the lower of the amounts specified in sub‑paragraph (a)(i) and (ii);
(c)for the year of assessment 2018, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2018; and
(ii)the balance after deducting from $1,200,000 the total of —
(A)X6 mentioned in sub‑paragraph (a)(ii);
(B)the lower of the amounts specified in sub‑paragraph (a)(i) and (ii); and
(C)the lower of the amounts specified in sub‑paragraph (b)(i) and (ii).
[S 170/2022 wef 27/11/2014]
(5B)  Where the date of amalgamation falls within the basis period for the year of assessment 2017, the amount of any PIC expenditure under a PIC provision incurred by the amalgamated company during the basis periods for the years of assessment 2017 and 2018 for which a deduction or an allowance may be allowed or made to it under that PIC provision for those years of assessment is determined as follows:
(a)for the year of assessment 2017, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2017; and
(ii)an amount computed in accordance with the formula $1,200,000 – X7, where X7 is the total of every amount of PIC expenditure under that PIC provision incurred by an amalgamating company during the basis period for the year of assessment 2016 or 2017 for which a deduction or an allowance is allowed or made to that company under that PIC provision, including any such expenditure for which a cash payout is granted to that company under section 37G of the Act;
[S 170/2022 wef 31/12/2021]
(b)for the year of assessment 2018, the lower of —
(i)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2018; and
(ii)the balance after deducting from $1,200,000 the total of —
(A)X7 mentioned in sub‑paragraph (a)(ii); and
(B)the lower of the amounts specified in sub‑paragraph (a)(i) and (ii).
[S 170/2022 wef 27/11/2014]
(5C)  Where the date of amalgamation falls within the basis period in the year of assessment 2018, the amount of any PIC expenditure under a PIC provision incurred by the amalgamated company during the basis period for that year of assessment for which a deduction or an allowance may be allowed or made to it under that PIC provision for that year of assessment is the lower of —
(a)the amount of the PIC expenditure under that PIC provision incurred by the amalgamated company during the basis period for the year of assessment 2018; and
(b)an amount computed in accordance with the formula $1,200,000 – X8, where X8 is the total of every amount of PIC expenditure under that PIC provision incurred by an amalgamating company during the basis period for the year of assessment 2016, 2017 or 2018 for which a deduction or an allowance is allowed or made to that company under that PIC provision, including any such expenditure for which a cash payout is granted to that company under section 37G of the Act.
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(6)  For the avoidance of doubt, the deduction or allowance which may be allowed or made to the amalgamated company under paragraphs (1) to (5C) shall be subject to section 37G(14A) of the Act.
[S 170/2022 wef 27/11/2014]
[S 170/2022 wef 31/12/2021]
(7)  For the purpose of determining the applicability of section 14A(1C), 14D(5)(a) and (b), 14O(4), 14P(2A), 14Q(5), 19A(2BA) or 19B(1BA) of the Act (reduction of the expenditure used for computing the deduction or allowance where the person claiming it did not carry on a trade or business during a specified basis period) to an amalgamating company and the amalgamated company in a case where the date of amalgamation falls within the basis period for the year of assessment 2011 or 2012 —
(a)in relation to the amalgamating company, any trade or business carried on by the amalgamated company on or after the date of amalgamation, shall be deemed to have been carried on by the amalgamating company as if the amalgamating company existed on or after that date; and
(b)in relation to the amalgamated company, any trade or business carried on by any of the amalgamating companies prior to the date of amalgamation, shall be deemed to have been carried on by the amalgamated company as if the amalgamated company existed prior to that date.
[S 170/2022 wef 27/11/2014]
[S 170/2022 wef 31/12/2021]
(8)  For the purpose of determining the applicability of section 14A(1D), 14D(5)(c), (d) and (e), 14O(5), 14P(2B), 14Q(6), 14T(3), 19A(2BB) or 19B(1BB) of the Act (reduction of the expenditure used for computing the deduction or allowance where the person claiming it did not carry on a trade or business during one or 2 specified basis periods) to an amalgamating company and the amalgamated company in a case where the date of amalgamation falls within the basis period for the year of assessment 2013, 2014 or 2015 —
(a)in relation to the amalgamating company, any trade or business carried on by the amalgamated company on or after the date of amalgamation shall be deemed to have been carried on by the amalgamating company as if the amalgamating company existed on or after that date; and
(b)in relation to the amalgamated company, any trade or business carried on by any of the amalgamating companies prior to the date of amalgamation shall be deemed to have been carried on by the amalgamated company as if the amalgamated company existed prior to that date.
[S 170/2022 wef 28/11/2013]
[S 170/2022 wef 27/11/2014]
[S 170/2022 wef 31/12/2021]
(8A)  For the purpose of determining the applicability of section 14A(1DA), 14D(5)(da), (db) and (f), 14O(5AA), 14P(2C), 14Q(6AA), 14T(4B), 19A(2BC) or 19B(1BC) of the Act (reduction of the expenditure used for computing the deduction or allowance where the person claiming it did not carry on a trade or business during one or 2 specified basis periods) to an amalgamating company and the amalgamated company in a case where the date of amalgamation falls within the basis period for the year of assessment 2016, 2017 or 2018 —
(a)in relation to the amalgamating company, any trade or business carried on by the amalgamated company on or after the date of amalgamation is considered to have been carried on by the amalgamating company as if the amalgamating company existed on or after that date; and
(b)in relation to the amalgamated company, any trade or business carried on by any of the amalgamating companies prior to the date of amalgamation is considered to have been carried on by the amalgamated company as if the amalgamated company existed prior to that date.
[S 170/2022 wef 27/11/2014]
[S 170/2022 wef 31/12/2021]
(9)  In this regulation —
“Productivity and Innovation Credit Scheme expenditure” or “PIC expenditure”, in relation to any PIC provision, means —
(a)in the case of section 14A(1A), (1B) or (1BA) of the Act, qualifying intellectual property registration costs under that provision;
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(b)in the case of section 14D(2) of the Act, qualifying expenditure under that section;
[S 170/2022 wef 31/12/2021]
(c)in the case of section 14O(1), (2) or (2A) of the Act, qualifying training expenditure under that provision;
[S 170/2022 wef 27/11/2014]
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(d)in the case of section 14P(1), (2) or (2AA) of the Act, qualifying design expenditure under that provision;
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[S 170/2022 wef 31/12/2021]
(e)in the case of section 14Q(1), (2) or (2A) of the Act read with section 14Q(6C) of the Act, expenditure on the leasing of any PIC automation equipment under a qualifying lease or procuring cloud computing services under that provision;
[S 170/2022 wef 27/11/2014]
[S 170/2022 wef 31/12/2021]
(ea)in the case of section 14T(1) or (4) of the Act, expenditure on the licensing from another person of any qualifying intellectual property rights under that provision;
[S 170/2022 wef 28/11/2013]
[S 170/2022 wef 27/11/2014]
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(f)in the case of section 19A(2A), (2B) or (2BAA) of the Act, capital expenditure on the provision of any PIC automation equipment under that provision; and
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(g)in the case of section 19B(1A), (1B) or (1BAA) of the Act, capital expenditure in acquiring any intellectual property rights under that provision;
[S 170/2022 wef 27/11/2014]
“PIC provision” means any of the following provisions of the Act:
(a)section 14A(1A), (1B) or (1BA);
(b)section 14D(2);
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(c)section 14O(1), (2) or (2A);
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(d)section 14P(1), (2) or (2AA);
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(e)section 14Q(1), (2) or (2A);
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(f)section 14T(1) or (4);
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(g)section 19A(2A), (2B) or (2BAA);
(h)section 19B(1A), (1B) or (1BAA).
[S 170/2022 wef 27/11/2014]
Modifications to section 14B of Act (Further deduction for expenses relating to approved trade fairs, exhibitions or trade missions or to maintenance of overseas trade office)
5C.  Where the date of amalgamation falls within the period from 1 April 2012 to 31 March 2020 (both dates inclusive), then, for the purpose of applying section 14B(2B) of the Act to the amalgamated company in respect of expenses incurred by it during the basis period for any year of assessment —
(a)the reference to $100,000 in section 14B(2B)(a) of the Act is a reference to the amount computed in accordance with the formula $100,000 – V1, where V1 is the total of —
(i)the expenses for which a deduction is allowed to an amalgamating company for that year of assessment under section 14B(2A) of the Act; and
(ii)the expenditure for which a deduction is allowed to an amalgamating company for that year of assessment under section 14H(1A) of the Act; and
[S 170/2022 wef 31/12/2021]
(b)the reference to $150,000 in section 14B(2B)(b) of the Act is a reference to the amount computed in accordance with the formula $150,000 – V2, where V2 is the total of —
(i)the expenses for which a deduction is allowed to an amalgamating company for that year of assessment under section 14B(2A) of the Act; and
(ii)the expenditure for which a deduction is allowed to an amalgamating company for that year of assessment under section 14H(1A) of the Act.
[S 170/2022 wef 12/11/2018]
[S 170/2022 wef 31/12/2021]
Modifications to section 14H of Act (Further or double deduction for overseas investment development expenditure)
5D.—(1)  Where the date of amalgamation falls within the period from 1 April 2012 to 31 March 2020 (both dates inclusive), then, for the purpose of applying section 14H(1B) of the Act to the amalgamated company in respect of expenses incurred by it during the basis period for any year of assessment —
(a)the reference to $100,000 in section 14H(1B)(a) of the Act is a reference to the amount computed in accordance with the formula $100,000 – W1, where W1 is the total of —
(i)the expenditure for which a deduction is allowed to an amalgamating company for that year of assessment under section 14H(1A) of the Act; and
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(ii)the expenses for which a deduction is allowed to an amalgamating company for that year of assessment under section 14B(2A) of the Act; and
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(b)the reference to $150,000 in section 14H(1B)(b) of the Act is a reference to the amount computed in accordance with the formula $150,000 – W2, where W2 is the total of —
(i)the expenditure for which a deduction is allowed to an amalgamating company for that year of assessment under section 14H(1A) of the Act; and
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(ii)the expenses for which a deduction is allowed to an amalgamating company for that year of assessment under section 14H(2A) of the Act.
[S 170/2022 wef 12/11/2018]
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(2)  Where the date of amalgamation falls within the period from 1 July 2015 to 31 March 2020 (both dates inclusive), then, for the purpose of applying section 14H(2A) of the Act to the amalgamated company in respect of expenditure incurred by it during the basis period for any year of assessment, the reference to $1 million in that section is a reference to the amount computed in accordance with the formula $1 million – W3, where W3 is the total of —
(a)the expenditure for which a deduction is allowed to an amalgamating company for that year of assessment under section 14H(1) of the Act; and
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(b)the expenditure for which a deduction is allowed to an amalgamating company for that year of assessment under section 14I(1) of the Act.
[S 170/2022 wef 01/04/2012]
[S 170/2022 wef 01/07/2015]
[S 170/2022 wef 12/11/2018]
[S 170/2022 wef 31/12/2021]
Modifications to section 14I of Act (Further or double deduction for salary expenditure for employees posted overseas)
5E.  Where the date of amalgamation falls within the period from 1 July 2015 to 31 March 2020 (both dates inclusive), then, for the purpose of applying section 14I(4) of the Act to the amalgamated company in respect of expenditure incurred by it during the basis period for any year of assessment, the reference to $1 million in that section is a reference to the amount computed in accordance with the formula $1 million – X, where X is the total of —
(a)the expenditure for which a deduction is allowed to an amalgamating company for that year of assessment under section 14I(1) of the Act; and
[S 170/2022 wef 31/12/2021]
(b)the expenditure for which a deduction is allowed to an amalgamating company for that year of assessment under section 14H(1) of the Act.
[S 170/2022 wef 01/07/2015]
[S 170/2022 wef 31/12/2021]
6.  [Deleted by S 170/2022 wef 10/03/2022]
Modification or exception to section 14N of Act (Deduction for renovation or refurbishment expenditure)
7.—(1)  Where —
(a)on or before the date of amalgamation, any amalgamating company incurred renovation or refurbishment expenditure referred to in section 14N of the Act; and
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(b)on the date of the amalgamation, the amalgamating company has not claimed all deductions allowed to it under that section in respect of the renovation or refurbishment expenditure incurred by it,
then the amalgamated company may claim under that section all deductions not already claimed by the amalgamating company under that section as if the amalgamated company is the amalgamating company, subject to the following provisions:
(i)notwithstanding section 14N(8) of the Act, the specified period for the purpose of section 14N(7) of the Act in relation to the amalgamated company shall be a period of 3 successive basis periods beginning with the basis period for the year of assessment in which a deduction was first allowed to any of the amalgamating companies under section 14N of the Act (as if the amalgamated company existed on the first day of that basis period), or any basis period for the next successive 3 years of assessment; and
[S 170/2022 wef 31/12/2021]
(ii)where the amalgamated company incurs any renovation or refurbishment expenditure in a basis period forming any part of a specified period referred to in sub-paragraph (i), the deduction that may be allowed to the amalgamated company under section 14N of the Act in respect of its renovation or refurbishment expenditure for the basis period shall be as specified in paragraph (2).
[S 170/2022 wef 31/12/2021]
(2)  For the purpose of sub-paragraph (ii) of paragraph (1), the deduction that may be allowed to the amalgamated company in respect of its renovation or refurbishment expenditure for a basis period referred to in that sub-paragraph shall be determined as follows:
(a)in the case of a specified period in which the date of amalgamation falls —
(i)where only one basis period of the amalgamated company falls within that specified period, the deduction for that basis period shall be the lower of —
(A)the amount of the renovation or refurbishment expenditure incurred by the amalgamated company during that basis period; and
(B)an amount computed in accordance with the formula
where X
is the aggregate of the amount of renovation or refurbishment expenditure incurred by each amalgamating company during the specified period of that amalgamating company (determined in accordance with section 14N(8) of the Act) in which the day immediately before the date of amalgamation falls; or
[S 170/2022 wef 31/12/2021]
(ii)where more than one basis period of the amalgamated company falls within that specified period, the deduction for each such basis period shall be the lower of —
(A)the amount of renovation or refurbishment expenditure incurred by the amalgamated company during that basis period; and
(B)an amount computed in accordance with the formula
where Y
is the aggregate of the amount of renovation or refurbishment expenditure incurred by each amalgamating company during the specified period of that amalgamating company (determined in accordance with section 14N(8) of the Act) in which the day immediately before the date of amalgamation falls; and
Z
is the aggregate of the amount of renovation or refurbishment expenditure incurred by the amalgamated company during all the basis periods preceding the basis period for which the deduction is being determined; and
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(b)in the case of any other specified period, the deduction shall be determined in accordance with section 14N of the Act (without any modification or exception).
[S 170/2022 wef 31/12/2021]
(3)  For the purpose of paragraph (2)(a)(i)(B) and (ii)(B), in relation to the basis period for the year of assessment 2013 or a subsequent year of assessment, the reference to “$150,000” shall be read as a reference to “$300,000”.
[S 694/2013 wef 13/11/2013]
[S 170/2022 wef 31/12/2021]
Modification or exception to sections 23 (Carry forward of allowances) and 37 of Act (Assessable income)
8.  Where —
(a)an amalgamating company ceases to exist on the date of amalgamation;
(b)any allowance of the amalgamating company arose, any loss was incurred by the amalgamating company or any donation was made by the amalgamating company in the year in which the amalgamation occurs; and
(c)the date of amalgamation is earlier than the last day of the year referred to in paragraph (b),
then the references to —
(i)“the last day of the year in which the allowances arose” in section 23(4) of the Act; and
(ii)“last day of the year in which the loss was incurred or the donation was made, as the case may be,” in section 37(12) of the Act,
shall, in relation to the amalgamating company and that allowance, loss or donation, be read in each case as a reference to “the day immediately before the date of amalgamation”.
Modifications to section 37P of Act (Treatment of unabsorbed donations attributable to exempt income)
8A.—(1)  Subject to the conditions specified in paragraph (2) and to paragraphs (3) and (4), where —
(a)an amalgamating company ceases to exist on the date of amalgamation; and
(b)as of the date of the amalgamation, there is still a balance of attributed donation (within the meaning of section 37P of the Act) that has yet to be deducted from the statutory income of the amalgamating company for a year of assessment,
then section 37P of the Act applies, with the necessary modifications, as if the amalgamated company is the amalgamating company for the purposes of deducting the balance from the statutory income of the amalgamated company.
[S 170/2022 wef 31/12/2021]
(2)  The conditions in paragraph (1) are —
(a)the amalgamating company was carrying on a trade or business until the date of the amalgamation; and
(b)the amalgamated company continues to carry on the same trade or business on the date of amalgamation as that of the amalgamating company.
(3)  The balance may only be deducted against the statutory income of the amalgamated company derived from the same trade or business carried on by the amalgamating company until the date of the amalgamation.
(4)  Where —
(a)any donation to which section 37P of the Act applies was made by the amalgamating company in the year in which the amalgamation occurs; and
[S 170/2022 wef 31/12/2021]
(b)the date of amalgamation is earlier than the last day of the year mentioned in sub‑paragraph (a),
then the reference to “the last day of the year in which the donation was made” in section 37P(1)(h) of the Act is, in relation to the amalgamating company, to be read as a reference to “the day immediately before the date of amalgamation”.
[S 170/2022 wef 18/12/2012]
[S 170/2022 wef 31/12/2021]
Modification or exception to section 37B of Act (Group relief for Singapore companies)
9.—(1)  Subject to paragraph (2), where —
(a)any unabsorbed capital allowances, donations or losses of an amalgamating company are transferred to the amalgamated company pursuant to section 34C(23) of the Act, being —
(i)unabsorbed capital allowances that arose in the year of assessment relating to the basis period of the amalgamating company in which the day immediately before the date of amalgamation falls; or
(ii)unabsorbed donations or losses that were made or incurred in the basis period of the year of assessment of the amalgamating company in which the day immediately before the date of amalgamation falls,
as the case may be; and
(b)the year of assessment referred to in sub-paragraph (i) or (ii) of sub-paragraph (a), as the case may be, is the same as the year of assessment relating to the basis period of the amalgamated company in which the date of amalgamation falls,
then the amount by which such unabsorbed capital allowances, donations or losses, as the case may be, exceeds the income of the amalgamated company from the same trade or business as that of the amalgamating company for that year of assessment shall be the qualifying deduction that may be transferred by the amalgamated company as a transferor company to a claimant company of the same group for the purposes of section 37B of the Act for the same year of assessment.
[S 170/2022 wef 31/12/2021]
(2)  Notwithstanding subsection (2) of section 37B of the Act, a transfer of the qualifying deduction referred to in paragraph (1) for any year of assessment from the amalgamated company to a claimant company under that section shall be made only if —
(a)the amalgamating company referred to in paragraph (1) and the claimant company are members of the same group immediately before the date of amalgamation; and
(b)the amalgamated company and the claimant company, for that year of assessment —
(i)are members of the same group on the last day of the basis period for that year of assessment;
(ii)have accounting periods ending on the same day; and
(iii)have made an election under subsection (11) of that section.
[S 170/2022 wef 31/12/2021]
Modification or exception to section 37F of Act (Deduction for incremental expenditure on research and development)
10.—(1)  Where —
(a)an amalgamating company ceases to exist on the date of amalgamation; and
(b)the amalgamating company has a research and development account which is in credit immediately before the amalgamation,
then section 37F of the Act shall apply to the amalgamated company as if it is the amalgamating company subject to the following provisions:
(i)on the date of amalgamation there shall be credited to the research and development account of the amalgamated company an amount equivalent to the amount standing to the research and development account of the amalgamating company immediately before the date of amalgamation;
(ii)as soon as the research and development account of the amalgamated company is credited with the amount referred to in sub-paragraph (i), the balance standing to the research and development account of the amalgamating company shall be reduced to nil by debiting it with the same amount;
(iii)any credit and debit to the research and development account of the amalgamated company subsequent to the date of amalgamation shall be made in accordance with section 37F of the Act; and
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(iv)the base qualifying research and development expenditure of the amalgamated company shall be the aggregate of the amounts of qualifying expenditure incurred by all the amalgamating companies in their respective base years.
[S 170/2022 wef 31/12/2021]
(2)  Notwithstanding section 37F of the Act, any amount credited to the research and development account of an amalgamating company on the day immediately before the date of amalgamation shall not be available for deduction against the assessable income of the amalgamated company for the year of assessment relating to the basis period in which the date of amalgamation falls, if that year of assessment is the same year of assessment relating to the basis period of the amalgamating company in which the day immediately before the date of amalgamation falls.
[S 170/2022 wef 31/12/2021]
Modification or exception to section 37H of Act (Cash grant for research and development expenditure for start-up company)
11.—(1)  Where all the amalgamating companies cease to exist on the date of amalgamation, then, in respect of any year of assessment in which the amalgamated company is a qualifying start-up company for the purpose of section 37H of the Act —
(a)in a case where the date of amalgamation does not fall within either of the basis periods of the first 2 years of assessment of any of the amalgamating companies, that section shall not apply to the amalgamated company; and
(b)in a case where the date of amalgamation falls within either of the basis periods of the first 2 years of assessment of any of the amalgamating companies, that section shall apply to the amalgamated company if and only if the year of assessment in which the amalgamated company is a qualifying start-up company falls within a year of assessment specified in paragraph (2).
(2)  For the purpose of paragraph (1)(b) —
(a)in a case where the day immediately before the date of amalgamation falls within the basis period of any amalgamating company in which that amalgamating company was incorporated, the specified year of assessment shall be —
(i)the year of assessment relating to the basis period in which the date of the amalgamation falls; or
(ii)the year of assessment immediately following that year of the assessment; and
(b)in any other case, the specified year of assessment shall be the year of assessment relating to the basis period in which the date of amalgamation falls.
Modifications to section 37G of Act (Cash payout under Productivity and Innovation Credit Scheme)
11A.—(1)  Where the date of amalgamation falls within the basis period for the year of assessment 2011, then, for the purpose of computing the amount of cash payout to be given under section 37G of the Act to the amalgamated company for the year of assessment 2011 or 2012, the references to “$200,000” in section 37G(3)(a)(ii) and (b)(ii)of the Act shall each be read as a reference to the amount computed in accordance with the formula:
where Y1
is the aggregate of every amount of expenditure for which an amalgamating company has made an election for a cash payout in lieu of a deduction or allowance under section 37G of the Act for the year of assessment 2011.
[S 170/2022 wef 31/12/2021]
(2)  Where the date of amalgamation falls within the basis period for the year of assessment 2012, then, for the purpose of computing the amount of cash payout to be given under section 37G of the Act to the amalgamated company for the year of assessment 2012, the reference to “$200,000” in section 37G(3)(b)(ii) of the Act shall be read as a reference to the amount computed in accordance with the formula:
where Y2
is the aggregate of every amount of expenditure for which an amalgamating company has made an election for a cash payout in lieu of a deduction or allowance under section 37G of the Act for the year of assessment 2011 or 2012.
[S 170/2022 wef 31/12/2021]
(3)  Where the date of amalgamation falls within the basis period for the year of assessment 2013, 2014, 2015 or 2016, then, for the purpose of computing the amount of cash payout to be given under section 37G of the Act to the amalgamated company, the reference to “$100,000” in section 37G(4)(b) of the Act shall be read as a reference to the amount computed in accordance with the formula:
where Y3
is the aggregate of every amount of expenditure for which an amalgamating company has made an election for a cash payout in lieu of a deduction or allowance under section 37G of the Act for the year of assessment 2013, 2014, 2015 or 2016, as the case may be.
[S 170/2022 wef 01/08/2016]
[S 170/2022 wef 31/12/2021]
(3A)  Where the date of amalgamation falls within the basis period for the year of assessment 2017, then, for the purpose of computing the amount of cash payout to be given under section 37G of the Act to the amalgamated company —
(a)in the case where subsection (4AA)(a) of that section applies to the amalgamated company — the reference to $100,000 in subsection (4) of that section; or
(b)in the case where subsection (4AA)(b) of that section applies to the amalgamated company — every reference to $100,000 in that subsection,
is a reference to the amount computed in accordance with the formula $100,000 – Y4, where Y4 is the total of every amount of expenditure for which an amalgamating company has made an election for a cash payout in lieu of a deduction or an allowance under section 37G of the Act for the year of assessment 2017.
[S 170/2022 wef 01/08/2016]
[S 170/2022 wef 31/12/2021]
(3B)  Where the date of amalgamation falls within the basis period for the year of assessment 2018, then, for the purpose of computing the amount of cash payout to be given under section 37G of the Act to the amalgamated company —
(a)in the case where subsection (4AB)(a) of that section applies to the amalgamated company — every reference to $100,000 in subsection (4AA)(b) of that section; or
(b)in the case where subsection (4AB)(b) of that section applies to the amalgamated company — the reference to $100,000 in that subsection,
is a reference to the amount computed in accordance with the formula $100,000 – Y5, where Y5 is the total of every amount of expenditure for which an amalgamating company has made an election for a cash payout in lieu of a deduction or an allowance under section 37G of the Act for the year of assessment 2018.
[S 170/2022 wef 01/08/2016]
[S 170/2022 wef 31/12/2021]
(4)  For the purpose of determining the applicability of section 37G(3A) of the Act (reduction of the selected expenditure used for computing the cash payout where the person which elected for the payout did not carry on a trade, profession or business during a specified basis period) to an amalgamating company and the amalgamated company in a case where the date of amalgamation falls within the basis period for the year of assessment 2011 or 2012 —
(a)in the case of an amalgamating company, any trade or business carried on by the amalgamated company on or after the date of amalgamation shall be deemed to have been carried on by the amalgamating company as if the amalgamating company existed on or after that date; and
(b)in the case of the amalgamated company, any trade or business carried on by any of the amalgamating companies prior to the date of amalgamation shall be deemed to have been carried on by the amalgamated company as if the amalgamated company existed prior to that date.
[S 694/2013 wef 13/11/2013]
[S 170/2022 wef 31/12/2021]
Modifications to section 37H of Act (Productivity and Innovation Credit bonus)
11B.  Where the date of amalgamation falls within the basis period for the year of assessment 2013, 2014 or 2015, then, for the purposes of computing the amount of PIC bonus to be given under section 37H of the Act to the amalgamated company for that year of assessment, the reference to $15,000 in section 37H(2)(b) and (4)(b) of the Act is a reference to the amount computed in accordance with the formula $15,000 – Z, where Z is the total of every amount of PIC expenditure incurred by an amalgamating company during the basis period for any year of assessment for which a PIC bonus has been given to the amalgamating company under section 37H of the Act.
[S 170/2022 wef 28/11/2013]
[S 170/2022 wef 31/12/2021]
Modification or exception to section 43F of Act (Concessionary rate of tax for offshore leasing of machinery and plant)
12.—(1)  Where —
(a)an amalgamated company is a leasing company; and
(b)all of the amalgamating companies that are leasing companies have elected under section 43F(6) of the Act for their respective incomes accruing in or derived from Singapore in respect of offshore leasing of their respective machinery or plant to be taxed at the rate prescribed by section 43(1)(a) of the Act,
then the income of the amalgamated company that accrues in or is derived from Singapore in respect of offshore leasing of its machinery or plant shall be taxed at the rate prescribed by section 43(1)( a) of the Act as if the amalgamated company had made an election under section 43F(6) of the Act for the same.
[S 170/2022 wef 31/12/2021]
(2)  Where —
(a)an amalgamated company is a leasing company; and
(b)one or more, but not all, of the amalgamating companies that are leasing companies have elected under section 43F(6) of the Act for their respective incomes accruing in or derived from Singapore in respect of all offshore leasing of their respective machinery or plant to be taxed at the rate prescribed by section 43(1)(a) of the Act,
then the concessionary rate of tax under section 43F of the Act of the income of the amalgamated company accruing in or derived from Singapore in respect of offshore leasing of its machinery or plant shall not be affected by any such election made by any amalgamating company.
[S 170/2022 wef 31/12/2021]
(3)  If the amalgamated company wishes for its income that accrues in or is derived from Singapore in respect of offshore leasing of its machinery or plant to be taxed at the rate prescribed by section 43(1)(a) of the Act, the amalgamated company shall make an election for the same under section 43F(6) of the Act no later than the time it furnishes a return of income to the Comptroller for the year of assessment relating to the basis period in which the date of amalgamation falls.
[S 170/2022 wef 31/12/2021]