§ 14Q — 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

where A is —

(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).

(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

where A is —

(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]

(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

where A is —

(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]

(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.

(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).

(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]

(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).

(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]

(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]

(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

—(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

where A is —

(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).

(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

where A is —

(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]

(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

where A is —

(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]

(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.

(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).

(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]

(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).

(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]

(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]

(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