§ 14X — 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, 14EB, 14N or 14P by reason of section 14A(3), 14C(2), 14EA(8), 14EB(12), 14N(4) or 14P(5), as the case may be.[34/2016]

[Act 30 of 2023 wef 30/10/2023]

[Act 25 of 2025 wef 19/02/2025]

(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]

—(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, 14EB, 14N or 14P by reason of section 14A(3), 14C(2), 14EA(8), 14EB(12), 14N(4) or 14P(5), as the case may be.[34/2016]

[Act 30 of 2023 wef 30/10/2023]

[Act 25 of 2025 wef 19/02/2025]

(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]