Initial and annual allowances for industrial buildings and structures
16.—(1) Where, in or after the basis period for the first year of assessment under this Act, a person incurs capital expenditure on the construction of a building or structure which is to be an industrial building or structure occupied for the purposes of a trade, there is to be made to the person who incurred the expenditure for the year of assessment in the basis period for which the expenditure was incurred an allowance to be known as an “initial allowance” equal to 25% thereof.(2) For the purposes of subsection (1) —(a)
where 2 basis periods overlap, the period common to both is deemed to fall in the first basis period only;
(b)
where there is an interval between the end of the basis period for a year of assessment and the commencement of a basis period for the next succeeding year of assessment, then, unless the second‑mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval is deemed to be part of the second basis period; and
(c)
where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the commencement of the basis period for the year in which it is permanently discontinued, the interval is deemed to form part of the first basis period.
(3) Any capital expenditure incurred for the purposes of a trade by a person about to carry on that trade is treated for the purposes of subsection (1) as if it had been incurred by that person on the first day on which that person does carry on that trade.
(4) Where any person is, at the end of the basis period for any year of assessment, entitled to an interest in a building or structure which is an industrial building or structure and where that interest is the relevant interest in relation to the capital expenditure incurred before 1 January 2006 on the construction of that building or structure, an allowance, to be known as an “annual allowance”, equal to 3% of the total capital expenditure incurred by that person on the construction of that building or structure is to be made to that person for that year of assessment.
(5) Where at any time in or after the basis period for the first year of assessment under this Act and before 1 January 2006, the interest in a building or structure which is the relevant interest in relation to any capital expenditure incurred before that date on the construction of that building or structure is sold while the building or structure is an industrial building or structure or after it has ceased to be one, the annual allowance, in the years of assessment the basis periods for which end after the time of that sale, is to be computed by reference to the residue of that expenditure immediately after the sale and is —(a)
the fraction of that residue the numerator of which is one and the denominator of which is the number of years of assessment comprised in the period which begins with the first year of assessment for which the buyer is entitled to an annual allowance or would be so entitled if the building or structure had at all material times continued to be an industrial building or structure, and ends with the fiftieth year after that in which the building or structure was first used; or
(b)
3% of that residue,
whichever is the greater, and so on for any subsequent sales.
(6) In the case referred to in subsection (4), no annual allowance may be made to any person for any year of assessment after the end of the fiftieth year after that in which the building or structure was first used.
(6A) Where any person is, at the end of the basis period for any year of assessment, entitled to an interest in a building or structure which is an industrial building or structure, and that interest is the relevant interest in relation to —(a)
any capital expenditure incurred by the person on or after 1 January 2006 on the construction of that building or structure; or
(b)
a sale or purchase agreement entered into for that building or structure on or after that date, whether or not the building or structure was previously used as an industrial building or structure,
an annual allowance determined under subsection (6B) is to be made to the person for that year of assessment.
(6B) The annual allowance under subsection (6A) is equal to —(a)
in the case referred to in subsection (6A)(a), 3% of the total capital expenditure incurred by the person on the construction of the building or structure; or
(b)
in the case referred to in subsection (6A)(b), 3% of the capital expenditure incurred by the person on the purchase of the building or structure.
(7) For the purposes of application to any industrial building or structure occupied for the purposes of a trade in intensive poultry production and approved by the Minister or such person as the Minister may appoint under section 18(1), the reference to 3% in subsections (4), (5) and (6B) and in sections 17(3)(a) and 18(9) is a reference to 5%.
(8) For the purposes of application to any industrial building or structure occupied for the purposes of a hotel on the island of Sentosa and approved by the Minister or such person as the Minister may appoint under section 18(1) —(a)
the reference to 25% in subsection (1) is a reference to 20%;
(b)
the reference to 3% in subsections (4), (5) and (6B) and in sections 17(3)(a) and 18(9) is a reference to 2%; and
(c)
the reference to capital expenditure in subsections (1) and (4) does not include any capital expenditure incurred before 1 January 1982.
(9) For the purposes of application to any industrial building or structure used for the purposes of a project for the promotion of the tourist industry (other than a hotel) in Singapore and approved by the Minister or such person as the Minister may appoint under section 18(1)(i) —(a)
the reference to 25% in subsection (1) is a reference to 20%;
(b)
the reference to 3% in subsections (4), (5) and (6B) and in sections 17(3)(a) and 18(9) is a reference to 2%; and
(c)
the reference to capital expenditure in subsections (1), (3) and (4) does not include any capital expenditure incurred before 1 January 1986.
(10) Despite anything in this section and section 17, where a person carrying out a project for the promotion of the tourist industry approved by the Minister or such person as the Minister may appoint under section 18(1)(i) fails to comply with any condition imposed by the Minister, the Minister may revoke the approval and thereupon the Comptroller may at any time within 6 years (if the year of assessment relating to the basis period in which the approval is revoked is 2007 or a preceding year of assessment) or 4 years (if the year of assessment relating to the basis period in which the approval is revoked is 2008 or a subsequent year of assessment) from the date of the revocation make such assessment or additional assessment upon the person as may appear necessary in order to recover any tax which ought to have been paid by that person if any allowances under those sections had not been made to that person.
(11) Despite anything in this section, the amount of an annual allowance made to a person for any year of assessment in respect of any expenditure must not in any case exceed what, apart from the writing off falling to be made by reason of the making of that allowance, would be the residue of that expenditure at the end of the person’s basis period for that year of assessment.
(12) For the purposes of subsection (1), where a person has incurred capital expenditure before 1 January 2006 on the purchase of an industrial building or structure (including the purchase of a leasehold interest therein of not less than 25 years) which has not previously been used by any person, the person is deemed to have incurred expenditure on the construction of that industrial building or structure equal to the cost of construction of that industrial building or structure or to the net price paid by the person for that industrial building or structure or the interest therein, whichever is less, if —(a)
the person claiming the initial allowance by virtue of this subsection purchased the industrial building or structure or acquired the leasehold interest therein from the person who constructed that building or structure; and
(b)
no initial allowance has been granted under subsection (1) in respect of that industrial building or structure to the person who constructed that building or structure.
(13) For the purposes of subsection (1), where a person has incurred capital expenditure on or after 1 January 2006 on the purchase of an industrial building or structure which has not previously been used by any person, the person is deemed to have incurred expenditure on the construction of that industrial building or structure equal to the capital expenditure incurred by the person on the purchase of that industrial building or structure if —(a)
the person claiming the initial allowance by virtue of this subsection purchased the industrial building or structure from the person who constructed that building or structure; and
(b)
no initial allowance has been granted under subsection (1) in respect of that industrial building or structure to the person who constructed that building or structure.
(14) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade, for which purpose the industrial building is used, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment must be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(15) Subject to section 18B, this section does not apply to any capital expenditure incurred on or after 23 February 2010 on the construction or purchase of an industrial building or structure.
(16) Subject to subsection (18) and section 18B, no annual allowance may be made under subsections (4), (5) and (6A) to a person who incurs capital expenditure on or before 22 February 2010 on the construction or purchase of a building or structure which is not an industrial building or structure on 22 February 2010 but is an industrial building or structure on or after 23 February 2010.
(17) Section 18(2) and (3) applies for the purpose of determining under subsection (16) whether a building or structure is an industrial building or structure on 22 February 2010.
(18) Despite subsection (16), annual allowances under subsection (6A)(a) are to be made to a person who incurs capital expenditure on or before 22 February 2010 on a building or structure which is still under construction on 22 February 2010 and which is to be an industrial building or structure upon completion of that construction, if the person —(a)
on or before 22 February 2010 —(i)
has been granted the option to purchase the land or has entered into a sale and purchase agreement for the land on which the industrial building or structure is to be constructed;
(ii)
has entered into a lease agreement to lease the land on which the industrial building or structure is to be constructed; or
(iii)
has submitted an application to the Government or any statutory board —(A)
to bid for the purchase therefrom of the land on which the industrial building or structure is to be constructed; or
(B)
to lease therefrom the land on which the industrial building or structure is to be constructed; and
(b)
on or before 31 December 2010, has made an application for planning permission or conservation permission to the competent authority in accordance with the Planning Act 1998 for the development of the land comprising the construction work.
—(1) Where, in or after the basis period for the first year of assessment under this Act, a person incurs capital expenditure on the construction of a building or structure which is to be an industrial building or structure occupied for the purposes of a trade, there is to be made to the person who incurred the expenditure for the year of assessment in the basis period for which the expenditure was incurred an allowance to be known as an “initial allowance” equal to 25% thereof.
(2) For the purposes of subsection (1) —(a)
where 2 basis periods overlap, the period common to both is deemed to fall in the first basis period only;
(b)
where there is an interval between the end of the basis period for a year of assessment and the commencement of a basis period for the next succeeding year of assessment, then, unless the second‑mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval is deemed to be part of the second basis period; and
(c)
where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the commencement of the basis period for the year in which it is permanently discontinued, the interval is deemed to form part of the first basis period.
(3) Any capital expenditure incurred for the purposes of a trade by a person about to carry on that trade is treated for the purposes of subsection (1) as if it had been incurred by that person on the first day on which that person does carry on that trade.
(4) Where any person is, at the end of the basis period for any year of assessment, entitled to an interest in a building or structure which is an industrial building or structure and where that interest is the relevant interest in relation to the capital expenditure incurred before 1 January 2006 on the construction of that building or structure, an allowance, to be known as an “annual allowance”, equal to 3% of the total capital expenditure incurred by that person on the construction of that building or structure is to be made to that person for that year of assessment.
(5) Where at any time in or after the basis period for the first year of assessment under this Act and before 1 January 2006, the interest in a building or structure which is the relevant interest in relation to any capital expenditure incurred before that date on the construction of that building or structure is sold while the building or structure is an industrial building or structure or after it has ceased to be one, the annual allowance, in the years of assessment the basis periods for which end after the time of that sale, is to be computed by reference to the residue of that expenditure immediately after the sale and is —(a)
the fraction of that residue the numerator of which is one and the denominator of which is the number of years of assessment comprised in the period which begins with the first year of assessment for which the buyer is entitled to an annual allowance or would be so entitled if the building or structure had at all material times continued to be an industrial building or structure, and ends with the fiftieth year after that in which the building or structure was first used; or
(b)
3% of that residue,
whichever is the greater, and so on for any subsequent sales.
(6) In the case referred to in subsection (4), no annual allowance may be made to any person for any year of assessment after the end of the fiftieth year after that in which the building or structure was first used.
(6A) Where any person is, at the end of the basis period for any year of assessment, entitled to an interest in a building or structure which is an industrial building or structure, and that interest is the relevant interest in relation to —(a)
any capital expenditure incurred by the person on or after 1 January 2006 on the construction of that building or structure; or
(b)
a sale or purchase agreement entered into for that building or structure on or after that date, whether or not the building or structure was previously used as an industrial building or structure,
an annual allowance determined under subsection (6B) is to be made to the person for that year of assessment.
(6B) The annual allowance under subsection (6A) is equal to —(a)
in the case referred to in subsection (6A)(a), 3% of the total capital expenditure incurred by the person on the construction of the building or structure; or
(b)
in the case referred to in subsection (6A)(b), 3% of the capital expenditure incurred by the person on the purchase of the building or structure.
(7) For the purposes of application to any industrial building or structure occupied for the purposes of a trade in intensive poultry production and approved by the Minister or such person as the Minister may appoint under section 18(1), the reference to 3% in subsections (4), (5) and (6B) and in sections 17(3)(a) and 18(9) is a reference to 5%.
(8) For the purposes of application to any industrial building or structure occupied for the purposes of a hotel on the island of Sentosa and approved by the Minister or such person as the Minister may appoint under section 18(1) —(a)
the reference to 25% in subsection (1) is a reference to 20%;
(b)
the reference to 3% in subsections (4), (5) and (6B) and in sections 17(3)(a) and 18(9) is a reference to 2%; and
(c)
the reference to capital expenditure in subsections (1) and (4) does not include any capital expenditure incurred before 1 January 1982.
(9) For the purposes of application to any industrial building or structure used for the purposes of a project for the promotion of the tourist industry (other than a hotel) in Singapore and approved by the Minister or such person as the Minister may appoint under section 18(1)(i) —(a)
the reference to 25% in subsection (1) is a reference to 20%;
(b)
the reference to 3% in subsections (4), (5) and (6B) and in sections 17(3)(a) and 18(9) is a reference to 2%; and
(c)
the reference to capital expenditure in subsections (1), (3) and (4) does not include any capital expenditure incurred before 1 January 1986.
(10) Despite anything in this section and section 17, where a person carrying out a project for the promotion of the tourist industry approved by the Minister or such person as the Minister may appoint under section 18(1)(i) fails to comply with any condition imposed by the Minister, the Minister may revoke the approval and thereupon the Comptroller may at any time within 6 years (if the year of assessment relating to the basis period in which the approval is revoked is 2007 or a preceding year of assessment) or 4 years (if the year of assessment relating to the basis period in which the approval is revoked is 2008 or a subsequent year of assessment) from the date of the revocation make such assessment or additional assessment upon the person as may appear necessary in order to recover any tax which ought to have been paid by that person if any allowances under those sections had not been made to that person.
(11) Despite anything in this section, the amount of an annual allowance made to a person for any year of assessment in respect of any expenditure must not in any case exceed what, apart from the writing off falling to be made by reason of the making of that allowance, would be the residue of that expenditure at the end of the person’s basis period for that year of assessment.
(12) For the purposes of subsection (1), where a person has incurred capital expenditure before 1 January 2006 on the purchase of an industrial building or structure (including the purchase of a leasehold interest therein of not less than 25 years) which has not previously been used by any person, the person is deemed to have incurred expenditure on the construction of that industrial building or structure equal to the cost of construction of that industrial building or structure or to the net price paid by the person for that industrial building or structure or the interest therein, whichever is less, if —(a)
the person claiming the initial allowance by virtue of this subsection purchased the industrial building or structure or acquired the leasehold interest therein from the person who constructed that building or structure; and
(b)
no initial allowance has been granted under subsection (1) in respect of that industrial building or structure to the person who constructed that building or structure.
(13) For the purposes of subsection (1), where a person has incurred capital expenditure on or after 1 January 2006 on the purchase of an industrial building or structure which has not previously been used by any person, the person is deemed to have incurred expenditure on the construction of that industrial building or structure equal to the capital expenditure incurred by the person on the purchase of that industrial building or structure if —(a)
the person claiming the initial allowance by virtue of this subsection purchased the industrial building or structure from the person who constructed that building or structure; and
(b)
no initial allowance has been granted under subsection (1) in respect of that industrial building or structure to the person who constructed that building or structure.
(14) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade, for which purpose the industrial building is used, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment must be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(15) Subject to section 18B, this section does not apply to any capital expenditure incurred on or after 23 February 2010 on the construction or purchase of an industrial building or structure.
(16) Subject to subsection (18) and section 18B, no annual allowance may be made under subsections (4), (5) and (6A) to a person who incurs capital expenditure on or before 22 February 2010 on the construction or purchase of a building or structure which is not an industrial building or structure on 22 February 2010 but is an industrial building or structure on or after 23 February 2010.
(17) Section 18(2) and (3) applies for the purpose of determining under subsection (16) whether a building or structure is an industrial building or structure on 22 February 2010.
(18) Despite subsection (16), annual allowances under subsection (6A)(a) are to be made to a person who incurs capital expenditure on or before 22 February 2010 on a building or structure which is still under construction on 22 February 2010 and which is to be an industrial building or structure upon completion of that construction, if the person —(a)
on or before 22 February 2010 —(i)
has been granted the option to purchase the land or has entered into a sale and purchase agreement for the land on which the industrial building or structure is to be constructed;
(ii)
has entered into a lease agreement to lease the land on which the industrial building or structure is to be constructed; or
(iii)
has submitted an application to the Government or any statutory board —(A)
to bid for the purchase therefrom of the land on which the industrial building or structure is to be constructed; or
(B)
to lease therefrom the land on which the industrial building or structure is to be constructed; and
(b)
on or before 31 December 2010, has made an application for planning permission or conservation permission to the competent authority in accordance with the Planning Act 1998 for the development of the land comprising the construction work.
Balancing allowances and charges for industrial buildings and structures
17.—(1) Where any of the events referred to in subsection (1A) occurs while a building or structure is an industrial building or structure or after it has ceased to be one and —(a)
any capital expenditure has been incurred on the construction of the building or structure before 1 January 2006; or
(b)
either —(i)
any capital expenditure has been incurred on the construction of the building or structure on or after 1 January 2006; or
(ii)
a sale and purchase agreement for the building or structure was entered into on or after that date,
then an allowance or a charge, to be known as a “balancing allowance” or a “balancing charge” is, in the circumstances mentioned in this section, to be made to or (as the case may be) on the person entitled to the relevant interest immediately before that event occurs for the year of assessment in the basis period for which that event occurs.
(1A) The events referred to in subsection (1) are —(a)
the relevant interest in the building or structure is sold;
(b)
that interest, being a leasehold interest, comes to an end otherwise than on the person entitled thereto acquiring the interest which is reversionary thereon;
(c)
the building or structure is demolished or destroyed or, without being demolished or destroyed, ceases altogether to be used.
(2) In the case referred to in subsection (1)(a), no balancing allowance or balancing charge may be made to or on any person for any year of assessment by reason of any event occurring after the end of the fiftieth year after that in which the building or structure was first used.
(3) No balancing allowance may be made to any person —(a)
on the sale of the relevant interest in the building or structure unless the person proves to the Comptroller’s satisfaction that the value of the building or structure to the person is less than —(i)
in the case referred to in subsection (1)(a), the amount of the capital expenditure incurred on the construction of the building or structure reduced by the amount of any initial and annual allowances made (including an amount of 3% of the capital expenditure for each year in which no initial or annual allowance was made); or
(ii)
in the case referred to in subsection (1)(b), the amount of the capital expenditure incurred by the person on the construction or purchase of the building or structure (as the case may be) reduced by the amount of any initial and annual allowances made (including an amount of 3% of the capital expenditure for each year in which no initial or annual allowance was made); or
(b)
where the relevant interest in the building or structure is not sold but the building or structure is or would be redeveloped for any use other than as an industrial building or structure.
(4) Where there are no sale, insurance, salvage or compensation moneys, or where the residue of the expenditure immediately before the event exceeds those moneys, a balancing allowance is to be made and the amount thereof is the amount of the residue or (as the case may be) of the excess thereof over the moneys.
(5) If the sale, insurance, salvage or compensation moneys exceed the residue (if any) of the expenditure immediately before the event, a balancing charge is to be made and the amount on which it is made is an amount equal to the excess or, where the residue is nil, to the moneys.
(6) Despite anything in subsection (5) but subject to subsection (7), the amount on which a balancing charge is made on a person must not in any case exceed the aggregate of the following amounts:(a)
the amount of the initial allowance (if any) made to the person in respect of the expenditure in question;
(b)
the amount of the annual allowances (if any) made to the person in respect of the expenditure in question.
(7) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade, for which purpose the industrial building is used, produces income that is exempt from tax as well as income chargeable with tax, and any balancing allowance or balancing charge arises to be made —(a)
the balancing allowance must be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances; and
(b)
such proportion of the balancing charge is exempt from tax as appears reasonable to the Comptroller in the circumstances.
(8) Where allowances have been made under both sections 16 and 18C in respect of any industrial building or structure, then, for the purposes of subsections (4) and (5), the sale, insurance, salvage or compensation moneys in respect of that building or structure is such amount of those moneys as the Comptroller determines to be reasonable in the circumstances.
(9) Where the relevant interest in a building or structure in respect of which allowances have been made under section 16 is transferred at less than the open‑market price, then for the purpose of determining the amount of any balancing charge under subsection (5), the relevant interest in the building or structure is treated as if it had been sold for an amount equal to the open‑market price of the building or structure as at the date of transfer.
—(1) Where any of the events referred to in subsection (1A) occurs while a building or structure is an industrial building or structure or after it has ceased to be one and —(a)
any capital expenditure has been incurred on the construction of the building or structure before 1 January 2006; or
(b)
either —(i)
any capital expenditure has been incurred on the construction of the building or structure on or after 1 January 2006; or
(ii)
a sale and purchase agreement for the building or structure was entered into on or after that date,
then an allowance or a charge, to be known as a “balancing allowance” or a “balancing charge” is, in the circumstances mentioned in this section, to be made to or (as the case may be) on the person entitled to the relevant interest immediately before that event occurs for the year of assessment in the basis period for which that event occurs.
(1A) The events referred to in subsection (1) are —(a)
the relevant interest in the building or structure is sold;
(b)
that interest, being a leasehold interest, comes to an end otherwise than on the person entitled thereto acquiring the interest which is reversionary thereon;
(c)
the building or structure is demolished or destroyed or, without being demolished or destroyed, ceases altogether to be used.
(2) In the case referred to in subsection (1)(a), no balancing allowance or balancing charge may be made to or on any person for any year of assessment by reason of any event occurring after the end of the fiftieth year after that in which the building or structure was first used.
(3) No balancing allowance may be made to any person —(a)
on the sale of the relevant interest in the building or structure unless the person proves to the Comptroller’s satisfaction that the value of the building or structure to the person is less than —(i)
in the case referred to in subsection (1)(a), the amount of the capital expenditure incurred on the construction of the building or structure reduced by the amount of any initial and annual allowances made (including an amount of 3% of the capital expenditure for each year in which no initial or annual allowance was made); or
(ii)
in the case referred to in subsection (1)(b), the amount of the capital expenditure incurred by the person on the construction or purchase of the building or structure (as the case may be) reduced by the amount of any initial and annual allowances made (including an amount of 3% of the capital expenditure for each year in which no initial or annual allowance was made); or
(b)
where the relevant interest in the building or structure is not sold but the building or structure is or would be redeveloped for any use other than as an industrial building or structure.
(4) Where there are no sale, insurance, salvage or compensation moneys, or where the residue of the expenditure immediately before the event exceeds those moneys, a balancing allowance is to be made and the amount thereof is the amount of the residue or (as the case may be) of the excess thereof over the moneys.
(5) If the sale, insurance, salvage or compensation moneys exceed the residue (if any) of the expenditure immediately before the event, a balancing charge is to be made and the amount on which it is made is an amount equal to the excess or, where the residue is nil, to the moneys.
(6) Despite anything in subsection (5) but subject to subsection (7), the amount on which a balancing charge is made on a person must not in any case exceed the aggregate of the following amounts:(a)
the amount of the initial allowance (if any) made to the person in respect of the expenditure in question;
(b)
the amount of the annual allowances (if any) made to the person in respect of the expenditure in question.
(7) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade, for which purpose the industrial building is used, produces income that is exempt from tax as well as income chargeable with tax, and any balancing allowance or balancing charge arises to be made —(a)
the balancing allowance must be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances; and
(b)
such proportion of the balancing charge is exempt from tax as appears reasonable to the Comptroller in the circumstances.
(8) Where allowances have been made under both sections 16 and 18C in respect of any industrial building or structure, then, for the purposes of subsections (4) and (5), the sale, insurance, salvage or compensation moneys in respect of that building or structure is such amount of those moneys as the Comptroller determines to be reasonable in the circumstances.
(9) Where the relevant interest in a building or structure in respect of which allowances have been made under section 16 is transferred at less than the open‑market price, then for the purpose of determining the amount of any balancing charge under subsection (5), the relevant interest in the building or structure is treated as if it had been sold for an amount equal to the open‑market price of the building or structure as at the date of transfer.
Definitions for sections 16, 17 and 18B
18.—(1) Subject to this section, in sections 16, 17 and 18B, “industrial building or structure” means a building or structure in use —(a)
for the purposes of a trade carried on in a mill, factory or other similar premises;
(b)
for the purposes of a transport, dock, water or electricity undertaking;
(c)
for the purposes of a trade which consists in the manufacture of goods or materials or the subjection of goods or materials to any process;
(d)
for the purposes of a trade which consists in the storage of goods or materials which are to be used in the manufacture of other goods or to be subjected, in the course of a trade, to any process;
(e)
for the purposes of a trade which consists of the storage of goods or materials on their arrival in Singapore;
(f)
for the purposes of a trade in intensive poultry production as may be approved on or before 22 May 2010 by the Minister or such person as the Minister may appoint;
(g)
by a research and development organisation in carrying out research and development activities for any manufacturing trade or business;
(h)
for the purposes of a hotel on the island of Sentosa and approved before 1 September 2007 by the Minister or such person as the Minister may appoint (called in this section a Sentosa hotel);
(i)
for the purposes of a project for the promotion of the tourist industry (other than a hotel) in Singapore and approved on or before 22 May 2010 by the Minister or such person as the Minister may appoint subject to such conditions as he or she may impose; or
(j)
for prescribed purposes and where such building or structure has been approved on or before 22 May 2010 by the Minister or such person as the Minister may appoint subject to such conditions as he or she may impose,
and includes any building or structure provided by the person carrying on such a trade or undertaking for the welfare of workers employed in that trade or undertaking and in use for that purpose, but does not include a building or structure in respect of which a deduction is prescribed under section 14(1)(h).
(2) A building or structure is not deemed, by reason only of its falling or having fallen into temporary disuse, to have thereby ceased altogether to be used for one of the purposes specified in subsection (1) if, immediately prior to falling into such temporary disuse, it was in use for such a purpose and if, during the period of such temporary disuse, it is constantly maintained in readiness to be brought back into use for such a purpose.
(3) If, in the circumstances mentioned in subsection (2), the building or structure at any time during disuse ceases to be ready for use for any of the purposes mentioned in that subsection, or if at any time, for any reason, the disuse of the building or structure can no longer be reasonably regarded as temporary, then and in any such case, the building or structure is deemed to have ceased, on the commencement of the period of disuse, to be used for any of the purposes specified in subsection (1).
(4) Subsection (1) applies in relation to a part of a trade or undertaking as it applies to a trade or undertaking.
(5) Where part only of a trade or undertaking complies with the conditions set out in subsection (1), a building or structure is not, by virtue of subsection (4), an industrial building or structure unless it is in use for the purposes of that part of that trade or undertaking.
(6) Despite anything in subsection (1), (2), (3), (4) or (5), “industrial building or structure” does not include any building or structure in use as, or as part of, a dwelling house, retail shop, showroom, hotel (other than a Sentosa hotel) or office or for any purpose ancillary to the purposes of a dwelling house, retail shop, showroom, hotel (other than a Sentosa hotel) or office.
(7) Where part of a building or structure is, and part thereof is not, an industrial building or structure, and —(a)
in a case where capital expenditure is incurred on the construction of the building or structure before 1 January 2006, the capital expenditure incurred on the construction of the second‑mentioned part is not more than one‑tenth of the total capital expenditure which has been incurred on the construction of the whole building or structure; or
(b)
in a case where —(i)
capital expenditure is incurred on the construction of the building or structure on or after 1 January 2006; or
(ii)
a sale and purchase agreement was entered into for the building or structure on or after that date,
the capital expenditure incurred on the construction or purchase (as the case may be) of the second‑mentioned part is not more than one‑tenth of the total capital expenditure which has been incurred on the construction or purchase of the whole building or structure,
then the whole building or structure and every part thereof is treated as an industrial building or structure.
(7A) Where the Comptroller is satisfied that it is not reasonably practicable to determine the capital expenditure incurred on the second‑mentioned part of the building or structure under subsection (7), the whole building or structure and every part thereof may be treated as an industrial building or structure if —(a)
the floor area of the part of the building or structure that is not an industrial building or structure is not more than one‑tenth of the total floor area of the whole building or structure; or
(b)
the Comptroller is otherwise satisfied that it is just and proper to do so.
(8) In this section and sections 16, 17 and 18B —“capital expenditure”, in relation to the purchase of a building or structure, means the net price paid for the building or structure, but does not include the cost of land as determined to the Comptroller’s satisfaction;
“relevant interest” means —(a)
in relation to any capital expenditure incurred on the construction of a building or structure, the interest in that building or structure to which the person who incurred the expenditure was entitled when the person incurred it; and
(b)
in relation to a sale and purchase agreement for a building or structure, the interest in that building or structure to which the purchaser was entitled when the purchaser entered into the agreement;
“residue of expenditure” means —(a)
in relation to any capital expenditure incurred on the construction of a building or structure before 1 January 2006, the amount of the capital expenditure incurred on such construction reduced by —(i)
the amount of any initial allowance made;
(ii)
any annual allowance made; and
(iii)
any balancing allowances granted,
and increased by any balancing charges made; or
(b)
in relation to any capital expenditure incurred on the construction or purchase of a building or structure on or after 1 January 2006, the amount of the capital expenditure incurred on such construction or purchase (as the case may be) reduced by —(i)
the amount of any initial allowance made; and
(ii)
any annual allowance made.
(9) For the purpose of computing the residue of expenditure, an amount of 3% of the expenditure must be written off in respect of any year in which no initial or annual allowance has been made.
—(1) Subject to this section, in sections 16, 17 and 18B, “industrial building or structure” means a building or structure in use —(a)
for the purposes of a trade carried on in a mill, factory or other similar premises;
(b)
for the purposes of a transport, dock, water or electricity undertaking;
(c)
for the purposes of a trade which consists in the manufacture of goods or materials or the subjection of goods or materials to any process;
(d)
for the purposes of a trade which consists in the storage of goods or materials which are to be used in the manufacture of other goods or to be subjected, in the course of a trade, to any process;
(e)
for the purposes of a trade which consists of the storage of goods or materials on their arrival in Singapore;
(f)
for the purposes of a trade in intensive poultry production as may be approved on or before 22 May 2010 by the Minister or such person as the Minister may appoint;
(g)
by a research and development organisation in carrying out research and development activities for any manufacturing trade or business;
(h)
for the purposes of a hotel on the island of Sentosa and approved before 1 September 2007 by the Minister or such person as the Minister may appoint (called in this section a Sentosa hotel);
(i)
for the purposes of a project for the promotion of the tourist industry (other than a hotel) in Singapore and approved on or before 22 May 2010 by the Minister or such person as the Minister may appoint subject to such conditions as he or she may impose; or
(j)
for prescribed purposes and where such building or structure has been approved on or before 22 May 2010 by the Minister or such person as the Minister may appoint subject to such conditions as he or she may impose,
and includes any building or structure provided by the person carrying on such a trade or undertaking for the welfare of workers employed in that trade or undertaking and in use for that purpose, but does not include a building or structure in respect of which a deduction is prescribed under section 14(1)(h).
(2) A building or structure is not deemed, by reason only of its falling or having fallen into temporary disuse, to have thereby ceased altogether to be used for one of the purposes specified in subsection (1) if, immediately prior to falling into such temporary disuse, it was in use for such a purpose and if, during the period of such temporary disuse, it is constantly maintained in readiness to be brought back into use for such a purpose.
(3) If, in the circumstances mentioned in subsection (2), the building or structure at any time during disuse ceases to be ready for use for any of the purposes mentioned in that subsection, or if at any time, for any reason, the disuse of the building or structure can no longer be reasonably regarded as temporary, then and in any such case, the building or structure is deemed to have ceased, on the commencement of the period of disuse, to be used for any of the purposes specified in subsection (1).
(4) Subsection (1) applies in relation to a part of a trade or undertaking as it applies to a trade or undertaking.
(5) Where part only of a trade or undertaking complies with the conditions set out in subsection (1), a building or structure is not, by virtue of subsection (4), an industrial building or structure unless it is in use for the purposes of that part of that trade or undertaking.
(6) Despite anything in subsection (1), (2), (3), (4) or (5), “industrial building or structure” does not include any building or structure in use as, or as part of, a dwelling house, retail shop, showroom, hotel (other than a Sentosa hotel) or office or for any purpose ancillary to the purposes of a dwelling house, retail shop, showroom, hotel (other than a Sentosa hotel) or office.
(7) Where part of a building or structure is, and part thereof is not, an industrial building or structure, and —(a)
in a case where capital expenditure is incurred on the construction of the building or structure before 1 January 2006, the capital expenditure incurred on the construction of the second‑mentioned part is not more than one‑tenth of the total capital expenditure which has been incurred on the construction of the whole building or structure; or
(b)
in a case where —(i)
capital expenditure is incurred on the construction of the building or structure on or after 1 January 2006; or
(ii)
a sale and purchase agreement was entered into for the building or structure on or after that date,
the capital expenditure incurred on the construction or purchase (as the case may be) of the second‑mentioned part is not more than one‑tenth of the total capital expenditure which has been incurred on the construction or purchase of the whole building or structure,
then the whole building or structure and every part thereof is treated as an industrial building or structure.
(7A) Where the Comptroller is satisfied that it is not reasonably practicable to determine the capital expenditure incurred on the second‑mentioned part of the building or structure under subsection (7), the whole building or structure and every part thereof may be treated as an industrial building or structure if —(a)
the floor area of the part of the building or structure that is not an industrial building or structure is not more than one‑tenth of the total floor area of the whole building or structure; or
(b)
the Comptroller is otherwise satisfied that it is just and proper to do so.
(8) In this section and sections 16, 17 and 18B —“capital expenditure”, in relation to the purchase of a building or structure, means the net price paid for the building or structure, but does not include the cost of land as determined to the Comptroller’s satisfaction;
“relevant interest” means —(a)
in relation to any capital expenditure incurred on the construction of a building or structure, the interest in that building or structure to which the person who incurred the expenditure was entitled when the person incurred it; and
(b)
in relation to a sale and purchase agreement for a building or structure, the interest in that building or structure to which the purchaser was entitled when the purchaser entered into the agreement;
“residue of expenditure” means —(a)
in relation to any capital expenditure incurred on the construction of a building or structure before 1 January 2006, the amount of the capital expenditure incurred on such construction reduced by —(i)
the amount of any initial allowance made;
(ii)
any annual allowance made; and
(iii)
any balancing allowances granted,
and increased by any balancing charges made; or
(b)
in relation to any capital expenditure incurred on the construction or purchase of a building or structure on or after 1 January 2006, the amount of the capital expenditure incurred on such construction or purchase (as the case may be) reduced by —(i)
the amount of any initial allowance made; and
(ii)
any annual allowance made.
(9) For the purpose of computing the residue of expenditure, an amount of 3% of the expenditure must be written off in respect of any year in which no initial or annual allowance has been made.
Transitional provisions for capital expenditure incurred on industrial buildings or structures on or after 23 February 2010
18B.—(1) Despite section 16(15) but subject to subsection (11), where a person incurs on or after 23 February 2010 capital expenditure on the construction of a building or structure which is to be an industrial building or structure upon the completion of the construction works, other than one referred to in subsection (2), and the person —(a)
on or before 22 February 2010 —(i)
has been granted the option to purchase the land or has entered into a sale and purchase agreement for the land on which the industrial building or structure is to be constructed;
(ii)
has entered into a lease agreement to lease the land on which the industrial building or structure is to be constructed; or
(iii)
has submitted an application to the Government or any statutory board —(A)
to bid for the purchase therefrom of the land on which the industrial building or structure is to be constructed; or
(B)
to lease therefrom the land on which the industrial building or structure is to be constructed; and
(b)
on or before 31 December 2010, has made an application for planning permission or conservation permission to the competent authority in accordance with the Planning Act 1998 for the development of the land comprising the construction work,
there are to be made to that person an initial allowance and annual allowances in respect of that capital expenditure computed in accordance with section 16.
(2) Despite section 16(15) but subject to subsection (11), where a person incurs on or after 23 February 2010 capital expenditure on the construction of a building or structure which is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon completion of the construction works, there are to be made to that person an initial allowance and annual allowances in respect of that capital expenditure computed in accordance with section 16.
(3) Despite section 16(15), where a person —(a)
on or before 22 February 2010 —(i)
has been granted an option to purchase, or has entered into a sale and purchase agreement for, a new building or structure which is to be an industrial building or structure upon the purchase other than one referred to in subsection (4); or
(ii)
has been granted an option to acquire or has entered into an agreement to acquire the leasehold interest in such a building or structure; and
(b)
on or after 23 February 2010, incurs capital expenditure on the purchase of the building or structure or of the leasehold interest therein,
there are to be made to that person an initial allowance and annual allowances in respect of that capital expenditure computed in accordance with section 16.
(4) Despite section 16(15) but subject to subsection (12), where a person incurs on or after 23 February 2010 capital expenditure on the purchase of a new building or structure (including the purchase of a leasehold interest therein), and the building or structure is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the purchase or the completion of any renovation or refurbishment works carried out on the building or structure upon the purchase, there are to be made to that person an initial allowance and annual allowances in respect of the capital expenditure, as well as the capital expenditure incurred on such renovation or refurbishment works, both to be computed in accordance with section 16.
(5) Despite section 16(15), where a person —(a)
on or before 22 February 2010 —(i)
has been granted an option to purchase, or has entered into a sale and purchase agreement for, a building or structure (not being a new building or structure) which is to be an industrial building or structure upon the purchase other than one referred to in subsection (6); or
(ii)
has been granted an option to acquire or has entered into an agreement to acquire the leasehold interest in such a building or structure; and
(b)
on or after 23 February 2010, incurs capital expenditure on the purchase of the building or structure or of the leasehold interest therein,
there are to be made to that person annual allowances in respect of that capital expenditure computed in accordance with section 16.
(6) Despite section 16(15) but subject to subsection (12), where a person incurs on or after 23 February 2010 capital expenditure on the purchase of a building or structure (not being a new building or structure), or of a leasehold interest therein, and the building or structure is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the purchase or the completion of any renovation or refurbishment works carried out on the building or structure upon the purchase, there are to be made to that person, in accordance with section 16 —(a)
annual allowances in respect of the capital expenditure; and
(b)
an initial allowance and annual allowances in respect of capital expenditure incurred on such renovation or refurbishment works.
(7) Despite section 16(15) and (16) but subject to subsection (11), where a person —(a)
on or after 23 February 2010, incurs capital expenditure on extension works carried out on an existing building or structure that (together with the extension thereto) is to be an industrial building or structure, other than one referred to in subsection (8), upon the completion of the extension works;
(b)
on or before 22 February 2010, enters into a written agreement for a qualified person to carry out the extension works; and
(c)
on or before 31 December 2010, makes an application for planning permission or conservation permission to the competent authority in accordance with the Planning Act 1998 for the development of the land comprising the extension works,
there are to be made to that person, computed in accordance with section 16 —
(d)
an initial allowance and annual allowances in respect of the capital expenditure incurred on the extension works; and
(e)
where the existing building or structure is not an industrial building or structure on 22 February 2010, annual allowances in respect of any capital expenditure incurred before 23 February 2010 on the construction or purchase or the residue of that expenditure (as the case may be) of that building or structure.
(8) Despite section 16(15) and (16) but subject to subsection (11), where a person incurs on or after 23 February 2010 capital expenditure on extension works to an existing building or structure, not being an industrial building or structure on or at any time before 22 February 2010, that (together with the extension thereto) is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the completion of the extension works, there are to be made to that person, computed in accordance with section 16 —(a)
an initial allowance and annual allowances in respect of the capital expenditure; and
(b)
annual allowances in respect of any capital expenditure incurred before 23 February 2010 on the construction or purchase or the residue of that expenditure (as the case may be) of the existing building or structure.
(9) Despite section 16(15) and (16) but subject to subsection (12), where a person incurs on or after 23 February 2010 capital expenditure on renovation or refurbishment works on an existing building or structure, and —(a)
the building or structure is to be an industrial building or structure, other than one referred to in subsection (10), upon the completion of the renovation or refurbishment works; and
(b)
such renovation or refurbishment works are carried out pursuant to a written agreement entered into with a renovation contractor on or before 22 February 2010,
there are to be made to that person, computed in accordance with section 16 —
(c)
an initial allowance and annual allowances in respect of the capital expenditure incurred on the renovation or refurbishment works; and
(d)
where the existing building or structure is not an industrial building or structure on 22 February 2010, annual allowances in respect of the capital expenditure incurred before 23 February 2010 on the construction or purchase or the residue of that expenditure (as the case may be) of that building or structure.
(10) Despite section 16(15) and (16) but subject to subsection (12), where a person incurs on or after 23 February 2010 capital expenditure on renovation or refurbishment works on an existing building or structure, not being an industrial building or structure on or at any time before 22 February 2010, that is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the completion of the renovation or refurbishment works, there are to be made to that person, computed in accordance with section 16 —(a)
an initial allowance and annual allowances in respect of the capital expenditure; and
(b)
annual allowances in respect of any capital expenditure incurred before 23 February 2010 on the construction or purchase or the residue of that expenditure (as the case may be) of the existing building or structure.
(11) For the purposes of subsections (1), (2), (7) and (8), no allowance may be made to a person in respect of any capital expenditure incurred on an industrial building or structure after the date of issuance of the temporary occupation permit for that building or structure or the end of the basis period for the year of assessment 2016, whichever is earlier.
(12) For the purposes of subsections (4), (6), (9) and (10), no allowance may be made to a person in respect of any capital expenditure incurred after the completion of the renovation or refurbishment works referred to in those subsections or the end of the basis period for the year of assessment 2016, whichever is the earlier.
(13) No allowance may be made under this section in respect of any capital expenditure incurred on the construction of a building or structure for which an allowance is made under section 18C.
(14) In this section —“new building or structure” means a building or structure which —(a)
has not previously been used by any person; and
(b)
was purchased by a person from another person who —(i)
constructed that building or structure; and
(ii)
was not granted an initial allowance in respect of that building or structure under section 16;
“qualified person” means —(a)
any person who is registered as an architect under the Architects Act 1991 and who has in force a practising certificate issued under that Act; or
(b)
any person who is registered as a professional engineer under the Professional Engineers Act 1991 and who has in force a practising certificate issued under that Act.
—(1) Despite section 16(15) but subject to subsection (11), where a person incurs on or after 23 February 2010 capital expenditure on the construction of a building or structure which is to be an industrial building or structure upon the completion of the construction works, other than one referred to in subsection (2), and the person —(a)
on or before 22 February 2010 —(i)
has been granted the option to purchase the land or has entered into a sale and purchase agreement for the land on which the industrial building or structure is to be constructed;
(ii)
has entered into a lease agreement to lease the land on which the industrial building or structure is to be constructed; or
(iii)
has submitted an application to the Government or any statutory board —(A)
to bid for the purchase therefrom of the land on which the industrial building or structure is to be constructed; or
(B)
to lease therefrom the land on which the industrial building or structure is to be constructed; and
(b)
on or before 31 December 2010, has made an application for planning permission or conservation permission to the competent authority in accordance with the Planning Act 1998 for the development of the land comprising the construction work,
there are to be made to that person an initial allowance and annual allowances in respect of that capital expenditure computed in accordance with section 16.
(2) Despite section 16(15) but subject to subsection (11), where a person incurs on or after 23 February 2010 capital expenditure on the construction of a building or structure which is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon completion of the construction works, there are to be made to that person an initial allowance and annual allowances in respect of that capital expenditure computed in accordance with section 16.
(3) Despite section 16(15), where a person —(a)
on or before 22 February 2010 —(i)
has been granted an option to purchase, or has entered into a sale and purchase agreement for, a new building or structure which is to be an industrial building or structure upon the purchase other than one referred to in subsection (4); or
(ii)
has been granted an option to acquire or has entered into an agreement to acquire the leasehold interest in such a building or structure; and
(b)
on or after 23 February 2010, incurs capital expenditure on the purchase of the building or structure or of the leasehold interest therein,
there are to be made to that person an initial allowance and annual allowances in respect of that capital expenditure computed in accordance with section 16.
(4) Despite section 16(15) but subject to subsection (12), where a person incurs on or after 23 February 2010 capital expenditure on the purchase of a new building or structure (including the purchase of a leasehold interest therein), and the building or structure is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the purchase or the completion of any renovation or refurbishment works carried out on the building or structure upon the purchase, there are to be made to that person an initial allowance and annual allowances in respect of the capital expenditure, as well as the capital expenditure incurred on such renovation or refurbishment works, both to be computed in accordance with section 16.
(5) Despite section 16(15), where a person —(a)
on or before 22 February 2010 —(i)
has been granted an option to purchase, or has entered into a sale and purchase agreement for, a building or structure (not being a new building or structure) which is to be an industrial building or structure upon the purchase other than one referred to in subsection (6); or
(ii)
has been granted an option to acquire or has entered into an agreement to acquire the leasehold interest in such a building or structure; and
(b)
on or after 23 February 2010, incurs capital expenditure on the purchase of the building or structure or of the leasehold interest therein,
there are to be made to that person annual allowances in respect of that capital expenditure computed in accordance with section 16.
(6) Despite section 16(15) but subject to subsection (12), where a person incurs on or after 23 February 2010 capital expenditure on the purchase of a building or structure (not being a new building or structure), or of a leasehold interest therein, and the building or structure is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the purchase or the completion of any renovation or refurbishment works carried out on the building or structure upon the purchase, there are to be made to that person, in accordance with section 16 —(a)
annual allowances in respect of the capital expenditure; and
(b)
an initial allowance and annual allowances in respect of capital expenditure incurred on such renovation or refurbishment works.
(7) Despite section 16(15) and (16) but subject to subsection (11), where a person —(a)
on or after 23 February 2010, incurs capital expenditure on extension works carried out on an existing building or structure that (together with the extension thereto) is to be an industrial building or structure, other than one referred to in subsection (8), upon the completion of the extension works;
(b)
on or before 22 February 2010, enters into a written agreement for a qualified person to carry out the extension works; and
(c)
on or before 31 December 2010, makes an application for planning permission or conservation permission to the competent authority in accordance with the Planning Act 1998 for the development of the land comprising the extension works,
there are to be made to that person, computed in accordance with section 16 —
(d)
an initial allowance and annual allowances in respect of the capital expenditure incurred on the extension works; and
(e)
where the existing building or structure is not an industrial building or structure on 22 February 2010, annual allowances in respect of any capital expenditure incurred before 23 February 2010 on the construction or purchase or the residue of that expenditure (as the case may be) of that building or structure.
(8) Despite section 16(15) and (16) but subject to subsection (11), where a person incurs on or after 23 February 2010 capital expenditure on extension works to an existing building or structure, not being an industrial building or structure on or at any time before 22 February 2010, that (together with the extension thereto) is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the completion of the extension works, there are to be made to that person, computed in accordance with section 16 —(a)
an initial allowance and annual allowances in respect of the capital expenditure; and
(b)
annual allowances in respect of any capital expenditure incurred before 23 February 2010 on the construction or purchase or the residue of that expenditure (as the case may be) of the existing building or structure.
(9) Despite section 16(15) and (16) but subject to subsection (12), where a person incurs on or after 23 February 2010 capital expenditure on renovation or refurbishment works on an existing building or structure, and —(a)
the building or structure is to be an industrial building or structure, other than one referred to in subsection (10), upon the completion of the renovation or refurbishment works; and
(b)
such renovation or refurbishment works are carried out pursuant to a written agreement entered into with a renovation contractor on or before 22 February 2010,
there are to be made to that person, computed in accordance with section 16 —
(c)
an initial allowance and annual allowances in respect of the capital expenditure incurred on the renovation or refurbishment works; and
(d)
where the existing building or structure is not an industrial building or structure on 22 February 2010, annual allowances in respect of the capital expenditure incurred before 23 February 2010 on the construction or purchase or the residue of that expenditure (as the case may be) of that building or structure.
(10) Despite section 16(15) and (16) but subject to subsection (12), where a person incurs on or after 23 February 2010 capital expenditure on renovation or refurbishment works on an existing building or structure, not being an industrial building or structure on or at any time before 22 February 2010, that is to be an industrial building or structure by virtue of paragraph (f), (i) or (j) of section 18(1) upon the completion of the renovation or refurbishment works, there are to be made to that person, computed in accordance with section 16 —(a)
an initial allowance and annual allowances in respect of the capital expenditure; and
(b)
annual allowances in respect of any capital expenditure incurred before 23 February 2010 on the construction or purchase or the residue of that expenditure (as the case may be) of the existing building or structure.
(11) For the purposes of subsections (1), (2), (7) and (8), no allowance may be made to a person in respect of any capital expenditure incurred on an industrial building or structure after the date of issuance of the temporary occupation permit for that building or structure or the end of the basis period for the year of assessment 2016, whichever is earlier.
(12) For the purposes of subsections (4), (6), (9) and (10), no allowance may be made to a person in respect of any capital expenditure incurred after the completion of the renovation or refurbishment works referred to in those subsections or the end of the basis period for the year of assessment 2016, whichever is the earlier.
(13) No allowance may be made under this section in respect of any capital expenditure incurred on the construction of a building or structure for which an allowance is made under section 18C.
(14) In this section —“new building or structure” means a building or structure which —(a)
has not previously been used by any person; and
(b)
was purchased by a person from another person who —(i)
constructed that building or structure; and
(ii)
was not granted an initial allowance in respect of that building or structure under section 16;
“qualified person” means —(a)
any person who is registered as an architect under the Architects Act 1991 and who has in force a practising certificate issued under that Act; or
(b)
any person who is registered as a professional engineer under the Professional Engineers Act 1991 and who has in force a practising certificate issued under that Act.
Initial and annual allowances for certain buildings and structures
18C.—(1) Where any person proposes to incur or has incurred on or after 23 February 2010 qualifying capital expenditure on the construction or renovation of a building or structure on industrial land for which an application for planning permission or conservation permission is made to the competent authority in accordance with the Planning Act 1998 on or after 23 February 2010, the person may apply to the Minister or an authorised body, on or after 1 July 2010 for such construction or renovation to be approved for the purposes of making an allowance under this section in respect of such expenditure incurred by that person.[37/2014; 41/2020]
[Act 41 of 2020 wef 12/04/2024]
(1A) Where any person proposes to incur or has incurred on or after 22 February 2014 qualifying capital expenditure on the construction or renovation of a building or structure on port land or airport land, for which an application for planning permission or conservation permission is made on or after that date to the competent authority in accordance with the Planning Act 1998, the person may apply to the Minister or an authorised body, on or after 22 February 2014 for such construction or renovation to be approved for the purposes of making an allowance under this section in respect of such expenditure incurred by that person.[37/2014; 41/2020]
[Act 41 of 2020 wef 12/04/2024]
(1B) No approval may be granted under this section after 31 December 2030.[41/2020]
[Act 25 of 2025 wef 08/12/2025]
(2) Where the Minister or an authorised body, on an application made to the Minister or authorised body under subsection (1) or (1A) that is a pre‑25 March 2016 application, is satisfied that the construction or renovation of the building or structure on industrial land, port land or airport land (as the case may be) promotes the prescribed intensified use of the land for the purposes of a prescribed trade or business, the Minister or authorised body may, by notice in writing, approve the construction or renovation for the purposes of this section, which approval is subject to such conditions as the Minister or authorised body may impose, including the particular trade or business for which the building or structure is to be used upon completion of construction or renovation.[Act 41 of 2020 wef 12/04/2024]
(2A) The Minister or an authorised body may, on application by a person who made an application under subsection (1) or (1A) pursuant to which a construction or renovation of a building or structure is approved under subsection (2), vary a condition of the approval as to the particular trade or business for which the building or structure may be used upon completion of the construction or renovation, if the Minister or authorised body is satisfied that the ground mentioned in subsection (2) for approving an application under subsection (1) or (1A) continues to be met.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2B) The Minister or an authorised body may, by written notice, approve an application made under subsection (1) or (1A) that is a post‑25 March 2016 application if, based on the information provided by the applicant, the Minister or authorised body is satisfied that —(a)
on completion of the construction or renovation, at least 80% of the total floor area of the building or structure will be used —(i)
by —(A)
a single person who is either the applicant or a person related to the applicant; or
(B)
2 or more persons who satisfy the requirements of relatedness; and
(ii)
for one or more prescribed trades or businesses; and
(b)
the construction or renovation of the building or structure on the land promotes the prescribed intensified use of the land for the purposes of that trade or business or, if there is more than one trade or business, such of those trades or businesses as may be designated in the regulations.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2C) An approval under subsection (2B) is subject to the condition that, upon completion of the construction or renovation, at least 80% of the total floor area of the building or structure will be used —(a)
by one or more persons specified in the notice mentioned in subsection (2B) who —(i)
if it will be used by a single person, is either the applicant of the application concerned under subsection (1) or (1A), or a person related to the applicant; or
(ii)
if it will be used by 2 or more persons, satisfy the requirements of relatedness; and
(b)
for one or more trades or businesses specified in the application.[34/2016]
(2D) An approval under subsection (2B) may be subject to such other conditions as the Minister or authorised body may impose.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2E) The Minister or an authorised body may, on application by a person who made an application under subsection (1) or (1A) pursuant to which a construction or renovation of a building or structure is approved under subsection (2B) —(a)
substitute any person or trade or business mentioned in subsection (2C) with any other person or trade or business; or
(b)
add a person or trade or business to the person or trade or business mentioned in subsection (2C),
if the Minister or authorised body is satisfied that the requirements in subsection (2B)(a) and (b) continue to be met.
[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2F) Where a trade or business is prescribed by regulations under subsection (11A), then, unless otherwise provided in the regulations, the Minister or authorised body may only —(a)
approve an application under subsection (2) for a renovation or construction because it promotes the prescribed intensified use of the land for that trade or business; or
(b)
approve an application under subsection (2B) because at least 80% of the total floor area of the building or structure will be used, on completion of the construction or renovation, by a person or persons mentioned in subsection (2B)(a)(i) for that trade or business or for trades or businesses which include that trade or business,
if —
(c)
the application is made on or after a prescribed date; and
(d)
the application for planning permission or conservation permission for the construction or renovation is made on or after a prescribed date.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2G) In relation to any construction or renovation that is approved pursuant to an application to which subsection (2F) applies, the qualifying capital expenditure for which an allowance may be made under subsections (3) and (4) excludes any expenditure incurred before a prescribed date, unless the regulations under subsection (11A) provide otherwise.[34/2016]
(2H) The prescribed date mentioned in subsection (2F)(c) or (d) or (2G) is, unless otherwise specified in the regulations, the date the trade or business is prescribed by regulations under subsection (11A).[34/2016]
(2I) To avoid doubt, a reference in subsections (2F) and (2H) to the prescribing of a trade or business under subsection (11A) is, in the case of an application made under subsection (1) or (1A) before 25 March 2016, a reference to the prescribing of a trade or business under subsection (2) in force immediately before that date.[34/2016]
(2J) In relation to any construction or renovation that is approved pursuant to a post‑25 March 2016 application (other than one with only a single specified user and a single specified trade or business), the qualifying capital expenditure for which an allowance may be made under subsections (3) and (4) excludes any expenditure incurred before 25 March 2016.[34/2016]
(3) Where in the basis period for any year of assessment the person has incurred any qualifying capital expenditure on the approved construction or approved renovation (as the case may be), there is to be made to the person for the year of assessment in the basis period for which the expenditure was incurred an allowance to be known as an “initial allowance” equal to 25% of the expenditure.
(4) Subject to subsections (5), (5AA) and (6), where the person is, at the end of the basis period for any year of assessment, entitled to a relevant interest in the building or structure which is being used for the purposes of the specified trade or business or (as the case may be) trades or businesses, and in respect of which qualifying capital expenditure is incurred, there is to be made to the person for that year of assessment an allowance to be known as an “annual allowance” equal to 5% of the qualifying capital expenditure incurred by the person.[34/2016]
(5) Where the construction or renovation is approved pursuant to a pre‑25 March 2016 application, no allowance is to be made under subsection (4) for any year of assessment unless —(a)
in a case where 2 or more temporary occupation permits are to be issued for the subject of the approved construction or renovation, and one or more of those temporary occupation permits have been issued but not all of them, at least 80% of the total floor area of the subject of each temporary occupation permit that has been issued; or
(b)
in any other case, at least 80% of the total floor area of the subject of the approved construction or renovation,
is used, at the end of the basis period for that year of assessment, by any one person for the purposes of the specified trade or business, and, for the case in paragraph (a), that person is the same person for all the subjects of the temporary occupation permits that have been issued.
[2/2016; 34/2016]
(5AA) Where the construction or renovation is approved pursuant to a post‑25 March 2016 application, no allowance is to be made under subsection (4) for any year of assessment unless —(a)
in a case where 2 or more temporary occupation permits are to be issued for the subject of the approved construction or renovation, but not all of those temporary occupation permits have been issued, at least 80% of the total floor area of the subject of each temporary occupation permit that has been issued; or
(b)
in any other case, at least 80% of the total floor area of the subject of the approved construction or renovation,
is used, at the end of the basis period for that year of assessment —
(c)
for the purposes of the specified trade or business or one or more of the specified trades or businesses; and
(d)
by —(i)
one person who is a specified user and is either the applicant of the post‑25 March 2016 application or related to the applicant; or
(ii)
2 or more persons who are specified users and satisfy the requirements of relatedness.[34/2016]
(5A) In subsections (5) and (5AA), the subject of an approved construction or renovation, or of a temporary occupation permit, is the building or structure, all the buildings or structures, or the part or all the parts of a building or structure (as the case may be) that forms or form the subject matter of the approved construction or renovation, or the temporary occupation permit.[2/2016; 34/2016]
(6) Any annual allowance made to any person under subsection (4) in respect of an approved construction or approved renovation for any year of assessment must not exceed the amount of qualifying capital expenditure remaining unallowed as at the beginning of the basis period for that year of assessment.
(7) For the purposes of this section, qualifying capital expenditure incurred by any person on the approved construction or approved renovation (as the case may be) prior to the commencement of the person’s trade or business is deemed to have been incurred by that person on the first day that person carries on that trade or business.
(8) Where the person fails to comply with the condition in subsection (2C), or any condition imposed under subsection (2) or (2D) in respect of the approved construction or approved renovation, the Minister or an authorised body, may, by written notice, revoke the approval granted under that subsection.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(9) Despite section 74(1) and (4), where an approval has been revoked under subsection (8), the Comptroller may, at any time, for the purpose of making good any loss of tax attributable to such revocation of approval, assess the person who has utilised the allowance made under this section at such amount or additional amount as according to the Comptroller’s judgment ought to have been charged; and this subsection also applies, with the necessary modifications, to any assessment which results in any unabsorbed allowances or losses.
(10) Where, in the basis period for any year of assessment, the specified trade or business for which purpose the building or structure is used, produces income that is exempt from tax as well as income chargeable with tax, the allowance for that year of assessment must be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(11) A person who has incurred qualifying capital expenditure on the approved construction or approved renovation must maintain and deliver to the Minister or an authorised body or the Comptroller, in such form and manner and within such reasonable time as the Minister, the authorised body or the Comptroller may determine, the relevant records of the approved construction or approved renovation, and such other particulars as may be required for the purposes of this section.[Act 41 of 2020 wef 12/04/2024]
(11A) The Minister may make regulations prescribing matters required or permitted by this section to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to this section.[34/2016]
(12) In this section —“airport land” means any land zoned for use as an airport under the Master Plan;
“approved construction or approved renovation” means the construction or renovation (as the case may be) of a building or structure on industrial land, port land or airport land (as the case may be) approved under subsection (2) or (2B);
“industrial land” means any land zoned for the purpose of “Business 1” or “Business 2” (other than “Business 1 White” and “Business 2 White”) under the Master Plan, and includes such other land as may be approved by the Minister;
“Master Plan” means the Master Plan as defined in the Planning Act 1998 which is effective on the date of the application for planning permission or conservation permission referred to in subsection (1) or (1A), as the case may be;
“port land” means any land zoned for use as a port under the Master Plan;
“post‑25 March 2016 application” means an application under subsection (1) or (1A) —(a)
that is made on or after 25 March 2016; and
(b)
that relates to the construction or renovation of a building or structure for which an application for planning permission or conservation permission is made on or after 25 March 2016;
“pre‑25 March 2016 application” means an application under subsection (1) or (1A) that is not a post‑25 March 2016 application;
“qualifying capital expenditure” means the following types of capital expenditure:(a)
costs of feasibility study on the layout of the building or structure;
(b)
design fees of the building or structure;
(c)
costs of preparing plans for obtaining approval for the building or structure;
(d)
piling, construction and renovation costs;
(e)
demolition costs of an existing building or structure for which an allowance was not made under section 16;
(f)
legal and other professional fees in relation to the approved construction or approved renovation; and
(g)
stamp duties payable in respect of title of the building or structure;
“relevant interest”, in relation to any qualifying capital expenditure incurred on an approved construction or approved renovation of a building or structure, means the interest in that building or structure to which the person who incurred the expenditure was entitled when the person incurred it;
“specified trade or business” means —(a)
the trade or business specified in a condition of approval under subsection (2) as one for which the building or structure may be used upon completion of the approved construction or renovation, including one substituted for that trade or business pursuant to a variation under subsection (2A); or
(b)
the trade or business or any of the trades or businesses mentioned in subsection (2C)(b), including one substituted for that trade or business or added under subsection (2E),
as the case may be;
“specified user” means the person or any of the persons mentioned in subsection (2C), including one substituted for that person or added under subsection (2E);
“temporary occupation permit” means a temporary occupation permit granted under section 12(3) of the Building Control Act 1989.[37/2014; 2/2016; 34/2016]
(13) In this section, capital expenditure for the renovation or construction of a building or structure or of a part of a building or structure, that is incurred after the date a temporary occupation permit is issued for the building, structure or part of the building or structure (as the case may be) is not qualifying capital expenditure.[2/2016]
(14) In this section —(a)
a reference to a temporary occupation permit issued or to be issued for one or more buildings or structures or one or more parts of a building or structure (called in this paragraph the subject) is, if no temporary occupation permit is issued or to be issued for the subject, a reference to the certificate of statutory completion issued or to be issued under section 12(1) of the Building Control Act 1989 for —(i)
the subject; or
(ii)
a building or structure that includes the subject; and
(b)
a reference to the date of issue of a temporary occupation permit is to be construed accordingly.[2/2016]
(15) In this section —(a)
2 or more persons satisfy the requirements of relatedness if —(i)
each of them is related to one or more of the others; and
(ii)
either —(A)
one of them is the applicant of the application under subsection (1) or (1A) and the other or others is or are related to the applicant; or
(B)
all of them are related to the applicant; and
(b)
a person is related to another person if —(i)
where the application for planning permission or conservation permission is made between 25 March 2016 and 31 December 2025 (both dates inclusive) and the application under subsection (1) or (1A) is made on or after 25 March 2016 —(A)
one of those persons beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares of the other person (being a company);
(B)
one of those persons is entitled, directly or indirectly, to at least 75% of the income of the other person (being a partnership);
(C)
a third person beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares of each of those persons (being companies);
(D)
a third person is entitled, directly or indirectly, to at least 75% of the income of each of those persons (being partnerships); or
(E)
a third person beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares of one of those persons (being a company), and is entitled, directly or indirectly, to at least 75% of the income of the other person (being a partnership); or[Act 25 of 2025 wef 08/12/2025]
(ii)
where the application for planning permission or conservation permission and the application under subsection (1) or (1A) are made on or after 1 January 2026 —(A)
one of those persons beneficially holds, directly or indirectly, more than 50% of the total number of issued ordinary shares of the other person (being a company);
(B)
one of those persons is entitled, directly or indirectly, to more than 50% of the income of the other person (being a partnership);
(C)
a third person beneficially holds, directly or indirectly, more than 50% of the total number of issued ordinary shares of each of those persons (being companies);
(D)
a third person is entitled, directly or indirectly, to more than 50% of the income of each of those persons (being partnerships); or
(E)
a third person beneficially holds, directly or indirectly, more than 50% of the total number of issued ordinary shares of one of those persons (being a company), and is entitled, directly or indirectly, to more than 50% of the income of the other person (being a partnership).[Act 25 of 2025 wef 08/12/2025]
(iii)
[Deleted by Act 25 of 2025 wef 08/12/2025]
(iv)
[Deleted by Act 25 of 2025 wef 08/12/2025]
(v)
[Deleted by Act 25 of 2025 wef 08/12/2025][34/2016]
(16) A reference to a person in subsections (2B)(a)(i), (2C)(a), (2E)(a) and (b), (5AA)(d) and (15), and in the definition of “specified user” in subsection (12), includes a partnership.[34/2016]
—(1) Where any person proposes to incur or has incurred on or after 23 February 2010 qualifying capital expenditure on the construction or renovation of a building or structure on industrial land for which an application for planning permission or conservation permission is made to the competent authority in accordance with the Planning Act 1998 on or after 23 February 2010, the person may apply to the Minister or an authorised body, on or after 1 July 2010 for such construction or renovation to be approved for the purposes of making an allowance under this section in respect of such expenditure incurred by that person.[37/2014; 41/2020]
[Act 41 of 2020 wef 12/04/2024]
(1A) Where any person proposes to incur or has incurred on or after 22 February 2014 qualifying capital expenditure on the construction or renovation of a building or structure on port land or airport land, for which an application for planning permission or conservation permission is made on or after that date to the competent authority in accordance with the Planning Act 1998, the person may apply to the Minister or an authorised body, on or after 22 February 2014 for such construction or renovation to be approved for the purposes of making an allowance under this section in respect of such expenditure incurred by that person.[37/2014; 41/2020]
[Act 41 of 2020 wef 12/04/2024]
(1B) No approval may be granted under this section after 31 December 2030.[41/2020]
[Act 25 of 2025 wef 08/12/2025]
(2) Where the Minister or an authorised body, on an application made to the Minister or authorised body under subsection (1) or (1A) that is a pre‑25 March 2016 application, is satisfied that the construction or renovation of the building or structure on industrial land, port land or airport land (as the case may be) promotes the prescribed intensified use of the land for the purposes of a prescribed trade or business, the Minister or authorised body may, by notice in writing, approve the construction or renovation for the purposes of this section, which approval is subject to such conditions as the Minister or authorised body may impose, including the particular trade or business for which the building or structure is to be used upon completion of construction or renovation.[Act 41 of 2020 wef 12/04/2024]
(2A) The Minister or an authorised body may, on application by a person who made an application under subsection (1) or (1A) pursuant to which a construction or renovation of a building or structure is approved under subsection (2), vary a condition of the approval as to the particular trade or business for which the building or structure may be used upon completion of the construction or renovation, if the Minister or authorised body is satisfied that the ground mentioned in subsection (2) for approving an application under subsection (1) or (1A) continues to be met.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2B) The Minister or an authorised body may, by written notice, approve an application made under subsection (1) or (1A) that is a post‑25 March 2016 application if, based on the information provided by the applicant, the Minister or authorised body is satisfied that —(a)
on completion of the construction or renovation, at least 80% of the total floor area of the building or structure will be used —(i)
by —(A)
a single person who is either the applicant or a person related to the applicant; or
(B)
2 or more persons who satisfy the requirements of relatedness; and
(ii)
for one or more prescribed trades or businesses; and
(b)
the construction or renovation of the building or structure on the land promotes the prescribed intensified use of the land for the purposes of that trade or business or, if there is more than one trade or business, such of those trades or businesses as may be designated in the regulations.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2C) An approval under subsection (2B) is subject to the condition that, upon completion of the construction or renovation, at least 80% of the total floor area of the building or structure will be used —(a)
by one or more persons specified in the notice mentioned in subsection (2B) who —(i)
if it will be used by a single person, is either the applicant of the application concerned under subsection (1) or (1A), or a person related to the applicant; or
(ii)
if it will be used by 2 or more persons, satisfy the requirements of relatedness; and
(b)
for one or more trades or businesses specified in the application.[34/2016]
(2D) An approval under subsection (2B) may be subject to such other conditions as the Minister or authorised body may impose.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2E) The Minister or an authorised body may, on application by a person who made an application under subsection (1) or (1A) pursuant to which a construction or renovation of a building or structure is approved under subsection (2B) —(a)
substitute any person or trade or business mentioned in subsection (2C) with any other person or trade or business; or
(b)
add a person or trade or business to the person or trade or business mentioned in subsection (2C),
if the Minister or authorised body is satisfied that the requirements in subsection (2B)(a) and (b) continue to be met.
[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2F) Where a trade or business is prescribed by regulations under subsection (11A), then, unless otherwise provided in the regulations, the Minister or authorised body may only —(a)
approve an application under subsection (2) for a renovation or construction because it promotes the prescribed intensified use of the land for that trade or business; or
(b)
approve an application under subsection (2B) because at least 80% of the total floor area of the building or structure will be used, on completion of the construction or renovation, by a person or persons mentioned in subsection (2B)(a)(i) for that trade or business or for trades or businesses which include that trade or business,
if —
(c)
the application is made on or after a prescribed date; and
(d)
the application for planning permission or conservation permission for the construction or renovation is made on or after a prescribed date.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2G) In relation to any construction or renovation that is approved pursuant to an application to which subsection (2F) applies, the qualifying capital expenditure for which an allowance may be made under subsections (3) and (4) excludes any expenditure incurred before a prescribed date, unless the regulations under subsection (11A) provide otherwise.[34/2016]
(2H) The prescribed date mentioned in subsection (2F)(c) or (d) or (2G) is, unless otherwise specified in the regulations, the date the trade or business is prescribed by regulations under subsection (11A).[34/2016]
(2I) To avoid doubt, a reference in subsections (2F) and (2H) to the prescribing of a trade or business under subsection (11A) is, in the case of an application made under subsection (1) or (1A) before 25 March 2016, a reference to the prescribing of a trade or business under subsection (2) in force immediately before that date.[34/2016]
(2J) In relation to any construction or renovation that is approved pursuant to a post‑25 March 2016 application (other than one with only a single specified user and a single specified trade or business), the qualifying capital expenditure for which an allowance may be made under subsections (3) and (4) excludes any expenditure incurred before 25 March 2016.[34/2016]
(3) Where in the basis period for any year of assessment the person has incurred any qualifying capital expenditure on the approved construction or approved renovation (as the case may be), there is to be made to the person for the year of assessment in the basis period for which the expenditure was incurred an allowance to be known as an “initial allowance” equal to 25% of the expenditure.
(4) Subject to subsections (5), (5AA) and (6), where the person is, at the end of the basis period for any year of assessment, entitled to a relevant interest in the building or structure which is being used for the purposes of the specified trade or business or (as the case may be) trades or businesses, and in respect of which qualifying capital expenditure is incurred, there is to be made to the person for that year of assessment an allowance to be known as an “annual allowance” equal to 5% of the qualifying capital expenditure incurred by the person.[34/2016]
(5) Where the construction or renovation is approved pursuant to a pre‑25 March 2016 application, no allowance is to be made under subsection (4) for any year of assessment unless —(a)
in a case where 2 or more temporary occupation permits are to be issued for the subject of the approved construction or renovation, and one or more of those temporary occupation permits have been issued but not all of them, at least 80% of the total floor area of the subject of each temporary occupation permit that has been issued; or
(b)
in any other case, at least 80% of the total floor area of the subject of the approved construction or renovation,
is used, at the end of the basis period for that year of assessment, by any one person for the purposes of the specified trade or business, and, for the case in paragraph (a), that person is the same person for all the subjects of the temporary occupation permits that have been issued.
[2/2016; 34/2016]
(5AA) Where the construction or renovation is approved pursuant to a post‑25 March 2016 application, no allowance is to be made under subsection (4) for any year of assessment unless —(a)
in a case where 2 or more temporary occupation permits are to be issued for the subject of the approved construction or renovation, but not all of those temporary occupation permits have been issued, at least 80% of the total floor area of the subject of each temporary occupation permit that has been issued; or
(b)
in any other case, at least 80% of the total floor area of the subject of the approved construction or renovation,
is used, at the end of the basis period for that year of assessment —
(c)
for the purposes of the specified trade or business or one or more of the specified trades or businesses; and
(d)
by —(i)
one person who is a specified user and is either the applicant of the post‑25 March 2016 application or related to the applicant; or
(ii)
2 or more persons who are specified users and satisfy the requirements of relatedness.[34/2016]
(5A) In subsections (5) and (5AA), the subject of an approved construction or renovation, or of a temporary occupation permit, is the building or structure, all the buildings or structures, or the part or all the parts of a building or structure (as the case may be) that forms or form the subject matter of the approved construction or renovation, or the temporary occupation permit.[2/2016; 34/2016]
(6) Any annual allowance made to any person under subsection (4) in respect of an approved construction or approved renovation for any year of assessment must not exceed the amount of qualifying capital expenditure remaining unallowed as at the beginning of the basis period for that year of assessment.
(7) For the purposes of this section, qualifying capital expenditure incurred by any person on the approved construction or approved renovation (as the case may be) prior to the commencement of the person’s trade or business is deemed to have been incurred by that person on the first day that person carries on that trade or business.
(8) Where the person fails to comply with the condition in subsection (2C), or any condition imposed under subsection (2) or (2D) in respect of the approved construction or approved renovation, the Minister or an authorised body, may, by written notice, revoke the approval granted under that subsection.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(9) Despite section 74(1) and (4), where an approval has been revoked under subsection (8), the Comptroller may, at any time, for the purpose of making good any loss of tax attributable to such revocation of approval, assess the person who has utilised the allowance made under this section at such amount or additional amount as according to the Comptroller’s judgment ought to have been charged; and this subsection also applies, with the necessary modifications, to any assessment which results in any unabsorbed allowances or losses.
(10) Where, in the basis period for any year of assessment, the specified trade or business for which purpose the building or structure is used, produces income that is exempt from tax as well as income chargeable with tax, the allowance for that year of assessment must be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(11) A person who has incurred qualifying capital expenditure on the approved construction or approved renovation must maintain and deliver to the Minister or an authorised body or the Comptroller, in such form and manner and within such reasonable time as the Minister, the authorised body or the Comptroller may determine, the relevant records of the approved construction or approved renovation, and such other particulars as may be required for the purposes of this section.[Act 41 of 2020 wef 12/04/2024]
(11A) The Minister may make regulations prescribing matters required or permitted by this section to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to this section.[34/2016]
(12) In this section —“airport land” means any land zoned for use as an airport under the Master Plan;
“approved construction or approved renovation” means the construction or renovation (as the case may be) of a building or structure on industrial land, port land or airport land (as the case may be) approved under subsection (2) or (2B);
“industrial land” means any land zoned for the purpose of “Business 1” or “Business 2” (other than “Business 1 White” and “Business 2 White”) under the Master Plan, and includes such other land as may be approved by the Minister;
“Master Plan” means the Master Plan as defined in the Planning Act 1998 which is effective on the date of the application for planning permission or conservation permission referred to in subsection (1) or (1A), as the case may be;
“port land” means any land zoned for use as a port under the Master Plan;
“post‑25 March 2016 application” means an application under subsection (1) or (1A) —(a)
that is made on or after 25 March 2016; and
(b)
that relates to the construction or renovation of a building or structure for which an application for planning permission or conservation permission is made on or after 25 March 2016;
“pre‑25 March 2016 application” means an application under subsection (1) or (1A) that is not a post‑25 March 2016 application;
“qualifying capital expenditure” means the following types of capital expenditure:(a)
costs of feasibility study on the layout of the building or structure;
(b)
design fees of the building or structure;
(c)
costs of preparing plans for obtaining approval for the building or structure;
(d)
piling, construction and renovation costs;
(e)
demolition costs of an existing building or structure for which an allowance was not made under section 16;
(f)
legal and other professional fees in relation to the approved construction or approved renovation; and
(g)
stamp duties payable in respect of title of the building or structure;
“relevant interest”, in relation to any qualifying capital expenditure incurred on an approved construction or approved renovation of a building or structure, means the interest in that building or structure to which the person who incurred the expenditure was entitled when the person incurred it;
“specified trade or business” means —(a)
the trade or business specified in a condition of approval under subsection (2) as one for which the building or structure may be used upon completion of the approved construction or renovation, including one substituted for that trade or business pursuant to a variation under subsection (2A); or
(b)
the trade or business or any of the trades or businesses mentioned in subsection (2C)(b), including one substituted for that trade or business or added under subsection (2E),
as the case may be;
“specified user” means the person or any of the persons mentioned in subsection (2C), including one substituted for that person or added under subsection (2E);
“temporary occupation permit” means a temporary occupation permit granted under section 12(3) of the Building Control Act 1989.[37/2014; 2/2016; 34/2016]
(13) In this section, capital expenditure for the renovation or construction of a building or structure or of a part of a building or structure, that is incurred after the date a temporary occupation permit is issued for the building, structure or part of the building or structure (as the case may be) is not qualifying capital expenditure.[2/2016]
(14) In this section —(a)
a reference to a temporary occupation permit issued or to be issued for one or more buildings or structures or one or more parts of a building or structure (called in this paragraph the subject) is, if no temporary occupation permit is issued or to be issued for the subject, a reference to the certificate of statutory completion issued or to be issued under section 12(1) of the Building Control Act 1989 for —(i)
the subject; or
(ii)
a building or structure that includes the subject; and
(b)
a reference to the date of issue of a temporary occupation permit is to be construed accordingly.[2/2016]
(15) In this section —(a)
2 or more persons satisfy the requirements of relatedness if —(i)
each of them is related to one or more of the others; and
(ii)
either —(A)
one of them is the applicant of the application under subsection (1) or (1A) and the other or others is or are related to the applicant; or
(B)
all of them are related to the applicant; and
(b)
a person is related to another person if —(i)
where the application for planning permission or conservation permission is made between 25 March 2016 and 31 December 2025 (both dates inclusive) and the application under subsection (1) or (1A) is made on or after 25 March 2016 —(A)
one of those persons beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares of the other person (being a company);
(B)
one of those persons is entitled, directly or indirectly, to at least 75% of the income of the other person (being a partnership);
(C)
a third person beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares of each of those persons (being companies);
(D)
a third person is entitled, directly or indirectly, to at least 75% of the income of each of those persons (being partnerships); or
(E)
a third person beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares of one of those persons (being a company), and is entitled, directly or indirectly, to at least 75% of the income of the other person (being a partnership); or[Act 25 of 2025 wef 08/12/2025]
(ii)
where the application for planning permission or conservation permission and the application under subsection (1) or (1A) are made on or after 1 January 2026 —(A)
one of those persons beneficially holds, directly or indirectly, more than 50% of the total number of issued ordinary shares of the other person (being a company);
(B)
one of those persons is entitled, directly or indirectly, to more than 50% of the income of the other person (being a partnership);
(C)
a third person beneficially holds, directly or indirectly, more than 50% of the total number of issued ordinary shares of each of those persons (being companies);
(D)
a third person is entitled, directly or indirectly, to more than 50% of the income of each of those persons (being partnerships); or
(E)
a third person beneficially holds, directly or indirectly, more than 50% of the total number of issued ordinary shares of one of those persons (being a company), and is entitled, directly or indirectly, to more than 50% of the income of the other person (being a partnership).[Act 25 of 2025 wef 08/12/2025]
(iii)
[Deleted by Act 25 of 2025 wef 08/12/2025]
(iv)
[Deleted by Act 25 of 2025 wef 08/12/2025]
(v)
[Deleted by Act 25 of 2025 wef 08/12/2025][34/2016]
(16) A reference to a person in subsections (2B)(a)(i), (2C)(a), (2E)(a) and (b), (5AA)(d) and (15), and in the definition of “specified user” in subsection (12), includes a partnership.[34/2016]
Initial and annual allowances for machinery or plant
19.—(1) Where a person carrying on a trade, profession or business incurs capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, there is to be made to the person, on due claim for the year of assessment in the basis period for which the expenditure is incurred an allowance, to be known as an “initial allowance”, equal to one‑fifth of that expenditure or such other allowance as may be prescribed either generally or for any person or class of persons in respect of any machinery or plant or class of machinery or plant.(1A) For the purposes of subsection (1), in the case of any trade, profession or business —(a)
where 2 basis periods overlap, the period common to both is deemed to fall in the first basis period only;
(b)
where there is an interval between the end of the basis period for a year of assessment and the commencement of a basis period for the next succeeding year of assessment, then, unless the second‑mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval is deemed to be part of the second basis period; and
(c)
where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the commencement of the basis period for the year in which it is permanently discontinued, the interval is deemed to form part of the first basis period.
(1B) Any capital expenditure incurred for the purposes of a trade by a person about to carry on that trade is treated for the purposes of subsection (1) as if it had been incurred by that person on the first day on which that person does carry on that trade.
(2) Where at the end of the basis period for any year of assessment, a person has in use machinery or plant for the purpose of the person’s trade, profession or business, there is to be made to the person, on due claim, in respect of that year of assessment an allowance for depreciation by wear and tear of those assets (to be known as an annual allowance) which is to be calculated in accordance with the following provisions:(a)
subject to subsection (2AA), the annual allowance in respect of any machinery or plant acquired by a person either in the basis period for a year of assessment before the year of assessment 2023 or under a hire‑purchase agreement signed in the basis period for a year of assessment before the year of assessment 2023 is —(i)
in the case of an asset, other than an asset acquired under a hire‑purchase agreement — the amount ascertained by dividing the excess of the original cost of the asset over any initial allowance granted under subsection (1) by the number of years of working life of the asset as specified in the Sixth Schedule unless otherwise provided under paragraph (b) or (ba);
(ii)
in the case of an asset acquired under a hire‑purchase agreement — the amount ascertained by dividing the excess of the original cost of the asset over the total amount of initial allowance allowable in respect of the asset under subsection (1) by the number of years of working life of the asset as specified in the Sixth Schedule unless otherwise provided under paragraph (b) or (ba);
(b)
for the purposes of paragraph (a), the number of years of working life of any aircraft acquired between 1 March 1995 and 29 February 2012 (both dates inclusive) is, if it had been extended under section 19(2)(b) in force immediately before 1 March 2012, the number of years of its working life as specified in the Sixth Schedule together with the extension;
(ba)
for the purposes of paragraph (a), the total number of years of working life of an aircraft acquired on or after 1 March 2012 but before the basis period for the year of assessment 2023 by an approved aircraft leasing company mentioned in section 43N is, if the company has made an election under subsection (2A) —(i)
the sum of —(A)
the number of years of working life of an aircraft as specified in the Sixth Schedule; and
(B)
the period of extension specified by the company under subsection (2A); or
(ii)
20 years,
whichever is less;
(bb)
the annual allowance in respect of any machinery or plant acquired by a person in the basis period for the year of assessment 2023 or a subsequent year of assessment or under a hire‑purchase agreement signed in the basis period for the year of assessment 2023 or a subsequent year of assessment is —(i)
in the case of an asset that is not acquired under a hire‑purchase agreement — the amount ascertained by dividing the excess of the original cost of the asset over any initial allowance granted under subsection (1) by any of the following number of years as elected by the person:(A)
where the number of years of working life of the asset as specified in the Sixth Schedule is less than 16 years and unless otherwise provided under paragraph (bd) — 6 or 12 years;
(B)
where the number of years of working life of the asset as specified in the Sixth Schedule is 16 years — 6, 12 or 16 years; or
(ii)
in the case of an asset acquired under a hire‑purchase agreement — the amount ascertained by dividing the excess of the original cost of the asset over the total amount of the initial amount allowable in respect of the asset under subsection (1) by any of the following number of years as elected by the person:(A)
where the number of years of working life of the asset as specified in the Sixth Schedule is less than 16 years and unless otherwise provided under paragraph (bd) — 6 or 12 years;
(B)
where the number of years of working life of the asset as specified in the Sixth Schedule is 16 years — 6, 12 or 16 years;
(bc)
the election under paragraph (bb) must be made to the Comptroller at the time of lodgment of the person’s return of income for the year of assessment relating to the basis period in which the asset was acquired or the hire‑purchase agreement was signed or within such further time as the Comptroller may allow, and such election is irrevocable;
(bd)
for the purposes of paragraph (bb), the total number of years of working life of an aircraft acquired in the basis period for the year of assessment 2023 or a subsequent year of assessment by an approved aircraft leasing company mentioned in section 43N is, if the company has made an election under subsection (2A) —(i)
the sum of —(A)
either 6 or 12 years as elected by the company under paragraph (bb); and
(B)
the period of extension specified by the company under subsection (2A); or
(ii)
20 years,
whichever is less;
(c)
the annual allowance in respect of any asset for any year of assessment must not exceed the amount of the capital expenditure of the asset still unallowed under this section as at the beginning of the basis period for that year of assessment;
(d)
for the purposes of the Sixth Schedule, where any question arises as to the classification of an asset under any item of that Schedule, the asset is treated as falling under such item as the Comptroller considers proper.[41/2020]
(2AA) Where —(a)
a machinery or plant is acquired by a person either in the basis period for a year of assessment before the year of assessment 2023 or under a hire‑purchase agreement signed in the basis period for a year of assessment before the year of assessment 2023; and
(b)
no due claim for an allowance in respect of that asset has been made under subsection (1) or (2)(a) for any year of assessment before the year of assessment 2023,
then, if the person makes a claim for an annual allowance in respect of that asset for the year of assessment 2023 or a subsequent year of assessment, the annual allowance in respect of that asset is ascertained by dividing the original cost of that asset by the number of years of working life of that asset, as elected by the person under subsection (2AB).
[41/2020]
(2AB) For the purposes of subsection (2AA), the person may elect for the number of years of working life of the asset to be —(a)
if the number of years of its working life as specified in the Sixth Schedule is less than 16 years — 6 or 12 years; or
(b)
if the number of years of its working life as specified in the Sixth Schedule is 16 years — 6, 12 or 16 years.[41/2020]
(2AC) An election under subsection (2AB) must be made by the person to the Comptroller at the time of lodgment of the person’s return of income for the year of assessment 2023 or within such further time as the Comptroller may allow, and such election is irrevocable.[41/2020]
(2A) An approved aircraft leasing company which acquired any aircraft on or after 1 March 2012 may, at the time of lodgment of its return of income for the year of assessment relating to the basis period in which the aircraft was acquired, make an irrevocable election to the Comptroller for the number of years of the working life of the aircraft as specified in the Sixth Schedule or as elected by the person under subsection (2)(bb), to be extended by a period specified by the company.[41/2020]
(2B) [Deleted by Act 41 of 2020]
(3) Despite subsection (1) or (2) or section 19A(1), (1B) or (1E), in respect of a motor car to which this subsection applies —(a)
the initial allowance to be made under subsection (1) is to be calculated on an amount equal to the capital expenditure incurred in respect of that motor car or $35,000, whichever is less;
(b)
the annual allowance to be made under subsection (2) or section 19A(1), (1B) or (1E) is to be calculated on the basis that the original cost of that motor car is the capital expenditure incurred or $35,000, whichever is less; and
(c)
the aggregate of the initial and annual allowances to be made under this subsection for all relevant years of assessment must not exceed $35,000.[41/2020]
(4) Subsection (3) applies 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 —(a)
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 —(i)
used principally for instructional purposes; and
(ii)
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; or
(b)
was acquired in the basis period for the year of assessment 2013 or any preceding year of assessment, and is registered outside Singapore and used exclusively outside Singapore.
(5) No allowance under this section or section 19A may be made in respect of 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 except —(a)
a taxi, and then only to the following:(i)
a person that is not an individual and that holds a street‑hail service licence granted (on renewal or otherwise) or deemed granted under the Point‑to‑Point Passenger Transport Industry Act 2019 (called in this paragraph a street‑hail service licence);
(ii)
an individual who is a partner of the partnership that acquired the taxi and holds a street‑hail service licence;
(iii)
an individual who —(A)
acquired the taxi as a replacement or a subsequent replacement of a taxi acquired by him or her any time before 1 January 1975; and
(B)
holds a vocational licence granted under section 110 of the Road Traffic Act 1961 authorising him or her to drive a taxi;
(b)
a motor car registered outside Singapore and used exclusively outside Singapore;
(c)
a private hire car acquired by a person who carries on the business of hiring out cars and which is used by the person principally for hiring;
(d)
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;
(e)
a motor car registered on or after 1 April 1998 which is used principally for instructional purposes and 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 the Road Traffic Act 1961; and
(f)
a chauffeured private hire car as defined in section 14ZA(8) —(i)
that is acquired in the basis period for the year of assessment 2021 or a subsequent year of assessment by a person that carries on the business of providing chauffeur services, and used by the person principally for such business; or
(ii)
that was initially acquired by a person carrying on the business of hiring out cars and used by the person principally for such business, and is then used in the basis period for the year of assessment 2021 or a subsequent year of assessment by the same person principally for the business of providing chauffeur services carried on by the person.[45/2018; 20/2019; 41/2020]
(5A) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade, profession or business, for which purpose the machinery or plant is provided, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment must be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(5B) For the purposes of subsection (2), where, at the end of the basis period for the year of assessment 2009, a person has in use any of the following motor vehicles within the meaning of the Road Traffic Act 1961:(a)
a motor car;
(b)
a motor cycle;
(c)
a goods vehicle the maximum weight of which laden does not exceed 3,000 kilograms,
in respect of which allowances have been made under this section, there is to be made to the person, on due claim for that or any subsequent year of assessment and in lieu of any further annual allowance under this section, an annual allowance of 331/3% in respect of the capital expenditure remaining unallowed under this section in respect of the motor vehicle as at the beginning of the basis period for the year of assessment 2009.
(6) In subsection (1), “prescribed” means prescribed by an order made by the Minister.
(7) Every order made under this section must be presented to Parliament as soon as possible after publication in the Gazette.
(8) Subject to subsection (9), this section applies, with the necessary modifications, to a person carrying on any trade or business who incurs during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2028 (both years inclusive) capital expenditure on the provision of machinery or plant for any research and development undertaken by the person directly in Singapore or by a research and development organisation on the person’s behalf in Singapore, even though the machinery or plant is not for the purposes of that trade or business.[37/2014]
[Act 30 of 2023 wef 30/10/2023]
(9) Section 14C(4) and (5) applies in relation to the allowance for the capital expenditure referred to in subsection (8) 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 (after deducting any amount in respect of which an election for a cash payout has been made under section 37G) in section 14C(4) is a reference to the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37G;
(b)
a reference to the specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula
where A
is the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37G;
B
is the rate of tax specified in section 43(1)(a); and
C
is —
(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
(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; and
(c)
a reference to “unabsorbed losses” is a reference to “unabsorbed allowances”.
(10) This section applies to a person carrying on any trade or business who appropriates any trading stock of that trade or business for use as machinery or plant for the purpose of any of the person’s trades, professions or businesses in circumstances that give rise to a reasonable inference that the appropriation is permanent, subject to the following modifications:(a)
a reference to the capital expenditure incurred on the provision of machinery or plant is to the open market value of the trading stock as at the date of the appropriation;
(b)
the capital expenditure is treated as having been incurred on the date of the appropriation of the trading stock.[27/2021]
(11) In subsection (10), “open market value” and “trading stock” have the meanings given by section 10J(9).[27/2021]
—(1) Where a person carrying on a trade, profession or business incurs capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, there is to be made to the person, on due claim for the year of assessment in the basis period for which the expenditure is incurred an allowance, to be known as an “initial allowance”, equal to one‑fifth of that expenditure or such other allowance as may be prescribed either generally or for any person or class of persons in respect of any machinery or plant or class of machinery or plant.
(1A) For the purposes of subsection (1), in the case of any trade, profession or business —(a)
where 2 basis periods overlap, the period common to both is deemed to fall in the first basis period only;
(b)
where there is an interval between the end of the basis period for a year of assessment and the commencement of a basis period for the next succeeding year of assessment, then, unless the second‑mentioned year of assessment is the year of the permanent discontinuance of the trade, the interval is deemed to be part of the second basis period; and
(c)
where there is an interval between the end of the basis period for the year of assessment preceding that in which the trade is permanently discontinued and the commencement of the basis period for the year in which it is permanently discontinued, the interval is deemed to form part of the first basis period.
(1B) Any capital expenditure incurred for the purposes of a trade by a person about to carry on that trade is treated for the purposes of subsection (1) as if it had been incurred by that person on the first day on which that person does carry on that trade.
(2) Where at the end of the basis period for any year of assessment, a person has in use machinery or plant for the purpose of the person’s trade, profession or business, there is to be made to the person, on due claim, in respect of that year of assessment an allowance for depreciation by wear and tear of those assets (to be known as an annual allowance) which is to be calculated in accordance with the following provisions:(a)
subject to subsection (2AA), the annual allowance in respect of any machinery or plant acquired by a person either in the basis period for a year of assessment before the year of assessment 2023 or under a hire‑purchase agreement signed in the basis period for a year of assessment before the year of assessment 2023 is —(i)
in the case of an asset, other than an asset acquired under a hire‑purchase agreement — the amount ascertained by dividing the excess of the original cost of the asset over any initial allowance granted under subsection (1) by the number of years of working life of the asset as specified in the Sixth Schedule unless otherwise provided under paragraph (b) or (ba);
(ii)
in the case of an asset acquired under a hire‑purchase agreement — the amount ascertained by dividing the excess of the original cost of the asset over the total amount of initial allowance allowable in respect of the asset under subsection (1) by the number of years of working life of the asset as specified in the Sixth Schedule unless otherwise provided under paragraph (b) or (ba);
(b)
for the purposes of paragraph (a), the number of years of working life of any aircraft acquired between 1 March 1995 and 29 February 2012 (both dates inclusive) is, if it had been extended under section 19(2)(b) in force immediately before 1 March 2012, the number of years of its working life as specified in the Sixth Schedule together with the extension;
(ba)
for the purposes of paragraph (a), the total number of years of working life of an aircraft acquired on or after 1 March 2012 but before the basis period for the year of assessment 2023 by an approved aircraft leasing company mentioned in section 43N is, if the company has made an election under subsection (2A) —(i)
the sum of —(A)
the number of years of working life of an aircraft as specified in the Sixth Schedule; and
(B)
the period of extension specified by the company under subsection (2A); or
(ii)
20 years,
whichever is less;
(bb)
the annual allowance in respect of any machinery or plant acquired by a person in the basis period for the year of assessment 2023 or a subsequent year of assessment or under a hire‑purchase agreement signed in the basis period for the year of assessment 2023 or a subsequent year of assessment is —(i)
in the case of an asset that is not acquired under a hire‑purchase agreement — the amount ascertained by dividing the excess of the original cost of the asset over any initial allowance granted under subsection (1) by any of the following number of years as elected by the person:(A)
where the number of years of working life of the asset as specified in the Sixth Schedule is less than 16 years and unless otherwise provided under paragraph (bd) — 6 or 12 years;
(B)
where the number of years of working life of the asset as specified in the Sixth Schedule is 16 years — 6, 12 or 16 years; or
(ii)
in the case of an asset acquired under a hire‑purchase agreement — the amount ascertained by dividing the excess of the original cost of the asset over the total amount of the initial amount allowable in respect of the asset under subsection (1) by any of the following number of years as elected by the person:(A)
where the number of years of working life of the asset as specified in the Sixth Schedule is less than 16 years and unless otherwise provided under paragraph (bd) — 6 or 12 years;
(B)
where the number of years of working life of the asset as specified in the Sixth Schedule is 16 years — 6, 12 or 16 years;
(bc)
the election under paragraph (bb) must be made to the Comptroller at the time of lodgment of the person’s return of income for the year of assessment relating to the basis period in which the asset was acquired or the hire‑purchase agreement was signed or within such further time as the Comptroller may allow, and such election is irrevocable;
(bd)
for the purposes of paragraph (bb), the total number of years of working life of an aircraft acquired in the basis period for the year of assessment 2023 or a subsequent year of assessment by an approved aircraft leasing company mentioned in section 43N is, if the company has made an election under subsection (2A) —(i)
the sum of —(A)
either 6 or 12 years as elected by the company under paragraph (bb); and
(B)
the period of extension specified by the company under subsection (2A); or
(ii)
20 years,
whichever is less;
(c)
the annual allowance in respect of any asset for any year of assessment must not exceed the amount of the capital expenditure of the asset still unallowed under this section as at the beginning of the basis period for that year of assessment;
(d)
for the purposes of the Sixth Schedule, where any question arises as to the classification of an asset under any item of that Schedule, the asset is treated as falling under such item as the Comptroller considers proper.[41/2020]
(2AA) Where —(a)
a machinery or plant is acquired by a person either in the basis period for a year of assessment before the year of assessment 2023 or under a hire‑purchase agreement signed in the basis period for a year of assessment before the year of assessment 2023; and
(b)
no due claim for an allowance in respect of that asset has been made under subsection (1) or (2)(a) for any year of assessment before the year of assessment 2023,
then, if the person makes a claim for an annual allowance in respect of that asset for the year of assessment 2023 or a subsequent year of assessment, the annual allowance in respect of that asset is ascertained by dividing the original cost of that asset by the number of years of working life of that asset, as elected by the person under subsection (2AB).
[41/2020]
(2AB) For the purposes of subsection (2AA), the person may elect for the number of years of working life of the asset to be —(a)
if the number of years of its working life as specified in the Sixth Schedule is less than 16 years — 6 or 12 years; or
(b)
if the number of years of its working life as specified in the Sixth Schedule is 16 years — 6, 12 or 16 years.[41/2020]
(2AC) An election under subsection (2AB) must be made by the person to the Comptroller at the time of lodgment of the person’s return of income for the year of assessment 2023 or within such further time as the Comptroller may allow, and such election is irrevocable.[41/2020]
(2A) An approved aircraft leasing company which acquired any aircraft on or after 1 March 2012 may, at the time of lodgment of its return of income for the year of assessment relating to the basis period in which the aircraft was acquired, make an irrevocable election to the Comptroller for the number of years of the working life of the aircraft as specified in the Sixth Schedule or as elected by the person under subsection (2)(bb), to be extended by a period specified by the company.[41/2020]
(2B) [Deleted by Act 41 of 2020]
(3) Despite subsection (1) or (2) or section 19A(1), (1B) or (1E), in respect of a motor car to which this subsection applies —(a)
the initial allowance to be made under subsection (1) is to be calculated on an amount equal to the capital expenditure incurred in respect of that motor car or $35,000, whichever is less;
(b)
the annual allowance to be made under subsection (2) or section 19A(1), (1B) or (1E) is to be calculated on the basis that the original cost of that motor car is the capital expenditure incurred or $35,000, whichever is less; and
(c)
the aggregate of the initial and annual allowances to be made under this subsection for all relevant years of assessment must not exceed $35,000.[41/2020]
(4) Subsection (3) applies 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 —(a)
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 —(i)
used principally for instructional purposes; and
(ii)
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; or
(b)
was acquired in the basis period for the year of assessment 2013 or any preceding year of assessment, and is registered outside Singapore and used exclusively outside Singapore.
(5) No allowance under this section or section 19A may be made in respect of 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 except —(a)
a taxi, and then only to the following:(i)
a person that is not an individual and that holds a street‑hail service licence granted (on renewal or otherwise) or deemed granted under the Point‑to‑Point Passenger Transport Industry Act 2019 (called in this paragraph a street‑hail service licence);
(ii)
an individual who is a partner of the partnership that acquired the taxi and holds a street‑hail service licence;
(iii)
an individual who —(A)
acquired the taxi as a replacement or a subsequent replacement of a taxi acquired by him or her any time before 1 January 1975; and
(B)
holds a vocational licence granted under section 110 of the Road Traffic Act 1961 authorising him or her to drive a taxi;
(b)
a motor car registered outside Singapore and used exclusively outside Singapore;
(c)
a private hire car acquired by a person who carries on the business of hiring out cars and which is used by the person principally for hiring;
(d)
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;
(e)
a motor car registered on or after 1 April 1998 which is used principally for instructional purposes and 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 the Road Traffic Act 1961; and
(f)
a chauffeured private hire car as defined in section 14ZA(8) —(i)
that is acquired in the basis period for the year of assessment 2021 or a subsequent year of assessment by a person that carries on the business of providing chauffeur services, and used by the person principally for such business; or
(ii)
that was initially acquired by a person carrying on the business of hiring out cars and used by the person principally for such business, and is then used in the basis period for the year of assessment 2021 or a subsequent year of assessment by the same person principally for the business of providing chauffeur services carried on by the person.[45/2018; 20/2019; 41/2020]
(5A) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade, profession or business, for which purpose the machinery or plant is provided, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment must be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(5B) For the purposes of subsection (2), where, at the end of the basis period for the year of assessment 2009, a person has in use any of the following motor vehicles within the meaning of the Road Traffic Act 1961:(a)
a motor car;
(b)
a motor cycle;
(c)
a goods vehicle the maximum weight of which laden does not exceed 3,000 kilograms,
in respect of which allowances have been made under this section, there is to be made to the person, on due claim for that or any subsequent year of assessment and in lieu of any further annual allowance under this section, an annual allowance of 331/3% in respect of the capital expenditure remaining unallowed under this section in respect of the motor vehicle as at the beginning of the basis period for the year of assessment 2009.
(6) In subsection (1), “prescribed” means prescribed by an order made by the Minister.
(7) Every order made under this section must be presented to Parliament as soon as possible after publication in the Gazette.
(8) Subject to subsection (9), this section applies, with the necessary modifications, to a person carrying on any trade or business who incurs during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2028 (both years inclusive) capital expenditure on the provision of machinery or plant for any research and development undertaken by the person directly in Singapore or by a research and development organisation on the person’s behalf in Singapore, even though the machinery or plant is not for the purposes of that trade or business.[37/2014]
[Act 30 of 2023 wef 30/10/2023]
(9) Section 14C(4) and (5) applies in relation to the allowance for the capital expenditure referred to in subsection (8) 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 (after deducting any amount in respect of which an election for a cash payout has been made under section 37G) in section 14C(4) is a reference to the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37G;
(b)
a reference to the specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula
where A
is the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37G;
B
is the rate of tax specified in section 43(1)(a); and
C
is —
(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
(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; and
(c)
a reference to “unabsorbed losses” is a reference to “unabsorbed allowances”.
(10) This section applies to a person carrying on any trade or business who appropriates any trading stock of that trade or business for use as machinery or plant for the purpose of any of the person’s trades, professions or businesses in circumstances that give rise to a reasonable inference that the appropriation is permanent, subject to the following modifications:(a)
a reference to the capital expenditure incurred on the provision of machinery or plant is to the open market value of the trading stock as at the date of the appropriation;
(b)
the capital expenditure is treated as having been incurred on the date of the appropriation of the trading stock.[27/2021]
(11) In subsection (10), “open market value” and “trading stock” have the meanings given by section 10J(9).[27/2021]
Allowances of 3 years or 2 years write‑off for machinery and plant, and 100% write‑off for computer, prescribed automation equipment and robot, etc.
19A.—(1) Despite section 19, where a person carrying on a trade, profession or business incurs capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, there is to be made to the person, on due claim for any year of assessment and in lieu of the allowances provided by section 19, an annual allowance of 331/3% in respect of the capital expenditure incurred.(1A) Any annual allowance under this section in respect of any asset for any year of assessment must not exceed the amount of the capital expenditure of the asset remaining unallowed as at the beginning of the basis period for that year of assessment.
(1B) Despite subsection (1), where a person carrying on a trade, profession or business incurs, during the basis period relating to the year of assessment 2010 or 2011, capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, the person may, in lieu of the allowances provided by subsection (1) or section 19, elect to be entitled for any 2 years of assessment to the following:(a)
for the year of assessment relating to the basis period in which the capital expenditure was incurred or any subsequent year of assessment (called in this subsection the first year), an allowance of 75% in respect of the capital expenditure incurred;
(b)
for any year of assessment subsequent to the first year, an allowance of 25% in respect of the capital expenditure incurred.
(1C) Where a person carrying on a trade, profession or business enters into a hire‑purchase agreement during the basis period relating to the year of assessment 2010 or 2011 in respect of machinery or plant provided for the purposes of that trade, profession or business, subsection (1B) applies to each instalment paid by that person under that hire‑purchase agreement, whether the instalment is paid during or after the basis period relating to the year of assessment 2010 or 2011.
(1D) An election made by a person under subsection (1B) is irrevocable.
(1E) Despite subsection (1), where a person carrying on a trade, profession or business incurs, during the basis period for the year of assessment 2021, 2022 or 2024, capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, the person may, in lieu of the allowances under subsection (1) or section 19, elect to be entitled to the following:(a)
for the year of assessment relating to the basis period in which the capital expenditure is incurred — an annual allowance of 75% in respect of the capital expenditure incurred;
(b)
for the year of assessment immediately following the year of assessment mentioned in paragraph (a) — an annual allowance of 25% in respect of the capital expenditure incurred.[41/2020; 27/2021]
[Act 30 of 2023 wef 30/10/2023]
(1F) The election in subsection (1E) must be made at the time of lodgment of the person’s return of income for the year of assessment relating to the basis period in which the capital expenditure is incurred, and such election is irrevocable.[41/2020; 27/2021]
(1G) Where a person carrying on a trade, profession or business enters into a hire‑purchase agreement during the basis period for the year of assessment 2021, 2022 or 2024 in respect of machinery or plant provided for the purposes of that trade, profession or business, subsection (1E) applies, with the necessary modifications, to each instalment paid by the person under the hire‑purchase agreement in a basis period for a year of assessment (whether the firstmentioned year of assessment or a subsequent year of assessment), as it applies to capital expenditure incurred in the basis period for the year of assessment 2021, 2022 or 2024, as the case may be.[27/2021]
[Act 30 of 2023 wef 30/10/2023]
(2) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has installed a computer or other prescribed automation equipment for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that computer or automation equipment.[41/2020]
(2A) Where a person proves to the Comptroller’s satisfaction that the person has incurred capital expenditure during the basis period for the year of assessment 2011 or the year of assessment 2012 on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business carried on by the person, there is allowed on due claim, in respect of all of the person’s trades, professions and businesses, and in addition to the allowance under section 19 or subsection (1), (1B) or (2) (as the case may be), an allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2011, the lower of the following:(i)
such capital 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 capital 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).
(2B) Subject to section 37J, where a person proves to the Comptroller’s satisfaction that the person has incurred capital expenditure during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015 on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business carried on by the person, there is allowed on due claim, in respect of all of the person’s trades, professions and businesses and in addition to the allowance under section 19 or subsection (1), (1B) or (2) (as the case may be), an allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2013, the lower of the following:(i)
such capital 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 capital 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 capital 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]
(2BAA) Subject to section 37J, where a person proves to the Comptroller’s satisfaction that the person has incurred capital expenditure during the basis period for the year of assessment 2016, 2017 or 2018 on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business carried on by the person, there is allowed on due claim, in respect of all of the person’s trades, professions and businesses, and in addition to the allowance under section 19 or subsection (1), (1B) or (2) (as the case may be), an allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2016, the lower of the following:(i)
such capital 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 capital 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 capital 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]
(2BA) In subsection (2A), the amount under paragraph (a)(ii) is substituted with “$400,000” if the person does not carry on any trade, profession 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, profession or business during the basis period for the year of assessment 2011.
(2BB) In subsection (2B) —(a)
if the person does not carry on any trade, profession 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, profession 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 (2B)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2B)(a)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2013, and no deduction may be made from the substituted amount in subsection (2B)(c)(ii) of the lower of the amounts specified in subsection (2B)(b)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2014.
(2BC) In subsection (2BAA) —(a)
if the person does not carry on any trade, profession 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, profession 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 (2BAA)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2BAA)(a)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2016, and no deduction may be made from the substituted amount in subsection (2BAA)(c)(ii) of the lower of the amounts specified in subsection (2BAA)(b)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2017.[37/2014]
(2C) Where a person proves to the Comptroller’s satisfaction that the person has during or after the basis period for the year of assessment 2011 incurred capital expenditure by way of making one or more instalment payments under a hire‑purchase agreement or agreements to acquire one or more PIC automation equipment for the purposes of a trade, business or profession carried on by the person, that is or are signed during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), and the person makes a claim for an allowance under subsection (2A), (2B) or (2BAA), those subsections apply with the following modifications:(a)
a reference to the capital expenditure incurred on the provision of one or more PIC automation equipment during the basis period for a year of assessment, being the basis period in which the agreement or agreements is or are signed, is a reference to the aggregate of —(i)
the price or prices (including capital expenditure incurred on alterations to an existing building incidental to the installation of the equipment but excluding any finance charges) at which the person might have purchased the equipment or all the equipment that is the subject of the hire‑purchase agreement or agreements for cash at the time of the signing of the agreement or agreements; and
(ii)
the capital expenditure incurred on the provision of any other PIC automation equipment for the purposes of the person’s trade, profession or business during that basis period;
(b)
a reference to the capital expenditure incurred on the provision of one or more PIC automation equipment during the basis period for a year of assessment excludes the amount of any instalment paid or deposit made by the person under that agreement or any of those agreements during the basis period;
(c)
the allowance referred to in subsection (2A), (2B) or (2BAA) in respect of each equipment that is the subject of a hire‑purchase agreement must be made to the person for the year of assessment in respect of each basis period during which the person paid an instalment or instalments or made a deposit or deposits under the agreement, in the proportion which the total amount of the instalment or instalments paid, and deposit or deposits made, during that basis period for that equipment bears to the total amount of all instalments and deposits under the agreement for that equipment.[37/2014]
(2D) For the purposes of subsections (2A), (2B) and (2BAA), where an individual carrying on a trade, profession or business through 2 or more firms (excluding partnerships) has incurred capital 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) on the provision of one or more PIC automation equipment in respect of such firms for the purposes of his or her trade, profession or business, the allowance that may be allowed to him or her for that expenditure in respect of all of his or her trades, professions and businesses must not exceed the amount computed in accordance with subsection (2A), (2B) or (2BAA) (as the case may be) for that year of assessment.[37/2014]
(2E) For the purposes of subsections (2A), (2B) and (2BAA), where a partnership carrying on a trade, profession or business has incurred capital 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) on the provision of one or more PIC automation equipment for the purposes of its trade, profession or business, the aggregate of the allowances that may be allowed to all the partners of the partnership for that expenditure in respect of all of the trades, professions and businesses of the partnership must not exceed the amount computed in accordance with subsection (2A), (2B) or (2BAA) (as the case may be) for that year of assessment.[37/2014]
(2F) Despite subsections (2A), (2B) and (2BAA), where a person has incurred capital expenditure on the provision of any PIC automation equipment for the purpose of leasing such equipment, no allowance under those subsections may be made to the person in respect of such expenditure.[37/2014]
(2FA) Despite subsections (2A), (2B) and (2BAA), where the PIC automation equipment in question is not prescribed automation equipment under subsection (2), then the allowances claimed under subsections (2A), (2B) and (2BAA) must be written down in the following manner:(a)
where the person claiming the allowances elects to claim allowances in respect of such equipment under section 19 —(i)
one‑fifth of the allowances under subsections (2A), (2B) and (2BAA) must be allowed for the year of assessment for the basis period during which the expenditure is incurred; and
(ii)
the balance of the allowances under subsections (2A), (2B) and (2BAA) must be written down over the number of years of working life of the equipment as specified in the Sixth Schedule or as elected by the person under section 19(2AB);
(b)
where the person claiming the allowances elects to claim allowances in respect of such equipment under subsection (1) or (1B), the allowances under subsections (2A), (2B) and (2BAA) must be written down over 3 years in the case of subsection (1), or over 2 years in the case of subsection (1B), in the same proportions as those in which the allowances under subsection (1) or (1B) (as the case may be) may be made to the person over that period of years.[37/2014; 41/2020]
(2FB) To avoid doubt, subsection (2FA) does not apply to a website provided for the purposes of a trade, profession or business.[37/2014]
(2G) Despite subsections (2A), (2B) and (2BAA) —(a)
where a person who has incurred capital expenditure on the provision of any PIC automation equipment (being also a prescribed automation equipment under subsection (2)) elects to claim allowances in respect of such equipment under section 19 —(i)
one‑fifth of the allowances claimed under subsections (2A), (2B) and (2BAA) must be allowed for the year of assessment for the basis period during which the expenditure is incurred; and
(ii)
the balance of the allowances claimed under subsections (2A), (2B) and (2BAA) must be written down over the number of years of working life of the equipment as specified in the Sixth Schedule or as elected by the person under section 19(2AB);
(aa)
where a person who has incurred capital expenditure on the provision of any PIC automation equipment (being also a prescribed automation equipment under subsection (2)) elects to claim allowances in respect of such equipment under subsection (1) or (1B), the allowances claimed under subsections (2A), (2B) and (2BAA) must be written down over 3 years in the case of subsection (1), or over 2 years in the case of subsection (1B), in the same proportions as those in which the allowances under subsection (1) or (1B) (as the case may be) may be made to the person over that period of years; and
(b)
if the person referred to in paragraph (a) or (aa) sells, transfers or assigns the PIC automation equipment after one year from the provision of such equipment, any allowance in respect of such equipment under subsections (2A), (2B) and (2BAA) remaining unallowed at the time of the sale, transfer or assignment must be allowed to the person for the year of assessment relating to the basis period in which the sale, transfer or assignment occurs.[37/2014; 41/2020]
(2GA) The allowances referred to in subsection (2FA)(a)(i) or (b) or (2G)(a)(i) or (aa) (as the case may be), in respect of any equipment that is the subject of a hire‑purchase agreement, must be made to the person for the year of assessment in respect of each basis period during which the person paid an instalment or instalments or made a deposit or deposits under the agreement, in the proportion which the total amount of the instalment or instalments paid, and deposit or deposits made, during that basis period for the equipment bears to the total amount of all instalments and deposits under the agreement for that equipment.
(2H) Where any allowance has been made to any person under subsection (2A), (2B) or (2BAA) in respect of any PIC automation equipment and the person sells, transfers, assigns or leases the PIC automation equipment within the period of one year from the provision of such equipment —(a)
no allowance in respect of such equipment may be made to that person under subsections (2A), (2B) and (2BAA) for the year of assessment relating to the basis period in which the sale, transfer, assignment or lease occurs and for any subsequent year of assessment; and
(b)
any allowance made under subsection (2A), (2B) or (2BAA) must be brought to charge as if the allowances were not made, and is deemed as income for the year of assessment relating to the basis period in which the sale, transfer, assignment or lease occurs.[37/2014]
(2HA) The Minister or such person as the Minister appoints may waive the application of subsection (2H)(b) in the following circumstances:(a)
the capital expenditure incurred on the provision of other PIC automation equipment acquired in the basis period in which the equipment sold, transferred, assigned or leased was acquired, is more than or equal to the amount that applies to the year of assessment to which the basis period relates; or
(b)
the Minister or person appointed by the Minister is satisfied that there is a bona fide commercial reason for the sale, transfer, assignment or lease.
(2HB) In subsection (2HA), the amount that applies to a year of assessment is the amount set out in —(a)
for the year of assessment 2011, subsection (2A)(a)(ii);
(b)
for the year of assessment 2012, subsection (2A)(b)(ii);
(c)
for the year of assessment 2013, subsection (2B)(a)(ii);
(d)
for the year of assessment 2014, subsection (2B)(b)(ii);
(e)
for the year of assessment 2015, subsection (2B)(c)(ii);
(f)
for the year of assessment 2016, subsection (2BAA)(a)(ii);
(g)
for the year of assessment 2017, subsection (2BAA)(b)(ii);
(h)
for the year of assessment 2018, subsection (2BAA)(c)(ii),
as modified by subsection (2BA), (2BB) or (2BC), as the case may be.
[37/2014]
(2I) No allowance under subsections (2A), (2B) and (2BAA) may be made to any person in respect of any amount of capital expenditure incurred on the provision of PIC automation equipment for which an investment allowance has been claimed under Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967.[37/2014]
(2IA) [Deleted by Act 39 of 2023 wef 29/12/2023]
(2J) No allowance under subsections (2A), (2B) and (2BAA) may be made to any person in respect of any PIC automation equipment for which an allowance under this section or section 19 has been previously made to that person.[37/2014]
(2K) No allowance under subsections (2A), (2B) and (2BAA) may be made to any person in respect of any instalment paid by the person under any hire‑purchase agreement to acquire any PIC automation equipment that is signed before the basis period for the year of assessment 2011.[37/2014]
(3) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has, for the purposes of a trade, business or profession carried on by the person, installed a generator in any office or factory for the supply of electrical power to that office or factory in the event of a disruption in the normal supply of electrical power, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that generator.[41/2020]
(4) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has installed a robot for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that robot.[41/2020]
(5) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has installed during the period between 1 January 1996 and 16 February 2021 (both dates inclusive) any efficient pollution control equipment or device for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the efficient pollution control equipment or device.[41/2020; 27/2021]
(6) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has installed at any time from 1 January 1996 to 31 December 2017 (both dates inclusive) any certified energy‑efficient equipment as a replacement for any other equipment, or any certified energy‑saving equipment, for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1) or (1B) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the certified energy‑efficient equipment or certified energy‑saving equipment.[39/2017]
(7) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has, on or after 1 January 1998, installed any new —(a)
certified low‑decibel machine, equipment or system;
(b)
certified effective noise control device which is a distinct entity or an accessory of any new or existing machine, equipment or system; or
(c)
certified effective engineering noise control measure for any existing machine, equipment or process,
for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the certified machine, equipment or system, or the certified effective noise control device or measure.
[41/2020]
(8) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has, on or after 1 January 1998, installed any new —(a)
certified machine, equipment or system which reduces or eliminates exposure to chemical risk;
(b)
certified effective chemical hazard control device which is a distinct entity or an accessory of any new or existing machine, equipment or process; or
(c)
certified effective chemical hazard control measure for any existing machine, equipment or process,
for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the certified machine, equipment or system, or the certified effective chemical hazard control device or measure.
[41/2020]
(9) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has, for the purposes of a trade, business or profession carried on by the person, registered any new vehicle as a replacement for an existing vehicle which used diesel oil as fuel and which was registered before 1 January 1991 and deregistered on or after 27 February 1999, the person is, in lieu of the allowances provided by subsection (1) or (1B) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that new vehicle.
(9A) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has, for the purposes of a trade, business or profession carried on by the person, registered during the period from 15 February 2007 to 14 February 2012 (both dates inclusive) any new vehicle which uses diesel oil as fuel, as a replacement for an existing vehicle which used diesel oil as fuel and which was registered on or after 1 January 1991 but before 1 October 2006, the person is, in lieu of the allowances provided by subsection (1) or (1B) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that new vehicle.[37/2014]
(10) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has incurred capital expenditure on the provision of a website for the purposes of a trade, business or profession carried on by the person, the person is entitled to an allowance of 100% in respect of the capital expenditure incurred on the provision of that website, and for this purpose, a website is deemed to be machinery or plant.
(10A) Despite section 19 and subject to subsection (10B), where a person proves to the Comptroller’s satisfaction that the person has incurred capital expenditure not exceeding $5,000 on the provision of any item of machinery or plant for the purposes of a trade, profession or business carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of —(a)
100% in respect of that capital expenditure; or
(b)
where allowances have been made under subsection (1), (1B) or (1E) or section 19 for any previous year of assessment under subsection (10B), the amount of that capital expenditure still unallowed.[41/2020]
(10B) The aggregate amount of allowances claimed by any person under subsection (10A) for any year of assessment must not exceed $30,000; and allowances may be made under subsection (1), (1B) or (1E) or section 19 in respect of any capital expenditure still unallowed.[41/2020]
(10C) No allowance may be made under subsection (10A) in respect of any item of machinery or plant which is acquired under a hire‑purchase agreement and the original cost of that item of machinery or plant exceeds $5,000.
(11) Any claim by a person for allowances in respect of any machinery or plant under this section for any year of assessment is not to be disallowed by reason only that the person has not in use the machinery or plant at the end of the basis period for that year of assessment.
(12) Any claim for allowances under this section must be made at the time of lodgment of the return of income for the relevant years of assessment or within such further time as the Comptroller may allow.
(13) Where any allowance has been claimed and allowed under this section for any year of assessment, no allowances may be made in any subsequent year of assessment under section 19 in respect of such expenditure.
(13A) Where the tax relief period of a person to whom a certificate has been issued under Part 2 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 expires in any basis period ending on or after 1 January 1992 and the person has —(a)
at the end of the basis period immediately following that basis period, in use machinery or plant in respect of which capital allowances have been made under section 19; and
(b)
before the end of the year of assessment which relates to the basis period referred to in paragraph (a), so elected,
there is to be made to the person for a period of 3 years an annual allowance of 331/3% in respect of the capital expenditure remaining unallowed under section 19 in respect of the machinery or plant as at the end of that basis period.
(13B) [Deleted by Act 32 of 2019]
(14) Subject to subsections (10A) and (13A), where any allowance has been claimed and allowed under section 19 in respect of any expenditure, no allowances may, except with the approval of the Minister or the Comptroller and subject to such conditions as the Minister or Comptroller may impose, be made in any subsequent year of assessment under this section in respect of the amount of that expenditure remaining unallowed under section 19.[32/2019]
(14A) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade, profession or business, for which purpose the machinery or plant is provided, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment must be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(14B) Subject to subsection (14C), this section applies, with the necessary modifications, to a person carrying on any trade or business who incurs during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2028 (both years inclusive) capital expenditure on the provision of machinery or plant for any research and development undertaken by the person directly in Singapore or by a research and development organisation on the person’s behalf in Singapore, even though the machinery or plant is not for the purpose of that trade or business.[37/2014]
[Act 30 of 2023 wef 30/10/2023]
(14C) Section 14C(4) and (5) applies in relation to the allowance for the capital expenditure referred to in subsection (14B) 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 (after deducting any amount in respect of which an election for a cash payout has been made under section 37G) in section 14C(4) is a reference to the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37G;
(b)
a reference to the specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula
where A
is the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37G;
B
is the rate of tax specified in section 43(1)(a); and
C
is —
(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
(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; and
(c)
a reference to “unabsorbed losses” is a reference to “unabsorbed allowances”.
(14D) This section applies to a person carrying on any trade or business who appropriates any trading stock of that trade or business for use as machinery or plant for the purpose of any of the person’s trades, professions or businesses in circumstances that give rise to a reasonable inference that the appropriation is permanent, subject to the following modifications:(a)
a reference to the capital expenditure incurred on the provision of machinery or plant is to the open market value of the trading stock on the date of the appropriation;
(b)
the capital expenditure is treated as having been incurred on the date of the appropriation of the trading stock.[27/2021]
(14E) In subsection (14D), “open market value” and “trading stock” have the meanings given by section 10J(9).[27/2021]
(15) In this section —“automation equipment” means any machinery or plant designed for the automation of functions or services;
“certificate of entitlement” means a permit issued or deemed to be issued under section 10A of the Road Traffic Act 1961;
“certified effective chemical hazard control device” means —(a)
any local exhaust ventilation system;
(b)
any fugitive emission control equipment or system; or
(c)
any dilution ventilation system,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified effective chemical hazard control measure” means —(a)
any enclosed or automated system; or
(b)
any modification to machine, equipment or process,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified effective engineering noise control measure” means —(a)
any detachable personnel acoustic enclosure;
(b)
any acoustic barrier or shield;
(c)
any acoustic absorption device; or
(d)
any modification to machine, equipment or process,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified effective noise control device” means —(a)
any acoustic enclosure for machine, equipment or process;
(b)
any acoustic silencer or muffler;
(c)
any vibration absorption, isolation or damping device; or
(d)
any active noise control device,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified energy‑efficient equipment” means —(a)
any air‑conditioning system;
(b)
any boiler;
(c)
any water pumping system;
(d)
any washing or dry‑cleaning machine system;
(e)
any refrigeration system;
(f)
any lift or escalator; and
(g)
any instant hot water system,
which has been certified by a professional engineer registered under the Professional Engineers Act 1991 to be more energy‑efficient than the equipment which it replaces;
“certified energy‑saving equipment” means —(a)
any solar heating or cooling system;
(b)
any solar energy collection system;
(c)
any heat recovery system;
(d)
any power factor controller;
(e)
any high efficiency electric motor;
(f)
any variable speed drive motor control system;
(g)
any high frequency lighting system;
(h)
any computerised energy management system; and
(i)
any other energy‑saving equipment or device,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to be an energy‑saving equipment;
“certified low‑decibel machine, equipment or system” means —(a)
any concrete crusher or splitter;
(b)
any plastic granulator or crusher;
(c)
any automatic sawing machine;
(d)
any metal press or stamping machine;
(e)
any machine with active noise control feature; or
(f)
any other machine, equipment or system,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified machine, equipment or system which reduces or eliminates exposure to chemical risk” means —(a)
any water‑based degreasing machine or system;
(b)
any automated bagging or packing machine or system;
(c)
any automated degreasing machine or system; or
(d)
any other machine, equipment or system,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“computer” means any computer used for automatic data processing and includes any part thereof;
“efficient pollution control equipment or device” means any equipment or device for the purposes of preventing, controlling or reducing air pollution or water pollution which satisfies the prescribed criteria;
“existing vehicle” means any goods vehicle or bus using diesel oil as fuel which —(a)
is not a vehicle registered under the RU index marks;
(b)
is deregistered not later than one year before the last day on which a renewal of registration licence can be issued under the Road Traffic Act 1961 in respect of the vehicle; and
(c)
has, unless the vehicle has been exempted from obtaining a certificate of entitlement, at the date of deregistration of the vehicle —(i)
at least one year remaining in its certificate of entitlement; or
(ii)
a certificate of entitlement which can be renewed after its expiry;
“goods vehicle” means any motor vehicle constructed or adapted for use for the carriage of goods;
“new vehicle” means any new goods vehicle or new bus which —(a)
is registered within one month before, or within 6 months after, the deregistration of the existing vehicle which uses diesel oil as fuel; and
(b)
bears an index mark which is the same as the index mark of such existing vehicle, and for this purpose, where the new goods vehicle and such existing vehicle have a maximum laden weight exceeding 3.0 metric tons but not exceeding 3.5 metric tons, the new goods vehicle is deemed to bear an index mark which is the same as that of such existing vehicle;
“Productivity and Innovation Credit Scheme automation equipment” or “PIC automation equipment”, in relation to any person, means —(a)
any automation equipment that is prescribed by the Minister for the purposes of subsections (2A), (2B) and (2BAA) and section 14Q; or
(b)
any automation equipment which the Minister or a person appointed by the Minister has approved as PIC automation equipment for the firstmentioned person;
“website” means a collection of programmes, data and images which is accessible over the Internet or any network using a browser or any other form of access.[37/2014]
(16) In subsections (2A) to (2G) and (2I), a reference to capital expenditure incurred on 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.
(16A) For the purposes of subsections (2B), (2BAA), (2D) and (2E), each reference to capital expenditure incurred in the basis period for the year of assessment 2014 or a subsequent year of assessment, on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business includes a reference to any capital expenditure incurred on the provision of a website for the purposes of a trade, profession or business.[37/2014]
(16B) For the purposes of subsections (2F), (2H), (2HA), (2I) and (2J) —(a)
each reference to capital expenditure incurred on the provision of any PIC automation equipment includes a reference to capital expenditure incurred on the provision of a website; and
(b)
each reference to a PIC automation equipment includes a reference to a website.[37/2014]
[Act 39 of 2023 wef 29/12/2023]
(17) For the purposes of paragraph (b) of the definition of “PIC automation equipment”, the Minister or the person appointed by the Minister may only approve any automation equipment if the Minister or appointed person is satisfied that the equipment fulfils such criteria as may be prescribed by the Minister.
(18) Any rules made under paragraph (a) of the definition of “PIC automation equipment”, and any approval given under paragraph (b) of that definition, may be made to have effect for any year of assessment beginning with the year of assessment 2011.
—(1) Despite section 19, where a person carrying on a trade, profession or business incurs capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, there is to be made to the person, on due claim for any year of assessment and in lieu of the allowances provided by section 19, an annual allowance of 331/3% in respect of the capital expenditure incurred.
(1A) Any annual allowance under this section in respect of any asset for any year of assessment must not exceed the amount of the capital expenditure of the asset remaining unallowed as at the beginning of the basis period for that year of assessment.
(1B) Despite subsection (1), where a person carrying on a trade, profession or business incurs, during the basis period relating to the year of assessment 2010 or 2011, capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, the person may, in lieu of the allowances provided by subsection (1) or section 19, elect to be entitled for any 2 years of assessment to the following:(a)
for the year of assessment relating to the basis period in which the capital expenditure was incurred or any subsequent year of assessment (called in this subsection the first year), an allowance of 75% in respect of the capital expenditure incurred;
(b)
for any year of assessment subsequent to the first year, an allowance of 25% in respect of the capital expenditure incurred.
(1C) Where a person carrying on a trade, profession or business enters into a hire‑purchase agreement during the basis period relating to the year of assessment 2010 or 2011 in respect of machinery or plant provided for the purposes of that trade, profession or business, subsection (1B) applies to each instalment paid by that person under that hire‑purchase agreement, whether the instalment is paid during or after the basis period relating to the year of assessment 2010 or 2011.
(1D) An election made by a person under subsection (1B) is irrevocable.
(1E) Despite subsection (1), where a person carrying on a trade, profession or business incurs, during the basis period for the year of assessment 2021, 2022 or 2024, capital expenditure on the provision of machinery or plant for the purposes of that trade, profession or business, the person may, in lieu of the allowances under subsection (1) or section 19, elect to be entitled to the following:(a)
for the year of assessment relating to the basis period in which the capital expenditure is incurred — an annual allowance of 75% in respect of the capital expenditure incurred;
(b)
for the year of assessment immediately following the year of assessment mentioned in paragraph (a) — an annual allowance of 25% in respect of the capital expenditure incurred.[41/2020; 27/2021]
[Act 30 of 2023 wef 30/10/2023]
(1F) The election in subsection (1E) must be made at the time of lodgment of the person’s return of income for the year of assessment relating to the basis period in which the capital expenditure is incurred, and such election is irrevocable.[41/2020; 27/2021]
(1G) Where a person carrying on a trade, profession or business enters into a hire‑purchase agreement during the basis period for the year of assessment 2021, 2022 or 2024 in respect of machinery or plant provided for the purposes of that trade, profession or business, subsection (1E) applies, with the necessary modifications, to each instalment paid by the person under the hire‑purchase agreement in a basis period for a year of assessment (whether the firstmentioned year of assessment or a subsequent year of assessment), as it applies to capital expenditure incurred in the basis period for the year of assessment 2021, 2022 or 2024, as the case may be.[27/2021]
[Act 30 of 2023 wef 30/10/2023]
(2) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has installed a computer or other prescribed automation equipment for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that computer or automation equipment.[41/2020]
(2A) Where a person proves to the Comptroller’s satisfaction that the person has incurred capital expenditure during the basis period for the year of assessment 2011 or the year of assessment 2012 on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business carried on by the person, there is allowed on due claim, in respect of all of the person’s trades, professions and businesses, and in addition to the allowance under section 19 or subsection (1), (1B) or (2) (as the case may be), an allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2011, the lower of the following:(i)
such capital 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 capital 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).
(2B) Subject to section 37J, where a person proves to the Comptroller’s satisfaction that the person has incurred capital expenditure during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015 on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business carried on by the person, there is allowed on due claim, in respect of all of the person’s trades, professions and businesses and in addition to the allowance under section 19 or subsection (1), (1B) or (2) (as the case may be), an allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2013, the lower of the following:(i)
such capital 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 capital 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 capital 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]
(2BAA) Subject to section 37J, where a person proves to the Comptroller’s satisfaction that the person has incurred capital expenditure during the basis period for the year of assessment 2016, 2017 or 2018 on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business carried on by the person, there is allowed on due claim, in respect of all of the person’s trades, professions and businesses, and in addition to the allowance under section 19 or subsection (1), (1B) or (2) (as the case may be), an allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2016, the lower of the following:(i)
such capital 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 capital 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 capital 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]
(2BA) In subsection (2A), the amount under paragraph (a)(ii) is substituted with “$400,000” if the person does not carry on any trade, profession 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, profession or business during the basis period for the year of assessment 2011.
(2BB) In subsection (2B) —(a)
if the person does not carry on any trade, profession 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, profession 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 (2B)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2B)(a)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2013, and no deduction may be made from the substituted amount in subsection (2B)(c)(ii) of the lower of the amounts specified in subsection (2B)(b)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2014.
(2BC) In subsection (2BAA) —(a)
if the person does not carry on any trade, profession 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, profession 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 (2BAA)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2BAA)(a)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2016, and no deduction may be made from the substituted amount in subsection (2BAA)(c)(ii) of the lower of the amounts specified in subsection (2BAA)(b)(i) and (ii) if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2017.[37/2014]
(2C) Where a person proves to the Comptroller’s satisfaction that the person has during or after the basis period for the year of assessment 2011 incurred capital expenditure by way of making one or more instalment payments under a hire‑purchase agreement or agreements to acquire one or more PIC automation equipment for the purposes of a trade, business or profession carried on by the person, that is or are signed during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), and the person makes a claim for an allowance under subsection (2A), (2B) or (2BAA), those subsections apply with the following modifications:(a)
a reference to the capital expenditure incurred on the provision of one or more PIC automation equipment during the basis period for a year of assessment, being the basis period in which the agreement or agreements is or are signed, is a reference to the aggregate of —(i)
the price or prices (including capital expenditure incurred on alterations to an existing building incidental to the installation of the equipment but excluding any finance charges) at which the person might have purchased the equipment or all the equipment that is the subject of the hire‑purchase agreement or agreements for cash at the time of the signing of the agreement or agreements; and
(ii)
the capital expenditure incurred on the provision of any other PIC automation equipment for the purposes of the person’s trade, profession or business during that basis period;
(b)
a reference to the capital expenditure incurred on the provision of one or more PIC automation equipment during the basis period for a year of assessment excludes the amount of any instalment paid or deposit made by the person under that agreement or any of those agreements during the basis period;
(c)
the allowance referred to in subsection (2A), (2B) or (2BAA) in respect of each equipment that is the subject of a hire‑purchase agreement must be made to the person for the year of assessment in respect of each basis period during which the person paid an instalment or instalments or made a deposit or deposits under the agreement, in the proportion which the total amount of the instalment or instalments paid, and deposit or deposits made, during that basis period for that equipment bears to the total amount of all instalments and deposits under the agreement for that equipment.[37/2014]
(2D) For the purposes of subsections (2A), (2B) and (2BAA), where an individual carrying on a trade, profession or business through 2 or more firms (excluding partnerships) has incurred capital 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) on the provision of one or more PIC automation equipment in respect of such firms for the purposes of his or her trade, profession or business, the allowance that may be allowed to him or her for that expenditure in respect of all of his or her trades, professions and businesses must not exceed the amount computed in accordance with subsection (2A), (2B) or (2BAA) (as the case may be) for that year of assessment.[37/2014]
(2E) For the purposes of subsections (2A), (2B) and (2BAA), where a partnership carrying on a trade, profession or business has incurred capital 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) on the provision of one or more PIC automation equipment for the purposes of its trade, profession or business, the aggregate of the allowances that may be allowed to all the partners of the partnership for that expenditure in respect of all of the trades, professions and businesses of the partnership must not exceed the amount computed in accordance with subsection (2A), (2B) or (2BAA) (as the case may be) for that year of assessment.[37/2014]
(2F) Despite subsections (2A), (2B) and (2BAA), where a person has incurred capital expenditure on the provision of any PIC automation equipment for the purpose of leasing such equipment, no allowance under those subsections may be made to the person in respect of such expenditure.[37/2014]
(2FA) Despite subsections (2A), (2B) and (2BAA), where the PIC automation equipment in question is not prescribed automation equipment under subsection (2), then the allowances claimed under subsections (2A), (2B) and (2BAA) must be written down in the following manner:(a)
where the person claiming the allowances elects to claim allowances in respect of such equipment under section 19 —(i)
one‑fifth of the allowances under subsections (2A), (2B) and (2BAA) must be allowed for the year of assessment for the basis period during which the expenditure is incurred; and
(ii)
the balance of the allowances under subsections (2A), (2B) and (2BAA) must be written down over the number of years of working life of the equipment as specified in the Sixth Schedule or as elected by the person under section 19(2AB);
(b)
where the person claiming the allowances elects to claim allowances in respect of such equipment under subsection (1) or (1B), the allowances under subsections (2A), (2B) and (2BAA) must be written down over 3 years in the case of subsection (1), or over 2 years in the case of subsection (1B), in the same proportions as those in which the allowances under subsection (1) or (1B) (as the case may be) may be made to the person over that period of years.[37/2014; 41/2020]
(2FB) To avoid doubt, subsection (2FA) does not apply to a website provided for the purposes of a trade, profession or business.[37/2014]
(2G) Despite subsections (2A), (2B) and (2BAA) —(a)
where a person who has incurred capital expenditure on the provision of any PIC automation equipment (being also a prescribed automation equipment under subsection (2)) elects to claim allowances in respect of such equipment under section 19 —(i)
one‑fifth of the allowances claimed under subsections (2A), (2B) and (2BAA) must be allowed for the year of assessment for the basis period during which the expenditure is incurred; and
(ii)
the balance of the allowances claimed under subsections (2A), (2B) and (2BAA) must be written down over the number of years of working life of the equipment as specified in the Sixth Schedule or as elected by the person under section 19(2AB);
(aa)
where a person who has incurred capital expenditure on the provision of any PIC automation equipment (being also a prescribed automation equipment under subsection (2)) elects to claim allowances in respect of such equipment under subsection (1) or (1B), the allowances claimed under subsections (2A), (2B) and (2BAA) must be written down over 3 years in the case of subsection (1), or over 2 years in the case of subsection (1B), in the same proportions as those in which the allowances under subsection (1) or (1B) (as the case may be) may be made to the person over that period of years; and
(b)
if the person referred to in paragraph (a) or (aa) sells, transfers or assigns the PIC automation equipment after one year from the provision of such equipment, any allowance in respect of such equipment under subsections (2A), (2B) and (2BAA) remaining unallowed at the time of the sale, transfer or assignment must be allowed to the person for the year of assessment relating to the basis period in which the sale, transfer or assignment occurs.[37/2014; 41/2020]
(2GA) The allowances referred to in subsection (2FA)(a)(i) or (b) or (2G)(a)(i) or (aa) (as the case may be), in respect of any equipment that is the subject of a hire‑purchase agreement, must be made to the person for the year of assessment in respect of each basis period during which the person paid an instalment or instalments or made a deposit or deposits under the agreement, in the proportion which the total amount of the instalment or instalments paid, and deposit or deposits made, during that basis period for the equipment bears to the total amount of all instalments and deposits under the agreement for that equipment.
(2H) Where any allowance has been made to any person under subsection (2A), (2B) or (2BAA) in respect of any PIC automation equipment and the person sells, transfers, assigns or leases the PIC automation equipment within the period of one year from the provision of such equipment —(a)
no allowance in respect of such equipment may be made to that person under subsections (2A), (2B) and (2BAA) for the year of assessment relating to the basis period in which the sale, transfer, assignment or lease occurs and for any subsequent year of assessment; and
(b)
any allowance made under subsection (2A), (2B) or (2BAA) must be brought to charge as if the allowances were not made, and is deemed as income for the year of assessment relating to the basis period in which the sale, transfer, assignment or lease occurs.[37/2014]
(2HA) The Minister or such person as the Minister appoints may waive the application of subsection (2H)(b) in the following circumstances:(a)
the capital expenditure incurred on the provision of other PIC automation equipment acquired in the basis period in which the equipment sold, transferred, assigned or leased was acquired, is more than or equal to the amount that applies to the year of assessment to which the basis period relates; or
(b)
the Minister or person appointed by the Minister is satisfied that there is a bona fide commercial reason for the sale, transfer, assignment or lease.
(2HB) In subsection (2HA), the amount that applies to a year of assessment is the amount set out in —(a)
for the year of assessment 2011, subsection (2A)(a)(ii);
(b)
for the year of assessment 2012, subsection (2A)(b)(ii);
(c)
for the year of assessment 2013, subsection (2B)(a)(ii);
(d)
for the year of assessment 2014, subsection (2B)(b)(ii);
(e)
for the year of assessment 2015, subsection (2B)(c)(ii);
(f)
for the year of assessment 2016, subsection (2BAA)(a)(ii);
(g)
for the year of assessment 2017, subsection (2BAA)(b)(ii);
(h)
for the year of assessment 2018, subsection (2BAA)(c)(ii),
as modified by subsection (2BA), (2BB) or (2BC), as the case may be.
[37/2014]
(2I) No allowance under subsections (2A), (2B) and (2BAA) may be made to any person in respect of any amount of capital expenditure incurred on the provision of PIC automation equipment for which an investment allowance has been claimed under Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967.[37/2014]
(2IA) [Deleted by Act 39 of 2023 wef 29/12/2023]
(2J) No allowance under subsections (2A), (2B) and (2BAA) may be made to any person in respect of any PIC automation equipment for which an allowance under this section or section 19 has been previously made to that person.[37/2014]
(2K) No allowance under subsections (2A), (2B) and (2BAA) may be made to any person in respect of any instalment paid by the person under any hire‑purchase agreement to acquire any PIC automation equipment that is signed before the basis period for the year of assessment 2011.[37/2014]
(3) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has, for the purposes of a trade, business or profession carried on by the person, installed a generator in any office or factory for the supply of electrical power to that office or factory in the event of a disruption in the normal supply of electrical power, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that generator.[41/2020]
(4) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has installed a robot for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that robot.[41/2020]
(5) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has installed during the period between 1 January 1996 and 16 February 2021 (both dates inclusive) any efficient pollution control equipment or device for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the efficient pollution control equipment or device.[41/2020; 27/2021]
(6) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has installed at any time from 1 January 1996 to 31 December 2017 (both dates inclusive) any certified energy‑efficient equipment as a replacement for any other equipment, or any certified energy‑saving equipment, for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1) or (1B) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the certified energy‑efficient equipment or certified energy‑saving equipment.[39/2017]
(7) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has, on or after 1 January 1998, installed any new —(a)
certified low‑decibel machine, equipment or system;
(b)
certified effective noise control device which is a distinct entity or an accessory of any new or existing machine, equipment or system; or
(c)
certified effective engineering noise control measure for any existing machine, equipment or process,
for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the certified machine, equipment or system, or the certified effective noise control device or measure.
[41/2020]
(8) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has, on or after 1 January 1998, installed any new —(a)
certified machine, equipment or system which reduces or eliminates exposure to chemical risk;
(b)
certified effective chemical hazard control device which is a distinct entity or an accessory of any new or existing machine, equipment or process; or
(c)
certified effective chemical hazard control measure for any existing machine, equipment or process,
for the purposes of a trade, business or profession carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of the certified machine, equipment or system, or the certified effective chemical hazard control device or measure.
[41/2020]
(9) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has, for the purposes of a trade, business or profession carried on by the person, registered any new vehicle as a replacement for an existing vehicle which used diesel oil as fuel and which was registered before 1 January 1991 and deregistered on or after 27 February 1999, the person is, in lieu of the allowances provided by subsection (1) or (1B) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that new vehicle.
(9A) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has, for the purposes of a trade, business or profession carried on by the person, registered during the period from 15 February 2007 to 14 February 2012 (both dates inclusive) any new vehicle which uses diesel oil as fuel, as a replacement for an existing vehicle which used diesel oil as fuel and which was registered on or after 1 January 1991 but before 1 October 2006, the person is, in lieu of the allowances provided by subsection (1) or (1B) or section 19, entitled, if the person so elects, to an allowance of 100% in respect of the capital expenditure incurred on the provision of that new vehicle.[37/2014]
(10) Despite section 19, where a person proves to the Comptroller’s satisfaction that the person has incurred capital expenditure on the provision of a website for the purposes of a trade, business or profession carried on by the person, the person is entitled to an allowance of 100% in respect of the capital expenditure incurred on the provision of that website, and for this purpose, a website is deemed to be machinery or plant.
(10A) Despite section 19 and subject to subsection (10B), where a person proves to the Comptroller’s satisfaction that the person has incurred capital expenditure not exceeding $5,000 on the provision of any item of machinery or plant for the purposes of a trade, profession or business carried on by the person, the person is, in lieu of the allowances provided by subsection (1), (1B) or (1E) or section 19, entitled, if the person so elects, to an allowance of —(a)
100% in respect of that capital expenditure; or
(b)
where allowances have been made under subsection (1), (1B) or (1E) or section 19 for any previous year of assessment under subsection (10B), the amount of that capital expenditure still unallowed.[41/2020]
(10B) The aggregate amount of allowances claimed by any person under subsection (10A) for any year of assessment must not exceed $30,000; and allowances may be made under subsection (1), (1B) or (1E) or section 19 in respect of any capital expenditure still unallowed.[41/2020]
(10C) No allowance may be made under subsection (10A) in respect of any item of machinery or plant which is acquired under a hire‑purchase agreement and the original cost of that item of machinery or plant exceeds $5,000.
(11) Any claim by a person for allowances in respect of any machinery or plant under this section for any year of assessment is not to be disallowed by reason only that the person has not in use the machinery or plant at the end of the basis period for that year of assessment.
(12) Any claim for allowances under this section must be made at the time of lodgment of the return of income for the relevant years of assessment or within such further time as the Comptroller may allow.
(13) Where any allowance has been claimed and allowed under this section for any year of assessment, no allowances may be made in any subsequent year of assessment under section 19 in respect of such expenditure.
(13A) Where the tax relief period of a person to whom a certificate has been issued under Part 2 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 expires in any basis period ending on or after 1 January 1992 and the person has —(a)
at the end of the basis period immediately following that basis period, in use machinery or plant in respect of which capital allowances have been made under section 19; and
(b)
before the end of the year of assessment which relates to the basis period referred to in paragraph (a), so elected,
there is to be made to the person for a period of 3 years an annual allowance of 331/3% in respect of the capital expenditure remaining unallowed under section 19 in respect of the machinery or plant as at the end of that basis period.
(13B) [Deleted by Act 32 of 2019]
(14) Subject to subsections (10A) and (13A), where any allowance has been claimed and allowed under section 19 in respect of any expenditure, no allowances may, except with the approval of the Minister or the Comptroller and subject to such conditions as the Minister or Comptroller may impose, be made in any subsequent year of assessment under this section in respect of the amount of that expenditure remaining unallowed under section 19.[32/2019]
(14A) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade, profession or business, for which purpose the machinery or plant is provided, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment must be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(14B) Subject to subsection (14C), this section applies, with the necessary modifications, to a person carrying on any trade or business who incurs during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2028 (both years inclusive) capital expenditure on the provision of machinery or plant for any research and development undertaken by the person directly in Singapore or by a research and development organisation on the person’s behalf in Singapore, even though the machinery or plant is not for the purpose of that trade or business.[37/2014]
[Act 30 of 2023 wef 30/10/2023]
(14C) Section 14C(4) and (5) applies in relation to the allowance for the capital expenditure referred to in subsection (14B) 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 (after deducting any amount in respect of which an election for a cash payout has been made under section 37G) in section 14C(4) is a reference to the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37G;
(b)
a reference to the specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula
where A
is the remaining amount of the allowance after deducting the amount of the allowance that corresponds to the capital expenditure in respect of which an election for a cash payout has been made under section 37G;
B
is the rate of tax specified in section 43(1)(a); and
C
is —
(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
(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; and
(c)
a reference to “unabsorbed losses” is a reference to “unabsorbed allowances”.
(14D) This section applies to a person carrying on any trade or business who appropriates any trading stock of that trade or business for use as machinery or plant for the purpose of any of the person’s trades, professions or businesses in circumstances that give rise to a reasonable inference that the appropriation is permanent, subject to the following modifications:(a)
a reference to the capital expenditure incurred on the provision of machinery or plant is to the open market value of the trading stock on the date of the appropriation;
(b)
the capital expenditure is treated as having been incurred on the date of the appropriation of the trading stock.[27/2021]
(14E) In subsection (14D), “open market value” and “trading stock” have the meanings given by section 10J(9).[27/2021]
(15) In this section —“automation equipment” means any machinery or plant designed for the automation of functions or services;
“certificate of entitlement” means a permit issued or deemed to be issued under section 10A of the Road Traffic Act 1961;
“certified effective chemical hazard control device” means —(a)
any local exhaust ventilation system;
(b)
any fugitive emission control equipment or system; or
(c)
any dilution ventilation system,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified effective chemical hazard control measure” means —(a)
any enclosed or automated system; or
(b)
any modification to machine, equipment or process,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified effective engineering noise control measure” means —(a)
any detachable personnel acoustic enclosure;
(b)
any acoustic barrier or shield;
(c)
any acoustic absorption device; or
(d)
any modification to machine, equipment or process,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified effective noise control device” means —(a)
any acoustic enclosure for machine, equipment or process;
(b)
any acoustic silencer or muffler;
(c)
any vibration absorption, isolation or damping device; or
(d)
any active noise control device,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified energy‑efficient equipment” means —(a)
any air‑conditioning system;
(b)
any boiler;
(c)
any water pumping system;
(d)
any washing or dry‑cleaning machine system;
(e)
any refrigeration system;
(f)
any lift or escalator; and
(g)
any instant hot water system,
which has been certified by a professional engineer registered under the Professional Engineers Act 1991 to be more energy‑efficient than the equipment which it replaces;
“certified energy‑saving equipment” means —(a)
any solar heating or cooling system;
(b)
any solar energy collection system;
(c)
any heat recovery system;
(d)
any power factor controller;
(e)
any high efficiency electric motor;
(f)
any variable speed drive motor control system;
(g)
any high frequency lighting system;
(h)
any computerised energy management system; and
(i)
any other energy‑saving equipment or device,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to be an energy‑saving equipment;
“certified low‑decibel machine, equipment or system” means —(a)
any concrete crusher or splitter;
(b)
any plastic granulator or crusher;
(c)
any automatic sawing machine;
(d)
any metal press or stamping machine;
(e)
any machine with active noise control feature; or
(f)
any other machine, equipment or system,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“certified machine, equipment or system which reduces or eliminates exposure to chemical risk” means —(a)
any water‑based degreasing machine or system;
(b)
any automated bagging or packing machine or system;
(c)
any automated degreasing machine or system; or
(d)
any other machine, equipment or system,
which has been certified by any person approved by either the Minister or such person as the Minister may appoint to have satisfied the prescribed criteria;
“computer” means any computer used for automatic data processing and includes any part thereof;
“efficient pollution control equipment or device” means any equipment or device for the purposes of preventing, controlling or reducing air pollution or water pollution which satisfies the prescribed criteria;
“existing vehicle” means any goods vehicle or bus using diesel oil as fuel which —(a)
is not a vehicle registered under the RU index marks;
(b)
is deregistered not later than one year before the last day on which a renewal of registration licence can be issued under the Road Traffic Act 1961 in respect of the vehicle; and
(c)
has, unless the vehicle has been exempted from obtaining a certificate of entitlement, at the date of deregistration of the vehicle —(i)
at least one year remaining in its certificate of entitlement; or
(ii)
a certificate of entitlement which can be renewed after its expiry;
“goods vehicle” means any motor vehicle constructed or adapted for use for the carriage of goods;
“new vehicle” means any new goods vehicle or new bus which —(a)
is registered within one month before, or within 6 months after, the deregistration of the existing vehicle which uses diesel oil as fuel; and
(b)
bears an index mark which is the same as the index mark of such existing vehicle, and for this purpose, where the new goods vehicle and such existing vehicle have a maximum laden weight exceeding 3.0 metric tons but not exceeding 3.5 metric tons, the new goods vehicle is deemed to bear an index mark which is the same as that of such existing vehicle;
“Productivity and Innovation Credit Scheme automation equipment” or “PIC automation equipment”, in relation to any person, means —(a)
any automation equipment that is prescribed by the Minister for the purposes of subsections (2A), (2B) and (2BAA) and section 14Q; or
(b)
any automation equipment which the Minister or a person appointed by the Minister has approved as PIC automation equipment for the firstmentioned person;
“website” means a collection of programmes, data and images which is accessible over the Internet or any network using a browser or any other form of access.[37/2014]
(16) In subsections (2A) to (2G) and (2I), a reference to capital expenditure incurred on 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.
(16A) For the purposes of subsections (2B), (2BAA), (2D) and (2E), each reference to capital expenditure incurred in the basis period for the year of assessment 2014 or a subsequent year of assessment, on the provision of one or more PIC automation equipment for the purposes of a trade, profession or business includes a reference to any capital expenditure incurred on the provision of a website for the purposes of a trade, profession or business.[37/2014]
(16B) For the purposes of subsections (2F), (2H), (2HA), (2I) and (2J) —(a)
each reference to capital expenditure incurred on the provision of any PIC automation equipment includes a reference to capital expenditure incurred on the provision of a website; and
(b)
each reference to a PIC automation equipment includes a reference to a website.[37/2014]
[Act 39 of 2023 wef 29/12/2023]
(17) For the purposes of paragraph (b) of the definition of “PIC automation equipment”, the Minister or the person appointed by the Minister may only approve any automation equipment if the Minister or appointed person is satisfied that the equipment fulfils such criteria as may be prescribed by the Minister.
(18) Any rules made under paragraph (a) of the definition of “PIC automation equipment”, and any approval given under paragraph (b) of that definition, may be made to have effect for any year of assessment beginning with the year of assessment 2011.
Writing‑down allowances for intellectual property rights
19B.—(1) Subject to this section, where a company carrying on a trade or business has incurred on or after 1 November 2003 capital expenditure in acquiring any intellectual property rights for use in that trade or business and the acquisition date of those rights is on or before the last day of the basis period relating to the year of assessment 2016, writing‑down allowances in respect of that expenditure must be made to it during a writing‑down period of 5 years beginning with the year of assessment relating to the basis period in which that expenditure is incurred.[34/2016]
(1A) Where a company carrying on a trade or business incurs during the basis period for the year of assessment 2011 or the year of assessment 2012 capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there is, in addition to the writing‑down allowance under subsection (1), to be made in respect of all its trades and businesses a writing‑down allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2011, the lower of the following:(i)
such capital 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 capital 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).
(1AA) Where —(a)
a company carrying on a trade or business has incurred capital expenditure in acquiring any intellectual property rights for use in that trade or business; and
(b)
the acquisition date of those rights is on or after the first day of the basis period relating to the year of assessment 2017,
writing‑down allowances in respect of that expenditure must be made to it during a writing‑down period of 5 years, 10 years or 15 years (as elected by the company) beginning with the year of assessment relating to the basis period in which that expenditure is incurred.
[34/2016]
(1AB) The company mentioned in subsection (1AA) must make an irrevocable election to the Comptroller for the writing‑down allowances to be made to it over a writing‑down period of 5 years, 10 years or 15 years.[34/2016]
(1AC) The election under subsection (1AB) must be made at the time of lodgment of the company’s return of income for the year of assessment relating to —(a)
if the payment for the intellectual property rights is made by instalments, the basis period in which the first of any deposit or instalment payment for those rights is made; or
(b)
in any other case, the basis period in which the expenditure is incurred.[34/2016]
(1AD) Where a company —(a)
that is a qualifying company for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive); and
(b)
that carries on a trade or business during the basis period for that year of assessment,
incurs during the basis period capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there is to be made, in addition to the writing-down allowance under subsection (1AA), a writing-down allowance computed in accordance with the formula
where A is the lower of the following:
(a)
the capital expenditure incurred during the basis period for that year of assessment;
(b)
$400,000.[Act 30 of 2023 wef 30/10/2023]
(1AE) The writing-down allowance under subsection (1AD) is to be made to the qualifying company during the writing-down period elected under subsection (1AA) for the same expenditure.[Act 30 of 2023 wef 30/10/2023]
(1AF) In this section, a company is a qualifying company for a year of assessment if —(a)
where the company is not part of a group — the company derives less than $500 million in gross revenue from all of its trades and businesses in that basis period; or
(b)
where the company 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.[Act 30 of 2023 wef 30/10/2023]
(1AG) For the purposes of subsection (1AF) —(a)
“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; and
(b)
“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]
(1AH) No allowance under subsection (1AD) may be made to any qualifying company in respect of any instalment paid by the qualifying company under any agreement to acquire any intellectual property rights that is signed before the basis period for the year of assessment 2024.[Act 30 of 2023 wef 30/10/2023]
(1B) Subject to section 37J, where a company carrying on a trade or business incurs during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015 capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there is, in addition to the writing‑down allowance under subsection (1), to be made in respect of all its trades and businesses a writing‑down allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2013, the lower of the following:(i)
such capital 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 capital 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 capital 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]
(1BAA) Subject to section 37J, where a company carrying on a trade or business incurs during the basis period for the year of assessment 2016, 2017 or 2018 capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there is, in addition to the writing‑down allowance under subsection (1) or (1AA), to be made in respect of all its trades and businesses, a writing‑down allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2016, the lower of the following:(i)
such capital 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 capital 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 capital 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; 34/2016]
(1BA) In subsection (1A), the amount under paragraph (a)(ii) is substituted with “$400,000” if the company 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 company does not carry on any trade or business during the basis period for the year of assessment 2011.
(1BB) In subsection (1B) —(a)
if the company 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 company 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 company 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 company does not carry on any trade or business during the basis period for the year of assessment 2014.
(1BC) In subsection (1BAA) —(a)
if the company 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 company 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 (1BAA)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (1BAA)(a)(i) and (ii) if the company 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 (1BAA)(c)(ii) of the lower of the amounts specified in subsection (1BAA)(b)(i) and (ii) if the company does not carry on any trade or business during the basis period for the year of assessment 2017.[37/2014]
(1C) Where a company proves to the Comptroller’s satisfaction that it has during or after the basis period for the year of assessment 2011 incurred capital expenditure by way of making one or more instalment payments under an agreement or agreements in acquiring one or more intellectual property rights for use in its trade or business, that is or are signed during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), or between the year of assessment 2024 and the year of assessment 2028 (both years inclusive), and an allowance is made under subsection (1A), (1AD), (1B) or (1BAA), those subsections apply with the following modifications:(a)
a reference to the capital expenditure incurred on the acquisition of one or more intellectual property rights during the basis period for a year of assessment, being the basis period in which the agreement or agreements is or are signed, is a reference to the aggregate of —(i)
the price or prices (excluding any finance charges) at which it might have purchased the right or all the rights that is or are the subject of the agreement or agreements for cash at the time of the signing of the agreement or agreements; and
(ii)
the capital expenditure incurred on the acquisition of any other intellectual property rights for use in its trade or business during that basis period;
(b)
a reference to the capital expenditure incurred on the acquisition of one or more intellectual property rights during the basis period for a year of assessment excludes the amount of any instalment paid or deposit made by it under that agreement or any of those agreements during the basis period;
(c)
the allowance referred to in subsection (1A), (1AD), (1B) or (1BAA) in respect of each right that is the subject of an agreement is to be made to the company for the year of assessment in respect of each basis period during which it paid an instalment or instalments, or made a deposit or deposits, under the agreement, in the proportion which the total amount of the instalment or instalments paid (excluding any finance charges), and deposit or deposits made, during that basis period for that right bears to the total amount of all instalments (excluding any finance charges) and deposits under the agreement for that right.[37/2014; 34/2016]
[Act 30 of 2023 wef 30/10/2023]
(1D) No writing‑down allowance under subsections (1A), (1AD), (1B) and (1BAA) may be made for any capital expenditure incurred in acquiring any intellectual property rights in any software which are acquired for the purpose of licensing all or any of those rights to another.[37/2014]
[Act 30 of 2023 wef 30/10/2023]
(1E) To avoid doubt, the writing‑down allowance under subsection (1A), (1B) or (1BAA) is to be made to a company during the applicable writing‑down period in subsection (1) or (1AA).[34/2016]
(2) The total writing‑down allowance to be made for any year of assessment to a company for capital expenditure incurred in acquiring any intellectual property rights under subsection (1) or (1AA), and under subsection (1A), (1AD), (1B) or (1BAA), is an amount computed in accordance with the formula
where A
is —
(a)
20% if the writing‑down period for that allowance is 5 years;
(b)
10% if the writing‑down period for that allowance is 10 years; or
(c)
% if the writing‑down period for that allowance is 15 years; and
B
is the sum of —
(a)
the capital expenditure; and
(b)
the writing‑down allowance under subsection (1A), (1AD), (1B) or (1BAA) for that expenditure.
[34/2016]
[Act 30 of 2023 wef 30/10/2023]
(2A) The writing‑down allowances to be made to a company under this section are allowed only if —(a)
there is an undertaking by the company that it is an assignee of the intellectual property rights;
(b)
the claim is made by the company in such manner and subject to such conditions as the Comptroller may require; and
(c)
in the case of writing‑down allowances mentioned in subsection (1AA), the company makes the election mentioned in subsection (1AB).[34/2016]
(2B) The Minister or an authorised body may in any particular case waive any of the requirements under subsection (2A)(a) and (b) in respect of any intellectual property rights acquired on or after 17 February 2006, subject to such conditions as the Minister or authorised body may impose.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2BA) If —(a)
any requirement under subsection (2A)(a) and (b) has been waived (whether before, on or after 2 December 2019) for a company in relation to any writing‑down allowances under subsection (2B); and
(b)
the company fails to comply with a condition subsequent imposed under subsection (2B) for such waiver,
then, if the Minister or authorised body is satisfied, having regard to the company’s representation and all the relevant circumstances of the case, that it is just and reasonable to do so, the Minister or authorised body —
(c)
may make a determination that the company is not entitled to any writing‑down allowance in respect of the relevant intellectual property rights for each year of assessment beginning with a specified year of assessment; and
(d)
must give a written notice of the determination to the Comptroller and the company.[32/2019]
[Act 41 of 2020 wef 12/04/2024]
(2BB) If a determination is made under subsection (2BA), then (despite anything in this section) —(a)
any writing‑down allowance that has already been made to the company in respect of those relevant intellectual property rights for each year of assessment beginning with the specified year of assessment is treated for the purposes of this section as having been wrongly made, and the Comptroller may, subject to section 74, make an assessment or additional assessment on the company for the year or years of assessment to make good any tax shortfall; and
(b)
no writing‑down allowance may be made to the company in respect of the relevant intellectual property rights —(i)
for any year of assessment after the year or years of assessment mentioned in paragraph (a); or
(ii)
if no writing‑down allowance has been made to the company for the specified year of assessment, for the specified year of assessment and each subsequent year of assessment.[32/2019]
(2C) Despite subsections (1), (1AA) and (2), where a company that is an approved media and digital entertainment company carrying on a trade or business has acquired on or after 22 January 2009 approved intellectual property rights pertaining to films, television programmes, digital animations or games, or other media and digital entertainment contents, for use in that trade or business, writing‑down allowances in respect of the capital expenditure incurred in acquiring those rights —(a)
are to be made to it during a writing‑down period of 2 years beginning with the year of assessment relating to the basis period in which that expenditure is incurred; and
(b)
for each such year of assessment are an amount equal to 50% of the capital expenditure incurred.[34/2016]
(2D) No writing‑down allowances under subsections (1A), (1AD), (1B) and (1BAA) may be made in respect of any intellectual property rights in respect of which any of the requirements under subsection (2A)(a) and (b) has been waived under subsection (2B), or any approved intellectual property rights referred to under subsection (2C).[37/2014; 34/2016]
[Act 30 of 2023 wef 30/10/2023]
(2E) Where writing‑down allowances have been made to any company under subsection (1A), (1AD), (1B) or (1BAA) in respect of the acquisition of any intellectual property rights and any of the following events occurs within 5 years, 10 years or 15 years (depending on the writing‑down period for those allowances) from the acquisition of such intellectual property rights:(a)
the rights come to an end without being subsequently revived;
(b)
the company sells, transfers or assigns all or any part of those rights;
(ba)
the company licenses all or any of those rights (being rights in any software) to another;
(c)
the company permanently ceases to carry on the trade or business,
the following provisions apply:
(d)
no writing‑down allowance in respect of such intellectual property rights may be made to that company under subsections (1A), (1AD), (1B) and (1BAA) for the year of assessment relating to the basis period in which the event occurs and for any subsequent year of assessment; and[Act 30 of 2023 wef 30/10/2023]
(e)
if any of those events occurs within the period of one year from the acquisition of the intellectual property rights, any writing‑down allowances made under subsection (1A), (1AD), (1B) or (1BAA) must be brought to charge as if the allowances were not made, and are deemed as income for the year of assessment relating to the basis period in which the event occurs.[37/2014; 34/2016]
[Act 30 of 2023 wef 30/10/2023]
(3) Any capital expenditure incurred on the acquisition of any intellectual property rights by a company before the commencement of its trade or business is treated for the purpose of this section as if it had been incurred by it on the first day it commences that trade or business.
(4) Subject to subsection (4A), where writing‑down allowances have been made to any company under subsection (1), (1AA) or (2C) in respect of any intellectual property rights and, before the end of the writing‑down period, any of the following events occurs:(a)
the rights come to an end without being subsequently revived;
(b)
the company sells, transfers or assigns all or any part of those rights;
(c)
the company permanently ceases to carry on the trade or business,
no writing‑down allowance in respect of the intellectual property rights may be made to that company for the year of assessment relating to the basis period in which the event occurs or for any subsequent year of assessment, and, where (on the occurrence of the event referred to in paragraph (b)) the price at which the rights were sold, transferred or assigned exceeds the amount of the writing‑down allowances yet to be allowed on the date of the event, there is to be made on the company for the year of assessment relating to the basis period in which the event occurs a charge of an amount equal to the lower of —
(d)
the excess; and
(e)
the writing‑down allowances made under subsections (1), (1AA) and (2C).[34/2016]
(4A) Where parts of any intellectual property right are sold, transferred or assigned by the company at different times and at least one sale, transfer or assignment occurs before the end of the writing‑down period, subsection (4) applies to each sale, transfer and assignment with the following modifications:(a)
the reference to the amount of writing‑down allowances yet to be allowed for the year of assessment relating to the basis period in which the event occurs, is a reference to an amount ascertained in accordance with the formula
where A
is the amount of writing‑down allowances yet to be allowed for the intellectual property right on the date of the first of such sales, transfers or assignments; and
B
is the aggregate of the prices of the parts of that right previously sold, transferred or assigned by the company,
or zero, if the amount ascertained by that formula is less than or equal to zero; and
(b)
the reference to the writing‑down allowances made under subsections (1), (1AA) and (2C) is a reference to the balance of such allowances made under subsections (1), (1AA) and (2C) in respect of that right after deducting the total amount of any charges made under this section in respect of that right.[34/2016]
(5) Where a company to whom writing‑down allowances have been made under subsections (1), (1AA) and (2C) in respect of any intellectual property rights sells, transfers or assigns all or any part of those rights after the writing‑down period, there is to be made on the company for the year of assessment relating to the basis period in which the sale, transfer or assignment occurs, a charge in an amount equal to the price which the rights were sold, transferred or assigned or in an amount equal to the capital expenditure incurred in acquiring the rights, whichever is less.[34/2016]
(6) For the purposes of subsection (5), where there is more than one sale, transfer or assignment of any part of any intellectual property rights, the amount of the capital expenditure incurred in acquiring the intellectual property rights for the year of assessment relating to the basis period in which the sale, transfer or assignment of that part of the rights occurs is ascertained in accordance with the formula
where A
is the capital expenditure incurred in acquiring the intellectual property rights; and
B
is the total amount of any charges made under this section in any previous years of assessment in respect of that expenditure.
(6A) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade or business, in which the intellectual property rights are used, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment are to be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(6B) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade or business, in which the intellectual property rights are used, produces income that is exempt from tax as well as income chargeable with tax, and any charge under subsection (4) or (5) arises to be made, such proportion of that charge is exempt from tax as appears reasonable to the Comptroller in the circumstances.
(7) For the purpose of this section, any sale, transfer or assignment of any intellectual property rights which occurs after the date on which the trade or business of a company permanently ceases is deemed to have occurred immediately before the cessation.
(8) Despite the repeal of section 19B by the Income Tax (Amendment) Act 2001, the repealed section 19B continues to apply and have effect to any approved know‑how or patent rights for which writing‑down allowances had been made before the repeal as if that Act had not been enacted.
(9) Despite the amendment of section 19B by the Income Tax (Amendment) Act 2003, section 19B in force immediately before 1 November 2003 continues to apply and have effect to any intellectual property rights approved before that date.
(10) No writing‑down allowance may be made —(a)
under subsection (1) for any capital expenditure incurred in respect of intellectual property rights acquired after the last day of the basis period for the year of assessment 2016;
(aa)
under subsection (1AA) for any capital expenditure incurred in respect of intellectual property rights acquired after the last day of the basis period for the year of assessment 2028; or[Act 30 of 2023 wef 30/10/2023]
(b)
under subsection (2C) for any capital expenditure incurred in respect of intellectual property rights acquired after the last day of the basis period for the year of assessment 2018.[37/2014; 32/2019]
(10A) No writing‑down allowance under subsections (1), (1A), (1AA), (1AD), (1B), (1BAA) and (2C) may be made for any capital expenditure incurred by a company referred to in subsections (1), (1A), (1AA), (1AD), (1B), (1BAA) and (2C) in acquiring intellectual property rights from —(a)
its related party ––(i)
to whom any deduction has been allowed under section 14, 14C, 14D, 14E, 14EA, 14EB or 14P for any outgoing, expense or payment incurred for any activity which resulted in the creation of the intellectual property; and[Act 30 of 2023 wef 30/10/2023]
[Act 25 of 2025 wef 19/02/2025]
(ii)
whose proceeds from the sale, transfer or assignment of those intellectual property rights to the company are not chargeable to tax; or
(b)
its related party who acquired the rights, directly or indirectly, from a related party of the company referred to in paragraph (a).[37/2014; 34/2016]
[Act 30 of 2023 wef 30/10/2023]
(10B) The Minister may by order exempt a company from subsection (10A) in respect of such transaction as may be specified in the order.
(10C) No writing‑down allowance under subsections (1A), (1AD), (1B) and (1BAA) may be made to any company in respect of any amount of capital expenditure incurred on the acquisition of intellectual property rights for which an investment allowance has been claimed under Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967.[37/2014]
[Act 30 of 2023 wef 30/10/2023]
(10D) No allowance under subsections (1A), (1B) and (1BAA) may be made to any company in respect of any instalment paid by it under any agreement to acquire any intellectual property right that is signed before the basis period for the year of assessment 2011.[37/2014]
(10E) If, in the case of an acquisition of intellectual property rights —(a)
whose acquisition date is on or after 25 March 2016; and
(b)
the payment for which is not made by instalments,
the capital expenditure incurred for the acquisition exceeds the open‑market price for those rights, then, for the purpose of determining the amount of writing‑down allowances for that expenditure under subsection (1AA), (1AD), (1BAA) or (2C), the Comptroller may treat the open‑market price as the amount of that expenditure, and in that event subsection (5) also applies as if the open‑market price were the amount of that expenditure.
[34/2016]
[Act 30 of 2023 wef 30/10/2023]
(10F) In subsection (10E), “open‑market price”, for intellectual property rights, means either —(a)
the price which those rights could have been purchased in the open market on the acquisition date of those rights; or
(b)
if, by reason of the special nature of those rights, it is not possible to determine the price mentioned in paragraph (a), such other value as the Comptroller considers to be a reasonable value for those rights after considering the valuation of those rights by an appropriate valuer and other relevant circumstances.[34/2016]
(10G) If, in the case of an acquisition of intellectual property rights —(a)
whose acquisition date is on or after 25 March 2016; and
(b)
the payment for which is made by instalments,
the total amount of the deposits and instalment payments (excluding any finance charges) made in a basis period exceeds the open‑market price for those rights, then, for the purpose of determining the amount of writing‑down allowances in such a case under subsection (1AA) or (2C), the Comptroller may treat the open‑market price as the amount of such expenditure, and in that event subsection (5) also applies as if the open‑market price were the amount of such expenditure.
[34/2016]
(10H) In subsection (10G), “open‑market price”, for intellectual property rights, means an amount computed by the formula
where C
is the total amount of the deposits and instalment payments (excluding any finance charges) made in the basis period;
D
is the total amount of all the deposits and instalment payments (excluding any finance charges) under the agreement to acquire those rights; and
E
is either —
(a)
the price (excluding any finance charges) which those rights could have been purchased in the open market on their acquisition date; or
(b)
if, by reason of the special nature of those rights, it is not possible to determine the price mentioned in sub‑paragraph (a), such other value as the Comptroller considers to be a reasonable value for those rights after considering the valuation of those rights by an appropriate valuer and other relevant circumstances.
[34/2016]
(10I) If, in the case of an acquisition of intellectual property rights —(a)
whose acquisition date is on or after 25 March 2016; and
(b)
the payment for which is made by instalments,
the amount mentioned in subsection (1C)(a)(i) exceeds the open‑market price mentioned in subsection (10F), then, for the purpose of determining the amount of writing‑down allowances to be made for any year of assessment under subsection (1AD) or (1BAA) (as the case may be), the Comptroller may treat the open‑market price mentioned in subsection (10F) as the amount mentioned in subsection (1C)(a)(i).
[34/2016]
[Act 30 of 2023 wef 30/10/2023]
(10J) If —(a)
intellectual property rights or a part of such rights are or is sold, transferred or assigned on or after 25 March 2016; and
(b)
the rights or part are or is sold, transferred or assigned for less than the open‑market price,
then, for the purpose of determining the amount of any charge under subsection (4), (4A) or (5), the Comptroller may treat the open‑market price as the price at which the rights or part (as the case may be) are or is sold, transferred or assigned.
[34/2016]
(10K) In subsection (10J), “open‑market price”, for intellectual property rights or a part of such rights, means —(a)
the price which those rights or that part would have fetched if sold, transferred or assigned in the open market at the time of the actual sale, transfer or assignment; or
(b)
if, by reason of the special nature of those rights or part, it is not possible to determine the price mentioned in paragraph (a), such other value as the Comptroller considers to be a reasonable value for those rights or that part after considering the valuation of those rights or that part by an appropriate valuer and other relevant circumstances.[34/2016]
(11) In this section —“appropriate valuer” means a valuer who is independent of any party to the acquisition, sale, transfer or assignment (as the case may be) of the intellectual property rights, and has qualifications and experience that are relevant to the valuation in question;
“approved” means approved by the Minister or an authorised body, subject to such conditions as the Minister or authorised body may impose;[Act 41 of 2020 wef 12/04/2024]
“capital expenditure” does not include legal fees, registration fees, stamp duty and other costs related to the acquisition of any intellectual property rights;
“intellectual property rights” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of any patent, copyright, trade mark, registered design, geographical indication, layout‑design of integrated circuit, trade secret or information that has commercial value, or the grant of protection of a plant variety;
“media and digital entertainment company” means a company whose principal trade or business is to provide media and digital entertainment in Singapore.[Act 33 of 2022 wef 04/11/2022]
[34/2016]
[Deleted by Act 33 of 2022 wef 04/11/2022]
(11A) In the definition of “intellectual property rights” in subsection (11), the expressions “trade secret” and “information that has commercial value”, and any work or subject matter to which the expression “copyright” relates, exclude the following:(a)
information of customers of a trade or business, such as a list of those customers and requirements of those customers, gathered in the course of carrying on that trade or business;
(b)
information on work processes (such as standard operating procedures), other than industrial information, or technique, that is likely to assist in the manufacture or processing of goods or materials;
(c)
compilation of any information as described in paragraph (a) or (b);
(d)
such other matter as the Minister may by regulations prescribe.[37/2014]
(12) In subsections (1A), (1AD), (1B) and (1BAA), a reference to capital expenditure incurred on 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.[37/2014]
[Act 30 of 2023 wef 30/10/2023]
(13) In this section, for a company, the acquisition date of any intellectual property rights is —(a)
the date of the signing of the agreement to acquire those rights; or
(b)
if there is no agreement, the date on which those rights are assigned to the company.[34/2016]
—(1) Subject to this section, where a company carrying on a trade or business has incurred on or after 1 November 2003 capital expenditure in acquiring any intellectual property rights for use in that trade or business and the acquisition date of those rights is on or before the last day of the basis period relating to the year of assessment 2016, writing‑down allowances in respect of that expenditure must be made to it during a writing‑down period of 5 years beginning with the year of assessment relating to the basis period in which that expenditure is incurred.[34/2016]
(1A) Where a company carrying on a trade or business incurs during the basis period for the year of assessment 2011 or the year of assessment 2012 capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there is, in addition to the writing‑down allowance under subsection (1), to be made in respect of all its trades and businesses a writing‑down allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2011, the lower of the following:(i)
such capital 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 capital 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).
(1AA) Where —(a)
a company carrying on a trade or business has incurred capital expenditure in acquiring any intellectual property rights for use in that trade or business; and
(b)
the acquisition date of those rights is on or after the first day of the basis period relating to the year of assessment 2017,
writing‑down allowances in respect of that expenditure must be made to it during a writing‑down period of 5 years, 10 years or 15 years (as elected by the company) beginning with the year of assessment relating to the basis period in which that expenditure is incurred.
[34/2016]
(1AB) The company mentioned in subsection (1AA) must make an irrevocable election to the Comptroller for the writing‑down allowances to be made to it over a writing‑down period of 5 years, 10 years or 15 years.[34/2016]
(1AC) The election under subsection (1AB) must be made at the time of lodgment of the company’s return of income for the year of assessment relating to —(a)
if the payment for the intellectual property rights is made by instalments, the basis period in which the first of any deposit or instalment payment for those rights is made; or
(b)
in any other case, the basis period in which the expenditure is incurred.[34/2016]
(1AD) Where a company —(a)
that is a qualifying company for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive); and
(b)
that carries on a trade or business during the basis period for that year of assessment,
incurs during the basis period capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there is to be made, in addition to the writing-down allowance under subsection (1AA), a writing-down allowance computed in accordance with the formula
where A is the lower of the following:
(a)
the capital expenditure incurred during the basis period for that year of assessment;
(b)
$400,000.[Act 30 of 2023 wef 30/10/2023]
(1AE) The writing-down allowance under subsection (1AD) is to be made to the qualifying company during the writing-down period elected under subsection (1AA) for the same expenditure.[Act 30 of 2023 wef 30/10/2023]
(1AF) In this section, a company is a qualifying company for a year of assessment if —(a)
where the company is not part of a group — the company derives less than $500 million in gross revenue from all of its trades and businesses in that basis period; or
(b)
where the company 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.[Act 30 of 2023 wef 30/10/2023]
(1AG) For the purposes of subsection (1AF) —(a)
“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; and
(b)
“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]
(1AH) No allowance under subsection (1AD) may be made to any qualifying company in respect of any instalment paid by the qualifying company under any agreement to acquire any intellectual property rights that is signed before the basis period for the year of assessment 2024.[Act 30 of 2023 wef 30/10/2023]
(1B) Subject to section 37J, where a company carrying on a trade or business incurs during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015 capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there is, in addition to the writing‑down allowance under subsection (1), to be made in respect of all its trades and businesses a writing‑down allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2013, the lower of the following:(i)
such capital 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 capital 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 capital 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]
(1BAA) Subject to section 37J, where a company carrying on a trade or business incurs during the basis period for the year of assessment 2016, 2017 or 2018 capital expenditure in acquiring one or more intellectual property rights for use in its trade or business, there is, in addition to the writing‑down allowance under subsection (1) or (1AA), to be made in respect of all its trades and businesses, a writing‑down allowance computed in accordance with the formula
where A is —
(a)
for the year of assessment 2016, the lower of the following:(i)
such capital 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 capital 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 capital 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; 34/2016]
(1BA) In subsection (1A), the amount under paragraph (a)(ii) is substituted with “$400,000” if the company 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 company does not carry on any trade or business during the basis period for the year of assessment 2011.
(1BB) In subsection (1B) —(a)
if the company 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 company 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 company 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 company does not carry on any trade or business during the basis period for the year of assessment 2014.
(1BC) In subsection (1BAA) —(a)
if the company 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 company 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 (1BAA)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (1BAA)(a)(i) and (ii) if the company 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 (1BAA)(c)(ii) of the lower of the amounts specified in subsection (1BAA)(b)(i) and (ii) if the company does not carry on any trade or business during the basis period for the year of assessment 2017.[37/2014]
(1C) Where a company proves to the Comptroller’s satisfaction that it has during or after the basis period for the year of assessment 2011 incurred capital expenditure by way of making one or more instalment payments under an agreement or agreements in acquiring one or more intellectual property rights for use in its trade or business, that is or are signed during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2018 (both years inclusive), or between the year of assessment 2024 and the year of assessment 2028 (both years inclusive), and an allowance is made under subsection (1A), (1AD), (1B) or (1BAA), those subsections apply with the following modifications:(a)
a reference to the capital expenditure incurred on the acquisition of one or more intellectual property rights during the basis period for a year of assessment, being the basis period in which the agreement or agreements is or are signed, is a reference to the aggregate of —(i)
the price or prices (excluding any finance charges) at which it might have purchased the right or all the rights that is or are the subject of the agreement or agreements for cash at the time of the signing of the agreement or agreements; and
(ii)
the capital expenditure incurred on the acquisition of any other intellectual property rights for use in its trade or business during that basis period;
(b)
a reference to the capital expenditure incurred on the acquisition of one or more intellectual property rights during the basis period for a year of assessment excludes the amount of any instalment paid or deposit made by it under that agreement or any of those agreements during the basis period;
(c)
the allowance referred to in subsection (1A), (1AD), (1B) or (1BAA) in respect of each right that is the subject of an agreement is to be made to the company for the year of assessment in respect of each basis period during which it paid an instalment or instalments, or made a deposit or deposits, under the agreement, in the proportion which the total amount of the instalment or instalments paid (excluding any finance charges), and deposit or deposits made, during that basis period for that right bears to the total amount of all instalments (excluding any finance charges) and deposits under the agreement for that right.[37/2014; 34/2016]
[Act 30 of 2023 wef 30/10/2023]
(1D) No writing‑down allowance under subsections (1A), (1AD), (1B) and (1BAA) may be made for any capital expenditure incurred in acquiring any intellectual property rights in any software which are acquired for the purpose of licensing all or any of those rights to another.[37/2014]
[Act 30 of 2023 wef 30/10/2023]
(1E) To avoid doubt, the writing‑down allowance under subsection (1A), (1B) or (1BAA) is to be made to a company during the applicable writing‑down period in subsection (1) or (1AA).[34/2016]
(2) The total writing‑down allowance to be made for any year of assessment to a company for capital expenditure incurred in acquiring any intellectual property rights under subsection (1) or (1AA), and under subsection (1A), (1AD), (1B) or (1BAA), is an amount computed in accordance with the formula
where A
is —
(a)
20% if the writing‑down period for that allowance is 5 years;
(b)
10% if the writing‑down period for that allowance is 10 years; or
(c)
% if the writing‑down period for that allowance is 15 years; and
B
is the sum of —
(a)
the capital expenditure; and
(b)
the writing‑down allowance under subsection (1A), (1AD), (1B) or (1BAA) for that expenditure.
[34/2016]
[Act 30 of 2023 wef 30/10/2023]
(2A) The writing‑down allowances to be made to a company under this section are allowed only if —(a)
there is an undertaking by the company that it is an assignee of the intellectual property rights;
(b)
the claim is made by the company in such manner and subject to such conditions as the Comptroller may require; and
(c)
in the case of writing‑down allowances mentioned in subsection (1AA), the company makes the election mentioned in subsection (1AB).[34/2016]
(2B) The Minister or an authorised body may in any particular case waive any of the requirements under subsection (2A)(a) and (b) in respect of any intellectual property rights acquired on or after 17 February 2006, subject to such conditions as the Minister or authorised body may impose.[34/2016]
[Act 41 of 2020 wef 12/04/2024]
(2BA) If —(a)
any requirement under subsection (2A)(a) and (b) has been waived (whether before, on or after 2 December 2019) for a company in relation to any writing‑down allowances under subsection (2B); and
(b)
the company fails to comply with a condition subsequent imposed under subsection (2B) for such waiver,
then, if the Minister or authorised body is satisfied, having regard to the company’s representation and all the relevant circumstances of the case, that it is just and reasonable to do so, the Minister or authorised body —
(c)
may make a determination that the company is not entitled to any writing‑down allowance in respect of the relevant intellectual property rights for each year of assessment beginning with a specified year of assessment; and
(d)
must give a written notice of the determination to the Comptroller and the company.[32/2019]
[Act 41 of 2020 wef 12/04/2024]
(2BB) If a determination is made under subsection (2BA), then (despite anything in this section) —(a)
any writing‑down allowance that has already been made to the company in respect of those relevant intellectual property rights for each year of assessment beginning with the specified year of assessment is treated for the purposes of this section as having been wrongly made, and the Comptroller may, subject to section 74, make an assessment or additional assessment on the company for the year or years of assessment to make good any tax shortfall; and
(b)
no writing‑down allowance may be made to the company in respect of the relevant intellectual property rights —(i)
for any year of assessment after the year or years of assessment mentioned in paragraph (a); or
(ii)
if no writing‑down allowance has been made to the company for the specified year of assessment, for the specified year of assessment and each subsequent year of assessment.[32/2019]
(2C) Despite subsections (1), (1AA) and (2), where a company that is an approved media and digital entertainment company carrying on a trade or business has acquired on or after 22 January 2009 approved intellectual property rights pertaining to films, television programmes, digital animations or games, or other media and digital entertainment contents, for use in that trade or business, writing‑down allowances in respect of the capital expenditure incurred in acquiring those rights —(a)
are to be made to it during a writing‑down period of 2 years beginning with the year of assessment relating to the basis period in which that expenditure is incurred; and
(b)
for each such year of assessment are an amount equal to 50% of the capital expenditure incurred.[34/2016]
(2D) No writing‑down allowances under subsections (1A), (1AD), (1B) and (1BAA) may be made in respect of any intellectual property rights in respect of which any of the requirements under subsection (2A)(a) and (b) has been waived under subsection (2B), or any approved intellectual property rights referred to under subsection (2C).[37/2014; 34/2016]
[Act 30 of 2023 wef 30/10/2023]
(2E) Where writing‑down allowances have been made to any company under subsection (1A), (1AD), (1B) or (1BAA) in respect of the acquisition of any intellectual property rights and any of the following events occurs within 5 years, 10 years or 15 years (depending on the writing‑down period for those allowances) from the acquisition of such intellectual property rights:(a)
the rights come to an end without being subsequently revived;
(b)
the company sells, transfers or assigns all or any part of those rights;
(ba)
the company licenses all or any of those rights (being rights in any software) to another;
(c)
the company permanently ceases to carry on the trade or business,
the following provisions apply:
(d)
no writing‑down allowance in respect of such intellectual property rights may be made to that company under subsections (1A), (1AD), (1B) and (1BAA) for the year of assessment relating to the basis period in which the event occurs and for any subsequent year of assessment; and[Act 30 of 2023 wef 30/10/2023]
(e)
if any of those events occurs within the period of one year from the acquisition of the intellectual property rights, any writing‑down allowances made under subsection (1A), (1AD), (1B) or (1BAA) must be brought to charge as if the allowances were not made, and are deemed as income for the year of assessment relating to the basis period in which the event occurs.[37/2014; 34/2016]
[Act 30 of 2023 wef 30/10/2023]
(3) Any capital expenditure incurred on the acquisition of any intellectual property rights by a company before the commencement of its trade or business is treated for the purpose of this section as if it had been incurred by it on the first day it commences that trade or business.
(4) Subject to subsection (4A), where writing‑down allowances have been made to any company under subsection (1), (1AA) or (2C) in respect of any intellectual property rights and, before the end of the writing‑down period, any of the following events occurs:(a)
the rights come to an end without being subsequently revived;
(b)
the company sells, transfers or assigns all or any part of those rights;
(c)
the company permanently ceases to carry on the trade or business,
no writing‑down allowance in respect of the intellectual property rights may be made to that company for the year of assessment relating to the basis period in which the event occurs or for any subsequent year of assessment, and, where (on the occurrence of the event referred to in paragraph (b)) the price at which the rights were sold, transferred or assigned exceeds the amount of the writing‑down allowances yet to be allowed on the date of the event, there is to be made on the company for the year of assessment relating to the basis period in which the event occurs a charge of an amount equal to the lower of —
(d)
the excess; and
(e)
the writing‑down allowances made under subsections (1), (1AA) and (2C).[34/2016]
(4A) Where parts of any intellectual property right are sold, transferred or assigned by the company at different times and at least one sale, transfer or assignment occurs before the end of the writing‑down period, subsection (4) applies to each sale, transfer and assignment with the following modifications:(a)
the reference to the amount of writing‑down allowances yet to be allowed for the year of assessment relating to the basis period in which the event occurs, is a reference to an amount ascertained in accordance with the formula
where A
is the amount of writing‑down allowances yet to be allowed for the intellectual property right on the date of the first of such sales, transfers or assignments; and
B
is the aggregate of the prices of the parts of that right previously sold, transferred or assigned by the company,
or zero, if the amount ascertained by that formula is less than or equal to zero; and
(b)
the reference to the writing‑down allowances made under subsections (1), (1AA) and (2C) is a reference to the balance of such allowances made under subsections (1), (1AA) and (2C) in respect of that right after deducting the total amount of any charges made under this section in respect of that right.[34/2016]
(5) Where a company to whom writing‑down allowances have been made under subsections (1), (1AA) and (2C) in respect of any intellectual property rights sells, transfers or assigns all or any part of those rights after the writing‑down period, there is to be made on the company for the year of assessment relating to the basis period in which the sale, transfer or assignment occurs, a charge in an amount equal to the price which the rights were sold, transferred or assigned or in an amount equal to the capital expenditure incurred in acquiring the rights, whichever is less.[34/2016]
(6) For the purposes of subsection (5), where there is more than one sale, transfer or assignment of any part of any intellectual property rights, the amount of the capital expenditure incurred in acquiring the intellectual property rights for the year of assessment relating to the basis period in which the sale, transfer or assignment of that part of the rights occurs is ascertained in accordance with the formula
where A
is the capital expenditure incurred in acquiring the intellectual property rights; and
B
is the total amount of any charges made under this section in any previous years of assessment in respect of that expenditure.
(6A) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade or business, in which the intellectual property rights are used, produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment are to be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(6B) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade or business, in which the intellectual property rights are used, produces income that is exempt from tax as well as income chargeable with tax, and any charge under subsection (4) or (5) arises to be made, such proportion of that charge is exempt from tax as appears reasonable to the Comptroller in the circumstances.
(7) For the purpose of this section, any sale, transfer or assignment of any intellectual property rights which occurs after the date on which the trade or business of a company permanently ceases is deemed to have occurred immediately before the cessation.
(8) Despite the repeal of section 19B by the Income Tax (Amendment) Act 2001, the repealed section 19B continues to apply and have effect to any approved know‑how or patent rights for which writing‑down allowances had been made before the repeal as if that Act had not been enacted.
(9) Despite the amendment of section 19B by the Income Tax (Amendment) Act 2003, section 19B in force immediately before 1 November 2003 continues to apply and have effect to any intellectual property rights approved before that date.
(10) No writing‑down allowance may be made —(a)
under subsection (1) for any capital expenditure incurred in respect of intellectual property rights acquired after the last day of the basis period for the year of assessment 2016;
(aa)
under subsection (1AA) for any capital expenditure incurred in respect of intellectual property rights acquired after the last day of the basis period for the year of assessment 2028; or[Act 30 of 2023 wef 30/10/2023]
(b)
under subsection (2C) for any capital expenditure incurred in respect of intellectual property rights acquired after the last day of the basis period for the year of assessment 2018.[37/2014; 32/2019]
(10A) No writing‑down allowance under subsections (1), (1A), (1AA), (1AD), (1B), (1BAA) and (2C) may be made for any capital expenditure incurred by a company referred to in subsections (1), (1A), (1AA), (1AD), (1B), (1BAA) and (2C) in acquiring intellectual property rights from —(a)
its related party ––(i)
to whom any deduction has been allowed under section 14, 14C, 14D, 14E, 14EA, 14EB or 14P for any outgoing, expense or payment incurred for any activity which resulted in the creation of the intellectual property; and[Act 30 of 2023 wef 30/10/2023]
[Act 25 of 2025 wef 19/02/2025]
(ii)
whose proceeds from the sale, transfer or assignment of those intellectual property rights to the company are not chargeable to tax; or
(b)
its related party who acquired the rights, directly or indirectly, from a related party of the company referred to in paragraph (a).[37/2014; 34/2016]
[Act 30 of 2023 wef 30/10/2023]
(10B) The Minister may by order exempt a company from subsection (10A) in respect of such transaction as may be specified in the order.
(10C) No writing‑down allowance under subsections (1A), (1AD), (1B) and (1BAA) may be made to any company in respect of any amount of capital expenditure incurred on the acquisition of intellectual property rights for which an investment allowance has been claimed under Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967.[37/2014]
[Act 30 of 2023 wef 30/10/2023]
(10D) No allowance under subsections (1A), (1B) and (1BAA) may be made to any company in respect of any instalment paid by it under any agreement to acquire any intellectual property right that is signed before the basis period for the year of assessment 2011.[37/2014]
(10E) If, in the case of an acquisition of intellectual property rights —(a)
whose acquisition date is on or after 25 March 2016; and
(b)
the payment for which is not made by instalments,
the capital expenditure incurred for the acquisition exceeds the open‑market price for those rights, then, for the purpose of determining the amount of writing‑down allowances for that expenditure under subsection (1AA), (1AD), (1BAA) or (2C), the Comptroller may treat the open‑market price as the amount of that expenditure, and in that event subsection (5) also applies as if the open‑market price were the amount of that expenditure.
[34/2016]
[Act 30 of 2023 wef 30/10/2023]
(10F) In subsection (10E), “open‑market price”, for intellectual property rights, means either —(a)
the price which those rights could have been purchased in the open market on the acquisition date of those rights; or
(b)
if, by reason of the special nature of those rights, it is not possible to determine the price mentioned in paragraph (a), such other value as the Comptroller considers to be a reasonable value for those rights after considering the valuation of those rights by an appropriate valuer and other relevant circumstances.[34/2016]
(10G) If, in the case of an acquisition of intellectual property rights —(a)
whose acquisition date is on or after 25 March 2016; and
(b)
the payment for which is made by instalments,
the total amount of the deposits and instalment payments (excluding any finance charges) made in a basis period exceeds the open‑market price for those rights, then, for the purpose of determining the amount of writing‑down allowances in such a case under subsection (1AA) or (2C), the Comptroller may treat the open‑market price as the amount of such expenditure, and in that event subsection (5) also applies as if the open‑market price were the amount of such expenditure.
[34/2016]
(10H) In subsection (10G), “open‑market price”, for intellectual property rights, means an amount computed by the formula
where C
is the total amount of the deposits and instalment payments (excluding any finance charges) made in the basis period;
D
is the total amount of all the deposits and instalment payments (excluding any finance charges) under the agreement to acquire those rights; and
E
is either —
(a)
the price (excluding any finance charges) which those rights could have been purchased in the open market on their acquisition date; or
(b)
if, by reason of the special nature of those rights, it is not possible to determine the price mentioned in sub‑paragraph (a), such other value as the Comptroller considers to be a reasonable value for those rights after considering the valuation of those rights by an appropriate valuer and other relevant circumstances.
[34/2016]
(10I) If, in the case of an acquisition of intellectual property rights —(a)
whose acquisition date is on or after 25 March 2016; and
(b)
the payment for which is made by instalments,
the amount mentioned in subsection (1C)(a)(i) exceeds the open‑market price mentioned in subsection (10F), then, for the purpose of determining the amount of writing‑down allowances to be made for any year of assessment under subsection (1AD) or (1BAA) (as the case may be), the Comptroller may treat the open‑market price mentioned in subsection (10F) as the amount mentioned in subsection (1C)(a)(i).
[34/2016]
[Act 30 of 2023 wef 30/10/2023]
(10J) If —(a)
intellectual property rights or a part of such rights are or is sold, transferred or assigned on or after 25 March 2016; and
(b)
the rights or part are or is sold, transferred or assigned for less than the open‑market price,
then, for the purpose of determining the amount of any charge under subsection (4), (4A) or (5), the Comptroller may treat the open‑market price as the price at which the rights or part (as the case may be) are or is sold, transferred or assigned.
[34/2016]
(10K) In subsection (10J), “open‑market price”, for intellectual property rights or a part of such rights, means —(a)
the price which those rights or that part would have fetched if sold, transferred or assigned in the open market at the time of the actual sale, transfer or assignment; or
(b)
if, by reason of the special nature of those rights or part, it is not possible to determine the price mentioned in paragraph (a), such other value as the Comptroller considers to be a reasonable value for those rights or that part after considering the valuation of those rights or that part by an appropriate valuer and other relevant circumstances.[34/2016]
(11) In this section —“appropriate valuer” means a valuer who is independent of any party to the acquisition, sale, transfer or assignment (as the case may be) of the intellectual property rights, and has qualifications and experience that are relevant to the valuation in question;
“approved” means approved by the Minister or an authorised body, subject to such conditions as the Minister or authorised body may impose;[Act 41 of 2020 wef 12/04/2024]
“capital expenditure” does not include legal fees, registration fees, stamp duty and other costs related to the acquisition of any intellectual property rights;
“intellectual property rights” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of any patent, copyright, trade mark, registered design, geographical indication, layout‑design of integrated circuit, trade secret or information that has commercial value, or the grant of protection of a plant variety;
“media and digital entertainment company” means a company whose principal trade or business is to provide media and digital entertainment in Singapore.[Act 33 of 2022 wef 04/11/2022]
[34/2016]
[Deleted by Act 33 of 2022 wef 04/11/2022]
(11A) In the definition of “intellectual property rights” in subsection (11), the expressions “trade secret” and “information that has commercial value”, and any work or subject matter to which the expression “copyright” relates, exclude the following:(a)
information of customers of a trade or business, such as a list of those customers and requirements of those customers, gathered in the course of carrying on that trade or business;
(b)
information on work processes (such as standard operating procedures), other than industrial information, or technique, that is likely to assist in the manufacture or processing of goods or materials;
(c)
compilation of any information as described in paragraph (a) or (b);
(d)
such other matter as the Minister may by regulations prescribe.[37/2014]
(12) In subsections (1A), (1AD), (1B) and (1BAA), a reference to capital expenditure incurred on 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.[37/2014]
[Act 30 of 2023 wef 30/10/2023]
(13) In this section, for a company, the acquisition date of any intellectual property rights is —(a)
the date of the signing of the agreement to acquire those rights; or
(b)
if there is no agreement, the date on which those rights are assigned to the company.[34/2016]
Writing‑down allowances for approved cost‑sharing agreement for research and development activities
19C.—(1) Subject to this section, where a person carrying on a trade or business has incurred expenditure under any cost‑sharing agreement entered into and approved on or after 17 February 2006, in respect of research and development activities for the purposes of that trade or business (called in this section the relevant trade or business), the person is, subject to such conditions as may be imposed by the Minister or such person as the Minister may appoint, entitled to a writing‑down allowance of 100% of that expenditure in the year of assessment relating to the basis period in which that expenditure was incurred.(1A) No writing‑down allowance may be made under this section in respect of any expenditure incurred during the basis period for the year of assessment 2012 or any subsequent year of assessment.
(2) The Minister or such person as the Minister may appoint may specify the maximum amount of expenditure in respect of which writing‑down allowances are to be made under subsection (1).
(3) No writing‑down allowance may be made under subsection (1) to any person in respect of any payment or contribution paid by the person for the right to become a party to any existing approved cost‑sharing agreement.
(4) Any expenditure incurred by a person under any approved cost‑sharing agreement before the commencement of the person’s trade or business is treated for the purpose of this section as if it had been incurred by the person on the first day the person commences that trade or business.
(5) Where a person to whom writing‑down allowances have been made under this section —(a)
sells, assigns or otherwise disposes of any right under any approved cost‑sharing agreement to which the person is a party;
(b)
sells, assigns or otherwise disposes of the whole or part of any technology or know‑how developed from the research and development activities carried out under any approved cost‑sharing agreement to which the person is a party;
(c)
receives any consideration from any other person for permitting that other person to become a party to any approved cost‑sharing agreement to which the firstmentioned person is a party; or
(d)
receives any consideration from the disposal of any machinery, plant or building acquired under any approved cost‑sharing agreement to which the person is a party,
the amount or value of any consideration is treated as a trading receipt of the relevant trade or business for the year of assessment which relates to the basis period in which the event in paragraph (a), (b), (c) or (d) occurs.
(5A) To avoid doubt, section 19C(6) in force immediately before 17 February 2006, or subsection (5) of this section (as the case may be), continues to apply to a person to whom writing‑down allowances have previously been made under this section in respect of a cost‑sharing agreement, and deductions are allowed under section 14C for expenditure incurred or payments made under the same agreement.
(6) For the purpose of subsection (5), the amount or value of the consideration to be treated as a trading receipt must not exceed the amount of writing‑down allowance made under this section.
(7) Where no writing‑down allowances have been made to any person in respect of expenditure incurred by the person by virtue of subsection (2) or in respect of any payment or contribution made by the person by virtue of subsection (3), the Minister may for the purposes of subsection (5) exempt such part of the amount or value of the consideration as the Minister thinks fit.
(8) Any event referred to in subsection (5) which occurs after the date on which the relevant trade or business permanently ceases is deemed to have occurred immediately before the cessation.
(9) Where a person to whom writing‑down allowances have been made under this section is entitled to royalty or other payments in one lump sum or otherwise for the use of or right to use any technology or know‑how developed from the research and development activities carried out under any approved cost‑sharing agreement, such royalty or payments are deemed to be income derived from Singapore for the year of assessment which relates to the basis period in which the person is entitled to the royalty or payments, as the case may be.
(10) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the relevant trade or business produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment are to be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(11) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the relevant trade or business, produces income that is exempt from tax as well as income chargeable with tax, and an event referred to in subsection (5)(a), (b), (c) or (d) occurs, such proportion of any amount or value of any consideration treated as a trading receipt under that subsection is exempt from tax as appears reasonable to the Comptroller in the circumstances.
(12) Despite the provisions of this section, section 19C in force immediately before 17 February 2006 continues to apply and have effect in relation to any approved cost‑sharing agreement entered into before that date in respect of research and development activities.
(13) In this section —“approved” means approved by the Minister or such person as the Minister may appoint;
“cost‑sharing agreement” means any agreement or arrangement made by 2 or more persons to share the expenditure of research and development activities to be carried out under the agreement or arrangement.
—(1) Subject to this section, where a person carrying on a trade or business has incurred expenditure under any cost‑sharing agreement entered into and approved on or after 17 February 2006, in respect of research and development activities for the purposes of that trade or business (called in this section the relevant trade or business), the person is, subject to such conditions as may be imposed by the Minister or such person as the Minister may appoint, entitled to a writing‑down allowance of 100% of that expenditure in the year of assessment relating to the basis period in which that expenditure was incurred.
(1A) No writing‑down allowance may be made under this section in respect of any expenditure incurred during the basis period for the year of assessment 2012 or any subsequent year of assessment.
(2) The Minister or such person as the Minister may appoint may specify the maximum amount of expenditure in respect of which writing‑down allowances are to be made under subsection (1).
(3) No writing‑down allowance may be made under subsection (1) to any person in respect of any payment or contribution paid by the person for the right to become a party to any existing approved cost‑sharing agreement.
(4) Any expenditure incurred by a person under any approved cost‑sharing agreement before the commencement of the person’s trade or business is treated for the purpose of this section as if it had been incurred by the person on the first day the person commences that trade or business.
(5) Where a person to whom writing‑down allowances have been made under this section —(a)
sells, assigns or otherwise disposes of any right under any approved cost‑sharing agreement to which the person is a party;
(b)
sells, assigns or otherwise disposes of the whole or part of any technology or know‑how developed from the research and development activities carried out under any approved cost‑sharing agreement to which the person is a party;
(c)
receives any consideration from any other person for permitting that other person to become a party to any approved cost‑sharing agreement to which the firstmentioned person is a party; or
(d)
receives any consideration from the disposal of any machinery, plant or building acquired under any approved cost‑sharing agreement to which the person is a party,
the amount or value of any consideration is treated as a trading receipt of the relevant trade or business for the year of assessment which relates to the basis period in which the event in paragraph (a), (b), (c) or (d) occurs.
(5A) To avoid doubt, section 19C(6) in force immediately before 17 February 2006, or subsection (5) of this section (as the case may be), continues to apply to a person to whom writing‑down allowances have previously been made under this section in respect of a cost‑sharing agreement, and deductions are allowed under section 14C for expenditure incurred or payments made under the same agreement.
(6) For the purpose of subsection (5), the amount or value of the consideration to be treated as a trading receipt must not exceed the amount of writing‑down allowance made under this section.
(7) Where no writing‑down allowances have been made to any person in respect of expenditure incurred by the person by virtue of subsection (2) or in respect of any payment or contribution made by the person by virtue of subsection (3), the Minister may for the purposes of subsection (5) exempt such part of the amount or value of the consideration as the Minister thinks fit.
(8) Any event referred to in subsection (5) which occurs after the date on which the relevant trade or business permanently ceases is deemed to have occurred immediately before the cessation.
(9) Where a person to whom writing‑down allowances have been made under this section is entitled to royalty or other payments in one lump sum or otherwise for the use of or right to use any technology or know‑how developed from the research and development activities carried out under any approved cost‑sharing agreement, such royalty or payments are deemed to be income derived from Singapore for the year of assessment which relates to the basis period in which the person is entitled to the royalty or payments, as the case may be.
(10) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the relevant trade or business produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment are to be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(11) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the relevant trade or business, produces income that is exempt from tax as well as income chargeable with tax, and an event referred to in subsection (5)(a), (b), (c) or (d) occurs, such proportion of any amount or value of any consideration treated as a trading receipt under that subsection is exempt from tax as appears reasonable to the Comptroller in the circumstances.
(12) Despite the provisions of this section, section 19C in force immediately before 17 February 2006 continues to apply and have effect in relation to any approved cost‑sharing agreement entered into before that date in respect of research and development activities.
(13) In this section —“approved” means approved by the Minister or such person as the Minister may appoint;
“cost‑sharing agreement” means any agreement or arrangement made by 2 or more persons to share the expenditure of research and development activities to be carried out under the agreement or arrangement.
Writing‑down allowance for IRU
19D.—(1) Subject to this section, where a person carrying on a trade, business or profession has incurred capital expenditure during or after the basis period for the year of assessment 2004 for the acquisition of an indefeasible right to use any international telecommunications submarine cable system (called in this section Indefeasible Right of Use or IRU) for the purposes of that trade, business or profession (called in this section the relevant trade, business or profession), writing‑down allowances computed in accordance with subsection (3) are to be made to the person, on due claim, in respect of that capital expenditure during the writing‑down period.(2) The writing‑down period in respect of an IRU is the number of years for which the IRU is acquired commencing with the year of assessment relating to the basis period in which the capital expenditure for the acquisition of the IRU is incurred.
(3) For the purposes of this section, the writing‑down allowances in respect of an IRU are determined by the formula
where A
is the amount of capital expenditure incurred for the acquisition of the IRU; and
B
is the writing‑down period for the IRU.
(4) Despite anything in this section, no writing‑down allowance may be granted to any person under subsection (1) in any year of assessment if the international telecommunications submarine cable system is not in use at the end of the basis period for that year of assessment by that person in the trade, business or profession carried on by the person.
(4A) No writing‑down allowance is to be made under subsection (1) for any capital expenditure incurred after 31 December 2028.[2/2016; 41/2020]
[Act 30 of 2023 wef 30/10/2023]
(5) Any capital expenditure incurred for the acquisition of any IRU by a person before the commencement of the person’s trade, business or profession is treated for the purpose of this section as if it had been incurred by the person on the first day the person commences that trade, business or profession.
(6) Where writing‑down allowances in respect of any IRU have been made to any person under this section and, before or at the end of the writing‑down period for the IRU, any of the following events occurs:(a)
the IRU comes to an end without subsequent renewal by the person;
(b)
the person permanently ceases to carry on the relevant trade, business or profession;
(c)
the person sells, transfers or assigns all the IRU or so much of it as the person still owns;
(d)
the person sells, transfers or assigns part of the IRU and the amount or value of any consideration less any decommissioning cost (called in this section the consideration) for the sale, transfer or assignment is not less than the amount of capital expenditure remaining unallowed for the IRU,
no writing‑down allowance in respect of the IRU may be made to the person for the year of assessment relating to the basis period in which the event occurs or for any subsequent year of assessment.
(7) Where an IRU remains with any person after the date on which it permanently ceases to be used by the person for the relevant trade, business or profession, the IRU is deemed to have been sold by the person at the open‑market price on the date of permanent cessation of use.
(8) Where writing‑down allowances in respect of any IRU have been made to any person under this section and, before or at the end of the writing‑down period for the IRU, any of the following events occurs:(a)
the IRU comes to an end without subsequent renewal by the person;
(b)
the person permanently ceases to carry on the relevant trade, business or profession;
(c)
the person sells, transfers or assigns all the IRU or so much of it as the person still owns and the consideration for the sale, transfer or assignment is less than the amount of capital expenditure remaining unallowed for the IRU,
there is to be made to the person for the year of assessment relating to the basis period in which the event occurs, a balancing allowance equal to —
(d)
in the case where the amount of capital expenditure remaining unallowed for the IRU exceeds the consideration for the sale, transfer or assignment of the IRU, the excess; or
(e)
in any other case, the amount of capital expenditure remaining unallowed for the IRU.
(9) Where writing‑down allowances in respect of any IRU have been made to any person under this section and the person sells, transfers or assigns all or any part of the IRU and the consideration for the sale, transfer or assignment of the IRU exceeds the amount of capital expenditure remaining unallowed for the IRU (if any) there is to be made on the person, a balancing charge, which is based on an amount equal to —(a)
the excess of the consideration for the sale, transfer or assignment of the IRU over the amount of capital expenditure remaining unallowed for the IRU; or
(b)
the consideration for the sale, transfer or assignment of the IRU, where the amount of capital expenditure remaining unallowed for the IRU is nil,
and the balancing charge is deemed as income for the year of assessment relating to the basis period in which the sale, transfer or assignment of the IRU occurs.
(10) Where writing‑down allowances in respect of any IRU have been made to any person under this section and the person sells, transfers or assigns any part of the IRU, and the consideration for the sale, transfer or assignment of the IRU is less than the amount of capital expenditure remaining unallowed for the IRU, the amount of any writing‑down allowances made in respect of the IRU for the year of assessment relating to the basis period in which the sale, transfer or assignment of the IRU occurs or any subsequent year of assessment is the amount determined by the formula
where C
is the amount of capital expenditure remaining unallowed at the time of the sale, transfer or assignment of the IRU;
D
is the consideration for the sale, transfer or assignment of that part of the IRU; and
E
is the number of complete years of the writing‑down period remaining at the beginning of the year of assessment relating to the basis period in which the sale, transfer or assignment of the IRU occurs,
and so on for any subsequent sale, transfer or assignment of the IRU.
(11) Despite subsections (9) and (10), the total amount on which a balancing charge is made in respect of any capital expenditure incurred for the acquisition of an IRU must not exceed the total writing‑down allowances actually made for the IRU in respect of that capital expenditure, less, if a balancing charge has previously been made in respect of that capital expenditure, the amount on which that balancing charge was made.
(12) Where the sale, transfer or assignment of all or part of any IRU is made at less than the open‑market price, then for the purpose of determining the amount of any balancing allowance or balancing charge, the event is treated as if it had given rise to sale, transfer or assignment moneys of an amount equal to the open‑market price of the IRU.
(13) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the relevant trade, business or profession produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment are to be made against each income in that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(14) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the relevant trade, business or profession produces income that is exempt from tax as well as income chargeable with tax, and any balancing allowance or balancing charge arises to be made —(a)
the balancing allowance is to be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances; and
(b)
such proportion of the balancing charge is exempt from tax as appears reasonable to the Comptroller in the circumstances.
(15) In this section —“capital expenditure” does not include legal fees, registration fees, stamp duty and other costs related to the acquisition of any IRU;
“capital expenditure remaining unallowed”, in relation to any IRU, means the amount of capital expenditure incurred for the acquisition of the IRU less —(a)
any writing‑down allowances made in respect of that capital expenditure for the years of assessment before the year of assessment relating to the basis period in which any event referred to in subsection (6), (8), (9) or (10) occurs; and
(b)
the consideration for any prior sale, transfer or assignment by the person who incurred the capital expenditure of any part of the IRU acquired by the capital expenditure;
“international telecommunications submarine cable system” means an international submarine cable that is laid in the sea and includes its cable landing station and any other equipment ancillary to the submarine cable system;
“open‑market price”, in relation to any IRU, means —(a)
the price which the IRU would have fetched if sold in the open market at the time any event referred to in subsection (6), (8), (9) or (10) occurs; or
(b)
where the Comptroller is satisfied by reason of the special nature of any IRU that it is not practicable to determine the open‑market price, such other value as appears to the Comptroller to be reasonable in the circumstances.
(16) For the purposes of this section, any sale, transfer or assignment of any IRU which occurs after the date on which a relevant trade, business or profession permanently ceases is deemed to have occurred immediately before the cessation.
—(1) Subject to this section, where a person carrying on a trade, business or profession has incurred capital expenditure during or after the basis period for the year of assessment 2004 for the acquisition of an indefeasible right to use any international telecommunications submarine cable system (called in this section Indefeasible Right of Use or IRU) for the purposes of that trade, business or profession (called in this section the relevant trade, business or profession), writing‑down allowances computed in accordance with subsection (3) are to be made to the person, on due claim, in respect of that capital expenditure during the writing‑down period.
(2) The writing‑down period in respect of an IRU is the number of years for which the IRU is acquired commencing with the year of assessment relating to the basis period in which the capital expenditure for the acquisition of the IRU is incurred.
(3) For the purposes of this section, the writing‑down allowances in respect of an IRU are determined by the formula
where A
is the amount of capital expenditure incurred for the acquisition of the IRU; and
B
is the writing‑down period for the IRU.
(4) Despite anything in this section, no writing‑down allowance may be granted to any person under subsection (1) in any year of assessment if the international telecommunications submarine cable system is not in use at the end of the basis period for that year of assessment by that person in the trade, business or profession carried on by the person.
(4A) No writing‑down allowance is to be made under subsection (1) for any capital expenditure incurred after 31 December 2028.[2/2016; 41/2020]
[Act 30 of 2023 wef 30/10/2023]
(5) Any capital expenditure incurred for the acquisition of any IRU by a person before the commencement of the person’s trade, business or profession is treated for the purpose of this section as if it had been incurred by the person on the first day the person commences that trade, business or profession.
(6) Where writing‑down allowances in respect of any IRU have been made to any person under this section and, before or at the end of the writing‑down period for the IRU, any of the following events occurs:(a)
the IRU comes to an end without subsequent renewal by the person;
(b)
the person permanently ceases to carry on the relevant trade, business or profession;
(c)
the person sells, transfers or assigns all the IRU or so much of it as the person still owns;
(d)
the person sells, transfers or assigns part of the IRU and the amount or value of any consideration less any decommissioning cost (called in this section the consideration) for the sale, transfer or assignment is not less than the amount of capital expenditure remaining unallowed for the IRU,
no writing‑down allowance in respect of the IRU may be made to the person for the year of assessment relating to the basis period in which the event occurs or for any subsequent year of assessment.
(7) Where an IRU remains with any person after the date on which it permanently ceases to be used by the person for the relevant trade, business or profession, the IRU is deemed to have been sold by the person at the open‑market price on the date of permanent cessation of use.
(8) Where writing‑down allowances in respect of any IRU have been made to any person under this section and, before or at the end of the writing‑down period for the IRU, any of the following events occurs:(a)
the IRU comes to an end without subsequent renewal by the person;
(b)
the person permanently ceases to carry on the relevant trade, business or profession;
(c)
the person sells, transfers or assigns all the IRU or so much of it as the person still owns and the consideration for the sale, transfer or assignment is less than the amount of capital expenditure remaining unallowed for the IRU,
there is to be made to the person for the year of assessment relating to the basis period in which the event occurs, a balancing allowance equal to —
(d)
in the case where the amount of capital expenditure remaining unallowed for the IRU exceeds the consideration for the sale, transfer or assignment of the IRU, the excess; or
(e)
in any other case, the amount of capital expenditure remaining unallowed for the IRU.
(9) Where writing‑down allowances in respect of any IRU have been made to any person under this section and the person sells, transfers or assigns all or any part of the IRU and the consideration for the sale, transfer or assignment of the IRU exceeds the amount of capital expenditure remaining unallowed for the IRU (if any) there is to be made on the person, a balancing charge, which is based on an amount equal to —(a)
the excess of the consideration for the sale, transfer or assignment of the IRU over the amount of capital expenditure remaining unallowed for the IRU; or
(b)
the consideration for the sale, transfer or assignment of the IRU, where the amount of capital expenditure remaining unallowed for the IRU is nil,
and the balancing charge is deemed as income for the year of assessment relating to the basis period in which the sale, transfer or assignment of the IRU occurs.
(10) Where writing‑down allowances in respect of any IRU have been made to any person under this section and the person sells, transfers or assigns any part of the IRU, and the consideration for the sale, transfer or assignment of the IRU is less than the amount of capital expenditure remaining unallowed for the IRU, the amount of any writing‑down allowances made in respect of the IRU for the year of assessment relating to the basis period in which the sale, transfer or assignment of the IRU occurs or any subsequent year of assessment is the amount determined by the formula
where C
is the amount of capital expenditure remaining unallowed at the time of the sale, transfer or assignment of the IRU;
D
is the consideration for the sale, transfer or assignment of that part of the IRU; and
E
is the number of complete years of the writing‑down period remaining at the beginning of the year of assessment relating to the basis period in which the sale, transfer or assignment of the IRU occurs,
and so on for any subsequent sale, transfer or assignment of the IRU.
(11) Despite subsections (9) and (10), the total amount on which a balancing charge is made in respect of any capital expenditure incurred for the acquisition of an IRU must not exceed the total writing‑down allowances actually made for the IRU in respect of that capital expenditure, less, if a balancing charge has previously been made in respect of that capital expenditure, the amount on which that balancing charge was made.
(12) Where the sale, transfer or assignment of all or part of any IRU is made at less than the open‑market price, then for the purpose of determining the amount of any balancing allowance or balancing charge, the event is treated as if it had given rise to sale, transfer or assignment moneys of an amount equal to the open‑market price of the IRU.
(13) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the relevant trade, business or profession produces income that is exempt from tax as well as income chargeable with tax, the allowances for that year of assessment are to be made against each income in that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances.
(14) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the relevant trade, business or profession produces income that is exempt from tax as well as income chargeable with tax, and any balancing allowance or balancing charge arises to be made —(a)
the balancing allowance is to be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances; and
(b)
such proportion of the balancing charge is exempt from tax as appears reasonable to the Comptroller in the circumstances.
(15) In this section —“capital expenditure” does not include legal fees, registration fees, stamp duty and other costs related to the acquisition of any IRU;
“capital expenditure remaining unallowed”, in relation to any IRU, means the amount of capital expenditure incurred for the acquisition of the IRU less —(a)
any writing‑down allowances made in respect of that capital expenditure for the years of assessment before the year of assessment relating to the basis period in which any event referred to in subsection (6), (8), (9) or (10) occurs; and
(b)
the consideration for any prior sale, transfer or assignment by the person who incurred the capital expenditure of any part of the IRU acquired by the capital expenditure;
“international telecommunications submarine cable system” means an international submarine cable that is laid in the sea and includes its cable landing station and any other equipment ancillary to the submarine cable system;
“open‑market price”, in relation to any IRU, means —(a)
the price which the IRU would have fetched if sold in the open market at the time any event referred to in subsection (6), (8), (9) or (10) occurs; or
(b)
where the Comptroller is satisfied by reason of the special nature of any IRU that it is not practicable to determine the open‑market price, such other value as appears to the Comptroller to be reasonable in the circumstances.
(16) For the purposes of this section, any sale, transfer or assignment of any IRU which occurs after the date on which a relevant trade, business or profession permanently ceases is deemed to have occurred immediately before the cessation.
Use of open‑market price for making allowances under sections 19, 19A and 19D
19E.—(1) This section applies for the purpose of making an allowance under section 19, 19A or 19D for capital expenditure incurred in acquiring any machinery, plant or IRU (called in this section the property), and applies despite anything in that section.[27/2021]
(2) If the capital expenditure (not being a deposit or an instalment payment) incurred for the acquisition of the property exceeds the open‑market price for the property, then, for the purpose of determining the amount of allowances for the capital expenditure under section 19, 19A or 19D, the Comptroller may treat the open‑market price as the amount of that expenditure.[27/2021]
(3) In subsection (2), the open‑market price for the property is either —(a)
the price which the property could have been purchased in the open market on the date of its acquisition; or
(b)
where the Comptroller is satisfied by reason of the special nature of the property that it is not practicable to determine the price mentioned in paragraph (a), such other value as appears to the Comptroller to be reasonable in the circumstances.[27/2021]
(4) If the capital expenditure consists of deposits and instalment payments and the total amount of the deposits and instalment payments (excluding any finance charges) made in any basis period exceeds a proportion of the open‑market price for the property as computed under subsection (5), then, for the purpose of determining the amount of allowances for the expenditure under section 19, 19A or 19D, the Comptroller may treat that proportion of the open‑market price as the amount of that expenditure.[27/2021]
(5) In subsection (4), the proportion of the open‑market price for the property is an amount computed by the formula
where —
(a)
A is the total amount of the deposits and instalment payments (excluding any finance charges) made in the basis period;
(b)
B is the total amount of all the deposits and instalment payments (excluding any finance charges) payable to acquire the property; and
(c)
C is either —(i)
the price (excluding any finance charges) which the property could have been purchased in the open market on the date of its acquisition; or
(ii)
where the Comptroller is satisfied by reason of the special nature of the property that it is not practicable to determine the price mentioned in sub‑paragraph (i), such other value as appears to the Comptroller to be reasonable in the circumstances.[27/2021]
(6) In this section, “IRU” has the meaning given by section 19D(1).[27/2021]
—(1) This section applies for the purpose of making an allowance under section 19, 19A or 19D for capital expenditure incurred in acquiring any machinery, plant or IRU (called in this section the property), and applies despite anything in that section.[27/2021]
(2) If the capital expenditure (not being a deposit or an instalment payment) incurred for the acquisition of the property exceeds the open‑market price for the property, then, for the purpose of determining the amount of allowances for the capital expenditure under section 19, 19A or 19D, the Comptroller may treat the open‑market price as the amount of that expenditure.[27/2021]
(3) In subsection (2), the open‑market price for the property is either —(a)
the price which the property could have been purchased in the open market on the date of its acquisition; or
(b)
where the Comptroller is satisfied by reason of the special nature of the property that it is not practicable to determine the price mentioned in paragraph (a), such other value as appears to the Comptroller to be reasonable in the circumstances.[27/2021]
(4) If the capital expenditure consists of deposits and instalment payments and the total amount of the deposits and instalment payments (excluding any finance charges) made in any basis period exceeds a proportion of the open‑market price for the property as computed under subsection (5), then, for the purpose of determining the amount of allowances for the expenditure under section 19, 19A or 19D, the Comptroller may treat that proportion of the open‑market price as the amount of that expenditure.[27/2021]
(5) In subsection (4), the proportion of the open‑market price for the property is an amount computed by the formula
where —
(a)
A is the total amount of the deposits and instalment payments (excluding any finance charges) made in the basis period;
(b)
B is the total amount of all the deposits and instalment payments (excluding any finance charges) payable to acquire the property; and
(c)
C is either —(i)
the price (excluding any finance charges) which the property could have been purchased in the open market on the date of its acquisition; or
(ii)
where the Comptroller is satisfied by reason of the special nature of the property that it is not practicable to determine the price mentioned in sub‑paragraph (i), such other value as appears to the Comptroller to be reasonable in the circumstances.[27/2021]
(6) In this section, “IRU” has the meaning given by section 19D(1).[27/2021]
Balancing allowances and charges for machinery or plant
20.—(1) Except as provided in this section, where at any time after the setting up and on or before the permanent discontinuance of a trade, profession or business, any event occurs whereby machinery or plant in respect of which allowances under section 19 or 19A have been made to a person carrying on a trade, profession or business —(a)
ceases to belong to that person (whether on a sale of the machinery or plant or in any other circumstances of any description); or
(b)
while continuing to belong to that person —(i)
in a case where the machinery or plant which —(A)
was provided for any research and development undertaken by that person directly in Singapore or by a research and development organisation on that person’s behalf in Singapore; and
(B)
was not provided for the purpose of a trade or business carried on by that person,
permanently ceases to be used for any research and development undertaken by that person directly in Singapore or by a research and development organisation on that person’s behalf in Singapore, and is not used for the purpose of a trade, profession or business carried on by that person; or
(ii)
in any other case, permanently ceases to be used for the purpose of a trade, profession or business carried on by that person in Singapore (whether by reason of the discontinuance of the trade, profession or business, or discontinuance of use of such machinery or plant in a trade, profession or business which continues to be carried on in Singapore),
an allowance or a charge, to be known as a balancing allowance or a balancing charge, is in the circumstances mentioned in this section to be made to or (as the case may be) on that person for the year of assessment in the basis period for which that event occurs.
(1A) Where the property in machinery or plant passes at less than the open‑market price, then for the purpose of determining the amount of any balancing allowance or balancing charge the event is treated as if it had given rise to sale moneys of an amount equal to the open‑market price of the machinery or plant.
(2) Where machinery or plant continues to belong to that person after the date on which it permanently ceases to be used for the purposes of a trade, profession or business carried on by that person in Singapore, or (as the case may be) for the purpose of any research and development undertaken by that person directly in Singapore or by a research and development organisation on that person’s behalf in Singapore, it is deemed to have been sold on the date of permanent cessation of use at the open‑market price on that date.
(2A) Where there are no sale, insurance, salvage or compensation moneys or where the amount of the capital expenditure of the person in question on the provision of the machinery or plant still unallowed as at the time of the event exceeds those moneys, a balancing allowance is to be made, and the amount thereof is the amount of the expenditure still unallowed as aforesaid or (as the case may be) the excess thereof over those moneys.
(3) If the sale, insurance, salvage or compensation moneys exceed the amount (if any) of the said expenditure still unallowed as at the time of the event, a balancing charge is to be made, and the amount on which it is made is an amount equal to the excess or, where the said amount still unallowed is nil, to those moneys.
(4) Despite anything in subsection (3), the amount on which a balancing charge is made on a person must not in any case exceed —(a)
the aggregate of the initial allowance (if any) and the annual allowances (if any) made to the person under section 19 in respect of the expenditure in question; and
(b)
the allowances (if any) made to the person under section 19A in respect of the expenditure in question.[27/2021]
(5) Despite anything in this section but subject to subsection (6A), where a balancing allowance or balancing charge falls to be made under subsection (1) in respect of a motor car to which section 19(3) applies, the sum to be taken in lieu of the open‑market price or sale, insurance, salvage or compensation moneys for the purpose of calculating such balancing allowance or charge is ascertained in accordance with the formula
where A
is the open‑market price or sale, insurance, salvage or compensation moneys in respect of the motor car; and
B
is the capital expenditure incurred in respect of the motor car.
(6) Despite anything in this section, no balancing allowance may be made in respect of a motor car within the meaning of section 19(4)(a) which is not, for any basis period after the basis period for the year of assessment 1981, registered as a business service passenger vehicle for the purposes of the Road Traffic Act 1961.
(6A) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade, profession or business, for which purpose the machinery or plant is provided, produces income that is exempt from tax as well as income chargeable with tax, and any balancing allowance or balancing charge arises to be made —(a)
the balancing allowance is to be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances; and
(b)
such proportion of the balancing charge is exempt from tax as appears reasonable to the Comptroller in the circumstances.
(6B) Section 14C(4) and (5) applies in relation to the balancing allowance to be made to a person under subsection (1)(b)(i) 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 the balancing allowance;
(b)
a reference to unabsorbed losses is a reference to unabsorbed allowances; and
(c)
a reference to a specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula
where A
is the amount of the balancing allowance that could have been made against the income of the person under subsection (1)(b)(i) if the income had been subject to tax at the rate specified in section 43(1)(a);
B
is the rate of tax specified in section 43(1)(a); and
C
is —
(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
(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.
(6C) Despite anything in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where a balancing charge falls to be made on a person under subsection (1)(b)(i), the amount of the charge is deemed to be income of that person that is chargeable to tax at the rate of tax specified in section 43(1)(a).
(7) In this section, “open‑market price”, in relation to any machinery or plant, means the price which the machinery or plant would have fetched if sold in the open market at the time of the event in question; except that where the Comptroller is satisfied by reason of the special nature of any machinery or plant that it is not practicable to determine an open‑market price, the Comptroller may adopt such other value as appears to the Comptroller to be reasonable in the circumstances.
—(1) Except as provided in this section, where at any time after the setting up and on or before the permanent discontinuance of a trade, profession or business, any event occurs whereby machinery or plant in respect of which allowances under section 19 or 19A have been made to a person carrying on a trade, profession or business —(a)
ceases to belong to that person (whether on a sale of the machinery or plant or in any other circumstances of any description); or
(b)
while continuing to belong to that person —(i)
in a case where the machinery or plant which —(A)
was provided for any research and development undertaken by that person directly in Singapore or by a research and development organisation on that person’s behalf in Singapore; and
(B)
was not provided for the purpose of a trade or business carried on by that person,
permanently ceases to be used for any research and development undertaken by that person directly in Singapore or by a research and development organisation on that person’s behalf in Singapore, and is not used for the purpose of a trade, profession or business carried on by that person; or
(ii)
in any other case, permanently ceases to be used for the purpose of a trade, profession or business carried on by that person in Singapore (whether by reason of the discontinuance of the trade, profession or business, or discontinuance of use of such machinery or plant in a trade, profession or business which continues to be carried on in Singapore),
an allowance or a charge, to be known as a balancing allowance or a balancing charge, is in the circumstances mentioned in this section to be made to or (as the case may be) on that person for the year of assessment in the basis period for which that event occurs.
(1A) Where the property in machinery or plant passes at less than the open‑market price, then for the purpose of determining the amount of any balancing allowance or balancing charge the event is treated as if it had given rise to sale moneys of an amount equal to the open‑market price of the machinery or plant.
(2) Where machinery or plant continues to belong to that person after the date on which it permanently ceases to be used for the purposes of a trade, profession or business carried on by that person in Singapore, or (as the case may be) for the purpose of any research and development undertaken by that person directly in Singapore or by a research and development organisation on that person’s behalf in Singapore, it is deemed to have been sold on the date of permanent cessation of use at the open‑market price on that date.
(2A) Where there are no sale, insurance, salvage or compensation moneys or where the amount of the capital expenditure of the person in question on the provision of the machinery or plant still unallowed as at the time of the event exceeds those moneys, a balancing allowance is to be made, and the amount thereof is the amount of the expenditure still unallowed as aforesaid or (as the case may be) the excess thereof over those moneys.
(3) If the sale, insurance, salvage or compensation moneys exceed the amount (if any) of the said expenditure still unallowed as at the time of the event, a balancing charge is to be made, and the amount on which it is made is an amount equal to the excess or, where the said amount still unallowed is nil, to those moneys.
(4) Despite anything in subsection (3), the amount on which a balancing charge is made on a person must not in any case exceed —(a)
the aggregate of the initial allowance (if any) and the annual allowances (if any) made to the person under section 19 in respect of the expenditure in question; and
(b)
the allowances (if any) made to the person under section 19A in respect of the expenditure in question.[27/2021]
(5) Despite anything in this section but subject to subsection (6A), where a balancing allowance or balancing charge falls to be made under subsection (1) in respect of a motor car to which section 19(3) applies, the sum to be taken in lieu of the open‑market price or sale, insurance, salvage or compensation moneys for the purpose of calculating such balancing allowance or charge is ascertained in accordance with the formula
where A
is the open‑market price or sale, insurance, salvage or compensation moneys in respect of the motor car; and
B
is the capital expenditure incurred in respect of the motor car.
(6) Despite anything in this section, no balancing allowance may be made in respect of a motor car within the meaning of section 19(4)(a) which is not, for any basis period after the basis period for the year of assessment 1981, registered as a business service passenger vehicle for the purposes of the Road Traffic Act 1961.
(6A) Unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where, in the basis period for any year of assessment, the trade, profession or business, for which purpose the machinery or plant is provided, produces income that is exempt from tax as well as income chargeable with tax, and any balancing allowance or balancing charge arises to be made —(a)
the balancing allowance is to be made against each income for that year of assessment in such proportion as appears reasonable to the Comptroller in the circumstances; and
(b)
such proportion of the balancing charge is exempt from tax as appears reasonable to the Comptroller in the circumstances.
(6B) Section 14C(4) and (5) applies in relation to the balancing allowance to be made to a person under subsection (1)(b)(i) 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 the balancing allowance;
(b)
a reference to unabsorbed losses is a reference to unabsorbed allowances; and
(c)
a reference to a specified amount of the expenditure or payments is a reference to an amount computed in accordance with the formula
where A
is the amount of the balancing allowance that could have been made against the income of the person under subsection (1)(b)(i) if the income had been subject to tax at the rate specified in section 43(1)(a);
B
is the rate of tax specified in section 43(1)(a); and
C
is —
(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
(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.
(6C) Despite anything in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where a balancing charge falls to be made on a person under subsection (1)(b)(i), the amount of the charge is deemed to be income of that person that is chargeable to tax at the rate of tax specified in section 43(1)(a).
(7) In this section, “open‑market price”, in relation to any machinery or plant, means the price which the machinery or plant would have fetched if sold in the open market at the time of the event in question; except that where the Comptroller is satisfied by reason of the special nature of any machinery or plant that it is not practicable to determine an open‑market price, the Comptroller may adopt such other value as appears to the Comptroller to be reasonable in the circumstances.
Replacement of machinery or plant
21.—(1) Where machinery or plant in the case of which any of the events mentioned in section 20(1) has occurred is replaced by the owner thereof and a balancing charge falls to be made on the owner by reason of that event or, but for this section, would have fallen to be made on the owner by reason thereof, then, if by written notice to the Comptroller the owner so elects, this section has effect.(2) If the amount on which the charge would have been made is greater than the capital expenditure on providing the new machinery or plant —(a)
the charge is to be made only on an amount equal to the difference;
(b)
no initial allowance, no balancing allowance and no annual allowance may be made or allowed in respect of the new machinery or plant or the expenditure on the provision thereof; and
(c)
in considering whether any (and if so what) balancing charge falls to be made in respect of the expenditure on the new machinery or plant, there is deemed to have been made in respect of that expenditure an initial allowance equal to the full amount of that expenditure.
(3) If the capital expenditure on providing the new machinery or plant is equal to or greater than the amount on which the charge would have been made —(a)
the charge must not be made;
(b)
the amount of any initial allowance in respect of the said expenditure is to be calculated as if the expenditure had been reduced by the amount on which the charge would have been made;
(c)
in considering what annual allowance is to be made in respect of the new machinery or plant, there is to be left out of account a proportion of the machinery or plant equal to the proportion which the amount on which the charge would have been made bears to the amount of the said expenditure; and
(d)
in considering whether any (and if so what) balancing allowance or balancing charge falls to be made in respect of the new machinery or plant, the initial allowance in respect thereof is deemed to have been increased by an amount equal to the amount on which the charge would have been made.
(4) This section does not apply to the provision of any new motor car for which no allowance is allowed by virtue of section 19(5).
(5) For the purpose of this section, where the capital expenditure incurred in providing, in the basis period for the year of assessment 2013 or any preceding year of assessment, a new motor car registered outside Singapore and used exclusively outside Singapore exceeds $35,000, the expenditure incurred is deemed to be $35,000.
—(1) Where machinery or plant in the case of which any of the events mentioned in section 20(1) has occurred is replaced by the owner thereof and a balancing charge falls to be made on the owner by reason of that event or, but for this section, would have fallen to be made on the owner by reason thereof, then, if by written notice to the Comptroller the owner so elects, this section has effect.
(2) If the amount on which the charge would have been made is greater than the capital expenditure on providing the new machinery or plant —(a)
the charge is to be made only on an amount equal to the difference;
(b)
no initial allowance, no balancing allowance and no annual allowance may be made or allowed in respect of the new machinery or plant or the expenditure on the provision thereof; and
(c)
in considering whether any (and if so what) balancing charge falls to be made in respect of the expenditure on the new machinery or plant, there is deemed to have been made in respect of that expenditure an initial allowance equal to the full amount of that expenditure.
(3) If the capital expenditure on providing the new machinery or plant is equal to or greater than the amount on which the charge would have been made —(a)
the charge must not be made;
(b)
the amount of any initial allowance in respect of the said expenditure is to be calculated as if the expenditure had been reduced by the amount on which the charge would have been made;
(c)
in considering what annual allowance is to be made in respect of the new machinery or plant, there is to be left out of account a proportion of the machinery or plant equal to the proportion which the amount on which the charge would have been made bears to the amount of the said expenditure; and
(d)
in considering whether any (and if so what) balancing allowance or balancing charge falls to be made in respect of the new machinery or plant, the initial allowance in respect thereof is deemed to have been increased by an amount equal to the amount on which the charge would have been made.
(4) This section does not apply to the provision of any new motor car for which no allowance is allowed by virtue of section 19(5).
(5) For the purpose of this section, where the capital expenditure incurred in providing, in the basis period for the year of assessment 2013 or any preceding year of assessment, a new motor car registered outside Singapore and used exclusively outside Singapore exceeds $35,000, the expenditure incurred is deemed to be $35,000.
Expenditure on machinery or plant
22.—(1) Expenditure on the provision of machinery or plant includes capital expenditure on alterations to an existing building incidental to the installation of that machinery or plant for the purposes of the trade, profession or business.[39/2017]
(2) Expenditure on the provision of machinery or plant excludes any option premium paid under an option agreement entered into for the purpose of hedging against the cost of the acquisition of such machinery or plant.[39/2017]
—(1) Expenditure on the provision of machinery or plant includes capital expenditure on alterations to an existing building incidental to the installation of that machinery or plant for the purposes of the trade, profession or business.[39/2017]
(2) Expenditure on the provision of machinery or plant excludes any option premium paid under an option agreement entered into for the purpose of hedging against the cost of the acquisition of such machinery or plant.[39/2017]
Order of set‑off of allowances
22A.—(1) Where for any year of assessment the allowances consist of allowances a person is entitled to or allowances made to a person under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 for that year of assessment and any previous year of assessment added to and deemed to form part of the corresponding allowance for the year of assessment under section 23(1), the allowances are to be deducted in the following order:(a)
firstly, any balance of allowance from any previous year of assessment added to and deemed to form part of the corresponding allowance for the year of assessment under section 23(1); and
(b)
secondly, any allowance for that year of assessment falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20.
(2) For the purposes of subsection (1)(a), the balance of allowance for the earliest year of assessment is deemed to have been deducted first, followed by the balance of allowance for the next earliest year of assessment, and so on.
—(1) Where for any year of assessment the allowances consist of allowances a person is entitled to or allowances made to a person under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 for that year of assessment and any previous year of assessment added to and deemed to form part of the corresponding allowance for the year of assessment under section 23(1), the allowances are to be deducted in the following order:(a)
firstly, any balance of allowance from any previous year of assessment added to and deemed to form part of the corresponding allowance for the year of assessment under section 23(1); and
(b)
secondly, any allowance for that year of assessment falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20.
(2) For the purposes of subsection (1)(a), the balance of allowance for the earliest year of assessment is deemed to have been deducted first, followed by the balance of allowance for the next earliest year of assessment, and so on.
Carry forward of allowances
23.—(1) Where, in any year of assessment, full effect cannot, by reason of an insufficiency of gains or profits chargeable for that year of assessment, be given to any allowance falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20, then, so long as the person entitled thereto continues to carry on the trade, profession or business in respect of the gains or profits of which the allowance falls to be made, the balance of the allowance is, subject to subsection (3), to be added to, and is deemed to form part of, the corresponding allowance (if any) for the next succeeding year of assessment, and, if no such corresponding allowance falls to be made for that year, is deemed to constitute the corresponding allowance for that year, and so on for subsequent years of assessment.(2) Where any person entitled to the allowances under sections 16, 17, 18B and 18C in respect of a building or structure derives income from the letting of that building or structure, subsection (1) applies, in relation to the allowances under those sections, to the person so long as the person continues to derive such income, whether or not the person is carrying on a business in respect of the letting of the building or structure.
(3) Where any allowance for any year of assessment falling to be made to any person under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 is deducted against income of the person from other sources under section 35(1), transferred to a claimant company under section 37B or to a spouse under section 37C or 37E, or deducted against income for the immediate preceding year of assessment under section 37D(1) or any of the 3 immediate preceding years of assessment under section 37D(1A), the amount of such allowance must be deducted from the balance in subsection (1).[39/2017; 41/2020]
(4) No balance may be added to and be deemed to form part of the corresponding allowance (if any) to be given to a company under subsection (1) unless the Comptroller is satisfied that the shareholders of the company on the last day of the year in which the allowances arose were substantially the same as the shareholders of the company on the first day of the year of assessment in which such allowances would otherwise be available under this section and such a balance is not allowed in any subsequent year of assessment.
(5) The Minister or such person as the Minister may appoint may, where there is a substantial change in the shareholders of a company and the Minister or appointed person is satisfied that such change is not for the purpose of deriving any tax benefit or obtaining any tax advantage, exempt that company from the provisions of subsection (4).
(6) Upon such exemption, the balance of the allowances referred to in subsection (1) may be added to and be deemed to form part of the corresponding allowance to be given to that company under that subsection but only for deduction against the gains or profits derived from the same trade or business in respect of which the allowances would have been made.
(7) For the purpose of subsection (4) —(a)
the shareholders of a company at any date are not deemed to be substantially the same as the shareholders at any other date unless, on both those dates, not less than 50% of the total number of issued shares of the company are held by or on behalf of the same persons;
(b)
shares in a company held by or on behalf of another company are deemed to be held by the shareholders of the last mentioned company; and
(c)
shares held by or on behalf of the trustee of the estate of a deceased shareholder or by or on behalf of the person entitled to those shares as beneficiaries under the will or any intestacy of a deceased shareholder are deemed to be held by that deceased shareholder.
(8) For the purpose of subsection (7), where any part of a share of a shareholder is not fully paid up, there is to be disregarded a proportion equal to
where A
is the amount that has not been paid in respect of the share; and
B
is the total amount payable in respect of the share.
—(1) Where, in any year of assessment, full effect cannot, by reason of an insufficiency of gains or profits chargeable for that year of assessment, be given to any allowance falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20, then, so long as the person entitled thereto continues to carry on the trade, profession or business in respect of the gains or profits of which the allowance falls to be made, the balance of the allowance is, subject to subsection (3), to be added to, and is deemed to form part of, the corresponding allowance (if any) for the next succeeding year of assessment, and, if no such corresponding allowance falls to be made for that year, is deemed to constitute the corresponding allowance for that year, and so on for subsequent years of assessment.
(2) Where any person entitled to the allowances under sections 16, 17, 18B and 18C in respect of a building or structure derives income from the letting of that building or structure, subsection (1) applies, in relation to the allowances under those sections, to the person so long as the person continues to derive such income, whether or not the person is carrying on a business in respect of the letting of the building or structure.
(3) Where any allowance for any year of assessment falling to be made to any person under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 is deducted against income of the person from other sources under section 35(1), transferred to a claimant company under section 37B or to a spouse under section 37C or 37E, or deducted against income for the immediate preceding year of assessment under section 37D(1) or any of the 3 immediate preceding years of assessment under section 37D(1A), the amount of such allowance must be deducted from the balance in subsection (1).[39/2017; 41/2020]
(4) No balance may be added to and be deemed to form part of the corresponding allowance (if any) to be given to a company under subsection (1) unless the Comptroller is satisfied that the shareholders of the company on the last day of the year in which the allowances arose were substantially the same as the shareholders of the company on the first day of the year of assessment in which such allowances would otherwise be available under this section and such a balance is not allowed in any subsequent year of assessment.
(5) The Minister or such person as the Minister may appoint may, where there is a substantial change in the shareholders of a company and the Minister or appointed person is satisfied that such change is not for the purpose of deriving any tax benefit or obtaining any tax advantage, exempt that company from the provisions of subsection (4).
(6) Upon such exemption, the balance of the allowances referred to in subsection (1) may be added to and be deemed to form part of the corresponding allowance to be given to that company under that subsection but only for deduction against the gains or profits derived from the same trade or business in respect of which the allowances would have been made.
(7) For the purpose of subsection (4) —(a)
the shareholders of a company at any date are not deemed to be substantially the same as the shareholders at any other date unless, on both those dates, not less than 50% of the total number of issued shares of the company are held by or on behalf of the same persons;
(b)
shares in a company held by or on behalf of another company are deemed to be held by the shareholders of the last mentioned company; and
(c)
shares held by or on behalf of the trustee of the estate of a deceased shareholder or by or on behalf of the person entitled to those shares as beneficiaries under the will or any intestacy of a deceased shareholder are deemed to be held by that deceased shareholder.
(8) For the purpose of subsection (7), where any part of a share of a shareholder is not fully paid up, there is to be disregarded a proportion equal to
where A
is the amount that has not been paid in respect of the share; and
B
is the total amount payable in respect of the share.
Special provisions as to certain sales
24.—(1) This section, except subsection (5), has effect in relation to any sale of any property where the buyer is a body of persons over whom the seller has control, or the seller is a body of persons over whom the buyer has control, or both the seller and buyer are bodies of persons and some other person has control over both of them, and the sale is not one to which section 33 applies.(2) References in subsection (1) to a body of persons include references to a company or a partnership.
(3) Where the parties to the sale by written notice to the Comptroller so elect —(a)
the like consequences ensue for the purposes of sections 16 to 21 as would have ensued if the property had been sold —(i)
in the case of an industrial building or structure, for a sum equal to the residue of expenditure on the construction or purchase (pursuant to a sale and purchase agreement entered into on or after 1 January 2006) of that building or structure immediately before the sale, computed in accordance with section 17;
(ii)
in the case of machinery or plant, for a sum equal to the amount of the expenditure on the provision thereof still unallowed immediately before the sale, computed in accordance with section 20;
(iii)
in the case of an Indefeasible Right of Use, for a sum equal to the amount of capital expenditure remaining unallowed immediately before the sale, computed in accordance with section 19D;
(b)
despite anything in section 19, where the sale is a sale of machinery or plant, no initial allowance may be made to the buyer;
(c)
despite anything in section 19A, where the sale is a sale of machinery or plant, the allowances provided under that section continue to be available as if no sale had taken place;
(d)
despite anything in section 19D, where the sale is a sale of an Indefeasible Right of Use, the writing‑down allowances provided under that section continue to be available as if no sale had taken place; and
(e)
despite anything in the preceding provisions of this section or in sections 17, 19D and 20, such balancing charge (if any) is to be made on the buyer on any event occurring after the date of the sale as would have fallen to be made on the seller if the seller had continued to own the property and had done all such things and been allowed all such allowances and deductions in connection therewith as were done by or allowed to the buyer.[27/2021]
(3A) In subsection (3), “Indefeasible Right of Use” has the meaning given by section 19D(1).[27/2021]
(4) No election may be made under subsection (3) unless before the sale in the case of the seller and after the sale in the case of the buyer the property is used in the production of income chargeable under the provisions of this Act and unless the machinery or plant was not leased by the seller to the buyer before the sale.
(4A) No election may be made under subsection (3) for the sale of an industrial building or structure for which an option to purchase is granted or a sale and purchase agreement is entered into on or after 23 February 2010, or which is transferred on or after that date.
(4B) Subsection (4A) does not apply to a transfer of property to which section 34C(8) and (9) apply.
(5) Where a change occurs in a partnership of persons carrying on any trade, business or profession by reason of retirement or death, or the dissolution of the partnership as to one or more of the partners, or the admission of a new partner, and where no election is made under subsection (3), any property of the partnership is treated as if the property had been sold —(a)
to all the remaining partners and new partners of the partnership on the date the change occurs; and
(b)
at the open‑market price.
(6) In subsection (5), “open‑market price” has the meaning given by section 20(7).
—(1) This section, except subsection (5), has effect in relation to any sale of any property where the buyer is a body of persons over whom the seller has control, or the seller is a body of persons over whom the buyer has control, or both the seller and buyer are bodies of persons and some other person has control over both of them, and the sale is not one to which section 33 applies.
(2) References in subsection (1) to a body of persons include references to a company or a partnership.
(3) Where the parties to the sale by written notice to the Comptroller so elect —(a)
the like consequences ensue for the purposes of sections 16 to 21 as would have ensued if the property had been sold —(i)
in the case of an industrial building or structure, for a sum equal to the residue of expenditure on the construction or purchase (pursuant to a sale and purchase agreement entered into on or after 1 January 2006) of that building or structure immediately before the sale, computed in accordance with section 17;
(ii)
in the case of machinery or plant, for a sum equal to the amount of the expenditure on the provision thereof still unallowed immediately before the sale, computed in accordance with section 20;
(iii)
in the case of an Indefeasible Right of Use, for a sum equal to the amount of capital expenditure remaining unallowed immediately before the sale, computed in accordance with section 19D;
(b)
despite anything in section 19, where the sale is a sale of machinery or plant, no initial allowance may be made to the buyer;
(c)
despite anything in section 19A, where the sale is a sale of machinery or plant, the allowances provided under that section continue to be available as if no sale had taken place;
(d)
despite anything in section 19D, where the sale is a sale of an Indefeasible Right of Use, the writing‑down allowances provided under that section continue to be available as if no sale had taken place; and
(e)
despite anything in the preceding provisions of this section or in sections 17, 19D and 20, such balancing charge (if any) is to be made on the buyer on any event occurring after the date of the sale as would have fallen to be made on the seller if the seller had continued to own the property and had done all such things and been allowed all such allowances and deductions in connection therewith as were done by or allowed to the buyer.[27/2021]
(3A) In subsection (3), “Indefeasible Right of Use” has the meaning given by section 19D(1).[27/2021]
(4) No election may be made under subsection (3) unless before the sale in the case of the seller and after the sale in the case of the buyer the property is used in the production of income chargeable under the provisions of this Act and unless the machinery or plant was not leased by the seller to the buyer before the sale.
(4A) No election may be made under subsection (3) for the sale of an industrial building or structure for which an option to purchase is granted or a sale and purchase agreement is entered into on or after 23 February 2010, or which is transferred on or after that date.
(4B) Subsection (4A) does not apply to a transfer of property to which section 34C(8) and (9) apply.
(5) Where a change occurs in a partnership of persons carrying on any trade, business or profession by reason of retirement or death, or the dissolution of the partnership as to one or more of the partners, or the admission of a new partner, and where no election is made under subsection (3), any property of the partnership is treated as if the property had been sold —(a)
to all the remaining partners and new partners of the partnership on the date the change occurs; and
(b)
at the open‑market price.
(6) In subsection (5), “open‑market price” has the meaning given by section 20(7).
Special provisions as to certain transfers
25.—(1) This section has effect in relation to any transfer of any property without consideration as a result of —(a)
a conversion of a firm to a limited liability partnership under section 26 of the Limited Liability Partnerships Act 2005;
(b)
a conversion of a private company to a limited liability partnership under section 27 of the Limited Liability Partnerships Act 2005;
(c)
a conversion of any business carried on by an individual proprietor to one carried on by a firm, where the individual proprietor is a partner of, and has control over, the firm after the conversion; or
(d)
a conversion of any business carried on by a firm to one carried on by an individual proprietor, where the individual proprietor was a partner of, and had control over, the firm before the conversion,
and the transfer is not one to which section 33 applies.
[27/2021]
(2) For the purposes of subsection (1), “conversion” means a transfer of the property, assets, interests, rights, privileges, liabilities, obligations and undertaking —(a)
in the case of subsection (1)(a) — of the partners of the firm relating to the business to the limited liability partnership;
(b)
in the case of subsection (1)(b) — of the private company to the limited liability partnership;
(c)
in the case of subsection (1)(c) — of the individual proprietor relating to the business to the partners of the firm; or
(d)
in the case of subsection (1)(d) — of the partners of the firm relating to the business to the individual proprietor.[27/2021]
(3) Where the parties to the transfer of the property by written notice to the Comptroller so elect —(a)
the like consequences ensue for the purposes of sections 19, 19A, 19D, 20 and 21 as would have ensued if the property had been transferred —(i)
in the case of machinery or plant — for a sum equal to the amount of the expenditure on the provision of the machinery or plant remaining unallowed immediately before the transfer, computed in accordance with section 20; or
(ii)
in the case of an IRU — for a sum equal to the amount of capital expenditure remaining unallowed immediately before the transfer, computed in accordance with section 19D;
(b)
despite anything in section 19, where the transfer is a transfer of machinery or plant, no initial allowance is to be made to the transferee;
(c)
despite anything in section 19A, where the transfer is a transfer of machinery or plant, allowances provided under that section continue to be available as if no transfer had taken place;
(d)
despite anything in section 19D, where the transfer is a transfer of an IRU, the writing‑down allowances provided under that section continue to be available as if no transfer had taken place; and
(e)
despite anything in paragraphs (a) to (d) or in sections 19D and 20, such balancing charge (if any) must be made on the transferee on any event occurring after the date of the transfer as would have fallen to be made on the transferor if the transferor had continued to own the property and had done all the things and been allowed all the allowances and deductions in connection with the property as were done by or allowed to the transferee.[27/2021]
(4) No election may be made under subsection (3) unless, before the transfer in the case of the transferor and after the transfer in the case of the transferee, the property is used in the production of income chargeable under the provisions of this Act.[27/2021]
(5) In this section —“firm” and “individual proprietor” have the meanings given by section 2(1) of the Business Names Registration Act 2014;
“IRU” has the meaning given by section 19D(1);
“private company” has the meaning given by section 2(1) of the Limited Liability Partnerships Act 2005.[27/2021]
—(1) This section has effect in relation to any transfer of any property without consideration as a result of —(a)
a conversion of a firm to a limited liability partnership under section 26 of the Limited Liability Partnerships Act 2005;
(b)
a conversion of a private company to a limited liability partnership under section 27 of the Limited Liability Partnerships Act 2005;
(c)
a conversion of any business carried on by an individual proprietor to one carried on by a firm, where the individual proprietor is a partner of, and has control over, the firm after the conversion; or
(d)
a conversion of any business carried on by a firm to one carried on by an individual proprietor, where the individual proprietor was a partner of, and had control over, the firm before the conversion,
and the transfer is not one to which section 33 applies.
[27/2021]
(2) For the purposes of subsection (1), “conversion” means a transfer of the property, assets, interests, rights, privileges, liabilities, obligations and undertaking —(a)
in the case of subsection (1)(a) — of the partners of the firm relating to the business to the limited liability partnership;
(b)
in the case of subsection (1)(b) — of the private company to the limited liability partnership;
(c)
in the case of subsection (1)(c) — of the individual proprietor relating to the business to the partners of the firm; or
(d)
in the case of subsection (1)(d) — of the partners of the firm relating to the business to the individual proprietor.[27/2021]
(3) Where the parties to the transfer of the property by written notice to the Comptroller so elect —(a)
the like consequences ensue for the purposes of sections 19, 19A, 19D, 20 and 21 as would have ensued if the property had been transferred —(i)
in the case of machinery or plant — for a sum equal to the amount of the expenditure on the provision of the machinery or plant remaining unallowed immediately before the transfer, computed in accordance with section 20; or
(ii)
in the case of an IRU — for a sum equal to the amount of capital expenditure remaining unallowed immediately before the transfer, computed in accordance with section 19D;
(b)
despite anything in section 19, where the transfer is a transfer of machinery or plant, no initial allowance is to be made to the transferee;
(c)
despite anything in section 19A, where the transfer is a transfer of machinery or plant, allowances provided under that section continue to be available as if no transfer had taken place;
(d)
despite anything in section 19D, where the transfer is a transfer of an IRU, the writing‑down allowances provided under that section continue to be available as if no transfer had taken place; and
(e)
despite anything in paragraphs (a) to (d) or in sections 19D and 20, such balancing charge (if any) must be made on the transferee on any event occurring after the date of the transfer as would have fallen to be made on the transferor if the transferor had continued to own the property and had done all the things and been allowed all the allowances and deductions in connection with the property as were done by or allowed to the transferee.[27/2021]
(4) No election may be made under subsection (3) unless, before the transfer in the case of the transferor and after the transfer in the case of the transferee, the property is used in the production of income chargeable under the provisions of this Act.[27/2021]
(5) In this section —“firm” and “individual proprietor” have the meanings given by section 2(1) of the Business Names Registration Act 2014;
“IRU” has the meaning given by section 19D(1);
“private company” has the meaning given by section 2(1) of the Limited Liability Partnerships Act 2005.[27/2021]
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
