Assessable income
37.—(1) The assessable income of any person from all sources chargeable with tax under this Act for any year of assessment is the remainder of the person’s statutory income for that year after the deductions allowed in this Part have been made.(2) For the purposes of this section, unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where a person is a company whose income (if any) is subject to tax at different rates of tax for any year of assessment, the Comptroller must apportion any sum allowable under subsection (3)(b), (c), (d) or (f) among the different rates of tax on such basis as the Comptroller considers reasonable.
(3) Subject to subsections (2) and (3B), there is to be deducted —(a)
the amount of loss incurred by that person in any trade, business, profession or vocation, which, if it had been a profit would have been assessable under this Act, in the following order:(i)
firstly, any balance of such loss which remains unabsorbed at the end of the basis period for the previous year of assessment;
(ii)
secondly, the amount incurred during the basis period for the year of assessment;
(b)
an amount equivalent to twice the value, the value to be determined by the Minister or such person as the Minister may appoint, of an approved donation of —(i)
any artefact or work of art made by that person in the year preceding the year of assessment to an approved museum;
(ii)
any sculpture or work of art for public display made by that person in the year preceding the year of assessment to an approved recipient not being an approved museum; or
(iii)
money or services for installing or maintaining any sculpture or work of art for public display made by that person in the year preceding the year of assessment,
and for this purpose, “approved” means approved by the Minister or such person as the Minister may appoint;
(c)
an amount equivalent to twice the amount of any donation of money made by that person in the year preceding the year of assessment to —(i)
the Government; or
(ii)
any institution of a public character, whether made directly to the institution or indirectly through any grant‑making philanthropic organisation registered by the Comptroller for the purpose of this sub‑paragraph;
(d)
an amount equivalent to twice the value of any donation of a computer (including computer software and peripherals) approved by the Minister or such person as the Minister may appoint and made by any company in the year preceding the year of assessment to —(i)
any institution of a public character; or
(ii)
a prescribed educational, research or other institution in Singapore;
(e)
an amount equivalent to —(i)
twice the value of any donation of shares in a company listed on the Singapore Exchange; or
(ii)
twice the value of any donation of units in unit trusts traded in Singapore or listed on the Singapore Exchange,
made by an individual in the year preceding the year of assessment to any institution of a public character; and
(f)
an amount equivalent to twice the value, the value to be determined by an appraiser licensed under the Appraisers Act 1906 and approved by the Chief Valuer appointed under the State Lands Act 1920, of any donation of any immovable property made by that person in the year preceding the year of assessment to any institution of a public character.
(3A) For the purpose of subsection (3), a reference to “twice the value” or “twice the amount” in subsection (3)(b) to (f) is a reference to —(a)
in the case of a donation made during either of the following periods:(i)
from 1 January 2009 to 31 December 2014 (both dates inclusive);
(ii)
from 1 January 2016 to 31 December 2026 (both dates inclusive),
2.5 times the value or 2.5 times the amount, as the case may be; or
[Act 30 of 2023 wef 30/10/2023]
(b)
in the case of a donation made during the period from 1 January 2015 to 31 December 2015 (both dates inclusive), 3 times the value or 3 times the amount, as the case may be.[2/2016; 45/2018; 27/2021]
(3B) No deduction may be made under subsection (3)(b), (c), (d), (e) or (f) to a person in respect of any donation made to an approved museum, approved recipient not being an approved museum, the Government, an institution of a public character or a prescribed educational, research or other institution in Singapore on or after 1 January 2012 unless the person provides to —(a)
the approved museum, approved recipient, Government, institution of a public character or educational, research or other institution; or
(b)
in a case where the donation is made under subsection (3)(c) to an institution of a public character indirectly through a grant‑making philanthropic organisation, the grant‑making philanthropic organisation,
as the case may be, such information within such time and in such form and manner as the Comptroller may specify.
(3C) A donation made on or after 18 December 2012 of any property or money referred to in subsection (3)(b)(i) or (ii), (c), (d), (e) or (f) to a recipient under that provision, which is subject to any condition specified by the donor as to the purpose for which the donation may be applied (including where the donor specifies another purpose for the application of the donation in the event the firstmentioned purpose should fail), is treated as a donation under that provision if (and only if) all of the following requirements are satisfied:(a)
except where the recipient is the Government, each specified purpose must be one that advances an objective of the recipient set out in its governing instrument;
(b)
none of the specified purposes must be to advance the interests (whether directly or indirectly) of a particular race, belief or religion, or of a particular person or persons;
(c)
the donor did not specify or imply in any manner that any part of the property or money that cannot be used for any of the specified purposes must revert to the donor or be given to any other person (other than the recipient).
(3D) To avoid doubt, subsection (3C) applies to a donation of money referred to in subsection (3)(c)(ii) to a recipient under that provision, whether made directly to the recipient or indirectly through a grant‑making philanthropic organisation.
(3E) In subsections (3C) and (3D) —“governing instrument”, in relation to a recipient under subsection (3)(b)(i) or (ii), (c), (d), (e) or (f), includes the memorandum and articles of association, constitution, trust instrument or any rules or regulations governing the objects and administration of the recipient;
“recipient” —(a)
in the case of a donation referred to in subsection (3)(b)(i), means an approved museum;
(b)
in the case of a donation referred to in subsection (3)(b)(ii), means an approved recipient not being an approved museum;
(c)
in the case of a donation referred to in subsection (3)(c), means the Government or an institution of a public character;
(d)
in the case of a donation referred to in subsection (3)(d), means an institution of a public character or a prescribed educational, research or other institution in Singapore; or
(e)
in the case of a donation referred to in subsection (3)(e) or (f), means an institution of a public character.
(3F) Subject to subsection (3G), a donation referred to in subsection (3)(b), (c), (d), (e) or (f) is eligible for a deduction under that provision even if the donor or another person receives or will receive a benefit in consequence of making the donation.
(3G) Where a donor who makes a donation referred to in subsection (3)(b), (c), (d), (e) or (f), or a person connected with the donor, receives or will receive a benefit in consequence of making the donation, a reference to the value or amount of the donation under that provision excludes an amount equivalent to the value of the benefit.
(3H) The Minister may by rules —(a)
exclude any type of benefit from the application of subsection (3G); and
(b)
provide for the basis for determining the value of any benefit under that subsection.
(3I) To avoid doubt, the Comptroller may make an assessment or additional assessment under section 74 if the benefit is received only after the deduction of the donation under subsection (3) is made.
(3J) In subsection (3G), a person is connected with the donor if —(a)
the person is a relative of the donor within the meaning of section 37N(12);
(b)
the person, or a person who is the person’s relative within the meaning of section 37N(12), directly or indirectly controls the donor;
(c)
the person is controlled, directly or indirectly, by the donor; or
(d)
the person and the donor, directly or indirectly, are under the control of a common person.
(3K) No approval may be granted for the purposes of subsection (3)(d) for a donation made on or after 21 February 2017.[39/2017]
(4) A deduction under subsection (3)(a)(i) is to be made in the following order:(a)
firstly, against statutory income from the same trade, business, profession or vocation;
(b)
secondly, against statutory income from any other trade, business, profession or vocation;
(c)
thirdly, against statutory income from any other source.
(5) A deduction under subsection (3)(a)(i) is to be made as far as possible in the order specified in subsection (4) from the statutory income of the first year of assessment after the year in which such loss was incurred, and, so far as it cannot be so made, then from the statutory income of the next year of assessment, and so on.
(6) Where, in any year of assessment, the amount of loss incurred by any person during the year preceding the year of assessment is not fully deducted under subsection (3)(a)(ii), the balance of such loss, after deducting any amount of such loss 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), is available for deduction against the person’s statutory income for subsequent year of assessment under subsection (3)(a)(i).[39/2017; 41/2020]
(7) A deduction under this section to any person in respect of any sum allowable under subsection (3)(b), (c), (d), (e) or (f) is only allowed against the person’s statutory income after the deduction under subsection (3)(a) and sections 37AA, 37AB and 37N.[Act 30 of 2023 wef 30/10/2023]
[Act 35 of 2024 wef 27/11/2024]
(8) Subject to subsections (2), (7) and (12), the deduction to any person in respect of any sum allowable under subsection (3)(b), (c), (d), (e) or (f) is to be allowed —(a)
as far as possible against the person’s statutory income of the first year of assessment after the year in which the donation was made by the person; and
(b)
so far as the deduction cannot be so allowed, after deducting any of such sum transferred to a claimant company under section 37B or to a spouse under section 37C, then from the person’s statutory income of the next year of assessment,
and so on, except that any balance of the donation not deducted against the person’s statutory income of the fifth year of assessment after the year of assessment relating to the basis period in which the donation was made is disregarded.
(9) For the purposes of subsections (7) and (8), any sum allowable under subsection (3)(b), (c), (d), (e) or (f) in respect of any donation made on an earlier date is deemed to have been deducted first.
(10) For the purposes of subsection (3), the loss incurred during any year is computed, where the Comptroller so decides, by reference to the year ending on a day in such year which would have been adopted under section 35(4) for the computation of the statutory income of the following year of assessment if a profit had arisen.
(10A) For the purposes of subsection (3)(b) to (f), the reference to the year preceding any year of assessment is —(a)
if the person making the donation is not an individual and is one to whom a direction is made under section 35(4);
(b)
if the persons making the donation are the partners of a partnership, a direction is made under section 35(4) in relation to the income of that partnership, and the donation is made by them in the name of the partnership; or
(c)
if the person making the donation is an individual to whom a direction is made under section 35(4), and the donation is made by the person in the name of the trade, business or profession to which the accounts relate,
a reference to —
(d)
the period of 12 months or such other period as the Comptroller may allow, ending on the day the accounts of the person or the partnership (as the case may be) are made up to; or
(e)
such other period as the Comptroller, having regard to any special circumstance, otherwise directs.
(11) No deduction is allowed under this section to any person in respect of any sum which has been allowed as a deduction under this section against the income of his or her spouse chargeable in his or her own name.
(12) Despite subsection (3), the amount of any loss incurred by a company in any trade or business or any sum allowable under subsection (3)(b), (c), (d), (e) or (f) to a company in respect of any donation is disregarded unless the Comptroller is satisfied that the shareholders of the company on the last day of the year in which the loss was incurred or the donation was made (as the case may be) were substantially the same as the shareholders of the company on the first day of the year of assessment in which such loss or donation would otherwise be deductible under subsection (3).
(13) A loss or donation disregarded under subsection (12) must not be allowed in any subsequent year of assessment.
(14) For the purposes of subsection (12) —(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.
(15) For the purpose of subsection (14), 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.
(16) 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 (12).
(17) Upon an exemption under subsection (16) —(a)
any loss referred to in subsection (3)(a) incurred by a company may only be deducted against the profits from the same trade or business of the company in respect of which that loss was incurred; and
(b)
any balance of the donation referred to in subsection (8) is allowed against the person’s statutory income of the year of assessment in which such donation would otherwise be deductible under that subsection.
(18) For the purposes of subsection (3)(b), “museum” includes any institution established for the purpose of acquiring any collection of artefacts and making them accessible to the public.
(18A) For the purposes of subsection (3)(c)(ii), the Minister may make regulations with respect to the following matters:(a)
the registration of a grant‑making philanthropic organisation;
(b)
the deregistration of an organisation referred to in paragraph (a);
(c)
the issue of tax deduction receipts and maintenance of records and accounts by a registered grant‑making philanthropic organisation for donations received by it and the audit of such records and accounts;
(d)
the requirements to be complied with by a registered grant‑making philanthropic organisation;
(e)
any other matter for giving full effect to or for carrying out the purposes of that provision.
(18B) Where a registered grant‑making philanthropic organisation contravenes any regulation made under subsection (18A), being a regulation prescribed as one to which this subsection applies —(a)
the organisation is liable to pay to the Comptroller a financial penalty of the higher of $100 and the amount ascertained by the formula
(b)
the Minister or such person as the Minister may appoint may deregister the organisation.
(18BA) The Comptroller may for any good cause remit the whole or any part of the financial penalty payable under subsection (18B).[37/2014]
(18C) Despite anything to the contrary in this Act or any other written law, a registered grant‑making philanthropic organisation must keep and retain in safe custody all records and accounts in respect of any donation maintained under regulations made under subsection (18A), for a period of 7 years or such period as may be prescribed by regulations from the year of assessment relating to the year in which the donation is received by the organisation.
(18D) In subsection (3)(c)(ii), “grant‑making philanthropic organisation” means —(a)
a charity registered or exempt from registration under the Charities Act 1994; or
(b)
a not‑for‑profit organisation approved under section 13R.
(19) For the purposes of subsection (3)(e) and subject to subsection (3G) —(a)
the amount in respect of any donation of shares in a company or units in a unit trust listed on the Singapore Exchange is the price of such shares or units (as the case may be) in the open market at the last transaction of such shares or units on the date of the donation;
(b)
the amount in respect of any donation of units in unit trusts traded in Singapore (other than those listed on the Singapore Exchange) is the bid price of such units immediately after the date of the donation quoted by the manager of the unit trusts; and
(c)
“date of the donation”, in relation to any shares or units referred to in paragraph (a) or (b) (as the case may be), means the date of legal transfer to the institution of a public character of the donation of such shares or units.
—(1) The assessable income of any person from all sources chargeable with tax under this Act for any year of assessment is the remainder of the person’s statutory income for that year after the deductions allowed in this Part have been made.
(2) For the purposes of this section, unless otherwise provided in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, where a person is a company whose income (if any) is subject to tax at different rates of tax for any year of assessment, the Comptroller must apportion any sum allowable under subsection (3)(b), (c), (d) or (f) among the different rates of tax on such basis as the Comptroller considers reasonable.
(3) Subject to subsections (2) and (3B), there is to be deducted —(a)
the amount of loss incurred by that person in any trade, business, profession or vocation, which, if it had been a profit would have been assessable under this Act, in the following order:(i)
firstly, any balance of such loss which remains unabsorbed at the end of the basis period for the previous year of assessment;
(ii)
secondly, the amount incurred during the basis period for the year of assessment;
(b)
an amount equivalent to twice the value, the value to be determined by the Minister or such person as the Minister may appoint, of an approved donation of —(i)
any artefact or work of art made by that person in the year preceding the year of assessment to an approved museum;
(ii)
any sculpture or work of art for public display made by that person in the year preceding the year of assessment to an approved recipient not being an approved museum; or
(iii)
money or services for installing or maintaining any sculpture or work of art for public display made by that person in the year preceding the year of assessment,
and for this purpose, “approved” means approved by the Minister or such person as the Minister may appoint;
(c)
an amount equivalent to twice the amount of any donation of money made by that person in the year preceding the year of assessment to —(i)
the Government; or
(ii)
any institution of a public character, whether made directly to the institution or indirectly through any grant‑making philanthropic organisation registered by the Comptroller for the purpose of this sub‑paragraph;
(d)
an amount equivalent to twice the value of any donation of a computer (including computer software and peripherals) approved by the Minister or such person as the Minister may appoint and made by any company in the year preceding the year of assessment to —(i)
any institution of a public character; or
(ii)
a prescribed educational, research or other institution in Singapore;
(e)
an amount equivalent to —(i)
twice the value of any donation of shares in a company listed on the Singapore Exchange; or
(ii)
twice the value of any donation of units in unit trusts traded in Singapore or listed on the Singapore Exchange,
made by an individual in the year preceding the year of assessment to any institution of a public character; and
(f)
an amount equivalent to twice the value, the value to be determined by an appraiser licensed under the Appraisers Act 1906 and approved by the Chief Valuer appointed under the State Lands Act 1920, of any donation of any immovable property made by that person in the year preceding the year of assessment to any institution of a public character.
(3A) For the purpose of subsection (3), a reference to “twice the value” or “twice the amount” in subsection (3)(b) to (f) is a reference to —(a)
in the case of a donation made during either of the following periods:(i)
from 1 January 2009 to 31 December 2014 (both dates inclusive);
(ii)
from 1 January 2016 to 31 December 2026 (both dates inclusive),
2.5 times the value or 2.5 times the amount, as the case may be; or
[Act 30 of 2023 wef 30/10/2023]
(b)
in the case of a donation made during the period from 1 January 2015 to 31 December 2015 (both dates inclusive), 3 times the value or 3 times the amount, as the case may be.[2/2016; 45/2018; 27/2021]
(3B) No deduction may be made under subsection (3)(b), (c), (d), (e) or (f) to a person in respect of any donation made to an approved museum, approved recipient not being an approved museum, the Government, an institution of a public character or a prescribed educational, research or other institution in Singapore on or after 1 January 2012 unless the person provides to —(a)
the approved museum, approved recipient, Government, institution of a public character or educational, research or other institution; or
(b)
in a case where the donation is made under subsection (3)(c) to an institution of a public character indirectly through a grant‑making philanthropic organisation, the grant‑making philanthropic organisation,
as the case may be, such information within such time and in such form and manner as the Comptroller may specify.
(3C) A donation made on or after 18 December 2012 of any property or money referred to in subsection (3)(b)(i) or (ii), (c), (d), (e) or (f) to a recipient under that provision, which is subject to any condition specified by the donor as to the purpose for which the donation may be applied (including where the donor specifies another purpose for the application of the donation in the event the firstmentioned purpose should fail), is treated as a donation under that provision if (and only if) all of the following requirements are satisfied:(a)
except where the recipient is the Government, each specified purpose must be one that advances an objective of the recipient set out in its governing instrument;
(b)
none of the specified purposes must be to advance the interests (whether directly or indirectly) of a particular race, belief or religion, or of a particular person or persons;
(c)
the donor did not specify or imply in any manner that any part of the property or money that cannot be used for any of the specified purposes must revert to the donor or be given to any other person (other than the recipient).
(3D) To avoid doubt, subsection (3C) applies to a donation of money referred to in subsection (3)(c)(ii) to a recipient under that provision, whether made directly to the recipient or indirectly through a grant‑making philanthropic organisation.
(3E) In subsections (3C) and (3D) —“governing instrument”, in relation to a recipient under subsection (3)(b)(i) or (ii), (c), (d), (e) or (f), includes the memorandum and articles of association, constitution, trust instrument or any rules or regulations governing the objects and administration of the recipient;
“recipient” —(a)
in the case of a donation referred to in subsection (3)(b)(i), means an approved museum;
(b)
in the case of a donation referred to in subsection (3)(b)(ii), means an approved recipient not being an approved museum;
(c)
in the case of a donation referred to in subsection (3)(c), means the Government or an institution of a public character;
(d)
in the case of a donation referred to in subsection (3)(d), means an institution of a public character or a prescribed educational, research or other institution in Singapore; or
(e)
in the case of a donation referred to in subsection (3)(e) or (f), means an institution of a public character.
(3F) Subject to subsection (3G), a donation referred to in subsection (3)(b), (c), (d), (e) or (f) is eligible for a deduction under that provision even if the donor or another person receives or will receive a benefit in consequence of making the donation.
(3G) Where a donor who makes a donation referred to in subsection (3)(b), (c), (d), (e) or (f), or a person connected with the donor, receives or will receive a benefit in consequence of making the donation, a reference to the value or amount of the donation under that provision excludes an amount equivalent to the value of the benefit.
(3H) The Minister may by rules —(a)
exclude any type of benefit from the application of subsection (3G); and
(b)
provide for the basis for determining the value of any benefit under that subsection.
(3I) To avoid doubt, the Comptroller may make an assessment or additional assessment under section 74 if the benefit is received only after the deduction of the donation under subsection (3) is made.
(3J) In subsection (3G), a person is connected with the donor if —(a)
the person is a relative of the donor within the meaning of section 37N(12);
(b)
the person, or a person who is the person’s relative within the meaning of section 37N(12), directly or indirectly controls the donor;
(c)
the person is controlled, directly or indirectly, by the donor; or
(d)
the person and the donor, directly or indirectly, are under the control of a common person.
(3K) No approval may be granted for the purposes of subsection (3)(d) for a donation made on or after 21 February 2017.[39/2017]
(4) A deduction under subsection (3)(a)(i) is to be made in the following order:(a)
firstly, against statutory income from the same trade, business, profession or vocation;
(b)
secondly, against statutory income from any other trade, business, profession or vocation;
(c)
thirdly, against statutory income from any other source.
(5) A deduction under subsection (3)(a)(i) is to be made as far as possible in the order specified in subsection (4) from the statutory income of the first year of assessment after the year in which such loss was incurred, and, so far as it cannot be so made, then from the statutory income of the next year of assessment, and so on.
(6) Where, in any year of assessment, the amount of loss incurred by any person during the year preceding the year of assessment is not fully deducted under subsection (3)(a)(ii), the balance of such loss, after deducting any amount of such loss 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), is available for deduction against the person’s statutory income for subsequent year of assessment under subsection (3)(a)(i).[39/2017; 41/2020]
(7) A deduction under this section to any person in respect of any sum allowable under subsection (3)(b), (c), (d), (e) or (f) is only allowed against the person’s statutory income after the deduction under subsection (3)(a) and sections 37AA, 37AB and 37N.[Act 30 of 2023 wef 30/10/2023]
[Act 35 of 2024 wef 27/11/2024]
(8) Subject to subsections (2), (7) and (12), the deduction to any person in respect of any sum allowable under subsection (3)(b), (c), (d), (e) or (f) is to be allowed —(a)
as far as possible against the person’s statutory income of the first year of assessment after the year in which the donation was made by the person; and
(b)
so far as the deduction cannot be so allowed, after deducting any of such sum transferred to a claimant company under section 37B or to a spouse under section 37C, then from the person’s statutory income of the next year of assessment,
and so on, except that any balance of the donation not deducted against the person’s statutory income of the fifth year of assessment after the year of assessment relating to the basis period in which the donation was made is disregarded.
(9) For the purposes of subsections (7) and (8), any sum allowable under subsection (3)(b), (c), (d), (e) or (f) in respect of any donation made on an earlier date is deemed to have been deducted first.
(10) For the purposes of subsection (3), the loss incurred during any year is computed, where the Comptroller so decides, by reference to the year ending on a day in such year which would have been adopted under section 35(4) for the computation of the statutory income of the following year of assessment if a profit had arisen.
(10A) For the purposes of subsection (3)(b) to (f), the reference to the year preceding any year of assessment is —(a)
if the person making the donation is not an individual and is one to whom a direction is made under section 35(4);
(b)
if the persons making the donation are the partners of a partnership, a direction is made under section 35(4) in relation to the income of that partnership, and the donation is made by them in the name of the partnership; or
(c)
if the person making the donation is an individual to whom a direction is made under section 35(4), and the donation is made by the person in the name of the trade, business or profession to which the accounts relate,
a reference to —
(d)
the period of 12 months or such other period as the Comptroller may allow, ending on the day the accounts of the person or the partnership (as the case may be) are made up to; or
(e)
such other period as the Comptroller, having regard to any special circumstance, otherwise directs.
(11) No deduction is allowed under this section to any person in respect of any sum which has been allowed as a deduction under this section against the income of his or her spouse chargeable in his or her own name.
(12) Despite subsection (3), the amount of any loss incurred by a company in any trade or business or any sum allowable under subsection (3)(b), (c), (d), (e) or (f) to a company in respect of any donation is disregarded unless the Comptroller is satisfied that the shareholders of the company on the last day of the year in which the loss was incurred or the donation was made (as the case may be) were substantially the same as the shareholders of the company on the first day of the year of assessment in which such loss or donation would otherwise be deductible under subsection (3).
(13) A loss or donation disregarded under subsection (12) must not be allowed in any subsequent year of assessment.
(14) For the purposes of subsection (12) —(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.
(15) For the purpose of subsection (14), 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.
(16) 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 (12).
(17) Upon an exemption under subsection (16) —(a)
any loss referred to in subsection (3)(a) incurred by a company may only be deducted against the profits from the same trade or business of the company in respect of which that loss was incurred; and
(b)
any balance of the donation referred to in subsection (8) is allowed against the person’s statutory income of the year of assessment in which such donation would otherwise be deductible under that subsection.
(18) For the purposes of subsection (3)(b), “museum” includes any institution established for the purpose of acquiring any collection of artefacts and making them accessible to the public.
(18A) For the purposes of subsection (3)(c)(ii), the Minister may make regulations with respect to the following matters:(a)
the registration of a grant‑making philanthropic organisation;
(b)
the deregistration of an organisation referred to in paragraph (a);
(c)
the issue of tax deduction receipts and maintenance of records and accounts by a registered grant‑making philanthropic organisation for donations received by it and the audit of such records and accounts;
(d)
the requirements to be complied with by a registered grant‑making philanthropic organisation;
(e)
any other matter for giving full effect to or for carrying out the purposes of that provision.
(18B) Where a registered grant‑making philanthropic organisation contravenes any regulation made under subsection (18A), being a regulation prescribed as one to which this subsection applies —(a)
the organisation is liable to pay to the Comptroller a financial penalty of the higher of $100 and the amount ascertained by the formula
(b)
the Minister or such person as the Minister may appoint may deregister the organisation.
(18BA) The Comptroller may for any good cause remit the whole or any part of the financial penalty payable under subsection (18B).[37/2014]
(18C) Despite anything to the contrary in this Act or any other written law, a registered grant‑making philanthropic organisation must keep and retain in safe custody all records and accounts in respect of any donation maintained under regulations made under subsection (18A), for a period of 7 years or such period as may be prescribed by regulations from the year of assessment relating to the year in which the donation is received by the organisation.
(18D) In subsection (3)(c)(ii), “grant‑making philanthropic organisation” means —(a)
a charity registered or exempt from registration under the Charities Act 1994; or
(b)
a not‑for‑profit organisation approved under section 13R.
(19) For the purposes of subsection (3)(e) and subject to subsection (3G) —(a)
the amount in respect of any donation of shares in a company or units in a unit trust listed on the Singapore Exchange is the price of such shares or units (as the case may be) in the open market at the last transaction of such shares or units on the date of the donation;
(b)
the amount in respect of any donation of units in unit trusts traded in Singapore (other than those listed on the Singapore Exchange) is the bid price of such units immediately after the date of the donation quoted by the manager of the unit trusts; and
(c)
“date of the donation”, in relation to any shares or units referred to in paragraph (a) or (b) (as the case may be), means the date of legal transfer to the institution of a public character of the donation of such shares or units.
Adjustment of capital allowances, losses or donations between income subject to tax at different rates
37A.—(1) This section applies where —(a)
a company has income subject to tax at different rates of tax for the year of assessment concerned, and there are UALD in respect of income that is subject to tax at one of those rates of tax; [Act 33 of 2022 wef 04/11/2022]
(b)
a company has income subject to tax at one rate of tax for the year of assessment concerned and income subject to tax at a different rate of tax for an earlier year of assessment, and there are UALD in respect of the second‑mentioned income;[41/2020]
[Act 33 of 2022 wef 04/11/2022]
(c)
a body of persons has income subject to tax at different rates of tax for the year of assessment concerned (being the year of assessment 2023 or a subsequent year of assessment), and there are UALD in respect of income that is subject to tax at one of those rates of tax; or[Act 33 of 2022 wef 04/11/2022]
(d)
a body of persons has income subject to tax at one rate of tax for the year of assessment concerned (being the year of assessment 2023 or a subsequent year of assessment) and income subject to tax at a different rate of tax for an earlier year of assessment, and there are UALD in respect of the second-mentioned income.[Act 33 of 2022 wef 04/11/2022]
(2) For the purposes of subsection (1), income may be subject to tax at different rates of tax even if the income is derived from carrying on the same trade or business.[41/2020]
(3) Subsection (1)(b) and (d) does not include a case where one of the rates of tax is that in section 43(1)(a) and the other rate of tax is also that in section 43(1)(a), but amended.[41/2020]
[Act 33 of 2022 wef 04/11/2022]
(4) Where the UALD relate to income of the company that is subject to tax at the lower rate of tax, then those UALD are to be deducted against the income of the company subject to tax at the higher rate of tax (if it is chargeable income) in accordance with the following provisions:(a)
in a case where the amount of those UALD does not exceed that chargeable income multiplied by the adjustment factor —(i)
that chargeable income is reduced by an amount arrived at by dividing the amount of those UALD by the adjustment factor; and
(ii)
the amount of those UALD is accordingly nil;
(b)
in any other case —(i)
the amount of those UALD is reduced by an amount arrived at by multiplying the amount of that chargeable income by the adjustment factor, and —(A)
the remaining UALD; or
(B)
if the remaining UALD are then reduced by one or more applications of subsection (6)(b) — the remaining UALD (if any) after such reduction or reductions,
are added to, and deemed to form part of, the corresponding allowances, losses or donations in respect of the income subject to tax at the lower rate of tax, for the next succeeding year of assessment and any subsequent year of assessment in accordance with section 23 or 37, as the case may be; and
(ii)
that chargeable income is accordingly nil.[41/2020]
(5) Where the UALD relate to income of the company or body of persons that is subject to tax at the higher rate of tax, then those UALD are to be deducted against the income of the company or body of persons subject to tax at the lower rate of tax (if it is chargeable income) in accordance with the following provisions:(a)
in a case where the amount of those UALD does not exceed that chargeable income divided by the adjustment factor —(i)
that chargeable income is reduced by an amount arrived at by multiplying the amount of those UALD by the adjustment factor; and
(ii)
the amount of those UALD is accordingly nil;
(b)
in any other case —(i)
the amount of those UALD is reduced by an amount arrived at by dividing the amount of that chargeable income by the adjustment factor, and —(A)
the remaining UALD; or
(B)
if the remaining UALD are then reduced by one or more applications of subsection (6)(b) — the remaining UALD (if any) after such reduction or reductions,
are added to, and deemed to form part of, the corresponding allowances, losses or donations in respect of the income subject to tax at the higher rate of tax, for the next succeeding year of assessment and any subsequent year of assessment in accordance with section 23 or 37, as the case may be; and
(ii)
that chargeable income is accordingly nil.[41/2020]
[Act 33 of 2022 wef 04/11/2022]
(6) Where, in a case mentioned in subsection (1)(a), the company has income subject to tax at 3 or more rates of tax (called in this subsection applicable tax rates), then for the purposes of subsection (4) or (5) —(a)
the company may elect its income that is subject to tax at one of the applicable tax rates as its income that is subject to tax at a lower or higher rate of tax, as the case may be;
(b)
the UALD in respect of the company’s income that is subject to tax at the lower or higher rate of tax (as the case may be), that have been reduced in accordance with subsection (4)(b) or (5)(b), may be further deducted in accordance with that provision against the company’s remaining income that is subject to tax at an applicable tax rate; and
(c)
paragraph (b) continues to apply until the amount of the UALD becomes nil or the company has no more income subject to tax at an applicable rate against which the deduction may be made.[41/2020]
(7) Where —(a)
the income in respect of which there are UALD is subject to tax at the lower rate of tax; and
(b)
the company ceases to derive that income in the basis period for the year of assessment concerned,
subsection (4) applies, with the necessary modifications, to the UALD mentioned in paragraph (a) for the purpose of deducting them against the income of the company subject to tax at the higher rate of tax (if it is chargeable income) for any year of assessment subsequent to the year of assessment concerned.
[41/2020]
(8) Where —(a)
the income in respect of which there are UALD is subject to tax at the higher rate of tax; and
(b)
the company or body of persons ceases to derive that income in the basis period for the year of assessment concerned,
subsection (5) applies, with the necessary modifications, to the UALD mentioned in paragraph (a) for the purpose of deducting them against the income of the company or body of persons subject to tax at the lower rate of tax (if it is chargeable income) for any year of assessment subsequent to the year of assessment concerned.
[41/2020]
[Act 33 of 2022 wef 04/11/2022]
(9) Nothing in this section is to be construed as affecting the application of section 23, 37, 37AA or 37AB unless otherwise provided in this section.[41/2020]
[Act 35 of 2024 wef 27/11/2024]
(10) If, during the basis period for any year of assessment (called in this subsection the relevant year of assessment), a company only derives income that is exempt from tax, then subsection (5) applies, with the necessary modifications, to any year of assessment subsequent to the relevant year of assessment as if any sum allowable under section 37(3)(b), (c), (d) or (f) in respect of any donation made by that company during the basis period for the relevant year of assessment were unabsorbed donation in respect of the income of a company that is subject to tax at the rate of tax specified in section 43(1)(a).[41/2020]
(11) In this section —“adjustment factor” means the factor ascertained in accordance with the formula
where —
(a)
A is the higher rate of tax; and
(b)
B is the lower rate of tax;
“allowances” means allowances under section 16, 17, 18B, 18C, 19, 19A, 19B, 19C, 19D, 20, 21, 22 or 23, including unabsorbed allowances that arose in any year of assessment before the year of assessment 1994;
“donations” means donations that are deductible including any unabsorbed donations allowable under section 37, 37AA or 37AB;[Act 35 of 2024 wef 27/11/2024]
“losses” means losses that are deductible under section 37 including unabsorbed losses incurred in respect of any year of assessment before the year of assessment 1994;
“rate of tax” means —(a)
the rate of tax under section 43(1)(a); [Act 33 of 2022 wef 04/11/2022]
(b)
in the case of a company, the concessionary rate of tax in accordance with —(i)
any order made under section 13(12); or
(ii)
section 43A, 43C, 43D of this Act as in force before 29 December 2016, 43D, 43F of this Act as in force before 29 December 2016, 43E, 43H of this Act as in force before 29 December 2016, 43F, 43G, 43K of this Act as in force before 29 December 2016, 43L of this Act as in force before 1 November 2006, 43M of this Act as in force before 3 December 2003, 43H, 43I, 43J, 43K, 43S of this Act as in force before 29 December 2016, 43T of this Act as in force before 29 December 2016, 43U of this Act as in force before 26 October 2017, 43V of this Act as in force before 29 December 2016, 43L, 43M, 43N, 43O, 43P, 43Q, 43R, 43S, 43T, 43U, 43V, 43W or 43X, or the regulations made under any of those sections, as the case may be; or[Act 33 of 2022 wef 04/11/2022]
(c)
in the case of a body of persons, the concessionary rate of tax in accordance with regulations made under section 43H;[Act 33 of 2022 wef 04/11/2022]
“UALD” or “unabsorbed allowances, losses or donations”, in relation to the income of a company or body of persons that is subject to tax at a particular rate of tax, means the balance of such allowances, losses or donations after deducting the expenses, donations, allowances or losses allowable under this Act against that income.[37B
[41/2020; 27/2021]
[Act 33 of 2022 wef 04/11/2022]
—(1) This section applies where —(a)
a company has income subject to tax at different rates of tax for the year of assessment concerned, and there are UALD in respect of income that is subject to tax at one of those rates of tax; [Act 33 of 2022 wef 04/11/2022]
(b)
a company has income subject to tax at one rate of tax for the year of assessment concerned and income subject to tax at a different rate of tax for an earlier year of assessment, and there are UALD in respect of the second‑mentioned income;[41/2020]
[Act 33 of 2022 wef 04/11/2022]
(c)
a body of persons has income subject to tax at different rates of tax for the year of assessment concerned (being the year of assessment 2023 or a subsequent year of assessment), and there are UALD in respect of income that is subject to tax at one of those rates of tax; or[Act 33 of 2022 wef 04/11/2022]
(d)
a body of persons has income subject to tax at one rate of tax for the year of assessment concerned (being the year of assessment 2023 or a subsequent year of assessment) and income subject to tax at a different rate of tax for an earlier year of assessment, and there are UALD in respect of the second-mentioned income.[Act 33 of 2022 wef 04/11/2022]
(2) For the purposes of subsection (1), income may be subject to tax at different rates of tax even if the income is derived from carrying on the same trade or business.[41/2020]
(3) Subsection (1)(b) and (d) does not include a case where one of the rates of tax is that in section 43(1)(a) and the other rate of tax is also that in section 43(1)(a), but amended.[41/2020]
[Act 33 of 2022 wef 04/11/2022]
(4) Where the UALD relate to income of the company that is subject to tax at the lower rate of tax, then those UALD are to be deducted against the income of the company subject to tax at the higher rate of tax (if it is chargeable income) in accordance with the following provisions:(a)
in a case where the amount of those UALD does not exceed that chargeable income multiplied by the adjustment factor —(i)
that chargeable income is reduced by an amount arrived at by dividing the amount of those UALD by the adjustment factor; and
(ii)
the amount of those UALD is accordingly nil;
(b)
in any other case —(i)
the amount of those UALD is reduced by an amount arrived at by multiplying the amount of that chargeable income by the adjustment factor, and —(A)
the remaining UALD; or
(B)
if the remaining UALD are then reduced by one or more applications of subsection (6)(b) — the remaining UALD (if any) after such reduction or reductions,
are added to, and deemed to form part of, the corresponding allowances, losses or donations in respect of the income subject to tax at the lower rate of tax, for the next succeeding year of assessment and any subsequent year of assessment in accordance with section 23 or 37, as the case may be; and
(ii)
that chargeable income is accordingly nil.[41/2020]
(5) Where the UALD relate to income of the company or body of persons that is subject to tax at the higher rate of tax, then those UALD are to be deducted against the income of the company or body of persons subject to tax at the lower rate of tax (if it is chargeable income) in accordance with the following provisions:(a)
in a case where the amount of those UALD does not exceed that chargeable income divided by the adjustment factor —(i)
that chargeable income is reduced by an amount arrived at by multiplying the amount of those UALD by the adjustment factor; and
(ii)
the amount of those UALD is accordingly nil;
(b)
in any other case —(i)
the amount of those UALD is reduced by an amount arrived at by dividing the amount of that chargeable income by the adjustment factor, and —(A)
the remaining UALD; or
(B)
if the remaining UALD are then reduced by one or more applications of subsection (6)(b) — the remaining UALD (if any) after such reduction or reductions,
are added to, and deemed to form part of, the corresponding allowances, losses or donations in respect of the income subject to tax at the higher rate of tax, for the next succeeding year of assessment and any subsequent year of assessment in accordance with section 23 or 37, as the case may be; and
(ii)
that chargeable income is accordingly nil.[41/2020]
[Act 33 of 2022 wef 04/11/2022]
(6) Where, in a case mentioned in subsection (1)(a), the company has income subject to tax at 3 or more rates of tax (called in this subsection applicable tax rates), then for the purposes of subsection (4) or (5) —(a)
the company may elect its income that is subject to tax at one of the applicable tax rates as its income that is subject to tax at a lower or higher rate of tax, as the case may be;
(b)
the UALD in respect of the company’s income that is subject to tax at the lower or higher rate of tax (as the case may be), that have been reduced in accordance with subsection (4)(b) or (5)(b), may be further deducted in accordance with that provision against the company’s remaining income that is subject to tax at an applicable tax rate; and
(c)
paragraph (b) continues to apply until the amount of the UALD becomes nil or the company has no more income subject to tax at an applicable rate against which the deduction may be made.[41/2020]
(7) Where —(a)
the income in respect of which there are UALD is subject to tax at the lower rate of tax; and
(b)
the company ceases to derive that income in the basis period for the year of assessment concerned,
subsection (4) applies, with the necessary modifications, to the UALD mentioned in paragraph (a) for the purpose of deducting them against the income of the company subject to tax at the higher rate of tax (if it is chargeable income) for any year of assessment subsequent to the year of assessment concerned.
[41/2020]
(8) Where —(a)
the income in respect of which there are UALD is subject to tax at the higher rate of tax; and
(b)
the company or body of persons ceases to derive that income in the basis period for the year of assessment concerned,
subsection (5) applies, with the necessary modifications, to the UALD mentioned in paragraph (a) for the purpose of deducting them against the income of the company or body of persons subject to tax at the lower rate of tax (if it is chargeable income) for any year of assessment subsequent to the year of assessment concerned.
[41/2020]
[Act 33 of 2022 wef 04/11/2022]
(9) Nothing in this section is to be construed as affecting the application of section 23, 37, 37AA or 37AB unless otherwise provided in this section.[41/2020]
[Act 35 of 2024 wef 27/11/2024]
(10) If, during the basis period for any year of assessment (called in this subsection the relevant year of assessment), a company only derives income that is exempt from tax, then subsection (5) applies, with the necessary modifications, to any year of assessment subsequent to the relevant year of assessment as if any sum allowable under section 37(3)(b), (c), (d) or (f) in respect of any donation made by that company during the basis period for the relevant year of assessment were unabsorbed donation in respect of the income of a company that is subject to tax at the rate of tax specified in section 43(1)(a).[41/2020]
(11) In this section —“adjustment factor” means the factor ascertained in accordance with the formula
where —
(a)
A is the higher rate of tax; and
(b)
B is the lower rate of tax;
“allowances” means allowances under section 16, 17, 18B, 18C, 19, 19A, 19B, 19C, 19D, 20, 21, 22 or 23, including unabsorbed allowances that arose in any year of assessment before the year of assessment 1994;
“donations” means donations that are deductible including any unabsorbed donations allowable under section 37, 37AA or 37AB;[Act 35 of 2024 wef 27/11/2024]
“losses” means losses that are deductible under section 37 including unabsorbed losses incurred in respect of any year of assessment before the year of assessment 1994;
“rate of tax” means —(a)
the rate of tax under section 43(1)(a); [Act 33 of 2022 wef 04/11/2022]
(b)
in the case of a company, the concessionary rate of tax in accordance with —(i)
any order made under section 13(12); or
(ii)
section 43A, 43C, 43D of this Act as in force before 29 December 2016, 43D, 43F of this Act as in force before 29 December 2016, 43E, 43H of this Act as in force before 29 December 2016, 43F, 43G, 43K of this Act as in force before 29 December 2016, 43L of this Act as in force before 1 November 2006, 43M of this Act as in force before 3 December 2003, 43H, 43I, 43J, 43K, 43S of this Act as in force before 29 December 2016, 43T of this Act as in force before 29 December 2016, 43U of this Act as in force before 26 October 2017, 43V of this Act as in force before 29 December 2016, 43L, 43M, 43N, 43O, 43P, 43Q, 43R, 43S, 43T, 43U, 43V, 43W or 43X, or the regulations made under any of those sections, as the case may be; or[Act 33 of 2022 wef 04/11/2022]
(c)
in the case of a body of persons, the concessionary rate of tax in accordance with regulations made under section 43H;[Act 33 of 2022 wef 04/11/2022]
“UALD” or “unabsorbed allowances, losses or donations”, in relation to the income of a company or body of persons that is subject to tax at a particular rate of tax, means the balance of such allowances, losses or donations after deducting the expenses, donations, allowances or losses allowable under this Act against that income.[37B
[41/2020; 27/2021]
[Act 33 of 2022 wef 04/11/2022]
Deduction for donation of money by person related to or connected with company approved under section 13O, limited partnership approved under section 13OA or person, master fund, etc., approved under section 13U
37AA.—(1) For the purpose of ascertaining the assessable income for any year of assessment of a person mentioned in subsection (2) that is approved as an approved donor for the purpose of this section, there is to be deducted an amount computed in accordance with subsection (4) of all donations of money for a purpose specified by the Minister or authorised body to the approved recipients, and made in the year immediately preceding the year of assessment, by the approved donor to all persons approved as approved recipients for the purpose of this section.(2) The approved donor is one that is related (directly or indirectly) in accordance with rules made under subsection (13) to any of the following:(a)
a company incorporated and resident in Singapore and approved under section 13O (called in this section a section 13O company);
(aa)
a limited partnership registered under the Limited Partnerships Act 2008 and approved under section 13OA (called in this section a section 13OA limited partnership);[Act 35 of 2024 wef 01/01/2025]
(b)
a person, master fund, feeder fund, SPV, master‑feeder fund structure, master‑feeder fund‑SPV structure or master fund‑SPV structure approved under section 13U (called in this section a section 13U vehicle).
(3) Any deduction under subsection (1) is made only after the deduction (if any) under section 37(3)(a).
(4) The amount of deduction under subsection (1) in any year of assessment for any approved donor must not exceed the lower of the following:(a)
the total amount of all donations of money made by the approved donor to approved recipients in the year immediately preceding the year of assessment;
(b)
40% of the statutory income of the approved donor for that year of assessment.
(5) Any balance of the amount that is not deducted is not available as a deduction against the approved donor’s income for any subsequent year of assessment and is disregarded.
(6) The Minister or an authorised body may, during the period from 1 January 2024 to 31 December 2028 (both dates inclusive) —(a)
approve a person mentioned in subsection (2) as an approved donor; and
(b)
approve a person or a class of persons as an approved recipient or approved recipients.
(7) The approval under subsection (6) is subject to any condition that the Minister or authorised body may impose.
(8) There must not be more than one approved donor at any one time for each section 13O company, section 13OA limited partnership or section 13U vehicle.[Act 35 of 2024 wef 01/01/2025]
(9) Any deduction under subsection (1) is subject to any condition precedent or condition subsequent that the Minister or authorised body may impose on the fund manager managing the funds of the section 13O company, the section 13OA limited partnership or the section 13U vehicle concerned.[Act 35 of 2024 wef 01/01/2025]
(10) If the fund manager fails to comply with any of the conditions subsequent, the deduction allowed to the approved donor is treated as the approved donor’s income for the year of assessment in which the Comptroller discovers the non-compliance.
(11) No deduction may be made under subsection (1) to an approved donor in respect of any donation made to an approved recipient unless the approved donor provides to the approved recipient any information within the time and in the form and manner specified by the Comptroller.
(12) Section 37(2), (3C), (3E) (but not the definition of “recipient”), (3F), (3G), (3H), (3I), (3J) and (10A) (except paragraph (b)) applies in relation to a donation of money under subsection (1) as those provisions apply in relation to a donation mentioned in section 37(3)(b), (c), (d), (e) or (f), subject to the necessary modifications and the following other modifications:(a)
a reference in section 37(3C), (3F), (3G) and (3J) to a donor is to an approved donor;
(b)
a reference in section 37(3C) to a recipient under section 37(3)(b)(i) or (ii), (c), (d), (e) or (f) is to an approved recipient;
(c)
a reference in section 37(10A)(a) and (c) to the person making the donation is to the approved donor;
(d)
such other modifications as may be prescribed by rules made under subsection (13).[Act 35 of 2024 wef 27/11/2024]
(13) The Minister may make rules with respect to the following matters:(a)
the manner in which a person must be related (directly or indirectly) to a section 13O company, a section 13OA limited partnership or a section 13U vehicle, to be an approved donor;[Act 35 of 2024 wef 01/01/2025]
(b)
the conditions of approval of an approved recipient;
(c)
the matters in section 37(3H) as applied by subsection (12);
(d)
any other matter for giving full effect to or for carrying out the purposes of this provision.
(14) In this regulation, “feeder fund”, “master‑feeder fund structure”, “master‑feeder fund‑SPV structure”, “master fund‑SPV structure”, “master fund” and “SPV” have the meanings given by section 13U.[Act 30 of 2023 wef 01/01/2024]
[Act 35 of 2024 wef 01/01/2025]
—(1) For the purpose of ascertaining the assessable income for any year of assessment of a person mentioned in subsection (2) that is approved as an approved donor for the purpose of this section, there is to be deducted an amount computed in accordance with subsection (4) of all donations of money for a purpose specified by the Minister or authorised body to the approved recipients, and made in the year immediately preceding the year of assessment, by the approved donor to all persons approved as approved recipients for the purpose of this section.
(2) The approved donor is one that is related (directly or indirectly) in accordance with rules made under subsection (13) to any of the following:(a)
a company incorporated and resident in Singapore and approved under section 13O (called in this section a section 13O company);
(aa)
a limited partnership registered under the Limited Partnerships Act 2008 and approved under section 13OA (called in this section a section 13OA limited partnership);[Act 35 of 2024 wef 01/01/2025]
(b)
a person, master fund, feeder fund, SPV, master‑feeder fund structure, master‑feeder fund‑SPV structure or master fund‑SPV structure approved under section 13U (called in this section a section 13U vehicle).
(3) Any deduction under subsection (1) is made only after the deduction (if any) under section 37(3)(a).
(4) The amount of deduction under subsection (1) in any year of assessment for any approved donor must not exceed the lower of the following:(a)
the total amount of all donations of money made by the approved donor to approved recipients in the year immediately preceding the year of assessment;
(b)
40% of the statutory income of the approved donor for that year of assessment.
(5) Any balance of the amount that is not deducted is not available as a deduction against the approved donor’s income for any subsequent year of assessment and is disregarded.
(6) The Minister or an authorised body may, during the period from 1 January 2024 to 31 December 2028 (both dates inclusive) —(a)
approve a person mentioned in subsection (2) as an approved donor; and
(b)
approve a person or a class of persons as an approved recipient or approved recipients.
(7) The approval under subsection (6) is subject to any condition that the Minister or authorised body may impose.
(8) There must not be more than one approved donor at any one time for each section 13O company, section 13OA limited partnership or section 13U vehicle.[Act 35 of 2024 wef 01/01/2025]
(9) Any deduction under subsection (1) is subject to any condition precedent or condition subsequent that the Minister or authorised body may impose on the fund manager managing the funds of the section 13O company, the section 13OA limited partnership or the section 13U vehicle concerned.[Act 35 of 2024 wef 01/01/2025]
(10) If the fund manager fails to comply with any of the conditions subsequent, the deduction allowed to the approved donor is treated as the approved donor’s income for the year of assessment in which the Comptroller discovers the non-compliance.
(11) No deduction may be made under subsection (1) to an approved donor in respect of any donation made to an approved recipient unless the approved donor provides to the approved recipient any information within the time and in the form and manner specified by the Comptroller.
(12) Section 37(2), (3C), (3E) (but not the definition of “recipient”), (3F), (3G), (3H), (3I), (3J) and (10A) (except paragraph (b)) applies in relation to a donation of money under subsection (1) as those provisions apply in relation to a donation mentioned in section 37(3)(b), (c), (d), (e) or (f), subject to the necessary modifications and the following other modifications:(a)
a reference in section 37(3C), (3F), (3G) and (3J) to a donor is to an approved donor;
(b)
a reference in section 37(3C) to a recipient under section 37(3)(b)(i) or (ii), (c), (d), (e) or (f) is to an approved recipient;
(c)
a reference in section 37(10A)(a) and (c) to the person making the donation is to the approved donor;
(d)
such other modifications as may be prescribed by rules made under subsection (13).[Act 35 of 2024 wef 27/11/2024]
(13) The Minister may make rules with respect to the following matters:(a)
the manner in which a person must be related (directly or indirectly) to a section 13O company, a section 13OA limited partnership or a section 13U vehicle, to be an approved donor;[Act 35 of 2024 wef 01/01/2025]
(b)
the conditions of approval of an approved recipient;
(c)
the matters in section 37(3H) as applied by subsection (12);
(d)
any other matter for giving full effect to or for carrying out the purposes of this provision.
(14) In this regulation, “feeder fund”, “master‑feeder fund structure”, “master‑feeder fund‑SPV structure”, “master fund‑SPV structure”, “master fund” and “SPV” have the meanings given by section 13U.[Act 30 of 2023 wef 01/01/2024]
[Act 35 of 2024 wef 01/01/2025]
Deduction for donation of money for overseas emergency humanitarian assistance
37AB.—(1) For the purpose of ascertaining the assessable income for any year of assessment of a person (called in this section the donor), there is to be deducted an amount computed in accordance with subsection (4) of all qualifying overseas cash donations made by the donor in the year immediately preceding the year of assessment.(2) Subsection (1) only applies to qualifying overseas cash donations made during the period from 1 January 2025 to 31 December 2028 (both dates inclusive).
(3) Any deduction under subsection (1) is made only after the deduction (if any) under sections 37(3)(a) and 37AA.
(4) The amount of deduction under subsection (1) in any year of assessment must not exceed the lower of the following:(a)
the total amount of all qualifying overseas cash donations made by the donor in the year immediately preceding the year of assessment;
(b)
40% of the statutory income of the donor, after subtracting the amount of any deduction made by the donor under section 37AA, for that year of assessment.
(5) Any balance of the amount that is not deducted is not available as a deduction against the donor’s income for any subsequent year of assessment and is disregarded.
(6) Section 37(2), (3C), (3E) (but not the definition of “recipient”), (3F), (3G), (3H), (3I), (3J) and (10A) applies in relation to a qualifying overseas cash donation as those provisions apply in relation to a donation mentioned in section 37(3)(b), (c), (d), (e) or (f), subject to the necessary modifications and the following other modifications:(a)
a reference in section 37(3C) to a recipient under section 37(3)(b)(i) or (ii), (c), (d), (e) or (f) is to the designated charity to which the qualifying overseas cash donation is made;
(b)
a reference in section 37(10A) to a person making the donation is to the donor.
(7) The Minister may make rules with respect to the following matters:(a)
the matters in section 37(3H) as applied by subsection (6);
(b)
any other matter for giving full effect to or for carrying out the purposes of this provision.
(8) In this section —“designated charity” means a charity (as defined by section 2(1) of the Charities Act 1994) which has been designated by the Minister or an authorised body for the purpose of this section;
“qualifying overseas cash donation” means a donation made —(a)
to a designated charity;
(b)
in response to a fund-raising appeal for which a permit has been granted by the Commissioner of Charities in accordance with regulations made under the Charities Act 1994; and
(c)
to provide humanitarian assistance connected with an emergency or event in a country outside Singapore, approved by the Minister or an authorised body for the purposes of this section.[Act 35 of 2024 wef 27/11/2024]
—(1) For the purpose of ascertaining the assessable income for any year of assessment of a person (called in this section the donor), there is to be deducted an amount computed in accordance with subsection (4) of all qualifying overseas cash donations made by the donor in the year immediately preceding the year of assessment.
(2) Subsection (1) only applies to qualifying overseas cash donations made during the period from 1 January 2025 to 31 December 2028 (both dates inclusive).
(3) Any deduction under subsection (1) is made only after the deduction (if any) under sections 37(3)(a) and 37AA.
(4) The amount of deduction under subsection (1) in any year of assessment must not exceed the lower of the following:(a)
the total amount of all qualifying overseas cash donations made by the donor in the year immediately preceding the year of assessment;
(b)
40% of the statutory income of the donor, after subtracting the amount of any deduction made by the donor under section 37AA, for that year of assessment.
(5) Any balance of the amount that is not deducted is not available as a deduction against the donor’s income for any subsequent year of assessment and is disregarded.
(6) Section 37(2), (3C), (3E) (but not the definition of “recipient”), (3F), (3G), (3H), (3I), (3J) and (10A) applies in relation to a qualifying overseas cash donation as those provisions apply in relation to a donation mentioned in section 37(3)(b), (c), (d), (e) or (f), subject to the necessary modifications and the following other modifications:(a)
a reference in section 37(3C) to a recipient under section 37(3)(b)(i) or (ii), (c), (d), (e) or (f) is to the designated charity to which the qualifying overseas cash donation is made;
(b)
a reference in section 37(10A) to a person making the donation is to the donor.
(7) The Minister may make rules with respect to the following matters:(a)
the matters in section 37(3H) as applied by subsection (6);
(b)
any other matter for giving full effect to or for carrying out the purposes of this provision.
(8) In this section —“designated charity” means a charity (as defined by section 2(1) of the Charities Act 1994) which has been designated by the Minister or an authorised body for the purpose of this section;
“qualifying overseas cash donation” means a donation made —(a)
to a designated charity;
(b)
in response to a fund-raising appeal for which a permit has been granted by the Commissioner of Charities in accordance with regulations made under the Charities Act 1994; and
(c)
to provide humanitarian assistance connected with an emergency or event in a country outside Singapore, approved by the Minister or an authorised body for the purposes of this section.[Act 35 of 2024 wef 27/11/2024]
Group relief for Singapore companies
37B.—(1) Subject to the provisions of this section, a transferor company may transfer any qualifying deduction for any year of assessment to a claimant company of the same group which has claimed the qualifying deduction against its assessable income for the same year of assessment.(2) A transfer of a qualifying deduction for any year of assessment may be made only if the transferor company and the claimant company, for that year of assessment —(a)
are members of the same group on the last day of the basis period;
(b)
have accounting periods ending on the same day; and
(c)
have made an election under subsection (11).
(3) For the purposes of this section, 2 Singapore companies are members of the same group if —(a)
at least 75% of the total number of issued ordinary shares in one company are beneficially held, directly or indirectly, by the other; or
(b)
at least 75% of the total number of issued ordinary shares in each of the 2 companies are beneficially held, directly or indirectly, by a third Singapore company.
(4) A Singapore company that beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares in another Singapore company, does not satisfy subsection (3) unless additionally it is beneficially entitled to at least 75% of —(a)
any residual profits of the other company available for distribution to that company’s equity holders; and
(b)
any residual assets of the other company available for distribution to that company’s equity holders on a winding up.
(5) For the purpose of subsection (3), where a Singapore company beneficially owns, directly or indirectly, a fraction of the total number of issued ordinary shares of a second Singapore company which in turn beneficially owns, directly or indirectly, a fraction of the total number of issued ordinary shares of a third Singapore company, the Singapore company is deemed to have a beneficial ownership of the number of issued ordinary shares of the third Singapore company equal to such fraction of the total number as results from the multiplication of those 2 fractions; and where the third Singapore company beneficially owns, directly or indirectly, a fraction of the total number of issued ordinary shares of a fourth Singapore company, the Singapore company is deemed to have a beneficial ownership of the number of issued ordinary shares of the fourth Singapore company equal to such fraction of the total number as results from the multiplication of those 3 fractions, and so on.
(6) A transfer of qualifying deduction may be —(a)
made by a transferor company to more than one claimant company, provided that the amount of qualifying deduction transferred is fully deducted against the assessable income of the first claimant company before any excess qualifying deduction is transferred and deducted against the assessable income of the second claimant company and so on; or
(b)
claimed by a claimant company from more than one transferor company, provided that the amount of qualifying deduction transferred from the first transferor company is fully deducted against the assessable income of the claimant company before any qualifying deduction transferred from a second transferor company is deducted against the assessable income of the claimant company and so on.
(7) Qualifying deductions must be transferred to a claimant company in accordance with the priority specified in the election made under subsection (11), and in the following order:(a)
any allowance specified in subsection (14)(a);
(b)
any loss specified in subsection (14)(b);
(c)
any donation specified in subsection (14)(c).
(8) Where, in any year of assessment, a transfer of qualifying deduction cannot be effected in accordance with the order of priority specified by any transferor company or claimant company in its election made under subsection (11), the transfer is to be allowed in such manner as the Comptroller thinks reasonable and proper.
(9) Subject to subsection (10), the amount of qualifying deduction that may be transferred to a claimant company from a transferor company for any year of assessment is —(a)
the available assessable income of the claimant company equal to
where A
is the number of days in the continuous period ending on the last day of the basis period for that year of assessment during which the companies are members of the same group or, if the continuous periods of the transferor company and the claimant company are different, the number of days in the shorter of the continuous periods;
B
is the number of days in the basis period of the claimant company for that year of assessment; and
C
is the assessable income of the claimant company for that year of assessment; or
(b)
the available qualifying deduction of the transferor company equal to
where A
has the meaning given by paragraph (a);
D
is the number of days in the basis period of the transferor company for that year of assessment; and
E
is the amount of qualifying deduction of the transferor company for that year of assessment,
whichever is the lower.
(10) Where, for any year of assessment, there are 2 or more —(a)
claims for any qualifying deduction by a claimant company, the available assessable income of the claimant company is, for the purpose of subsection (9)(a),
where A, B and C
have the meanings given by subsection (9)(a); and
F
is the aggregate of the amounts of qualifying deductions previously claimed from any other transferor company for the same year of assessment, if any;
(b)
transfers of any qualifying deduction by a transferor company, the available qualifying deduction of the transferor company is, for the purpose of subsection (9)(b),
where A, D and E
have the meanings given by subsection (9)(b); and
G
is the aggregate of the amounts of qualifying deductions previously transferred to any other claimant company for the same year of assessment, if any.
(11) Every transferor company and every claimant company of the same group must, at the time of lodgment of their returns of income for any year of assessment or within such further time as the Comptroller may allow, make an irrevocable election to transfer or claim qualifying deductions, as the case may be.
(12) An election under subsection (11) must be accompanied by —(a)
such particulars as the Comptroller may require; and
(b)
a list of companies, in order of priority, to which qualifying deductions would be transferred or from which such deductions would be claimed, as the case may be.
(13) Despite subsection (11), where at the time of furnishing its return of income under section 62(1) for any year of assessment —(a)
a company has assessable income, but is subsequently determined by the Comptroller to have any qualifying deduction for that year of assessment; or
(b)
a company has any qualifying deduction, but is subsequently determined by the Comptroller to have assessable income for that year of assessment,
the Comptroller may —
(c)
allow the company to make an election under subsection (11); and
(d)
allow any company of the same group to include that company in its list of companies submitted previously by it under subsection (11),
within such time and in such manner as the Comptroller may determine.
(14) For the purposes of this section, subject to subsection (15) and sections 35, 37 and 37A, qualifying deductions, in relation to a transferor company, for each year of assessment, are —(a)
any allowance falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 for that year of assessment that is in excess of the transferor company’s income from all sources chargeable to tax for that year of assessment;
(b)
any loss incurred by the transferor company in the basis period for that year of assessment in any trade or business which, if it had been a profit would have been assessable under this Act, and which is not deducted for that year of assessment because of insufficiency of statutory income of the transferor company; and
(c)
any donation made by the transferor company under section 37(3)(b), (c), (d) or (f) in the year preceding that year of assessment that is not deducted for that year of assessment because of insufficiency of statutory income of the transferor company.
(15) Despite subsection (14), the following companies are not entitled to transfer the following items of qualifying deductions:(a)
any company to which section 10D applies, in respect of qualifying deductions under subsection (14)(a) (except in relation to allowances falling under sections 16, 17, 18B and 18C) and (b);
(b)
any company to which section 97D or 97G of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 28 April 2004 or section 97V of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 19 April 2016 applies, in respect of qualifying deductions under subsection (14)(b) where the loss is deemed to be a loss incurred from a trade or business for the purposes of any of those sections;
(c)
any company, in respect of qualifying deductions under subsection (14) relating to any income that is fully exempt from tax under the provisions of this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967;
(d)
any company, in respect of qualifying deductions under subsection (14) relating to any income the tax on which is remitted under the provisions of this Act, unless the Minister otherwise approves.[37/2014; 11/2016; 32/2019]
(15A) This section does not entitle —(a)
a company that is a life insurer to transfer to another company that is a life insurer, any qualifying deduction relating to any income from a participating fund of the firstmentioned life insurer that is apportioned to policyholders in accordance with regulations made under section 43(9) or 43C; or
(b)
a company that is a life insurer to claim any qualifying deduction of another company that is a life insurer against any income of the firstmentioned insurer from a participating fund that is apportioned to policyholders in accordance with regulations made under section 43(9) or 43C.[27/2021]
(16) Despite subsections (9) and (10), where the Comptroller discovers that any transfer or claim of qualifying deduction which has been made from or to any company is or has become excessive, the Comptroller may make an assessment upon the company under section 74 on the amount which, in the Comptroller’s opinion, ought to have been charged to tax.
(17) Section 37A applies, with the necessary modifications, to the transfer of any qualifying deduction from a transferor company to a claimant company, where applicable, and for the purpose of such application, any reference in section 37A(4) and (5) to —(a)
unabsorbed allowances, losses or donations is a reference to qualifying deductions;
(b)
corresponding allowances, losses or donations is a reference to allowances, losses or donations;
(c)
income of a company subject to tax at a higher or lower rate of tax (as the case may be) is a reference to income of a transferor company subject to tax at a higher or lower rate of tax, respectively; and
(d)
chargeable income of the company is a reference to chargeable income of a claimant company.[41/2020]
(18) For the purposes of this section, the Minister may make regulations to provide generally for giving full effect to or for carrying out the purposes of this section.
(19) In this section —“assessable income”, in relation to a claimant company or transferor company, means assessable income of the company as determined under section 37 after deducting any deduction allowed under section 37F and investment allowance under Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967;[Act 39 of 2023 wef 29/12/2023]
“claimant company” or “transferor company” means a Singapore company that claims or transfers, respectively, any qualifying deduction under subsection (1) but does not include a company approved as —(a)
a technology company under section 94(2) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 28 April 2004;
(b)
a venture company under section 97B(2) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 28 April 2004;
(c)
a technology investment company under section 97C(2) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 28 April 2004;
(d)
an overseas investment company under section 97C(4) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 28 April 2004; or
(e)
a start‑up company under section 97T(2) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 19 April 2016;
“commercial loan” means any borrowing which entitles the creditor to any return which is of only —(a)
a fixed amount or at a fixed rate per cent of the amount of the borrowing; or
(b)
a fixed rate per cent of the profits of the company;
“equity holder”, in relation to a Singapore company, means any holder of ordinary shares in the company or any creditor of the company in respect of any non‑commercial loan;
“non‑commercial loan” means any borrowing other than a commercial loan;
“ordinary share” means any share other than a treasury share or a share which carries only a right to any dividend which is of —(a)
a fixed amount or at a fixed rate per cent of the value of the shares; or
(b)
a fixed rate per cent of the profits of the company;
“residual assets”, in relation to a Singapore company, means net assets of the company after distribution made to —(a)
creditors of the company in respect of commercial loans; and
(b)
holders of shares other than ordinary shares,
and where the company has no residual asset, a notional amount of $100 is deemed to be the residual assets of the company;
“residual profits”, in relation to a Singapore company, means profits of the company after deducting any dividend which is of —(a)
a fixed amount or at a fixed rate per cent of the value of the shares of the company; or
(b)
a fixed rate per cent of the profits of the company,
but before deducting any return due to any non‑commercial loan creditor which is not of —
(c)
a fixed amount or at a fixed rate per cent of the amount of the borrowing; or
(d)
a fixed rate per cent of the profits of the company,
and where the company has no residual profit, a notional amount of $100 is deemed to be the residual profits of the company;
“Singapore company” means any company incorporated in Singapore.[37C
[37/2014; 11/2016; 32/2019]
—(1) Subject to the provisions of this section, a transferor company may transfer any qualifying deduction for any year of assessment to a claimant company of the same group which has claimed the qualifying deduction against its assessable income for the same year of assessment.
(2) A transfer of a qualifying deduction for any year of assessment may be made only if the transferor company and the claimant company, for that year of assessment —(a)
are members of the same group on the last day of the basis period;
(b)
have accounting periods ending on the same day; and
(c)
have made an election under subsection (11).
(3) For the purposes of this section, 2 Singapore companies are members of the same group if —(a)
at least 75% of the total number of issued ordinary shares in one company are beneficially held, directly or indirectly, by the other; or
(b)
at least 75% of the total number of issued ordinary shares in each of the 2 companies are beneficially held, directly or indirectly, by a third Singapore company.
(4) A Singapore company that beneficially holds, directly or indirectly, at least 75% of the total number of issued ordinary shares in another Singapore company, does not satisfy subsection (3) unless additionally it is beneficially entitled to at least 75% of —(a)
any residual profits of the other company available for distribution to that company’s equity holders; and
(b)
any residual assets of the other company available for distribution to that company’s equity holders on a winding up.
(5) For the purpose of subsection (3), where a Singapore company beneficially owns, directly or indirectly, a fraction of the total number of issued ordinary shares of a second Singapore company which in turn beneficially owns, directly or indirectly, a fraction of the total number of issued ordinary shares of a third Singapore company, the Singapore company is deemed to have a beneficial ownership of the number of issued ordinary shares of the third Singapore company equal to such fraction of the total number as results from the multiplication of those 2 fractions; and where the third Singapore company beneficially owns, directly or indirectly, a fraction of the total number of issued ordinary shares of a fourth Singapore company, the Singapore company is deemed to have a beneficial ownership of the number of issued ordinary shares of the fourth Singapore company equal to such fraction of the total number as results from the multiplication of those 3 fractions, and so on.
(6) A transfer of qualifying deduction may be —(a)
made by a transferor company to more than one claimant company, provided that the amount of qualifying deduction transferred is fully deducted against the assessable income of the first claimant company before any excess qualifying deduction is transferred and deducted against the assessable income of the second claimant company and so on; or
(b)
claimed by a claimant company from more than one transferor company, provided that the amount of qualifying deduction transferred from the first transferor company is fully deducted against the assessable income of the claimant company before any qualifying deduction transferred from a second transferor company is deducted against the assessable income of the claimant company and so on.
(7) Qualifying deductions must be transferred to a claimant company in accordance with the priority specified in the election made under subsection (11), and in the following order:(a)
any allowance specified in subsection (14)(a);
(b)
any loss specified in subsection (14)(b);
(c)
any donation specified in subsection (14)(c).
(8) Where, in any year of assessment, a transfer of qualifying deduction cannot be effected in accordance with the order of priority specified by any transferor company or claimant company in its election made under subsection (11), the transfer is to be allowed in such manner as the Comptroller thinks reasonable and proper.
(9) Subject to subsection (10), the amount of qualifying deduction that may be transferred to a claimant company from a transferor company for any year of assessment is —(a)
the available assessable income of the claimant company equal to
where A
is the number of days in the continuous period ending on the last day of the basis period for that year of assessment during which the companies are members of the same group or, if the continuous periods of the transferor company and the claimant company are different, the number of days in the shorter of the continuous periods;
B
is the number of days in the basis period of the claimant company for that year of assessment; and
C
is the assessable income of the claimant company for that year of assessment; or
(b)
the available qualifying deduction of the transferor company equal to
where A
has the meaning given by paragraph (a);
D
is the number of days in the basis period of the transferor company for that year of assessment; and
E
is the amount of qualifying deduction of the transferor company for that year of assessment,
whichever is the lower.
(10) Where, for any year of assessment, there are 2 or more —(a)
claims for any qualifying deduction by a claimant company, the available assessable income of the claimant company is, for the purpose of subsection (9)(a),
where A, B and C
have the meanings given by subsection (9)(a); and
F
is the aggregate of the amounts of qualifying deductions previously claimed from any other transferor company for the same year of assessment, if any;
(b)
transfers of any qualifying deduction by a transferor company, the available qualifying deduction of the transferor company is, for the purpose of subsection (9)(b),
where A, D and E
have the meanings given by subsection (9)(b); and
G
is the aggregate of the amounts of qualifying deductions previously transferred to any other claimant company for the same year of assessment, if any.
(11) Every transferor company and every claimant company of the same group must, at the time of lodgment of their returns of income for any year of assessment or within such further time as the Comptroller may allow, make an irrevocable election to transfer or claim qualifying deductions, as the case may be.
(12) An election under subsection (11) must be accompanied by —(a)
such particulars as the Comptroller may require; and
(b)
a list of companies, in order of priority, to which qualifying deductions would be transferred or from which such deductions would be claimed, as the case may be.
(13) Despite subsection (11), where at the time of furnishing its return of income under section 62(1) for any year of assessment —(a)
a company has assessable income, but is subsequently determined by the Comptroller to have any qualifying deduction for that year of assessment; or
(b)
a company has any qualifying deduction, but is subsequently determined by the Comptroller to have assessable income for that year of assessment,
the Comptroller may —
(c)
allow the company to make an election under subsection (11); and
(d)
allow any company of the same group to include that company in its list of companies submitted previously by it under subsection (11),
within such time and in such manner as the Comptroller may determine.
(14) For the purposes of this section, subject to subsection (15) and sections 35, 37 and 37A, qualifying deductions, in relation to a transferor company, for each year of assessment, are —(a)
any allowance falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 for that year of assessment that is in excess of the transferor company’s income from all sources chargeable to tax for that year of assessment;
(b)
any loss incurred by the transferor company in the basis period for that year of assessment in any trade or business which, if it had been a profit would have been assessable under this Act, and which is not deducted for that year of assessment because of insufficiency of statutory income of the transferor company; and
(c)
any donation made by the transferor company under section 37(3)(b), (c), (d) or (f) in the year preceding that year of assessment that is not deducted for that year of assessment because of insufficiency of statutory income of the transferor company.
(15) Despite subsection (14), the following companies are not entitled to transfer the following items of qualifying deductions:(a)
any company to which section 10D applies, in respect of qualifying deductions under subsection (14)(a) (except in relation to allowances falling under sections 16, 17, 18B and 18C) and (b);
(b)
any company to which section 97D or 97G of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 28 April 2004 or section 97V of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 19 April 2016 applies, in respect of qualifying deductions under subsection (14)(b) where the loss is deemed to be a loss incurred from a trade or business for the purposes of any of those sections;
(c)
any company, in respect of qualifying deductions under subsection (14) relating to any income that is fully exempt from tax under the provisions of this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967;
(d)
any company, in respect of qualifying deductions under subsection (14) relating to any income the tax on which is remitted under the provisions of this Act, unless the Minister otherwise approves.[37/2014; 11/2016; 32/2019]
(15A) This section does not entitle —(a)
a company that is a life insurer to transfer to another company that is a life insurer, any qualifying deduction relating to any income from a participating fund of the firstmentioned life insurer that is apportioned to policyholders in accordance with regulations made under section 43(9) or 43C; or
(b)
a company that is a life insurer to claim any qualifying deduction of another company that is a life insurer against any income of the firstmentioned insurer from a participating fund that is apportioned to policyholders in accordance with regulations made under section 43(9) or 43C.[27/2021]
(16) Despite subsections (9) and (10), where the Comptroller discovers that any transfer or claim of qualifying deduction which has been made from or to any company is or has become excessive, the Comptroller may make an assessment upon the company under section 74 on the amount which, in the Comptroller’s opinion, ought to have been charged to tax.
(17) Section 37A applies, with the necessary modifications, to the transfer of any qualifying deduction from a transferor company to a claimant company, where applicable, and for the purpose of such application, any reference in section 37A(4) and (5) to —(a)
unabsorbed allowances, losses or donations is a reference to qualifying deductions;
(b)
corresponding allowances, losses or donations is a reference to allowances, losses or donations;
(c)
income of a company subject to tax at a higher or lower rate of tax (as the case may be) is a reference to income of a transferor company subject to tax at a higher or lower rate of tax, respectively; and
(d)
chargeable income of the company is a reference to chargeable income of a claimant company.[41/2020]
(18) For the purposes of this section, the Minister may make regulations to provide generally for giving full effect to or for carrying out the purposes of this section.
(19) In this section —“assessable income”, in relation to a claimant company or transferor company, means assessable income of the company as determined under section 37 after deducting any deduction allowed under section 37F and investment allowance under Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967;[Act 39 of 2023 wef 29/12/2023]
“claimant company” or “transferor company” means a Singapore company that claims or transfers, respectively, any qualifying deduction under subsection (1) but does not include a company approved as —(a)
a technology company under section 94(2) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 28 April 2004;
(b)
a venture company under section 97B(2) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 28 April 2004;
(c)
a technology investment company under section 97C(2) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 28 April 2004;
(d)
an overseas investment company under section 97C(4) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 28 April 2004; or
(e)
a start‑up company under section 97T(2) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 19 April 2016;
“commercial loan” means any borrowing which entitles the creditor to any return which is of only —(a)
a fixed amount or at a fixed rate per cent of the amount of the borrowing; or
(b)
a fixed rate per cent of the profits of the company;
“equity holder”, in relation to a Singapore company, means any holder of ordinary shares in the company or any creditor of the company in respect of any non‑commercial loan;
“non‑commercial loan” means any borrowing other than a commercial loan;
“ordinary share” means any share other than a treasury share or a share which carries only a right to any dividend which is of —(a)
a fixed amount or at a fixed rate per cent of the value of the shares; or
(b)
a fixed rate per cent of the profits of the company;
“residual assets”, in relation to a Singapore company, means net assets of the company after distribution made to —(a)
creditors of the company in respect of commercial loans; and
(b)
holders of shares other than ordinary shares,
and where the company has no residual asset, a notional amount of $100 is deemed to be the residual assets of the company;
“residual profits”, in relation to a Singapore company, means profits of the company after deducting any dividend which is of —(a)
a fixed amount or at a fixed rate per cent of the value of the shares of the company; or
(b)
a fixed rate per cent of the profits of the company,
but before deducting any return due to any non‑commercial loan creditor which is not of —
(c)
a fixed amount or at a fixed rate per cent of the amount of the borrowing; or
(d)
a fixed rate per cent of the profits of the company,
and where the company has no residual profit, a notional amount of $100 is deemed to be the residual profits of the company;
“Singapore company” means any company incorporated in Singapore.[37C
[37/2014; 11/2016; 32/2019]
Transfer of qualifying deduction between spouses
37C.—(1) Subject to the provisions of this section, an individual may transfer any qualifying deduction for any year of assessment to a spouse living with him or her who has claimed the qualifying deduction against her or his assessable income for the same year of assessment.(1A) No transfer may be made under subsection (1) of —(a)
any allowance made to the individual for the year of assessment 2016 or a subsequent year of assessment;
(b)
any loss incurred by the individual in the basis period for the year of assessment 2016 or a subsequent year of assessment; or
(c)
any donation made by the individual in the year immediately preceding the year of assessment 2016 or a subsequent year of assessment.[37/2014]
(1B) No transfer of any qualifying deduction under subsection (1) may be made for the year of assessment 2018 or any subsequent year of assessment.[37/2014]
(2) Qualifying deductions are to be transferred to a claimant spouse in the following order:(a)
any allowance specified in subsection (8)(a);
(b)
any loss specified in subsection (8)(b);
(c)
any donation specified in subsection (8)(c).
(3) For each type of qualifying deduction to be transferred in the order specified in subsection (2), any allowance, loss or donation (as the case may be) arising to the transferor in an earlier year of assessment is to be transferred first before any allowance, loss or donation arising to the transferor in a later year of assessment.
(4) The amount of qualifying deduction to be transferred by a transferor to a claimant spouse is the lower of —(a)
the amount of qualifying deduction available for transfer; and
(b)
the assessable income of the claimant spouse.
(5) Any individual transferring or claiming a qualifying deduction under this section must notify the Comptroller and make an election to transfer or claim qualifying deductions (as the case may be) not later than 30 days from the date of the service of the notice of assessment on the individual or his or her spouse, whichever is the later.
(6) An election made by an individual under subsection (5) is irrevocable unless the Comptroller otherwise allows and must be accompanied by such particulars as the Comptroller may require.
(7) Where the Comptroller discovers that any transfer or claim of qualifying deduction which has been made from or to any individual is or has become excessive, the Comptroller may make an assessment upon that individual under section 74 on the amount which, in the Comptroller’s opinion, ought to have been charged to tax.
(8) For the purposes of this section, subject to sections 35 and 37, qualifying deductions, in relation to an individual, for each year of assessment, are —(a)
any allowance falling to be made under section 16, 17, 18B, 18C, 19, 19A, 19C, 19D or 20 that is in excess of the individual’s income from all sources chargeable with tax for that year of assessment;
(b)
any loss incurred by the individual in any trade, business, profession or vocation which, if it had been a profit, would have been assessable under this Act, and which is not deducted for that year of assessment because of insufficiency of statutory income of the individual; and
(c)
any donation made by the individual under section 37(3)(b), (c), (e) or (f) that is not deducted for that year of assessment because of insufficiency of statutory income of the individual.[37D
—(1) Subject to the provisions of this section, an individual may transfer any qualifying deduction for any year of assessment to a spouse living with him or her who has claimed the qualifying deduction against her or his assessable income for the same year of assessment.
(1A) No transfer may be made under subsection (1) of —(a)
any allowance made to the individual for the year of assessment 2016 or a subsequent year of assessment;
(b)
any loss incurred by the individual in the basis period for the year of assessment 2016 or a subsequent year of assessment; or
(c)
any donation made by the individual in the year immediately preceding the year of assessment 2016 or a subsequent year of assessment.[37/2014]
(1B) No transfer of any qualifying deduction under subsection (1) may be made for the year of assessment 2018 or any subsequent year of assessment.[37/2014]
(2) Qualifying deductions are to be transferred to a claimant spouse in the following order:(a)
any allowance specified in subsection (8)(a);
(b)
any loss specified in subsection (8)(b);
(c)
any donation specified in subsection (8)(c).
(3) For each type of qualifying deduction to be transferred in the order specified in subsection (2), any allowance, loss or donation (as the case may be) arising to the transferor in an earlier year of assessment is to be transferred first before any allowance, loss or donation arising to the transferor in a later year of assessment.
(4) The amount of qualifying deduction to be transferred by a transferor to a claimant spouse is the lower of —(a)
the amount of qualifying deduction available for transfer; and
(b)
the assessable income of the claimant spouse.
(5) Any individual transferring or claiming a qualifying deduction under this section must notify the Comptroller and make an election to transfer or claim qualifying deductions (as the case may be) not later than 30 days from the date of the service of the notice of assessment on the individual or his or her spouse, whichever is the later.
(6) An election made by an individual under subsection (5) is irrevocable unless the Comptroller otherwise allows and must be accompanied by such particulars as the Comptroller may require.
(7) Where the Comptroller discovers that any transfer or claim of qualifying deduction which has been made from or to any individual is or has become excessive, the Comptroller may make an assessment upon that individual under section 74 on the amount which, in the Comptroller’s opinion, ought to have been charged to tax.
(8) For the purposes of this section, subject to sections 35 and 37, qualifying deductions, in relation to an individual, for each year of assessment, are —(a)
any allowance falling to be made under section 16, 17, 18B, 18C, 19, 19A, 19C, 19D or 20 that is in excess of the individual’s income from all sources chargeable with tax for that year of assessment;
(b)
any loss incurred by the individual in any trade, business, profession or vocation which, if it had been a profit, would have been assessable under this Act, and which is not deducted for that year of assessment because of insufficiency of statutory income of the individual; and
(c)
any donation made by the individual under section 37(3)(b), (c), (e) or (f) that is not deducted for that year of assessment because of insufficiency of statutory income of the individual.[37D
Carry‑back of capital allowances and losses
37D.—(1) Subject to the provisions of this section, a person may deduct any qualifying deduction for any year of assessment against the person’s assessable income for the immediate preceding year of assessment.(1A) Subject to the other provisions of this section, a person may, instead of deducting any qualifying deduction for the year of assessment 2020 or 2021 (called in this section the subject YA) in accordance with subsection (1), deduct the qualifying deduction for the subject YA against the person’s assessable income for the 3 years of assessment immediately preceding the subject YA.[27/2021]
(1B) A qualifying deduction for the subject YA under subsection (1A) must be deducted in the following order:(a)
the qualifying deduction must first be made against the person’s assessable income for the third year of assessment immediately preceding the subject YA;
(b)
any balance of the qualifying deduction after the deduction in paragraph (a) must then be made against the person’s assessable income for the second year of assessment immediately preceding the subject YA;
(c)
any balance of the qualifying deduction after the deduction in paragraph (b) must then be made against the person’s assessable income for the year of assessment immediately preceding the subject YA.[27/2021]
(1C) Where a person is entitled to make 2 or more of the qualifying deductions set out in the first column of the following table against the person’s assessable income for a particular year of assessment, then the deductions must be made in the order set out in the second column of the table, and each deduction must as far as possible be made against such assessable income (or any balance of such income after an earlier deduction) by the amount set out opposite that deduction in the third column of the table:First
column
Second
column
Third
column
A qualifying deduction under subsection (1)
First
Full amount of the qualifying deduction
A qualifying deduction for the year of assessment 2020 under subsection (1A)
Second
Full amount of the qualifying deduction or its balance as described in subsection (1B)
A qualifying deduction for the year of assessment 2021 under subsection (1A)
Third
Full amount of the qualifying deduction or its balance as described in subsection (1B)
[27/2021]
(1D) Any election made by a person under subsection (6) for the deduction of any qualifying deduction for the year of assessment 2020 to be in accordance with subsection (1A) as in force immediately before 17 February 2021, is treated as an election made for the deduction of such qualifying deduction to be in accordance with subsection (1A) as in force on that date.[27/2021]
(2) Qualifying deductions are to be deducted in the following order:(a)
any allowance specified in subsection (9)(a);
(b)
any loss specified in subsection (9)(b).
(3) The amount of qualifying deduction to be deducted for any year of assessment is the lower of —(a)
the amount of qualifying deduction available for deduction for that year of assessment; and
(b)
the assessable income of the person for the immediate preceding year of assessment.
(3A) Despite subsection (3), where a person makes an election under subsection (6) for the deduction of any qualifying deduction for the year of assessment 2020 or 2021 in accordance with subsection (1A), the amount of the qualifying deduction to be deducted against the assessable income for any of the 3 years of assessment immediately preceding it is the lower of —(a)
the amount of the qualifying deduction available for deduction for the second‑mentioned year of assessment under subsection (1B); and
(b)
the amount of the person’s assessable income for the second‑mentioned year of assessment or any balance of the assessable income as determined in accordance with the table in subsection (1C) against which the deduction may be made.[41/2020; 27/2021]
(4) Subject to the provisions of this section, section 37A (as it applies in a case mentioned in section 37A(1)(b)) applies, with the necessary modifications, to the deduction of any qualifying deduction by any company for any year of assessment against its assessable income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment, as if —(a)
the qualifying deduction for the year of assessment is qualifying deduction for an earlier year of assessment;
(b)
the income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment is income for the year of assessment concerned; and
(c)
in section 37A(4) and (5) —(i)
a reference to unabsorbed allowances, losses or donations or UALD is a reference to qualifying deduction;
(ii)
a reference to corresponding allowances, losses or donations is a reference to allowances or losses; and
(iii)
a reference to chargeable income of the company is a reference to assessable income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment of the company.[41/2020]
(4AA) Subject to the provisions of this section, section 37A (as it applies in a case mentioned in section 37A(1)(d)) applies, with the necessary modifications, to the deduction of any qualifying deduction by a body of persons for the year of assessment 2023 or a subsequent year of assessment, against its assessable income for the immediate preceding year of assessment, as if —(a)
the qualifying deduction for the year of assessment were a qualifying deduction for an earlier year of assessment;
(b)
the income for the immediate preceding year of assessment were income for the year of assessment concerned; and
(c)
in section 37A(5) —(i)
a reference to UALD were a reference to the qualifying deduction;
(ii)
a reference to corresponding allowances, losses or donations were a reference to allowances or losses; and
(iii)
a reference to chargeable income of the body of persons were a reference to assessable income for the immediate preceding year of assessment of the body of persons.[Act 33 of 2022 wef 04/11/2022]
(4A) For the purposes of applying section 37A to the provisions of this section under subsection (4) or (4AA), any reference to “rate of tax” in section 37A is a reference to —(a)
the rate of tax under section 43(1)(a) applicable to the year of assessment for which the assessable income is deducted by any qualifying deduction;
(b)
the concessionary rate of tax applicable to the year of assessment for which any allowance specified in subsection (9)(a) is made to or any loss specified in subsection (9)(b) is incurred by a company or body of persons; or[Act 33 of 2022 wef 04/11/2022]
(c)
the concessionary rate of tax applicable to the assessable income which is deducted by any qualifying deduction,
as the case may be.
[41/2020]
[Act 33 of 2022 wef 04/11/2022]
(5) The amount of qualifying deduction to be deducted for any year of assessment must not exceed $100,000; and in the case of a company or body of persons is determined by the formula
where A
is any amount deducted against assessable income subject to tax at the rate of tax specified in section 43(1)(a); and
B
is any amount deducted against assessable income subject to tax at any concessionary rate of tax divided by the adjustment factor for that concessionary rate of tax.
[Act 33 of 2022 wef 04/11/2022]
(5A) [Deleted by Act 39 of 2017]
(6) Any person deducting any qualifying deduction for any year of assessment against the person’s assessable income for the immediate preceding year of assessment under subsection (1) or any of the 3 immediate preceding years of assessment under subsection (1A) must notify the Comptroller and make an election to make such deduction —(a)
in the case of an individual, not later than 30 days from the date of service of the notice of assessment on the individual; and
(b)
in the case of any other person, not later than the time of lodgment of the person’s return of income for the year of assessment,
or within such further time as the Comptroller may allow.
[39/2017; 41/2020]
(7) Any election made under subsection (6) is irrevocable and must be accompanied by such particulars as the Comptroller may require.
(8) Where the Comptroller discovers that any deduction made under subsection (1) against the assessable income of any person for any year of assessment is or has become excessive, the Comptroller may make an assessment on the person on the amount which, in the Comptroller’s opinion, ought to have been charged to tax in that year of assessment within 7 years (if that year of assessment is 2007 or a preceding year of assessment) or 5 years (if that year of assessment is 2008 or a subsequent year of assessment) after the expiry of that year of assessment.[41/2020]
(8A) Despite subsection (8), where the Comptroller discovers that any deduction made under subsection (1A) of any qualifying deduction for a subject YA against the assessable income of a person for the year of assessment 2017, 2018, 2019 or 2020 (whichever is applicable) has become excessive, the Comptroller may make an assessment on the person on the amount which, in the Comptroller’s opinion, ought to have been charged to tax in the year of assessment 2017, 2018, 2019 or 2020, as the case may be —(a)
in the case of a qualifying deduction for the year of assessment 2020 — on or before 31 December 2024; or
(b)
in the case of a qualifying deduction for the year of assessment 2021 — on or before 31 December 2025.[27/2021]
(9) For the purposes of this section, subject to sections 35, 37 and 37A, qualifying deductions, in relation to any person, for each year of assessment, are —(a)
any allowance falling to be made under section 16, 17, 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 that is in excess of the person’s income from all sources chargeable to tax for that year of assessment and is not transferred under section 37B or 37C; and
(b)
any loss incurred by the person in any trade, business, profession or vocation which is not deducted for that year of assessment because of insufficiency of statutory income of the person and is not transferred under section 37B or 37C.
(10) Despite subsection (9), any loss deemed to be a loss incurred from a trade or business for the purpose of section 97V of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 19 April 2016 is not deductible.[11/2016]
(11) Despite subsection (9), any allowance specified in subsection (9)(a) made to a person for any year of assessment is not deductible against assessable income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment if the person did not carry on that trade, business or profession in the basis period for the year of assessment in which the allowance is claimed.[39/2017; 41/2020]
(12) Despite subsection (9), any allowance specified in subsection (9)(a) made to or any loss specified in subsection (9)(b) incurred by a company for any year of assessment is not deductible against income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment unless the Comptroller is satisfied that the shareholders of the company on the first day of the year in which the allowances arose or in which the loss was incurred (as the case may be) were substantially the same as the shareholders of the company on the last day of the year of assessment in which the allowance is claimed.[39/2017; 41/2020]
(13) For the purposes of subsection (12) —(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.
(14) For the purpose of subsection (13)(a), 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.
(15) 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 (12).
(16) Upon an exemption under subsection (15), any allowance specified in subsection (9)(a) made to or any loss specified in subsection (9)(b) incurred by a company may only be deducted against the profits from the same trade or business of the company in respect of which the allowance was made or the loss was incurred.
(16A) This section does not entitle any qualifying deduction of a life insurer for any year of assessment to be deducted against any income of the insurer for any preceding year of assessment from a participating fund that is apportioned to policyholders in accordance with regulations made under section 43(9) or 43C, unless the qualifying deduction is —(a)
a qualifying deduction in respect of any income from that participating fund that is apportioned to policyholders in accordance with those regulations; or
(b)
a qualifying deduction in respect of any income of the insurer from another participating fund that is also apportioned to policyholders in accordance with those regulations.[27/2021]
(16B) This section also does not entitle any qualifying deduction of a life insurer for any year of assessment in respect of any income of the insurer from a participating fund that is apportioned to policyholders in accordance with regulations made under section 43(9) or 43C, to be deducted against any income of the insurer for any preceding year of assessment, other than income from a participating fund that is apportioned to policyholders in accordance with regulations made under section 43(9) or 43C.[27/2021]
(17) In this section —“adjustment factor”, in relation to a concessionary rate of tax, means the factor ascertained in accordance with the formula
where C
is the rate of tax specified in section 43(1)(a); and
D
is the concessionary rate of tax;
“assessable income” means —(a)
in relation to a company, assessable income of the company as determined under section 37 after deducting any deduction allowed under section 37F, investment allowance under Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 and any deductions claimed under section 37B;[Act 39 of 2023 wef 29/12/2023]
(b)
in relation to an individual, assessable income of the individual as determined under section 37 after deducting any deductions claimed under section 37C; and
(c)
in relation to any other person, assessable income of the person as determined under section 37;
“concessionary rate of tax”, in relation to a body of persons, means any rate of tax lower than the rate specified in section 43(1)(a) in accordance with regulations made under section 43H;[Act 33 of 2022 wef 04/11/2022]
“concessionary rate of tax”, in relation to a company, means any rate of tax lower than the rate specified in section 43(1)(a) in accordance with —(a)
any order made under section 13(12);
(b)
section 43A, 43C, 43D of this Act as in force before 29 December 2016, 43D, 43F of this Act as in force before 29 December 2016, 43E, 43H of this Act as in force before 29 December 2016, 43F, 43G, 43K of this Act as in force before 29 December 2016, 43L of this Act as in force before 1 November 2006, 43H, 43I, 43J, 43K, 43S of this Act as in force before 29 December 2016, 43T of this Act as in force before 29 December 2016, 43U of this Act as in force before 26 October 2017, 43V of this Act as in force before 29 December 2016, 43L, 43M, 43N, 43O, 43P, 43Q, 43R, 43S, 43T, 43U, 43V, 43W or 43X, or the regulations made under any of those sections, as the case may be; or
(c)
section 21(9) or (13) or 23(1)(b) (as the case may be) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967.[34/2016; 39/2017; 45/2018; 27/2021]
[Act 33 of 2022 wef 04/11/2022]
(18) This section does not apply to —(a)
any company to which section 10D applies; or
(b)
any person, in respect of qualifying deductions under subsection (9) relating to any income the tax on which is remitted under the provisions of this Act for any year of assessment unless —(i)
no such remission would be given to any income in the following year of assessment; or
(ii)
the remission is to effect a deduction for any outgoing or expense incurred by the person not otherwise deductible under section 14.[37E
—(1) Subject to the provisions of this section, a person may deduct any qualifying deduction for any year of assessment against the person’s assessable income for the immediate preceding year of assessment.
(1A) Subject to the other provisions of this section, a person may, instead of deducting any qualifying deduction for the year of assessment 2020 or 2021 (called in this section the subject YA) in accordance with subsection (1), deduct the qualifying deduction for the subject YA against the person’s assessable income for the 3 years of assessment immediately preceding the subject YA.[27/2021]
(1B) A qualifying deduction for the subject YA under subsection (1A) must be deducted in the following order:(a)
the qualifying deduction must first be made against the person’s assessable income for the third year of assessment immediately preceding the subject YA;
(b)
any balance of the qualifying deduction after the deduction in paragraph (a) must then be made against the person’s assessable income for the second year of assessment immediately preceding the subject YA;
(c)
any balance of the qualifying deduction after the deduction in paragraph (b) must then be made against the person’s assessable income for the year of assessment immediately preceding the subject YA.[27/2021]
(1C) Where a person is entitled to make 2 or more of the qualifying deductions set out in the first column of the following table against the person’s assessable income for a particular year of assessment, then the deductions must be made in the order set out in the second column of the table, and each deduction must as far as possible be made against such assessable income (or any balance of such income after an earlier deduction) by the amount set out opposite that deduction in the third column of the table:First
column
Second
column
Third
column
A qualifying deduction under subsection (1)
First
Full amount of the qualifying deduction
A qualifying deduction for the year of assessment 2020 under subsection (1A)
Second
Full amount of the qualifying deduction or its balance as described in subsection (1B)
A qualifying deduction for the year of assessment 2021 under subsection (1A)
Third
Full amount of the qualifying deduction or its balance as described in subsection (1B)
[27/2021]
(1D) Any election made by a person under subsection (6) for the deduction of any qualifying deduction for the year of assessment 2020 to be in accordance with subsection (1A) as in force immediately before 17 February 2021, is treated as an election made for the deduction of such qualifying deduction to be in accordance with subsection (1A) as in force on that date.[27/2021]
(2) Qualifying deductions are to be deducted in the following order:(a)
any allowance specified in subsection (9)(a);
(b)
any loss specified in subsection (9)(b).
(3) The amount of qualifying deduction to be deducted for any year of assessment is the lower of —(a)
the amount of qualifying deduction available for deduction for that year of assessment; and
(b)
the assessable income of the person for the immediate preceding year of assessment.
(3A) Despite subsection (3), where a person makes an election under subsection (6) for the deduction of any qualifying deduction for the year of assessment 2020 or 2021 in accordance with subsection (1A), the amount of the qualifying deduction to be deducted against the assessable income for any of the 3 years of assessment immediately preceding it is the lower of —(a)
the amount of the qualifying deduction available for deduction for the second‑mentioned year of assessment under subsection (1B); and
(b)
the amount of the person’s assessable income for the second‑mentioned year of assessment or any balance of the assessable income as determined in accordance with the table in subsection (1C) against which the deduction may be made.[41/2020; 27/2021]
(4) Subject to the provisions of this section, section 37A (as it applies in a case mentioned in section 37A(1)(b)) applies, with the necessary modifications, to the deduction of any qualifying deduction by any company for any year of assessment against its assessable income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment, as if —(a)
the qualifying deduction for the year of assessment is qualifying deduction for an earlier year of assessment;
(b)
the income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment is income for the year of assessment concerned; and
(c)
in section 37A(4) and (5) —(i)
a reference to unabsorbed allowances, losses or donations or UALD is a reference to qualifying deduction;
(ii)
a reference to corresponding allowances, losses or donations is a reference to allowances or losses; and
(iii)
a reference to chargeable income of the company is a reference to assessable income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment of the company.[41/2020]
(4AA) Subject to the provisions of this section, section 37A (as it applies in a case mentioned in section 37A(1)(d)) applies, with the necessary modifications, to the deduction of any qualifying deduction by a body of persons for the year of assessment 2023 or a subsequent year of assessment, against its assessable income for the immediate preceding year of assessment, as if —(a)
the qualifying deduction for the year of assessment were a qualifying deduction for an earlier year of assessment;
(b)
the income for the immediate preceding year of assessment were income for the year of assessment concerned; and
(c)
in section 37A(5) —(i)
a reference to UALD were a reference to the qualifying deduction;
(ii)
a reference to corresponding allowances, losses or donations were a reference to allowances or losses; and
(iii)
a reference to chargeable income of the body of persons were a reference to assessable income for the immediate preceding year of assessment of the body of persons.[Act 33 of 2022 wef 04/11/2022]
(4A) For the purposes of applying section 37A to the provisions of this section under subsection (4) or (4AA), any reference to “rate of tax” in section 37A is a reference to —(a)
the rate of tax under section 43(1)(a) applicable to the year of assessment for which the assessable income is deducted by any qualifying deduction;
(b)
the concessionary rate of tax applicable to the year of assessment for which any allowance specified in subsection (9)(a) is made to or any loss specified in subsection (9)(b) is incurred by a company or body of persons; or[Act 33 of 2022 wef 04/11/2022]
(c)
the concessionary rate of tax applicable to the assessable income which is deducted by any qualifying deduction,
as the case may be.
[41/2020]
[Act 33 of 2022 wef 04/11/2022]
(5) The amount of qualifying deduction to be deducted for any year of assessment must not exceed $100,000; and in the case of a company or body of persons is determined by the formula
where A
is any amount deducted against assessable income subject to tax at the rate of tax specified in section 43(1)(a); and
B
is any amount deducted against assessable income subject to tax at any concessionary rate of tax divided by the adjustment factor for that concessionary rate of tax.
[Act 33 of 2022 wef 04/11/2022]
(5A) [Deleted by Act 39 of 2017]
(6) Any person deducting any qualifying deduction for any year of assessment against the person’s assessable income for the immediate preceding year of assessment under subsection (1) or any of the 3 immediate preceding years of assessment under subsection (1A) must notify the Comptroller and make an election to make such deduction —(a)
in the case of an individual, not later than 30 days from the date of service of the notice of assessment on the individual; and
(b)
in the case of any other person, not later than the time of lodgment of the person’s return of income for the year of assessment,
or within such further time as the Comptroller may allow.
[39/2017; 41/2020]
(7) Any election made under subsection (6) is irrevocable and must be accompanied by such particulars as the Comptroller may require.
(8) Where the Comptroller discovers that any deduction made under subsection (1) against the assessable income of any person for any year of assessment is or has become excessive, the Comptroller may make an assessment on the person on the amount which, in the Comptroller’s opinion, ought to have been charged to tax in that year of assessment within 7 years (if that year of assessment is 2007 or a preceding year of assessment) or 5 years (if that year of assessment is 2008 or a subsequent year of assessment) after the expiry of that year of assessment.[41/2020]
(8A) Despite subsection (8), where the Comptroller discovers that any deduction made under subsection (1A) of any qualifying deduction for a subject YA against the assessable income of a person for the year of assessment 2017, 2018, 2019 or 2020 (whichever is applicable) has become excessive, the Comptroller may make an assessment on the person on the amount which, in the Comptroller’s opinion, ought to have been charged to tax in the year of assessment 2017, 2018, 2019 or 2020, as the case may be —(a)
in the case of a qualifying deduction for the year of assessment 2020 — on or before 31 December 2024; or
(b)
in the case of a qualifying deduction for the year of assessment 2021 — on or before 31 December 2025.[27/2021]
(9) For the purposes of this section, subject to sections 35, 37 and 37A, qualifying deductions, in relation to any person, for each year of assessment, are —(a)
any allowance falling to be made under section 16, 17, 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 that is in excess of the person’s income from all sources chargeable to tax for that year of assessment and is not transferred under section 37B or 37C; and
(b)
any loss incurred by the person in any trade, business, profession or vocation which is not deducted for that year of assessment because of insufficiency of statutory income of the person and is not transferred under section 37B or 37C.
(10) Despite subsection (9), any loss deemed to be a loss incurred from a trade or business for the purpose of section 97V of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 19 April 2016 is not deductible.[11/2016]
(11) Despite subsection (9), any allowance specified in subsection (9)(a) made to a person for any year of assessment is not deductible against assessable income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment if the person did not carry on that trade, business or profession in the basis period for the year of assessment in which the allowance is claimed.[39/2017; 41/2020]
(12) Despite subsection (9), any allowance specified in subsection (9)(a) made to or any loss specified in subsection (9)(b) incurred by a company for any year of assessment is not deductible against income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment unless the Comptroller is satisfied that the shareholders of the company on the first day of the year in which the allowances arose or in which the loss was incurred (as the case may be) were substantially the same as the shareholders of the company on the last day of the year of assessment in which the allowance is claimed.[39/2017; 41/2020]
(13) For the purposes of subsection (12) —(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.
(14) For the purpose of subsection (13)(a), 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.
(15) 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 (12).
(16) Upon an exemption under subsection (15), any allowance specified in subsection (9)(a) made to or any loss specified in subsection (9)(b) incurred by a company may only be deducted against the profits from the same trade or business of the company in respect of which the allowance was made or the loss was incurred.
(16A) This section does not entitle any qualifying deduction of a life insurer for any year of assessment to be deducted against any income of the insurer for any preceding year of assessment from a participating fund that is apportioned to policyholders in accordance with regulations made under section 43(9) or 43C, unless the qualifying deduction is —(a)
a qualifying deduction in respect of any income from that participating fund that is apportioned to policyholders in accordance with those regulations; or
(b)
a qualifying deduction in respect of any income of the insurer from another participating fund that is also apportioned to policyholders in accordance with those regulations.[27/2021]
(16B) This section also does not entitle any qualifying deduction of a life insurer for any year of assessment in respect of any income of the insurer from a participating fund that is apportioned to policyholders in accordance with regulations made under section 43(9) or 43C, to be deducted against any income of the insurer for any preceding year of assessment, other than income from a participating fund that is apportioned to policyholders in accordance with regulations made under section 43(9) or 43C.[27/2021]
(17) In this section —“adjustment factor”, in relation to a concessionary rate of tax, means the factor ascertained in accordance with the formula
where C
is the rate of tax specified in section 43(1)(a); and
D
is the concessionary rate of tax;
“assessable income” means —(a)
in relation to a company, assessable income of the company as determined under section 37 after deducting any deduction allowed under section 37F, investment allowance under Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 and any deductions claimed under section 37B;[Act 39 of 2023 wef 29/12/2023]
(b)
in relation to an individual, assessable income of the individual as determined under section 37 after deducting any deductions claimed under section 37C; and
(c)
in relation to any other person, assessable income of the person as determined under section 37;
“concessionary rate of tax”, in relation to a body of persons, means any rate of tax lower than the rate specified in section 43(1)(a) in accordance with regulations made under section 43H;[Act 33 of 2022 wef 04/11/2022]
“concessionary rate of tax”, in relation to a company, means any rate of tax lower than the rate specified in section 43(1)(a) in accordance with —(a)
any order made under section 13(12);
(b)
section 43A, 43C, 43D of this Act as in force before 29 December 2016, 43D, 43F of this Act as in force before 29 December 2016, 43E, 43H of this Act as in force before 29 December 2016, 43F, 43G, 43K of this Act as in force before 29 December 2016, 43L of this Act as in force before 1 November 2006, 43H, 43I, 43J, 43K, 43S of this Act as in force before 29 December 2016, 43T of this Act as in force before 29 December 2016, 43U of this Act as in force before 26 October 2017, 43V of this Act as in force before 29 December 2016, 43L, 43M, 43N, 43O, 43P, 43Q, 43R, 43S, 43T, 43U, 43V, 43W or 43X, or the regulations made under any of those sections, as the case may be; or
(c)
section 21(9) or (13) or 23(1)(b) (as the case may be) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967.[34/2016; 39/2017; 45/2018; 27/2021]
[Act 33 of 2022 wef 04/11/2022]
(18) This section does not apply to —(a)
any company to which section 10D applies; or
(b)
any person, in respect of qualifying deductions under subsection (9) relating to any income the tax on which is remitted under the provisions of this Act for any year of assessment unless —(i)
no such remission would be given to any income in the following year of assessment; or
(ii)
the remission is to effect a deduction for any outgoing or expense incurred by the person not otherwise deductible under section 14.[37E
Carry‑back of capital allowances and losses between spouses
37E.—(1) Subject to the provisions of this section, an individual may transfer any qualifying deduction for any year of assessment to a spouse living with him or her who has claimed any qualifying deduction under this section against her or his assessable income for the immediate preceding year of assessment.(1AA) No transfer may be made under subsection (1) of —(a)
any allowance made to the individual for the year of assessment 2016 or a subsequent year of assessment; or
(b)
any loss incurred by the individual in the basis period for the year of assessment 2016 or a subsequent year of assessment.[37/2014]
(1A) [Deleted by Act 33 of 2022 wef 04/11/2022]
(1B) [Deleted by Act 33 of 2022 wef 04/11/2022]
(1C) [Deleted by Act 33 of 2022 wef 04/11/2022]
(2) Qualifying deductions are to be transferred to a claimant spouse in the following order:(a)
any allowance specified in subsection (10)(a);
(b)
any loss specified in subsection (10)(b).
(3) The amount of qualifying deduction for any year of assessment to be transferred by a transferor to a claimant spouse is the lower of —(a)
the amount of qualifying deduction available for transfer for that year of assessment; and
(b)
the assessable income of the claimant spouse for the immediate preceding year of assessment.
(3A) [Deleted by Act 33 of 2022 wef 04/11/2022]
(4) The amount of qualifying deduction for any year of assessment to be transferred by a transferor to a claimant spouse must not exceed an amount equal to
where A
is any amount deducted by the transferor against his or her assessable income for the immediate preceding year of assessment under section 37D.
(4A) [Deleted by Act 33 of 2022 wef 04/11/2022]
(5) No transfer is allowed under subsection (1) in any year of assessment if the transferor has assessable income for the immediate preceding year of assessment but no claim for relief has been made under section 37D.[Act 33 of 2022 wef 04/11/2022]
(6) No transfer is allowed under subsection (1) in any year of assessment if the claimant spouse has assessable income for the year of assessment but no transfer of any qualifying deduction from the transferor to the claimant spouse has been made under section 37C.[Act 33 of 2022 wef 04/11/2022]
(7) Any individual transferring or claiming a qualifying deduction under this section must notify the Comptroller and make an election to transfer or claim qualifying deductions (as the case may be) not later than 30 days from the date of the service of the notice of assessment on the individual or his or her spouse, whichever is the later.
(8) An election made by an individual under subsection (7) is irrevocable and must be accompanied by such particulars as the Comptroller may require.
(9) Where the Comptroller discovers that any transfer of qualifying deduction under this section against the assessable income of a claimant spouse for any year of assessment is or has become excessive, the Comptroller may make an assessment on the claimant spouse on the amount which, in the Comptroller’s opinion, ought to have been charged to tax in that year of assessment within 7 years (if that year of assessment is 2007 or a preceding year of assessment) or 5 years (if that year of assessment is 2008 or a subsequent year of assessment) after the expiry of that year of assessment.
(9A) [Deleted by Act 33 of 2022 wef 04/11/2022]
(10) For the purposes of this section, subject to sections 35 and 37, qualifying deductions, in relation to an individual, for each year of assessment, are —(a)
any allowance falling to be made under section 16, 17, 18B, 18C, 19, 19A, 19C, 19D or 20 that is in excess of the individual’s income from all sources chargeable to tax for that year of assessment and is not deducted under section 37D or transferred under section 37C; and
(b)
any loss incurred by the individual in any trade, business, profession or vocation which is not deducted for that year of assessment because of insufficiency of statutory income of the individual and is not deducted under section 37D or transferred under section 37C.
(11) Despite subsection (10), any loss deemed to be a loss incurred from a trade or business for the purpose of section 97V of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 19 April 2016 is not transferable.
(12) Despite subsection (10), any allowance specified in subsection (10)(a) made to a transferor for any year of assessment is not transferable if the transferor did not carry on that trade, business or profession in the basis period for the immediate preceding year of assessment.[Act 33 of 2022 wef 04/11/2022]
(13) In this section, “assessable income”, in relation to an individual, means assessable income of the individual as determined under section 37 after deducting any deductions claimed under sections 37C and 37D.[37F
—(1) Subject to the provisions of this section, an individual may transfer any qualifying deduction for any year of assessment to a spouse living with him or her who has claimed any qualifying deduction under this section against her or his assessable income for the immediate preceding year of assessment.
(1AA) No transfer may be made under subsection (1) of —(a)
any allowance made to the individual for the year of assessment 2016 or a subsequent year of assessment; or
(b)
any loss incurred by the individual in the basis period for the year of assessment 2016 or a subsequent year of assessment.[37/2014]
(1A) [Deleted by Act 33 of 2022 wef 04/11/2022]
(1B) [Deleted by Act 33 of 2022 wef 04/11/2022]
(1C) [Deleted by Act 33 of 2022 wef 04/11/2022]
(2) Qualifying deductions are to be transferred to a claimant spouse in the following order:(a)
any allowance specified in subsection (10)(a);
(b)
any loss specified in subsection (10)(b).
(3) The amount of qualifying deduction for any year of assessment to be transferred by a transferor to a claimant spouse is the lower of —(a)
the amount of qualifying deduction available for transfer for that year of assessment; and
(b)
the assessable income of the claimant spouse for the immediate preceding year of assessment.
(3A) [Deleted by Act 33 of 2022 wef 04/11/2022]
(4) The amount of qualifying deduction for any year of assessment to be transferred by a transferor to a claimant spouse must not exceed an amount equal to
where A
is any amount deducted by the transferor against his or her assessable income for the immediate preceding year of assessment under section 37D.
(4A) [Deleted by Act 33 of 2022 wef 04/11/2022]
(5) No transfer is allowed under subsection (1) in any year of assessment if the transferor has assessable income for the immediate preceding year of assessment but no claim for relief has been made under section 37D.[Act 33 of 2022 wef 04/11/2022]
(6) No transfer is allowed under subsection (1) in any year of assessment if the claimant spouse has assessable income for the year of assessment but no transfer of any qualifying deduction from the transferor to the claimant spouse has been made under section 37C.[Act 33 of 2022 wef 04/11/2022]
(7) Any individual transferring or claiming a qualifying deduction under this section must notify the Comptroller and make an election to transfer or claim qualifying deductions (as the case may be) not later than 30 days from the date of the service of the notice of assessment on the individual or his or her spouse, whichever is the later.
(8) An election made by an individual under subsection (7) is irrevocable and must be accompanied by such particulars as the Comptroller may require.
(9) Where the Comptroller discovers that any transfer of qualifying deduction under this section against the assessable income of a claimant spouse for any year of assessment is or has become excessive, the Comptroller may make an assessment on the claimant spouse on the amount which, in the Comptroller’s opinion, ought to have been charged to tax in that year of assessment within 7 years (if that year of assessment is 2007 or a preceding year of assessment) or 5 years (if that year of assessment is 2008 or a subsequent year of assessment) after the expiry of that year of assessment.
(9A) [Deleted by Act 33 of 2022 wef 04/11/2022]
(10) For the purposes of this section, subject to sections 35 and 37, qualifying deductions, in relation to an individual, for each year of assessment, are —(a)
any allowance falling to be made under section 16, 17, 18B, 18C, 19, 19A, 19C, 19D or 20 that is in excess of the individual’s income from all sources chargeable to tax for that year of assessment and is not deducted under section 37D or transferred under section 37C; and
(b)
any loss incurred by the individual in any trade, business, profession or vocation which is not deducted for that year of assessment because of insufficiency of statutory income of the individual and is not deducted under section 37D or transferred under section 37C.
(11) Despite subsection (10), any loss deemed to be a loss incurred from a trade or business for the purpose of section 97V of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in force immediately before 19 April 2016 is not transferable.
(12) Despite subsection (10), any allowance specified in subsection (10)(a) made to a transferor for any year of assessment is not transferable if the transferor did not carry on that trade, business or profession in the basis period for the immediate preceding year of assessment.[Act 33 of 2022 wef 04/11/2022]
(13) In this section, “assessable income”, in relation to an individual, means assessable income of the individual as determined under section 37 after deducting any deductions claimed under sections 37C and 37D.[37F
Deduction for incremental expenditure on research and development
37F.—(1) Subject to this section, where any company incurs during the basis period for any year of assessment between the year of assessment 2010 and the year of assessment 2016 (both years inclusive) any incremental qualifying research and development expenditure, then there is to be allowed to that company, on due claim, a deduction against its assessable income computed in accordance with this section.(2) For the purposes of this section, the company must keep an account to be known as its research and development account.
(3) If —(a)
the company derives any income chargeable to tax under this Act during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2010 (both years inclusive); and
(b)
the amount standing to its research and development account on the last day of that basis period is less than $300,000,
then there must be credited to the research and development account on the last day of that basis period the lowest of —
(c)
an amount computed in accordance with the specified formula;
(d)
the difference between $300,000 and the amount standing to the research and development account on the last day of that basis period; and
(e)
$150,000.
(4) For the purposes of subsection (3), the specified formula means —
where A
is the assessable income of the company for the year of assessment;
B
is the amount of deduction allowed against the assessable income of the company under subsection (5) for the year of assessment (if applicable);
C
is the amount of investment allowance deducted under Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 against the chargeable income of the company for the year of assessment, if any;
D
is the amount of qualifying deduction transferred to the company under section 37B (if any) and qualifying deduction allowed to the company under section 37D for the year of assessment, if any; and
E
is the amount of income of the company not charged to tax under section 43(6) or (6C) for the year of assessment.
[45/2018]
(5) Where on the first day of the basis period for any year of assessment between the year of assessment 2010 and the year of assessment 2016 (both years inclusive), the research and development account of the company is in credit, and —(a)
the company has assessable income for that year of assessment; and
(b)
the company has incurred incremental qualifying research and development expenditure during that basis period,
then there is to be deducted from the assessable income of the company for that year of assessment an amount equal to the lowest of —
(c)
the incremental qualifying research and development expenditure incurred by that company during the basis period;
(d)
the amount of credit standing in the research and development account as at the first day of the basis period; and
(e)
the assessable income of the company for that year of assessment.
(6) As soon as an amount is deducted against the assessable income of a company under subsection (5), the research and development account must be debited with such amount.
(7) Any deduction under this section must so far as possible be made against the part of its assessable income that is subject to the highest rate of tax, and any remaining balance of the deduction must so far as possible be made against the part of its assessable income that is subject to the next highest rate of tax, and so on.
(8) For the purpose of this section, the Minister may make regulations to give effect to or for carrying out the purposes of this section.
(9) A company to which a deduction has been given under this section must deliver to the Comptroller a copy of the audited account made up to any date specified by the Comptroller whenever called upon to do so by written notice.
(9A) No deduction is allowed to a company under this section for any year of assessment if a deduction for that expenditure has been allowed under section 14D(2) for that year of assessment.
(10) In this section, unless the context otherwise requires —“assessable income”, in relation to a company for any year of assessment, means the remainder of its statutory income for the year of assessment after making the deductions under sections 37 and 37A;
“base qualifying research and development expenditure” means the amount of qualifying research and development expenditure incurred in the base year;
“base year” —(a)
in relation to a company incorporated in the basis period relating to the year of assessment 2009 or any subsequent year of assessment, means the basis period in which the company is incorporated; or
(b)
in relation to any other company, means the basis period relating to the year of assessment 2008;
“incremental qualifying research and development expenditure”, in relation to the basis period for any year of assessment, means the excess of qualifying research and development expenditure incurred during the basis period relating to the year of assessment over the base qualifying research and development expenditure;
“qualifying research and development expenditure” means any research and development expenditure which ––(a)
qualifies for deduction under section 14C;
(b)
is incurred in respect of research and development activities carried out in Singapore; and
(c)
is not funded by any grant or subsidy from the Government or a statutory board.[37G
—(1) Subject to this section, where any company incurs during the basis period for any year of assessment between the year of assessment 2010 and the year of assessment 2016 (both years inclusive) any incremental qualifying research and development expenditure, then there is to be allowed to that company, on due claim, a deduction against its assessable income computed in accordance with this section.
(2) For the purposes of this section, the company must keep an account to be known as its research and development account.
(3) If —(a)
the company derives any income chargeable to tax under this Act during the basis period for any year of assessment between the year of assessment 2009 and the year of assessment 2010 (both years inclusive); and
(b)
the amount standing to its research and development account on the last day of that basis period is less than $300,000,
then there must be credited to the research and development account on the last day of that basis period the lowest of —
(c)
an amount computed in accordance with the specified formula;
(d)
the difference between $300,000 and the amount standing to the research and development account on the last day of that basis period; and
(e)
$150,000.
(4) For the purposes of subsection (3), the specified formula means —
where A
is the assessable income of the company for the year of assessment;
B
is the amount of deduction allowed against the assessable income of the company under subsection (5) for the year of assessment (if applicable);
C
is the amount of investment allowance deducted under Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 against the chargeable income of the company for the year of assessment, if any;
D
is the amount of qualifying deduction transferred to the company under section 37B (if any) and qualifying deduction allowed to the company under section 37D for the year of assessment, if any; and
E
is the amount of income of the company not charged to tax under section 43(6) or (6C) for the year of assessment.
[45/2018]
(5) Where on the first day of the basis period for any year of assessment between the year of assessment 2010 and the year of assessment 2016 (both years inclusive), the research and development account of the company is in credit, and —(a)
the company has assessable income for that year of assessment; and
(b)
the company has incurred incremental qualifying research and development expenditure during that basis period,
then there is to be deducted from the assessable income of the company for that year of assessment an amount equal to the lowest of —
(c)
the incremental qualifying research and development expenditure incurred by that company during the basis period;
(d)
the amount of credit standing in the research and development account as at the first day of the basis period; and
(e)
the assessable income of the company for that year of assessment.
(6) As soon as an amount is deducted against the assessable income of a company under subsection (5), the research and development account must be debited with such amount.
(7) Any deduction under this section must so far as possible be made against the part of its assessable income that is subject to the highest rate of tax, and any remaining balance of the deduction must so far as possible be made against the part of its assessable income that is subject to the next highest rate of tax, and so on.
(8) For the purpose of this section, the Minister may make regulations to give effect to or for carrying out the purposes of this section.
(9) A company to which a deduction has been given under this section must deliver to the Comptroller a copy of the audited account made up to any date specified by the Comptroller whenever called upon to do so by written notice.
(9A) No deduction is allowed to a company under this section for any year of assessment if a deduction for that expenditure has been allowed under section 14D(2) for that year of assessment.
(10) In this section, unless the context otherwise requires —“assessable income”, in relation to a company for any year of assessment, means the remainder of its statutory income for the year of assessment after making the deductions under sections 37 and 37A;
“base qualifying research and development expenditure” means the amount of qualifying research and development expenditure incurred in the base year;
“base year” —(a)
in relation to a company incorporated in the basis period relating to the year of assessment 2009 or any subsequent year of assessment, means the basis period in which the company is incorporated; or
(b)
in relation to any other company, means the basis period relating to the year of assessment 2008;
“incremental qualifying research and development expenditure”, in relation to the basis period for any year of assessment, means the excess of qualifying research and development expenditure incurred during the basis period relating to the year of assessment over the base qualifying research and development expenditure;
“qualifying research and development expenditure” means any research and development expenditure which ––(a)
qualifies for deduction under section 14C;
(b)
is incurred in respect of research and development activities carried out in Singapore; and
(c)
is not funded by any grant or subsidy from the Government or a statutory board.[37G
Cash payout under Productivity and Innovation Credit Scheme
37G.—(1) Subject to this section, where any qualifying person has incurred expenditure —(a)
during the basis period relating to the year of assessment 2011 or the year of assessment 2012; or
(b)
during any quarter of a basis period relating to the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018,
for which a deduction or an allowance is allowable or can be made to the qualifying person under any of the provisions of this Act mentioned in subsection (2A) (as qualified by that subsection), the qualifying person may, in lieu of one or more of the deductions or allowances or any part thereof, and in respect of —
(c)
the expenditure qualifying for it or them; or
(d)
any part of such expenditure,
(called in this section the selected expenditure) the total amount of which (together with the cash price of any PIC automation equipment or intellectual property rights in respect of which an election under subsection (4A) is made at the same time) is at least $400, make an irrevocable written election for a cash payout computed in accordance with subsection (3) or (4), as the case may be.
[37/2014]
(2) The irrevocable written election under subsection (1) must —(a)
in respect of the year of assessment 2011 or the year of assessment 2012, be made to the Comptroller by the qualifying person at any time after the end of the basis period for that year of assessment but before the expiry of the time the qualifying person must deliver a return of the qualifying person’s income for that year of assessment or within such extended time as the Comptroller may allow;
(b)
in respect of the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, be made to the Comptroller by the qualifying person at any time after the end of the quarter of the basis period for that year of assessment but before the expiry of the time the qualifying person must deliver a return of the qualifying person’s income for that year of assessment or within such extended time as the Comptroller may allow;
(ba)
if made on or after 1 August 2016, be made using the electronic service, except that the Comptroller may in any particular case or class of cases permit the election to be made in any other manner; and
(c)
be accompanied by such information and supporting document to be given in such form and manner as the Comptroller may specify.[37/2014; 15/2016]
(2A) For the purposes of subsection (1), the provisions of this Act are —(a)
section 14 in respect of —(i)
expenditure that falls within the definition of “qualifying training expenditure” under section 14O for which a deduction may be given under that section;
(ii)
expenditure that falls within the definition of “qualifying design expenditure” under section 14P for which a deduction may be given under that section;
(iii)
expenditure on the leasing of a PIC automation equipment under a qualifying lease for which a deduction may be given under section 14Q; or
(iv)
expenditure on the licensing from another person of any qualifying intellectual property rights for which a deduction may be given under section 14T;
(b)
section 14A;
(c)
section 14C in respect of expenditure that falls within the definition of “qualifying expenditure” under section 14D;
(d)
section 14D;
(e)
section 14O;
(f)
section 14P;
(g)
section 14Q;
(ga)
section 14T;
(h)
section 19 or 19A(1), (1B), (2), (2A), (2B), (2BAA) or (10), in respect of expenditure incurred on the provision of any PIC automation equipment (including any expenditure that is treated as expenditure incurred on the provision of PIC automation equipment under section 19A(16A)), other than any equipment acquired —(i)
under a hire‑purchase agreement signed before the basis period for the year of assessment 2012 with a payment period that spans over 2 or more basis periods; or
(ii)
under a hire‑purchase agreement signed in the basis period for the year of assessment 2012, the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018;
(i)
section 19B other than —(i)
a writing‑down allowance made in a case where the requirement under section 19B(2A) is waived;
(ii)
a writing‑down allowance made under section 19B(2C);
(iii)
a writing‑down allowance made in respect of any intellectual property rights acquired under an IPR instalment agreement signed before the basis period for the year of assessment 2012 with a payment period that spans over 2 or more basis periods; or
(iv)
a writing‑down allowance made in respect of any intellectual property rights acquired under an IPR instalment agreement signed in the basis period for the year of assessment 2012, the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018; and
(j)
section 37J.[37/2014]
(3) For the year of assessment 2011 and the year of assessment 2012, the amount of cash payout is calculated in accordance with the formula
where A is —
(a)
for the year of assessment 2011, the lower of the following:(i)
the amount of the selected expenditure;
(ii)
$200,000; and
(b)
for the year of assessment 2012, the lower of the following:(i)
the amount of the selected expenditure;
(ii)
the balance after deducting from $200,000 the lower of the amounts specified in paragraph (a)(i) and (ii).
(3A) In subsection (3), the amount under paragraph (a)(ii) is substituted with “$100,000” 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 “$100,000” if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2011.
(4) For the year of assessment 2013, the year of assessment 2014, the year of assessment 2015 and the year of assessment 2016, the amount of cash payout for each year of assessment is
where A is the lower of the following:
(a)
the aggregate amount of selected expenditure for all quarters of the basis period relating to that year of assessment;
(b)
$100,000.[37/2014; 15/2016]
(4AA) For the year of assessment 2017, the amount of cash payout is —(a)
if the last day of the basis period for that year of assessment is before 1 August 2016, the amount computed in accordance with subsection (4) (as applied with the necessary modifications); or
(b)
if the last day of the basis period for that year of assessment is on or after 1 August 2016
where A
is the lower of the following:
(i)
the aggregate amount of selected expenditure for one or more quarters (or part of such quarter) between the first day of the basis period for that year of assessment and 31 July 2016 (both dates inclusive);
(ii)
$100,000; and
B
is the lower of the following:
(i)
the aggregate amount of selected expenditure for one or more quarters (or part of such quarter) between 1 August 2016 and the last day of the basis period for that year of assessment (both dates inclusive);
(ii)
the balance after deducting the lower of the amounts specified in paragraphs (i) and (ii) of the definition of A from $100,000.
[15/2016]
(4AB) For the year of assessment 2018, the amount of cash payout is —(a)
if the first day of the basis period for that year of assessment is before 1 August 2016, the amount computed in accordance with subsection (4AA)(b) (as applied with the necessary modifications); or
(b)
if the first day of the basis period for that year of assessment is on or after 1 August 2016
where B
is the lower of the following:
(i)
the aggregate amount of selected expenditure for all quarters of the basis period for that year of assessment;
(ii)
$100,000.
[15/2016]
(4A) Where —(a)
a qualifying person has, in the basis period relating to the year of assessment 2012, the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, signed a hire‑purchase agreement to acquire any PIC automation equipment for the purposes of a trade, profession or business carried on by the qualifying person, or an IPR instalment agreement to acquire any intellectual property rights for use in the qualifying person’s trade or business;
(b)
allowances may be made to the qualifying person under section 19, 19A(1), (2), (2A), (2B) or (2BAA) or 19B for capital expenditure to be incurred under the agreement; and
(c)
the cash price for the equipment or intellectual property rights (together with any selected expenditure referred to in subsection (1) in respect of which an election is made under that subsection at the same time) is at least $400,
the qualifying person may, in lieu of all those allowances, make an irrevocable written election for a cash payout.
[37/2014]
(4B) The irrevocable written election under subsection (4A) must —(a)
if the hire‑purchase agreement or IPR instalment agreement is signed in the basis period for the year of assessment 2012, be made to the Comptroller by the qualifying person at any time after the end of the basis period but before the expiry of the time the qualifying person must deliver a return of the qualifying person’s income for that year of assessment or within such extended time as the Comptroller may allow;
(b)
if the hire‑purchase agreement or IPR instalment agreement is signed in any quarter of the basis period for the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, be made to the Comptroller by the qualifying person at any time after the end of that quarter but before the expiry of the time the qualifying person must deliver a return of the qualifying person’s income for that year of assessment or within such extended time as the Comptroller may allow;
(ba)
if made on or after 1 August 2016, be made using the electronic service, except that the Comptroller may in any particular case or class of cases permit the election to be made in any other manner; and
(c)
be accompanied by such information and supporting documents to be given in such form and manner as the Comptroller may specify.[37/2014; 15/2016]
(4C) Where an election under subsection (4A) is made, then subsections (3), (4), (4AA) and (4AB) apply with the following modifications:(a)
a reference to the amount of selected expenditure or the aggregate amount of selected expenditure for a year of assessment, being the year of assessment relating to the basis period in which the agreement is signed, is a reference to the aggregate of —(i)
the cash price of the PIC automation equipment or intellectual property rights; and
(ii)
the expenditure referred to in subsection (1) incurred in that basis period or all the quarters of that basis period (as the case may be), for which a deduction or an allowance is allowable or may be made to the qualifying person, and in respect of which an election has been made under that subsection;
(b)
a reference to the amount of selected expenditure or the aggregate amount of selected expenditure for any year of assessment excludes the amount of any capital expenditure made by the qualifying person under that agreement in the basis period for that year of assessment.[15/2016]
(4D) The maximum amount of cash payout for each equipment that is the subject of a hire‑purchase agreement, or any intellectual property rights that are the subject of an IPR instalment agreement, is the amount computed under subsection (3), (4), (4AA) or (4AB) (as modified by subsection (4C)) (as the case may be) that is attributable to —(a)
the cash price of the equipment or rights; or
(b)
such part of the price of the equipment or rights that the qualifying person elects to be used for computing the cash payout for the year of assessment if the selected expenditure or the aggregate amount of selected expenditure for the cash payout is —(i)
the amount mentioned in subsection (3)(a)(ii) in the case of the year of assessment 2011, or subsection (3)(b)(ii) in the case of the year of assessment 2012;
(ii)
$100,000 in the case of the year of assessment 2013, 2014, 2015 or 2016;
(iii)
$100,000 —(A)
in the case of the year of assessment 2017, where the last day of the basis period for that year of assessment is before 1 August 2016; or
(B)
in the case of the year of assessment 2018, where the first day of the basis period for that year of assessment is on or after 1 August 2016; or
(iv)
the amount mentioned in paragraph (ii) of the definition of A or paragraph (ii) of the definition of B in subsection (4AA)(b) —(A)
in the case of the year of assessment 2017, where the last day of the basis period for that year of assessment is on or after 1 August 2016; or
(B)
in the case of the year of assessment 2018, where the first day of the basis period for that year of assessment is before 1 August 2016.[15/2016]
(4DA) Sub‑paragraphs (i) to (iv) of subsection (4D)(b) have effect for all cash payouts for the respective years of assessment mentioned in those sub‑paragraphs.[15/2016]
(4DB) In subsections (4C)(a)(i) and (4D)(a), a reference to the cash price of intellectual property rights is, in a case where the Comptroller has treated the open‑market price mentioned in section 19B(10I) as the amount mentioned in section 19B(1C)(a)(i) in relation to those rights, a reference to the open‑market price.[34/2016]
(4E) The cash payout under subsection (4A) for each equipment that is the subject of a hire‑purchase agreement, or any intellectual property rights that are the subject of an IPR instalment agreement, must be made to the qualifying person in the following manner:(a)
the qualifying person may claim an amount of cash payout for the year of assessment relating to a basis period or a quarter thereof during which the qualifying person incurred capital expenditure under the agreement for that equipment or those rights;
(b)
the amount of cash payout that may be made to the qualifying person is the lesser of —(i)
A × B,where A
is the amount of such capital expenditure; and
B
is the percentage in the second column of the following table set out opposite the period in which the agreement is signed in the first column of the table:
If the agreement is signed
Percentage
In the basis period for the year of assessment 2012
30%
In the basis period for the year of assessment 2013, 2014, 2015 or 2016
60%
On or before 31 July 2016 in the basis period for the year of assessment 2017 or 2018
60%
On or after 1 August 2016 in the basis period for the year of assessment 2017 or 2018
40%; or
(ii)
the maximum amount referred to in subsection (4D) after deducting any cash payout made earlier for that equipment or those rights under this subsection;
(c)
no cash payout may be made for that equipment or those rights if the amount referred to in paragraph (b)(ii) is zero;
(d)
each claim must be made in such form and be accompanied by such information and supporting document relating to the capital expenditure as the Comptroller may specify;
(e)
to avoid doubt, a claim may be made for any year of assessment after the year of assessment 2018.[37/2014; 15/2016]
(5) For the purposes of subsections (1), (3), (4), (4AA), (4AB) and (4A), an individual carrying on one or more trades, professions or businesses through 2 or more firms (excluding partnerships) must not be granted a cash payout that exceeds the amount computed in accordance with subsection (3), (4), (4AA) or (4AB), as the case may be.[15/2016]
(6) [Deleted by Act 19 of 2013]
(7) Where a qualifying person has elected for a cash payout in lieu of a deduction or an allowance under section 14A, 19, 19A(1), (1B), (2), (2A), (2B), (2BAA) or (10) or 19B, the election so made is treated as having been made on the full amount of the expenditure qualifying for such deduction or allowance and incurred on —(a)
the grant or registration of each qualifying intellectual property right in each country;
(b)
the provision of each PIC automation equipment; or
(c)
the acquisition of each intellectual property right,
as the case may be, to which the election relates, net of any grant or subsidy from the Government or a statutory board.
[37/2014]
(8) Despite subsections (1), (4A) and (7), where a qualifying person has incurred capital expenditure —(a)
on the provision of any PIC automation equipment for the purpose of leasing such equipment; or
(b)
in acquiring any intellectual property rights in any software for the purpose of licensing all or any part of those rights,
the qualifying person is not allowed to exercise an election under subsection (1) or (4A) in respect of such expenditure.
(8A) Where a qualifying person incurs capital expenditure during the basis period for the year of assessment 2016 or a subsequent year of assessment on the provision of any PIC automation equipment, the qualifying person is only allowed to make an election under subsection (1) or (4A) in respect of that expenditure if the qualifying person proves to the Comptroller’s satisfaction that the PIC automation equipment is in use for the purposes of the qualifying person’s trade, profession or business.[37/2014]
(8B) The Comptroller may, subject to such conditions as the Comptroller may impose, waive the application of subsection (8A) if the Comptroller is satisfied that there is a reasonable cause for the PIC automation equipment not being in use for the purposes of the person’s trade, profession or business.[37/2014]
(9) No part of the amount of any expenditure referred to in subsection (7) for which an election is made or treated as having been made under subsection (1) or (4A) is eligible for a deduction or an allowance against the income of the qualifying person for any year of assessment.
(9A) [Deleted by Act 29 of 2012]
(10) Where a cash payout has been made under this section in lieu of —(a)
a deduction under section 14A and the intellectual property rights or the application for the registration or grant of the rights for which the deduction is made is sold, transferred or assigned within one year from the date of filing of the application for the registration or grant of such rights; or
(b)
an allowance under section 19 or 19A(1), (1B), (2), (2A), (2B), (2BAA) or (10) and the PIC automation equipment for which the allowance is made is sold, transferred, assigned or leased out within one year from the provision of such PIC automation equipment,
the following provisions apply:
(c)
the qualifying person must give written notice to the Comptroller of such sale, transfer, assignment or lease in the manner specified by the Comptroller within 30 days from the date of such sale, transfer, assignment or lease;
(d)
the cash payout in respect of the intellectual property rights, the application for the registration or grant of such rights, or the PIC automation equipment is recoverable by the Comptroller from the qualifying person as a debt due to the Government;
(e)
in the case of a PIC automation equipment that is the subject of a hire‑purchase agreement, no cash payout may be made to the qualifying person for any capital expenditure under the agreement incurred in the basis period or the quarter thereof (as the case may be) in which the sale, transfer, assignment or lease occurs and for any subsequent basis period or quarter thereof.[37/2014]
(10A) The Minister, or such person the Minister may appoint, may waive the application of subsection (10) in respect of an event referred to in paragraph (b) of that subsection in the same circumstances as those referred to in section 19A(2HA).
(11) Where a cash payout has been made to a qualifying person pursuant to an election under subsection (1) in lieu of a writing‑down allowance under section 19B, and any of the following events occurs within 5 years from the acquisition of the intellectual property rights:(a)
the intellectual property rights for which the writing‑down allowance is made come to an end without being subsequently revived;
(b)
all or any part of the intellectual property rights for which the writing‑down allowance is made are sold, transferred or assigned;
(c)
the qualifying person permanently ceases to carry on the trade or business for which the intellectual property rights are used;
(d)
all or any part of the intellectual property rights in any software for which the writing‑down allowance is granted are licensed to another,
then the following provisions apply:
(e)
the qualifying person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(f)
an amount computed in accordance with the following formula is recoverable by the Comptroller from the qualifying person as a debt due to the Government:
(11A) Where —(a)
an election has been made under subsection (4A) for a cash payout in lieu of a writing‑down allowance under section 19B; and
(b)
any of the events referred to in subsection (11)(a) to (d) occurs within 5 years from the acquisition of the intellectual property rights,
then the following provisions apply:
(c)
the qualifying person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(d)
where any amount of the cash payout has been made to the qualifying person before the occurrence of the event, an amount computed in accordance with the formula in subsection (11)(f) is recoverable by the Comptroller from the qualifying person as a debt due to the Government;
(e)
for the purposes of paragraph (d), the reference in the formula to the amount of cash payout is a reference to the total amount of the cash payout that has been made to the qualifying person before the occurrence of the event;
(f)
the amount of the cash payout that may be made to the qualifying person for the basis period or a quarter thereof (as the case may be) in which the event occurs and thereafter is, instead of the amount computed in accordance with subsection (4E)(b), an amount computed in accordance with the formula
(12) Where any tax, duty, interest or penalty is due under this Act, the Goods and Services Tax Act 1993, the Property Tax Act 1960 or the Stamp Duties Act 1929 by the qualifying person to the Comptroller of Income Tax, the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, the amount of cash payout made by the Comptroller to the qualifying person is reduced by the amount so due.
(13) Any amount reduced under subsection (12) is deemed to be tax, duty, interest or penalty paid by the qualifying person under the relevant Act and must (if it is due under an Act other than this Act) be paid by the Comptroller to the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, as the case may be.
(14) If an election has been made under subsection (1) or (4A) in respect of an amount of expenditure qualifying for a deduction or an allowance under section 14, 14A(1), 14C, 14D(1), 19, 19A(1), (1B), (2) or (10) or 19B(1) or (1AA), the amount of expenditure qualifying for the deduction or allowance under that provision is, despite anything in that provision, reduced by the firstmentioned amount.[37/2014; 34/2016]
(14A) If an election has been made under subsection (1) or (4A) in respect of an amount of expenditure qualifying for a deduction or allowance under section 14A(1A), (1B) or (1BA), 14D(2), 14O, 14P, 14Q, 14T, 19A(2A), (2B) or (2BAA) or 19B(1A), (1B) or (1BAA), the amount of expenditure qualifying for the deduction or allowance under that provision must, despite anything in that provision, not exceed the difference between —(a)
the maximum amount of expenditure in respect of which the deduction or allowance may be allowed or made under that provision for the year of assessment in question; and
(b)
the firstmentioned amount.[37/2014]
(15) Where a qualifying person has received a cash payout under subsection (1) or (4A) —(a)
in respect of any expenditure that is subsequently found not to qualify for the allowance or deduction under the relevant provision of this Act mentioned in subsection (2A) or (4A);
(b)
without having satisfied all of the requirements in this section (excluding the requirements in subsections (10) and (11)) for the payout; or
(c)
that is in excess of that which may be given to it under this section,
the amount of the cash payout or the excess amount of the cash payout (as the case may be) is recoverable by the Comptroller from the qualifying person as a debt due to the Government.
(16) The amount to be repaid under subsection (10), (11), (11A) or (15) is payable at the place stated in the notice served by the Comptroller on the qualifying person within 30 days after the service of the notice.
(17) The Comptroller may, in his or her discretion and subject to such terms and conditions as the Comptroller may impose, extend the time limit within which payment under subsection (16) is to be made.
(18) Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 apply to the collection and recovery by the Comptroller of the amounts recoverable under subsections (10), (11), (11A) and (15) as they apply to the collection and recovery of tax.
(19) Unless disallowed by the Comptroller under subsection (20), where the Comptroller has recovered any amount under subsection (15)(b) or (c), the amount of the relevant expenditure mentioned in subsection (14) or (14A) is to be increased by an amount determined in accordance with the formula
where A
is the amount recovered by the Comptroller under subsection (15)(b) or (c); and
B
is the percentage in the second column of the following table if the amount recovered is for a cash payout for —
(a)
expenditure incurred;
(b)
equipment acquired under a hire‑purchase agreement signed; or
(c)
intellectual property rights acquired under an IPR instalment agreement signed,
in the period set out opposite in the first column of the table:
When the expenditure was incurred, or the hire‑purchase agreement or IPR instalment agreement was signed
Percentage
In the basis period for the year of assessment 2011 or 2012
30%
In the basis period for the year of assessment 2013, 2014, 2015 or 2016
60%
On or before 31 July 2016 in the basis period for the year of assessment 2017 or 2018
60%
On or after 1 August 2016 in the basis period for the year of assessment 2017 or 2018
40%.
[15/2016]
(20) The Comptroller may disallow the increase under subsection (19) if the Comptroller is satisfied that the qualifying person has —(a)
provided the Comptroller with any information or document, in connection with an election under subsection (1) or (4A), which is false or misleading in a material particular;
(b)
omitted any material particular from any information or document given in connection with an election under subsection (1) or (4A);
(c)
prepared or maintained or authorised the preparation or maintenance of any false books of account or other records or falsified or authorised the falsification of any books of account or records in connection with an election under subsection (1) or (4A); or
(d)
made use of any fraud, art or contrivance whatsoever or authorised the use of such fraud, art or contrivance, in connection with an election under subsection (1) or (4A).
(21) In this section —“cash price” —(a)
in relation to any PIC automation equipment that is the subject of a hire‑purchase agreement, means the price (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 qualifying person in question might have purchased the equipment for cash at the time of the signing of the agreement; or
(b)
in relation to any intellectual property rights that are the subject of an IPR instalment agreement, means the price at which the qualifying person in question might have purchased those rights for cash at the time of the signing of the agreement;
“central hirer” and “central hiring arrangement” have the meanings given by section 14O(6);
“IPR instalment agreement” means an agreement for the purchase of intellectual property rights the payment for which is to be made by instalments;
“local employee”, in relation to a qualifying person who elects for a cash payout under subsection (1) or (4A), means any Singapore citizen or Singapore permanent resident, but excludes —(a)
a shareholder who is also a director of the qualifying person if the qualifying person is a company within the meaning of section 4 of the Companies Act 1967; and
(b)
a partner under a contract for service of the qualifying person if the qualifying person is a partnership;
“local person”, in relation to a qualifying person who elects for a cash payout under subsection (1) or (4A), means any citizen or permanent resident of Singapore, but excludes —(a)
a shareholder who is also a director of the qualifying person if the qualifying person is a company within the meaning of section 4 of the Companies Act 1967; and
(b)
a partner under a contract for service of the qualifying person if the qualifying person is a partnership;
“PIC automation equipment” has the meaning given by section 19A;
“qualifying person” means any company or firm (including a partnership) that —(a)
carries on a trade, profession or business in Singapore; and
(b)
employs and makes contributions to the Central Provident Fund in respect of not less than 3 local employees based on the payroll for —(i)
in the case of the basis period for the year of assessment 2011 or the year of assessment 2012, the last month (or such other month as the Comptroller may determine) of the basis period;
(ii)
in the case of a quarter of the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, the last month of the quarter; and
(iii)
in the case of a quarter of the basis period, for the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, all 3 months of the quarter;
“quarter”, in relation to a basis period, means a period of 3 months beginning with —(a)
the first month of the basis period;
(b)
the 4th month of the basis period;
(c)
the 7th month of the basis period; or
(d)
the 10th month of the basis period,
or any of several non‑overlapping periods within the basis period as the Comptroller may specify for the qualifying person.
[Act 33 of 2022 wef 04/11/2022]
[37/2014]
[Deleted by Act 33 of 2022 wef 04/11/2022]
(21A) For the purpose of paragraph (b)(ii) and (iii) of the definition of “qualifying person” in subsection (21), the reference to a local employee of a qualifying person based on the qualifying person’s payroll for any part of the basis period for the year of assessment 2014 or a subsequent year of assessment, includes a reference to —(a)
a local person —(i)
who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the qualifying person;
(ii)
who is deployed to work solely for the qualifying person in that part of the basis period;
(iii)
who is on the payroll of the central hirer or the qualifying person for that part of the basis period; and
(iv)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the qualifying person; and
(b)
a local person —(i)
who, being an employee of another person (called in this subsection and subsection (21B) the employer), is seconded to the qualifying person under a bona fide commercial arrangement to work solely for the qualifying person in that part of the basis period;
(ii)
who is on the payroll of the employer or the qualifying person for that part of the basis period; and
(iii)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the qualifying person,
and the local person is treated as employed by the qualifying person for the purpose of paragraph (b) of the definition.
[37/2014]
(21B) In determining whether the central hirer or employer referred to in subsection (21A) satisfies the definition of “qualifying person” in subsection (21), the person referred to in subsection (21A)(a) or (b) is not treated as being employed by the central hirer or the employer based on the payroll of the central hirer or employer for the part of the basis period referred to in subsection (21A).[37/2014]
(21C) In subsections (7), (8), (8A), (8B) and (10), a reference to expenditure incurred on the provision of a PIC automation equipment includes a reference to expenditure incurred on the provision of a website for the purposes of a trade, profession or business, and a reference to PIC automation equipment includes a reference to such a website.[37/2014]
(21D) To avoid doubt, where the Comptroller has treated the open‑market price mentioned in section 19B(10E) as the capital expenditure incurred for the acquisition of intellectual property rights, then the reference in this section to selected expenditure, insofar as it relates to that capital expenditure, is a reference to such open‑market price.[34/2016]
(22) The Comptroller may allow an election under subsection (1) or (4A), or both, to be made in respect of 2 or more consecutive quarters of the basis period for the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, and for that purpose —(a)
the reference in the definition of “qualifying person” in subsection (21) to the last month of a quarter is a reference to the last month of the combined consecutive quarters or, if the election is in respect of the entire basis period, the last month of the basis period or such other month as the Comptroller may determine;
(aa)
the reference in sub‑paragraph (b)(iii) of the definition of “qualifying person” in subsection (21) to all 3 months of the quarter is a reference to the last 3 months of the combined consecutive quarters or such other months as the Comptroller may determine or, if the election is in respect of the entire basis period, the last 3 months of the basis period or such other months as the Comptroller may determine;
(b)
the requirement under subsection (1) or (4A), or both (as the case may be) that the expenditure and cash price for a quarter of a basis period must be at least $400 is applied to all the expenditure or cash price, or both (as the case may be), for the combined consecutive quarters for which the qualifying person intends to make the election; and
(c)
the reference in subsection (2) or (4B), or both (as the case may be), to the end of a quarter is a reference to the end of the combined consecutive quarters.[37I
[37/2014]
—(1) Subject to this section, where any qualifying person has incurred expenditure —(a)
during the basis period relating to the year of assessment 2011 or the year of assessment 2012; or
(b)
during any quarter of a basis period relating to the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018,
for which a deduction or an allowance is allowable or can be made to the qualifying person under any of the provisions of this Act mentioned in subsection (2A) (as qualified by that subsection), the qualifying person may, in lieu of one or more of the deductions or allowances or any part thereof, and in respect of —
(c)
the expenditure qualifying for it or them; or
(d)
any part of such expenditure,
(called in this section the selected expenditure) the total amount of which (together with the cash price of any PIC automation equipment or intellectual property rights in respect of which an election under subsection (4A) is made at the same time) is at least $400, make an irrevocable written election for a cash payout computed in accordance with subsection (3) or (4), as the case may be.
[37/2014]
(2) The irrevocable written election under subsection (1) must —(a)
in respect of the year of assessment 2011 or the year of assessment 2012, be made to the Comptroller by the qualifying person at any time after the end of the basis period for that year of assessment but before the expiry of the time the qualifying person must deliver a return of the qualifying person’s income for that year of assessment or within such extended time as the Comptroller may allow;
(b)
in respect of the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, be made to the Comptroller by the qualifying person at any time after the end of the quarter of the basis period for that year of assessment but before the expiry of the time the qualifying person must deliver a return of the qualifying person’s income for that year of assessment or within such extended time as the Comptroller may allow;
(ba)
if made on or after 1 August 2016, be made using the electronic service, except that the Comptroller may in any particular case or class of cases permit the election to be made in any other manner; and
(c)
be accompanied by such information and supporting document to be given in such form and manner as the Comptroller may specify.[37/2014; 15/2016]
(2A) For the purposes of subsection (1), the provisions of this Act are —(a)
section 14 in respect of —(i)
expenditure that falls within the definition of “qualifying training expenditure” under section 14O for which a deduction may be given under that section;
(ii)
expenditure that falls within the definition of “qualifying design expenditure” under section 14P for which a deduction may be given under that section;
(iii)
expenditure on the leasing of a PIC automation equipment under a qualifying lease for which a deduction may be given under section 14Q; or
(iv)
expenditure on the licensing from another person of any qualifying intellectual property rights for which a deduction may be given under section 14T;
(b)
section 14A;
(c)
section 14C in respect of expenditure that falls within the definition of “qualifying expenditure” under section 14D;
(d)
section 14D;
(e)
section 14O;
(f)
section 14P;
(g)
section 14Q;
(ga)
section 14T;
(h)
section 19 or 19A(1), (1B), (2), (2A), (2B), (2BAA) or (10), in respect of expenditure incurred on the provision of any PIC automation equipment (including any expenditure that is treated as expenditure incurred on the provision of PIC automation equipment under section 19A(16A)), other than any equipment acquired —(i)
under a hire‑purchase agreement signed before the basis period for the year of assessment 2012 with a payment period that spans over 2 or more basis periods; or
(ii)
under a hire‑purchase agreement signed in the basis period for the year of assessment 2012, the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018;
(i)
section 19B other than —(i)
a writing‑down allowance made in a case where the requirement under section 19B(2A) is waived;
(ii)
a writing‑down allowance made under section 19B(2C);
(iii)
a writing‑down allowance made in respect of any intellectual property rights acquired under an IPR instalment agreement signed before the basis period for the year of assessment 2012 with a payment period that spans over 2 or more basis periods; or
(iv)
a writing‑down allowance made in respect of any intellectual property rights acquired under an IPR instalment agreement signed in the basis period for the year of assessment 2012, the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018; and
(j)
section 37J.[37/2014]
(3) For the year of assessment 2011 and the year of assessment 2012, the amount of cash payout is calculated in accordance with the formula
where A is —
(a)
for the year of assessment 2011, the lower of the following:(i)
the amount of the selected expenditure;
(ii)
$200,000; and
(b)
for the year of assessment 2012, the lower of the following:(i)
the amount of the selected expenditure;
(ii)
the balance after deducting from $200,000 the lower of the amounts specified in paragraph (a)(i) and (ii).
(3A) In subsection (3), the amount under paragraph (a)(ii) is substituted with “$100,000” 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 “$100,000” if the person does not carry on any trade, profession or business during the basis period for the year of assessment 2011.
(4) For the year of assessment 2013, the year of assessment 2014, the year of assessment 2015 and the year of assessment 2016, the amount of cash payout for each year of assessment is
where A is the lower of the following:
(a)
the aggregate amount of selected expenditure for all quarters of the basis period relating to that year of assessment;
(b)
$100,000.[37/2014; 15/2016]
(4AA) For the year of assessment 2017, the amount of cash payout is —(a)
if the last day of the basis period for that year of assessment is before 1 August 2016, the amount computed in accordance with subsection (4) (as applied with the necessary modifications); or
(b)
if the last day of the basis period for that year of assessment is on or after 1 August 2016
where A
is the lower of the following:
(i)
the aggregate amount of selected expenditure for one or more quarters (or part of such quarter) between the first day of the basis period for that year of assessment and 31 July 2016 (both dates inclusive);
(ii)
$100,000; and
B
is the lower of the following:
(i)
the aggregate amount of selected expenditure for one or more quarters (or part of such quarter) between 1 August 2016 and the last day of the basis period for that year of assessment (both dates inclusive);
(ii)
the balance after deducting the lower of the amounts specified in paragraphs (i) and (ii) of the definition of A from $100,000.
[15/2016]
(4AB) For the year of assessment 2018, the amount of cash payout is —(a)
if the first day of the basis period for that year of assessment is before 1 August 2016, the amount computed in accordance with subsection (4AA)(b) (as applied with the necessary modifications); or
(b)
if the first day of the basis period for that year of assessment is on or after 1 August 2016
where B
is the lower of the following:
(i)
the aggregate amount of selected expenditure for all quarters of the basis period for that year of assessment;
(ii)
$100,000.
[15/2016]
(4A) Where —(a)
a qualifying person has, in the basis period relating to the year of assessment 2012, the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, signed a hire‑purchase agreement to acquire any PIC automation equipment for the purposes of a trade, profession or business carried on by the qualifying person, or an IPR instalment agreement to acquire any intellectual property rights for use in the qualifying person’s trade or business;
(b)
allowances may be made to the qualifying person under section 19, 19A(1), (2), (2A), (2B) or (2BAA) or 19B for capital expenditure to be incurred under the agreement; and
(c)
the cash price for the equipment or intellectual property rights (together with any selected expenditure referred to in subsection (1) in respect of which an election is made under that subsection at the same time) is at least $400,
the qualifying person may, in lieu of all those allowances, make an irrevocable written election for a cash payout.
[37/2014]
(4B) The irrevocable written election under subsection (4A) must —(a)
if the hire‑purchase agreement or IPR instalment agreement is signed in the basis period for the year of assessment 2012, be made to the Comptroller by the qualifying person at any time after the end of the basis period but before the expiry of the time the qualifying person must deliver a return of the qualifying person’s income for that year of assessment or within such extended time as the Comptroller may allow;
(b)
if the hire‑purchase agreement or IPR instalment agreement is signed in any quarter of the basis period for the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, be made to the Comptroller by the qualifying person at any time after the end of that quarter but before the expiry of the time the qualifying person must deliver a return of the qualifying person’s income for that year of assessment or within such extended time as the Comptroller may allow;
(ba)
if made on or after 1 August 2016, be made using the electronic service, except that the Comptroller may in any particular case or class of cases permit the election to be made in any other manner; and
(c)
be accompanied by such information and supporting documents to be given in such form and manner as the Comptroller may specify.[37/2014; 15/2016]
(4C) Where an election under subsection (4A) is made, then subsections (3), (4), (4AA) and (4AB) apply with the following modifications:(a)
a reference to the amount of selected expenditure or the aggregate amount of selected expenditure for a year of assessment, being the year of assessment relating to the basis period in which the agreement is signed, is a reference to the aggregate of —(i)
the cash price of the PIC automation equipment or intellectual property rights; and
(ii)
the expenditure referred to in subsection (1) incurred in that basis period or all the quarters of that basis period (as the case may be), for which a deduction or an allowance is allowable or may be made to the qualifying person, and in respect of which an election has been made under that subsection;
(b)
a reference to the amount of selected expenditure or the aggregate amount of selected expenditure for any year of assessment excludes the amount of any capital expenditure made by the qualifying person under that agreement in the basis period for that year of assessment.[15/2016]
(4D) The maximum amount of cash payout for each equipment that is the subject of a hire‑purchase agreement, or any intellectual property rights that are the subject of an IPR instalment agreement, is the amount computed under subsection (3), (4), (4AA) or (4AB) (as modified by subsection (4C)) (as the case may be) that is attributable to —(a)
the cash price of the equipment or rights; or
(b)
such part of the price of the equipment or rights that the qualifying person elects to be used for computing the cash payout for the year of assessment if the selected expenditure or the aggregate amount of selected expenditure for the cash payout is —(i)
the amount mentioned in subsection (3)(a)(ii) in the case of the year of assessment 2011, or subsection (3)(b)(ii) in the case of the year of assessment 2012;
(ii)
$100,000 in the case of the year of assessment 2013, 2014, 2015 or 2016;
(iii)
$100,000 —(A)
in the case of the year of assessment 2017, where the last day of the basis period for that year of assessment is before 1 August 2016; or
(B)
in the case of the year of assessment 2018, where the first day of the basis period for that year of assessment is on or after 1 August 2016; or
(iv)
the amount mentioned in paragraph (ii) of the definition of A or paragraph (ii) of the definition of B in subsection (4AA)(b) —(A)
in the case of the year of assessment 2017, where the last day of the basis period for that year of assessment is on or after 1 August 2016; or
(B)
in the case of the year of assessment 2018, where the first day of the basis period for that year of assessment is before 1 August 2016.[15/2016]
(4DA) Sub‑paragraphs (i) to (iv) of subsection (4D)(b) have effect for all cash payouts for the respective years of assessment mentioned in those sub‑paragraphs.[15/2016]
(4DB) In subsections (4C)(a)(i) and (4D)(a), a reference to the cash price of intellectual property rights is, in a case where the Comptroller has treated the open‑market price mentioned in section 19B(10I) as the amount mentioned in section 19B(1C)(a)(i) in relation to those rights, a reference to the open‑market price.[34/2016]
(4E) The cash payout under subsection (4A) for each equipment that is the subject of a hire‑purchase agreement, or any intellectual property rights that are the subject of an IPR instalment agreement, must be made to the qualifying person in the following manner:(a)
the qualifying person may claim an amount of cash payout for the year of assessment relating to a basis period or a quarter thereof during which the qualifying person incurred capital expenditure under the agreement for that equipment or those rights;
(b)
the amount of cash payout that may be made to the qualifying person is the lesser of —(i)
A × B,where A
is the amount of such capital expenditure; and
B
is the percentage in the second column of the following table set out opposite the period in which the agreement is signed in the first column of the table:
If the agreement is signed
Percentage
In the basis period for the year of assessment 2012
30%
In the basis period for the year of assessment 2013, 2014, 2015 or 2016
60%
On or before 31 July 2016 in the basis period for the year of assessment 2017 or 2018
60%
On or after 1 August 2016 in the basis period for the year of assessment 2017 or 2018
40%; or
(ii)
the maximum amount referred to in subsection (4D) after deducting any cash payout made earlier for that equipment or those rights under this subsection;
(c)
no cash payout may be made for that equipment or those rights if the amount referred to in paragraph (b)(ii) is zero;
(d)
each claim must be made in such form and be accompanied by such information and supporting document relating to the capital expenditure as the Comptroller may specify;
(e)
to avoid doubt, a claim may be made for any year of assessment after the year of assessment 2018.[37/2014; 15/2016]
(5) For the purposes of subsections (1), (3), (4), (4AA), (4AB) and (4A), an individual carrying on one or more trades, professions or businesses through 2 or more firms (excluding partnerships) must not be granted a cash payout that exceeds the amount computed in accordance with subsection (3), (4), (4AA) or (4AB), as the case may be.[15/2016]
(6) [Deleted by Act 19 of 2013]
(7) Where a qualifying person has elected for a cash payout in lieu of a deduction or an allowance under section 14A, 19, 19A(1), (1B), (2), (2A), (2B), (2BAA) or (10) or 19B, the election so made is treated as having been made on the full amount of the expenditure qualifying for such deduction or allowance and incurred on —(a)
the grant or registration of each qualifying intellectual property right in each country;
(b)
the provision of each PIC automation equipment; or
(c)
the acquisition of each intellectual property right,
as the case may be, to which the election relates, net of any grant or subsidy from the Government or a statutory board.
[37/2014]
(8) Despite subsections (1), (4A) and (7), where a qualifying person has incurred capital expenditure —(a)
on the provision of any PIC automation equipment for the purpose of leasing such equipment; or
(b)
in acquiring any intellectual property rights in any software for the purpose of licensing all or any part of those rights,
the qualifying person is not allowed to exercise an election under subsection (1) or (4A) in respect of such expenditure.
(8A) Where a qualifying person incurs capital expenditure during the basis period for the year of assessment 2016 or a subsequent year of assessment on the provision of any PIC automation equipment, the qualifying person is only allowed to make an election under subsection (1) or (4A) in respect of that expenditure if the qualifying person proves to the Comptroller’s satisfaction that the PIC automation equipment is in use for the purposes of the qualifying person’s trade, profession or business.[37/2014]
(8B) The Comptroller may, subject to such conditions as the Comptroller may impose, waive the application of subsection (8A) if the Comptroller is satisfied that there is a reasonable cause for the PIC automation equipment not being in use for the purposes of the person’s trade, profession or business.[37/2014]
(9) No part of the amount of any expenditure referred to in subsection (7) for which an election is made or treated as having been made under subsection (1) or (4A) is eligible for a deduction or an allowance against the income of the qualifying person for any year of assessment.
(9A) [Deleted by Act 29 of 2012]
(10) Where a cash payout has been made under this section in lieu of —(a)
a deduction under section 14A and the intellectual property rights or the application for the registration or grant of the rights for which the deduction is made is sold, transferred or assigned within one year from the date of filing of the application for the registration or grant of such rights; or
(b)
an allowance under section 19 or 19A(1), (1B), (2), (2A), (2B), (2BAA) or (10) and the PIC automation equipment for which the allowance is made is sold, transferred, assigned or leased out within one year from the provision of such PIC automation equipment,
the following provisions apply:
(c)
the qualifying person must give written notice to the Comptroller of such sale, transfer, assignment or lease in the manner specified by the Comptroller within 30 days from the date of such sale, transfer, assignment or lease;
(d)
the cash payout in respect of the intellectual property rights, the application for the registration or grant of such rights, or the PIC automation equipment is recoverable by the Comptroller from the qualifying person as a debt due to the Government;
(e)
in the case of a PIC automation equipment that is the subject of a hire‑purchase agreement, no cash payout may be made to the qualifying person for any capital expenditure under the agreement incurred in the basis period or the quarter thereof (as the case may be) in which the sale, transfer, assignment or lease occurs and for any subsequent basis period or quarter thereof.[37/2014]
(10A) The Minister, or such person the Minister may appoint, may waive the application of subsection (10) in respect of an event referred to in paragraph (b) of that subsection in the same circumstances as those referred to in section 19A(2HA).
(11) Where a cash payout has been made to a qualifying person pursuant to an election under subsection (1) in lieu of a writing‑down allowance under section 19B, and any of the following events occurs within 5 years from the acquisition of the intellectual property rights:(a)
the intellectual property rights for which the writing‑down allowance is made come to an end without being subsequently revived;
(b)
all or any part of the intellectual property rights for which the writing‑down allowance is made are sold, transferred or assigned;
(c)
the qualifying person permanently ceases to carry on the trade or business for which the intellectual property rights are used;
(d)
all or any part of the intellectual property rights in any software for which the writing‑down allowance is granted are licensed to another,
then the following provisions apply:
(e)
the qualifying person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(f)
an amount computed in accordance with the following formula is recoverable by the Comptroller from the qualifying person as a debt due to the Government:
(11A) Where —(a)
an election has been made under subsection (4A) for a cash payout in lieu of a writing‑down allowance under section 19B; and
(b)
any of the events referred to in subsection (11)(a) to (d) occurs within 5 years from the acquisition of the intellectual property rights,
then the following provisions apply:
(c)
the qualifying person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(d)
where any amount of the cash payout has been made to the qualifying person before the occurrence of the event, an amount computed in accordance with the formula in subsection (11)(f) is recoverable by the Comptroller from the qualifying person as a debt due to the Government;
(e)
for the purposes of paragraph (d), the reference in the formula to the amount of cash payout is a reference to the total amount of the cash payout that has been made to the qualifying person before the occurrence of the event;
(f)
the amount of the cash payout that may be made to the qualifying person for the basis period or a quarter thereof (as the case may be) in which the event occurs and thereafter is, instead of the amount computed in accordance with subsection (4E)(b), an amount computed in accordance with the formula
(12) Where any tax, duty, interest or penalty is due under this Act, the Goods and Services Tax Act 1993, the Property Tax Act 1960 or the Stamp Duties Act 1929 by the qualifying person to the Comptroller of Income Tax, the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, the amount of cash payout made by the Comptroller to the qualifying person is reduced by the amount so due.
(13) Any amount reduced under subsection (12) is deemed to be tax, duty, interest or penalty paid by the qualifying person under the relevant Act and must (if it is due under an Act other than this Act) be paid by the Comptroller to the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, as the case may be.
(14) If an election has been made under subsection (1) or (4A) in respect of an amount of expenditure qualifying for a deduction or an allowance under section 14, 14A(1), 14C, 14D(1), 19, 19A(1), (1B), (2) or (10) or 19B(1) or (1AA), the amount of expenditure qualifying for the deduction or allowance under that provision is, despite anything in that provision, reduced by the firstmentioned amount.[37/2014; 34/2016]
(14A) If an election has been made under subsection (1) or (4A) in respect of an amount of expenditure qualifying for a deduction or allowance under section 14A(1A), (1B) or (1BA), 14D(2), 14O, 14P, 14Q, 14T, 19A(2A), (2B) or (2BAA) or 19B(1A), (1B) or (1BAA), the amount of expenditure qualifying for the deduction or allowance under that provision must, despite anything in that provision, not exceed the difference between —(a)
the maximum amount of expenditure in respect of which the deduction or allowance may be allowed or made under that provision for the year of assessment in question; and
(b)
the firstmentioned amount.[37/2014]
(15) Where a qualifying person has received a cash payout under subsection (1) or (4A) —(a)
in respect of any expenditure that is subsequently found not to qualify for the allowance or deduction under the relevant provision of this Act mentioned in subsection (2A) or (4A);
(b)
without having satisfied all of the requirements in this section (excluding the requirements in subsections (10) and (11)) for the payout; or
(c)
that is in excess of that which may be given to it under this section,
the amount of the cash payout or the excess amount of the cash payout (as the case may be) is recoverable by the Comptroller from the qualifying person as a debt due to the Government.
(16) The amount to be repaid under subsection (10), (11), (11A) or (15) is payable at the place stated in the notice served by the Comptroller on the qualifying person within 30 days after the service of the notice.
(17) The Comptroller may, in his or her discretion and subject to such terms and conditions as the Comptroller may impose, extend the time limit within which payment under subsection (16) is to be made.
(18) Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 apply to the collection and recovery by the Comptroller of the amounts recoverable under subsections (10), (11), (11A) and (15) as they apply to the collection and recovery of tax.
(19) Unless disallowed by the Comptroller under subsection (20), where the Comptroller has recovered any amount under subsection (15)(b) or (c), the amount of the relevant expenditure mentioned in subsection (14) or (14A) is to be increased by an amount determined in accordance with the formula
where A
is the amount recovered by the Comptroller under subsection (15)(b) or (c); and
B
is the percentage in the second column of the following table if the amount recovered is for a cash payout for —
(a)
expenditure incurred;
(b)
equipment acquired under a hire‑purchase agreement signed; or
(c)
intellectual property rights acquired under an IPR instalment agreement signed,
in the period set out opposite in the first column of the table:
When the expenditure was incurred, or the hire‑purchase agreement or IPR instalment agreement was signed
Percentage
In the basis period for the year of assessment 2011 or 2012
30%
In the basis period for the year of assessment 2013, 2014, 2015 or 2016
60%
On or before 31 July 2016 in the basis period for the year of assessment 2017 or 2018
60%
On or after 1 August 2016 in the basis period for the year of assessment 2017 or 2018
40%.
[15/2016]
(20) The Comptroller may disallow the increase under subsection (19) if the Comptroller is satisfied that the qualifying person has —(a)
provided the Comptroller with any information or document, in connection with an election under subsection (1) or (4A), which is false or misleading in a material particular;
(b)
omitted any material particular from any information or document given in connection with an election under subsection (1) or (4A);
(c)
prepared or maintained or authorised the preparation or maintenance of any false books of account or other records or falsified or authorised the falsification of any books of account or records in connection with an election under subsection (1) or (4A); or
(d)
made use of any fraud, art or contrivance whatsoever or authorised the use of such fraud, art or contrivance, in connection with an election under subsection (1) or (4A).
(21) In this section —“cash price” —(a)
in relation to any PIC automation equipment that is the subject of a hire‑purchase agreement, means the price (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 qualifying person in question might have purchased the equipment for cash at the time of the signing of the agreement; or
(b)
in relation to any intellectual property rights that are the subject of an IPR instalment agreement, means the price at which the qualifying person in question might have purchased those rights for cash at the time of the signing of the agreement;
“central hirer” and “central hiring arrangement” have the meanings given by section 14O(6);
“IPR instalment agreement” means an agreement for the purchase of intellectual property rights the payment for which is to be made by instalments;
“local employee”, in relation to a qualifying person who elects for a cash payout under subsection (1) or (4A), means any Singapore citizen or Singapore permanent resident, but excludes —(a)
a shareholder who is also a director of the qualifying person if the qualifying person is a company within the meaning of section 4 of the Companies Act 1967; and
(b)
a partner under a contract for service of the qualifying person if the qualifying person is a partnership;
“local person”, in relation to a qualifying person who elects for a cash payout under subsection (1) or (4A), means any citizen or permanent resident of Singapore, but excludes —(a)
a shareholder who is also a director of the qualifying person if the qualifying person is a company within the meaning of section 4 of the Companies Act 1967; and
(b)
a partner under a contract for service of the qualifying person if the qualifying person is a partnership;
“PIC automation equipment” has the meaning given by section 19A;
“qualifying person” means any company or firm (including a partnership) that —(a)
carries on a trade, profession or business in Singapore; and
(b)
employs and makes contributions to the Central Provident Fund in respect of not less than 3 local employees based on the payroll for —(i)
in the case of the basis period for the year of assessment 2011 or the year of assessment 2012, the last month (or such other month as the Comptroller may determine) of the basis period;
(ii)
in the case of a quarter of the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, the last month of the quarter; and
(iii)
in the case of a quarter of the basis period, for the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, all 3 months of the quarter;
“quarter”, in relation to a basis period, means a period of 3 months beginning with —(a)
the first month of the basis period;
(b)
the 4th month of the basis period;
(c)
the 7th month of the basis period; or
(d)
the 10th month of the basis period,
or any of several non‑overlapping periods within the basis period as the Comptroller may specify for the qualifying person.
[Act 33 of 2022 wef 04/11/2022]
[37/2014]
[Deleted by Act 33 of 2022 wef 04/11/2022]
(21A) For the purpose of paragraph (b)(ii) and (iii) of the definition of “qualifying person” in subsection (21), the reference to a local employee of a qualifying person based on the qualifying person’s payroll for any part of the basis period for the year of assessment 2014 or a subsequent year of assessment, includes a reference to —(a)
a local person —(i)
who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the qualifying person;
(ii)
who is deployed to work solely for the qualifying person in that part of the basis period;
(iii)
who is on the payroll of the central hirer or the qualifying person for that part of the basis period; and
(iv)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the qualifying person; and
(b)
a local person —(i)
who, being an employee of another person (called in this subsection and subsection (21B) the employer), is seconded to the qualifying person under a bona fide commercial arrangement to work solely for the qualifying person in that part of the basis period;
(ii)
who is on the payroll of the employer or the qualifying person for that part of the basis period; and
(iii)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the qualifying person,
and the local person is treated as employed by the qualifying person for the purpose of paragraph (b) of the definition.
[37/2014]
(21B) In determining whether the central hirer or employer referred to in subsection (21A) satisfies the definition of “qualifying person” in subsection (21), the person referred to in subsection (21A)(a) or (b) is not treated as being employed by the central hirer or the employer based on the payroll of the central hirer or employer for the part of the basis period referred to in subsection (21A).[37/2014]
(21C) In subsections (7), (8), (8A), (8B) and (10), a reference to expenditure incurred on the provision of a PIC automation equipment includes a reference to expenditure incurred on the provision of a website for the purposes of a trade, profession or business, and a reference to PIC automation equipment includes a reference to such a website.[37/2014]
(21D) To avoid doubt, where the Comptroller has treated the open‑market price mentioned in section 19B(10E) as the capital expenditure incurred for the acquisition of intellectual property rights, then the reference in this section to selected expenditure, insofar as it relates to that capital expenditure, is a reference to such open‑market price.[34/2016]
(22) The Comptroller may allow an election under subsection (1) or (4A), or both, to be made in respect of 2 or more consecutive quarters of the basis period for the year of assessment 2013, the year of assessment 2014, the year of assessment 2015, the year of assessment 2016, the year of assessment 2017 or the year of assessment 2018, and for that purpose —(a)
the reference in the definition of “qualifying person” in subsection (21) to the last month of a quarter is a reference to the last month of the combined consecutive quarters or, if the election is in respect of the entire basis period, the last month of the basis period or such other month as the Comptroller may determine;
(aa)
the reference in sub‑paragraph (b)(iii) of the definition of “qualifying person” in subsection (21) to all 3 months of the quarter is a reference to the last 3 months of the combined consecutive quarters or such other months as the Comptroller may determine or, if the election is in respect of the entire basis period, the last 3 months of the basis period or such other months as the Comptroller may determine;
(b)
the requirement under subsection (1) or (4A), or both (as the case may be) that the expenditure and cash price for a quarter of a basis period must be at least $400 is applied to all the expenditure or cash price, or both (as the case may be), for the combined consecutive quarters for which the qualifying person intends to make the election; and
(c)
the reference in subsection (2) or (4B), or both (as the case may be), to the end of a quarter is a reference to the end of the combined consecutive quarters.[37I
[37/2014]
Productivity and Innovation Credit bonus
37H.—(1) For each of the years of assessment 2013, 2014 and 2015, a person, being a company or firm (including a partnership) (called in this section an eligible person), is entitled to be given an amount in cash (called in this section the Productivity and Innovation Credit Scheme bonus or PIC bonus) if the Comptroller is satisfied, based on the return of the person’s income for that year of assessment and other information available to the Comptroller, that —(a)
the person has incurred during the basis period for the year of assessment PIC expenditure of at least $5,000 in total;
(b)
the person is carrying on a trade, profession or business in Singapore; and
(c)
the person employed and made contributions to the Central Provident Fund in respect of at least 3 local employees based on the payroll for the last month (or such other month as the Comptroller may determine) of the basis period.
(2) The amount of the PIC bonus to be given to the eligible person for any year of assessment is the lower of the following:(a)
the amount of PIC expenditure incurred by the eligible person during the basis period for that year of assessment;
(b)
$15,000 less any PIC expenditure incurred by the eligible person during the basis period or periods for the other year or years of assessment (whether earlier or later than the firstmentioned basis period) for which the eligible person has already been given the PIC bonus.
(3) Despite subsection (1), the eligible person is entitled to be given the PIC bonus for the year of assessment 2013, 2014 or 2015 before the expiry of the time the eligible person must deliver the return of the eligible person’s income for that year of assessment, if the eligible person has made an election under section 37G for a cash payout in respect of PIC expenditure incurred for a period comprising the whole or a part of the basis period for the year of assessment (called in this section the elected period), and the Comptroller is satisfied, based on information given by the person pursuant to the election and other information available to the Comptroller, that —(a)
the person has incurred PIC expenditure of at least $5,000 in total from the beginning of the basis period to the end of the elected period;
(b)
the person is a qualifying person within the meaning of section 37G in respect of the elected period; and
(c)
the person is carrying on a trade, profession or business in Singapore.
(4) The amount of the PIC bonus to be given to the eligible person under subsection (3) is the lower of the following:(a)
an amount that corresponds to the PIC expenditure incurred from the beginning of the basis period to the end of the elected period, less any expenditure incurred in that period for which the eligible person has already been given the PIC bonus;
(b)
$15,000 less any PIC expenditure incurred by the eligible person during the basis period or periods for the other year or years of assessment (whether earlier or later than the firstmentioned basis period) for which the eligible person has already been given the PIC bonus.
(5) Where —(a)
one or more payments of the PIC bonus for a year of assessment has been made to an eligible person under subsection (3); and
(b)
as of the date the eligible person delivers the return of the eligible person’s income for that year of assessment, the eligible person has not been given the maximum amount of the PIC bonus which the eligible person may be given under subsection (2) for that year of assessment,
then the eligible person is entitled to be given the balance of the PIC bonus in respect of any PIC expenditure incurred in the basis period for the year of assessment for which no PIC bonus has been given, if the Comptroller is satisfied, based on the return and other information available to the Comptroller, that the person —
(c)
is carrying on a trade, profession or business in Singapore; and
(d)
employed and made contributions to the Central Provident Fund in respect of at least 3 local employees based on the payroll for the last month (or such other month as the Comptroller may determine) of the basis period.
(5A) For the purpose of subsections (1)(c) and (5)(d), a reference to a local employee of an eligible person based on the eligible person’s payroll for any part of the basis period for the year of assessment 2014 or a subsequent year of assessment, includes a reference to —(a)
a local person —(i)
who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the eligible person;
(ii)
who is deployed to work solely for the eligible person in that part of the basis period;
(iii)
who is on the payroll of the central hirer or the eligible person for that part of the basis period; and
(iv)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the eligible person; and
(b)
a local person —(i)
who, being an employee of another person (called in this subsection and subsection (5B) the employer), is seconded to the eligible person under a bona fide commercial arrangement to work solely for the eligible person in that part of the basis period;
(ii)
who is on the payroll of the employer or the eligible person for that part of the basis period; and
(iii)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the eligible person,
and the local person is treated as employed by the eligible person for the purpose of those provisions.
[37/2014]
(5B) In determining whether the central hirer or employer referred to in subsection (5A) satisfies subsection (1)(c) or (5)(d), the person referred to in subsection (5A)(a) or (b) is not treated as being employed by the central hirer or the employer based on the payroll of the central hirer or employer for the part of the basis period referred to in subsection (5A).[37/2014]
(6) For the purposes of this section, an individual carrying on one or more trades, professions or businesses through 2 or more firms (excluding partnerships) must not be given a PIC bonus for any year of assessment that exceeds the amount computed in accordance with subsection (2) for that year of assessment.
(7) Despite subsections (1), (3) and (5), no PIC bonus may be given in respect of —(a)
any qualifying intellectual property registration costs under section 14A relating to any intellectual property rights or any application for the registration or grant of such rights, if the rights or application have or has been sold, transferred or assigned within one year from the date of filing of the application for the registration or grant of those rights;
(b)
any capital expenditure on the provision of any PIC automation equipment —(i)
if it has been sold, transferred, assigned or leased out within one year from the date of provision; and
(ii)
a waiver under section 19A(2HA) (in the case of subsection (1) or (5)) or 37G(10A) (in the case of subsection (3)) has not been granted in respect of the sale, transfer, assignment or lease; and
(c)
any capital expenditure on the acquisition of any intellectual property rights if any of the following has occurred within one year from the date of acquisition:(i)
the intellectual property rights have come to an end without being subsequently revived;
(ii)
all or any part of the intellectual property rights have been sold, transferred or assigned;
(iii)
the eligible person has permanently ceased to carry on the trade or business for which the intellectual property rights were used;
(iv)
all or any part of the intellectual property rights in any software have been licensed to another.
(8) Where a PIC bonus has been given to an eligible person in respect of —(a)
qualifying intellectual property registration costs under section 14A relating to any intellectual property rights or any application for the registration or grant of such rights, and the rights or application are or is sold, transferred or assigned within one year from the date of filing of the application for the registration or grant of those rights; or
(b)
capital expenditure on the provision of any PIC automation equipment and that equipment is sold, transferred, assigned or leased out within one year from the date of provision,
then all of the following provisions apply:
(c)
the eligible person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(d)
the PIC bonus given for the PIC expenditure in respect of the application for the registration or grant of intellectual property rights or the PIC automation equipment, is recoverable by the Comptroller from the person as a debt due to the Government;
(e)
where the PIC automation equipment is the subject of a hire‑purchase agreement, no PIC bonus may be given to the person for any PIC expenditure under the agreement incurred in the basis period in which the event occurs and for any subsequent basis period thereof.
(8A) For the purposes of subsections (7) and (8), a reference to capital expenditure on the provision of any PIC automation equipment includes a reference to capital expenditure on the provision of a website for the purposes of a trade, profession or business, and a reference to PIC automation equipment includes a reference to such a website.[37/2014]
(9) The Minister, or such person as the Minister may appoint, may waive the application of subsection (8) in respect of an event referred to in paragraph (b) of that subsection in the same circumstances as those referred to in section 19A(2HA).
(10) Where a PIC bonus has been given to an eligible person in respect of capital expenditure on the acquisition of any intellectual property rights and any of the following occurs within 5 years from the date of acquisition:(a)
the intellectual property rights come to an end without being subsequently revived;
(b)
all or any part of the intellectual property rights are sold, transferred or assigned;
(c)
the person permanently ceases to carry on the trade or business for which the intellectual property rights are used;
(d)
all or any part of the intellectual property rights in any software are licensed to another,
then both of the following provisions apply:
(e)
the person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(f)
an amount computed in accordance with the following formula is recoverable by the Comptroller from the person as a debt due to the Government:
(11) Where a PIC bonus has been given to an eligible person in respect of capital expenditure on the acquisition of any intellectual property rights under an IPR instalment agreement and any of the events in subsection (10)(a) to (d) occurs within 5 years from the date of acquisition of the intellectual property rights, then all the following provisions apply:(a)
the person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(b)
where any amount of the PIC bonus has been given to the person before the occurrence of the event, an amount computed in accordance with the formula in subsection (10)(f) is recoverable by the Comptroller from the person as a debt due to the Government;
(c)
for the purpose of paragraph (b), the reference in the formula to the amount of PIC bonus is a reference to the total amount of the PIC bonus that has been given to the person before the occurrence of the event;
(d)
the amount of the PIC bonus that may be given to the person in respect of those intellectual property rights for the basis period or elected period (as the case may be) in which the event occurs and thereafter is the part of the PIC bonus that corresponds to the intellectual property rights multiplied by the following:
(12) Where any tax, duty, interest or penalty is due under this Act, the Goods and Services Tax Act 1993, the Property Tax Act 1960 or the Stamp Duties Act 1929 by an eligible person to the Comptroller, the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, the amount of PIC bonus that may be given by the Comptroller to the eligible person is reduced by the amount so due.
(13) Any amount reduced under subsection (12) is deemed to be tax, duty, interest or penalty paid by the eligible person under the relevant Act and must (if it is due under an Act other than this Act) be paid by the Comptroller to the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, as the case may be.
(14) Where an eligible person has received a PIC bonus —(a)
in respect of any expenditure that is subsequently found not to qualify for the deduction or allowance under the relevant PIC provision;
(b)
without having satisfied all of the requirements in this section for the PIC bonus; or
(c)
that is in excess of that which may be given to the eligible person under this section,
the amount of the PIC bonus or the excess amount of the PIC bonus (as the case may be) is recoverable by the Comptroller from the person as a debt due to the Government.
(15) The amounts to be repaid under subsections (8), (10), (11) and (14) are payable at the place stated in the notice served by the Comptroller on the eligible person within 30 days after the service of the notice.
(16) The Comptroller may, in his or her discretion and subject to such terms and conditions as the Comptroller may impose, extend the time limit within which payment under subsection (15) is to be made.
(17) Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 apply to the collection and recovery by the Comptroller of the amounts recoverable under subsections (8), (10), (11) and (14) as they apply to the collection and recovery of tax.
(18) In this section —“IPR instalment agreement” has the meaning given by section 37G(21);
“local employee”, in relation to an eligible person, means any Singapore citizen or Singapore permanent resident, but excludes —(a)
a shareholder who is also a director of the eligible person if the eligible person is a company within the meaning of section 4 of the Companies Act 1967; and
(b)
a partner under a contract for service of the eligible person if the eligible person is a partnership;
“local person”, in relation to an eligible person, means any citizen or permanent resident of Singapore, but excludes —(a)
a shareholder who is also a director of the eligible person if the eligible person is a company within the meaning of section 4 of the Companies Act 1967; and
(b)
a partner under a contract for service of the eligible person if the eligible person is a partnership;
“PIC automation equipment” has the meaning given by section 19A(15);
“PIC provision” means any of the provisions of this Act in the second column of the table in the definition of “PIC expenditure”;
“Productivity and Innovation Credit Scheme expenditure” or “PIC expenditure”, in relation to an eligible person who incurs the expenditure, means any of the expenditure in the first column of the following table for which a deduction or an allowance may be allowed or made to the eligible person under the provision of this Act that corresponds to it in the second column of the table:
Expenditure
Provision of Act
(a)
Qualifying intellectual property registration costs as defined in section 14A
Section 14A(1B)
(b)
Qualifying expenditure as defined in section 14D
Section 14D(2)
(c)
Qualifying training expenditure as defined in section 14O
Section 14O(2)
(d)
Qualifying design expenditure as defined in section 14P
Section 14P(2)
(e)
Expenditure on the leasing of any PIC automation equipment, or procuring of cloud computing services as defined in section 14Q
Section 14Q(2)
(f)
Expenditure on the licensing from another of any intellectual property rights
Section 14T(1)
(g)
Capital expenditure on the provision of any PIC automation equipment (including any expenditure that is treated as expenditure incurred on the provision of PIC automation equipment under section 19A(16A))
Section 19A(2B)
(h)
Capital expenditure on acquiring any intellectual property rights
Section 19B(1B).
[37IA
[37/2014]
—(1) For each of the years of assessment 2013, 2014 and 2015, a person, being a company or firm (including a partnership) (called in this section an eligible person), is entitled to be given an amount in cash (called in this section the Productivity and Innovation Credit Scheme bonus or PIC bonus) if the Comptroller is satisfied, based on the return of the person’s income for that year of assessment and other information available to the Comptroller, that —(a)
the person has incurred during the basis period for the year of assessment PIC expenditure of at least $5,000 in total;
(b)
the person is carrying on a trade, profession or business in Singapore; and
(c)
the person employed and made contributions to the Central Provident Fund in respect of at least 3 local employees based on the payroll for the last month (or such other month as the Comptroller may determine) of the basis period.
(2) The amount of the PIC bonus to be given to the eligible person for any year of assessment is the lower of the following:(a)
the amount of PIC expenditure incurred by the eligible person during the basis period for that year of assessment;
(b)
$15,000 less any PIC expenditure incurred by the eligible person during the basis period or periods for the other year or years of assessment (whether earlier or later than the firstmentioned basis period) for which the eligible person has already been given the PIC bonus.
(3) Despite subsection (1), the eligible person is entitled to be given the PIC bonus for the year of assessment 2013, 2014 or 2015 before the expiry of the time the eligible person must deliver the return of the eligible person’s income for that year of assessment, if the eligible person has made an election under section 37G for a cash payout in respect of PIC expenditure incurred for a period comprising the whole or a part of the basis period for the year of assessment (called in this section the elected period), and the Comptroller is satisfied, based on information given by the person pursuant to the election and other information available to the Comptroller, that —(a)
the person has incurred PIC expenditure of at least $5,000 in total from the beginning of the basis period to the end of the elected period;
(b)
the person is a qualifying person within the meaning of section 37G in respect of the elected period; and
(c)
the person is carrying on a trade, profession or business in Singapore.
(4) The amount of the PIC bonus to be given to the eligible person under subsection (3) is the lower of the following:(a)
an amount that corresponds to the PIC expenditure incurred from the beginning of the basis period to the end of the elected period, less any expenditure incurred in that period for which the eligible person has already been given the PIC bonus;
(b)
$15,000 less any PIC expenditure incurred by the eligible person during the basis period or periods for the other year or years of assessment (whether earlier or later than the firstmentioned basis period) for which the eligible person has already been given the PIC bonus.
(5) Where —(a)
one or more payments of the PIC bonus for a year of assessment has been made to an eligible person under subsection (3); and
(b)
as of the date the eligible person delivers the return of the eligible person’s income for that year of assessment, the eligible person has not been given the maximum amount of the PIC bonus which the eligible person may be given under subsection (2) for that year of assessment,
then the eligible person is entitled to be given the balance of the PIC bonus in respect of any PIC expenditure incurred in the basis period for the year of assessment for which no PIC bonus has been given, if the Comptroller is satisfied, based on the return and other information available to the Comptroller, that the person —
(c)
is carrying on a trade, profession or business in Singapore; and
(d)
employed and made contributions to the Central Provident Fund in respect of at least 3 local employees based on the payroll for the last month (or such other month as the Comptroller may determine) of the basis period.
(5A) For the purpose of subsections (1)(c) and (5)(d), a reference to a local employee of an eligible person based on the eligible person’s payroll for any part of the basis period for the year of assessment 2014 or a subsequent year of assessment, includes a reference to —(a)
a local person —(i)
who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the eligible person;
(ii)
who is deployed to work solely for the eligible person in that part of the basis period;
(iii)
who is on the payroll of the central hirer or the eligible person for that part of the basis period; and
(iv)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the eligible person; and
(b)
a local person —(i)
who, being an employee of another person (called in this subsection and subsection (5B) the employer), is seconded to the eligible person under a bona fide commercial arrangement to work solely for the eligible person in that part of the basis period;
(ii)
who is on the payroll of the employer or the eligible person for that part of the basis period; and
(iii)
whose salary and other remuneration (including training expenditure incurred in respect of the person) for that part of the basis period is borne, directly or indirectly, by the eligible person,
and the local person is treated as employed by the eligible person for the purpose of those provisions.
[37/2014]
(5B) In determining whether the central hirer or employer referred to in subsection (5A) satisfies subsection (1)(c) or (5)(d), the person referred to in subsection (5A)(a) or (b) is not treated as being employed by the central hirer or the employer based on the payroll of the central hirer or employer for the part of the basis period referred to in subsection (5A).[37/2014]
(6) For the purposes of this section, an individual carrying on one or more trades, professions or businesses through 2 or more firms (excluding partnerships) must not be given a PIC bonus for any year of assessment that exceeds the amount computed in accordance with subsection (2) for that year of assessment.
(7) Despite subsections (1), (3) and (5), no PIC bonus may be given in respect of —(a)
any qualifying intellectual property registration costs under section 14A relating to any intellectual property rights or any application for the registration or grant of such rights, if the rights or application have or has been sold, transferred or assigned within one year from the date of filing of the application for the registration or grant of those rights;
(b)
any capital expenditure on the provision of any PIC automation equipment —(i)
if it has been sold, transferred, assigned or leased out within one year from the date of provision; and
(ii)
a waiver under section 19A(2HA) (in the case of subsection (1) or (5)) or 37G(10A) (in the case of subsection (3)) has not been granted in respect of the sale, transfer, assignment or lease; and
(c)
any capital expenditure on the acquisition of any intellectual property rights if any of the following has occurred within one year from the date of acquisition:(i)
the intellectual property rights have come to an end without being subsequently revived;
(ii)
all or any part of the intellectual property rights have been sold, transferred or assigned;
(iii)
the eligible person has permanently ceased to carry on the trade or business for which the intellectual property rights were used;
(iv)
all or any part of the intellectual property rights in any software have been licensed to another.
(8) Where a PIC bonus has been given to an eligible person in respect of —(a)
qualifying intellectual property registration costs under section 14A relating to any intellectual property rights or any application for the registration or grant of such rights, and the rights or application are or is sold, transferred or assigned within one year from the date of filing of the application for the registration or grant of those rights; or
(b)
capital expenditure on the provision of any PIC automation equipment and that equipment is sold, transferred, assigned or leased out within one year from the date of provision,
then all of the following provisions apply:
(c)
the eligible person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(d)
the PIC bonus given for the PIC expenditure in respect of the application for the registration or grant of intellectual property rights or the PIC automation equipment, is recoverable by the Comptroller from the person as a debt due to the Government;
(e)
where the PIC automation equipment is the subject of a hire‑purchase agreement, no PIC bonus may be given to the person for any PIC expenditure under the agreement incurred in the basis period in which the event occurs and for any subsequent basis period thereof.
(8A) For the purposes of subsections (7) and (8), a reference to capital expenditure on the provision of any PIC automation equipment includes a reference to capital expenditure on the provision of a website for the purposes of a trade, profession or business, and a reference to PIC automation equipment includes a reference to such a website.[37/2014]
(9) The Minister, or such person as the Minister may appoint, may waive the application of subsection (8) in respect of an event referred to in paragraph (b) of that subsection in the same circumstances as those referred to in section 19A(2HA).
(10) Where a PIC bonus has been given to an eligible person in respect of capital expenditure on the acquisition of any intellectual property rights and any of the following occurs within 5 years from the date of acquisition:(a)
the intellectual property rights come to an end without being subsequently revived;
(b)
all or any part of the intellectual property rights are sold, transferred or assigned;
(c)
the person permanently ceases to carry on the trade or business for which the intellectual property rights are used;
(d)
all or any part of the intellectual property rights in any software are licensed to another,
then both of the following provisions apply:
(e)
the person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(f)
an amount computed in accordance with the following formula is recoverable by the Comptroller from the person as a debt due to the Government:
(11) Where a PIC bonus has been given to an eligible person in respect of capital expenditure on the acquisition of any intellectual property rights under an IPR instalment agreement and any of the events in subsection (10)(a) to (d) occurs within 5 years from the date of acquisition of the intellectual property rights, then all the following provisions apply:(a)
the person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days from the date of such event;
(b)
where any amount of the PIC bonus has been given to the person before the occurrence of the event, an amount computed in accordance with the formula in subsection (10)(f) is recoverable by the Comptroller from the person as a debt due to the Government;
(c)
for the purpose of paragraph (b), the reference in the formula to the amount of PIC bonus is a reference to the total amount of the PIC bonus that has been given to the person before the occurrence of the event;
(d)
the amount of the PIC bonus that may be given to the person in respect of those intellectual property rights for the basis period or elected period (as the case may be) in which the event occurs and thereafter is the part of the PIC bonus that corresponds to the intellectual property rights multiplied by the following:
(12) Where any tax, duty, interest or penalty is due under this Act, the Goods and Services Tax Act 1993, the Property Tax Act 1960 or the Stamp Duties Act 1929 by an eligible person to the Comptroller, the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, the amount of PIC bonus that may be given by the Comptroller to the eligible person is reduced by the amount so due.
(13) Any amount reduced under subsection (12) is deemed to be tax, duty, interest or penalty paid by the eligible person under the relevant Act and must (if it is due under an Act other than this Act) be paid by the Comptroller to the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, as the case may be.
(14) Where an eligible person has received a PIC bonus —(a)
in respect of any expenditure that is subsequently found not to qualify for the deduction or allowance under the relevant PIC provision;
(b)
without having satisfied all of the requirements in this section for the PIC bonus; or
(c)
that is in excess of that which may be given to the eligible person under this section,
the amount of the PIC bonus or the excess amount of the PIC bonus (as the case may be) is recoverable by the Comptroller from the person as a debt due to the Government.
(15) The amounts to be repaid under subsections (8), (10), (11) and (14) are payable at the place stated in the notice served by the Comptroller on the eligible person within 30 days after the service of the notice.
(16) The Comptroller may, in his or her discretion and subject to such terms and conditions as the Comptroller may impose, extend the time limit within which payment under subsection (15) is to be made.
(17) Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 apply to the collection and recovery by the Comptroller of the amounts recoverable under subsections (8), (10), (11) and (14) as they apply to the collection and recovery of tax.
(18) In this section —“IPR instalment agreement” has the meaning given by section 37G(21);
“local employee”, in relation to an eligible person, means any Singapore citizen or Singapore permanent resident, but excludes —(a)
a shareholder who is also a director of the eligible person if the eligible person is a company within the meaning of section 4 of the Companies Act 1967; and
(b)
a partner under a contract for service of the eligible person if the eligible person is a partnership;
“local person”, in relation to an eligible person, means any citizen or permanent resident of Singapore, but excludes —(a)
a shareholder who is also a director of the eligible person if the eligible person is a company within the meaning of section 4 of the Companies Act 1967; and
(b)
a partner under a contract for service of the eligible person if the eligible person is a partnership;
“PIC automation equipment” has the meaning given by section 19A(15);
“PIC provision” means any of the provisions of this Act in the second column of the table in the definition of “PIC expenditure”;
“Productivity and Innovation Credit Scheme expenditure” or “PIC expenditure”, in relation to an eligible person who incurs the expenditure, means any of the expenditure in the first column of the following table for which a deduction or an allowance may be allowed or made to the eligible person under the provision of this Act that corresponds to it in the second column of the table:
Expenditure
Provision of Act
(a)
Qualifying intellectual property registration costs as defined in section 14A
Section 14A(1B)
(b)
Qualifying expenditure as defined in section 14D
Section 14D(2)
(c)
Qualifying training expenditure as defined in section 14O
Section 14O(2)
(d)
Qualifying design expenditure as defined in section 14P
Section 14P(2)
(e)
Expenditure on the leasing of any PIC automation equipment, or procuring of cloud computing services as defined in section 14Q
Section 14Q(2)
(f)
Expenditure on the licensing from another of any intellectual property rights
Section 14T(1)
(g)
Capital expenditure on the provision of any PIC automation equipment (including any expenditure that is treated as expenditure incurred on the provision of PIC automation equipment under section 19A(16A))
Section 19A(2B)
(h)
Capital expenditure on acquiring any intellectual property rights
Section 19B(1B).
[37IA
[37/2014]
Modification of sections 37G and 37H in their application to partnership
37I.—(1) A reference to a qualifying person in section 37G (including the person who has to satisfy the conditions for a cash payout), and a reference to an eligible person in section 37H (including the person who has to satisfy the conditions for the PIC bonus) is in each case, where the person is a partnership, a reference to the partnership; except that a reference in those sections to any deduction or allowance that may be allowed or made to a qualifying person or an eligible person under a provision of this Act, is a reference to such deduction or allowance that may be allowed or made to all of the partners of the partnership.(2) In subsection (1) —“cash payout” means a payment under section 37G;
“PIC bonus” means a payment under section 37H.[37IB
—(1) A reference to a qualifying person in section 37G (including the person who has to satisfy the conditions for a cash payout), and a reference to an eligible person in section 37H (including the person who has to satisfy the conditions for the PIC bonus) is in each case, where the person is a partnership, a reference to the partnership; except that a reference in those sections to any deduction or allowance that may be allowed or made to a qualifying person or an eligible person under a provision of this Act, is a reference to such deduction or allowance that may be allowed or made to all of the partners of the partnership.
(2) In subsection (1) —“cash payout” means a payment under section 37G;
“PIC bonus” means a payment under section 37H.[37IB
Enhanced deduction or allowance under Productivity and Innovation Credit Plus Scheme
37J.—(1) A person who —(a)
during the basis period for the year of assessment 2015, 2016, 2017 or 2018, has incurred any expenditure mentioned in the first column of the following table;
(b)
is a qualifying person for that year of assessment within the meaning of the regulations made under subsection (3); and
(c)
has made an application in accordance with subsection (2),
is entitled to an enhanced deduction or allowance under the provision in the second column (in the case of the year of assessment 2015) or the third column (in the case of any of the other years of assessment) of the table that corresponds to that expenditure, computed in accordance with the regulations made under subsection (3):
First column
Second column
Third column
Expenditure
Year of assessment 2015
Year of assessment 2016, 2017 or 2018
1.
Qualifying intellectual property registration costs as defined in section 14A
Section 14A(1B)
Section 14A(1BA)
2.
Qualifying expenditure as defined in section 14D
Section 14D(2)
Section 14D(2)
3.
Qualifying training expenditure as defined in section 14O
Section 14O(2)
Section 14O(2A)
4.
Qualifying design expenditure as defined in section 14P
Section 14P(2)
Section 14P(2AA)
5.
Expenditure on the leasing of any PIC automation equipment, or procuring of cloud computing services as defined in section 14Q
Section 14Q(2)
Section 14Q(2A)
6.
Expenditure on the licensing from another of any qualifying intellectual property rights as defined in section 14T
Section 14T(1)
Section 14T(4)
7.
Capital expenditure on the provision of any PIC automation equipment
(including any capital expenditure treated as capital expenditure incurred on the provision of PIC automation equipment under section 19A(16A))
Section 19A(2B)
Section 19A(2BAA)
8.
Capital expenditure on acquiring any intellectual property rights
Section 19B(1B)
Section 19B(1BAA).
[37/2014]
(2) The application under subsection (1)(c) —(a)
must be made to the Comptroller at the time of lodgment by the qualifying person of the return of income for that year of assessment or within such extended time as the Comptroller may allow; and
(b)
must be accompanied by such information and supporting document, given in such form and manner, as the Comptroller may specify.[37/2014]
(3) The Minister may make regulations —(a)
to define a qualifying person for each year of assessment for the purposes of subsection (1);
(b)
to provide for the computation of the amount of the enhanced deduction or allowance under that subsection; and
(c)
to make provisions generally for giving effect to or for carrying out the purposes of this section.[37/2014]
(4) All regulations made under subsection (3) must be presented to Parliament as soon as possible after publication in the Gazette.[37/2014]
(5) To avoid doubt, an enhanced deduction or allowance referred to in subsection (1) is a deduction or allowance under the applicable provision under the second or third column of the table in that subsection, and the provisions of section 14A, 14D, 14O, 14P, 14Q, 14T, 19A or 19B (whichever is applicable) apply to the deduction or allowance.[37/2014]
(6) In this section, “person” means a company or firm (including a partnership).[37IC
[37/2014]
—(1) A person who —(a)
during the basis period for the year of assessment 2015, 2016, 2017 or 2018, has incurred any expenditure mentioned in the first column of the following table;
(b)
is a qualifying person for that year of assessment within the meaning of the regulations made under subsection (3); and
(c)
has made an application in accordance with subsection (2),
is entitled to an enhanced deduction or allowance under the provision in the second column (in the case of the year of assessment 2015) or the third column (in the case of any of the other years of assessment) of the table that corresponds to that expenditure, computed in accordance with the regulations made under subsection (3):
First column
Second column
Third column
Expenditure
Year of assessment 2015
Year of assessment 2016, 2017 or 2018
1.
Qualifying intellectual property registration costs as defined in section 14A
Section 14A(1B)
Section 14A(1BA)
2.
Qualifying expenditure as defined in section 14D
Section 14D(2)
Section 14D(2)
3.
Qualifying training expenditure as defined in section 14O
Section 14O(2)
Section 14O(2A)
4.
Qualifying design expenditure as defined in section 14P
Section 14P(2)
Section 14P(2AA)
5.
Expenditure on the leasing of any PIC automation equipment, or procuring of cloud computing services as defined in section 14Q
Section 14Q(2)
Section 14Q(2A)
6.
Expenditure on the licensing from another of any qualifying intellectual property rights as defined in section 14T
Section 14T(1)
Section 14T(4)
7.
Capital expenditure on the provision of any PIC automation equipment
(including any capital expenditure treated as capital expenditure incurred on the provision of PIC automation equipment under section 19A(16A))
Section 19A(2B)
Section 19A(2BAA)
8.
Capital expenditure on acquiring any intellectual property rights
Section 19B(1B)
Section 19B(1BAA).
[37/2014]
(2) The application under subsection (1)(c) —(a)
must be made to the Comptroller at the time of lodgment by the qualifying person of the return of income for that year of assessment or within such extended time as the Comptroller may allow; and
(b)
must be accompanied by such information and supporting document, given in such form and manner, as the Comptroller may specify.[37/2014]
(3) The Minister may make regulations —(a)
to define a qualifying person for each year of assessment for the purposes of subsection (1);
(b)
to provide for the computation of the amount of the enhanced deduction or allowance under that subsection; and
(c)
to make provisions generally for giving effect to or for carrying out the purposes of this section.[37/2014]
(4) All regulations made under subsection (3) must be presented to Parliament as soon as possible after publication in the Gazette.[37/2014]
(5) To avoid doubt, an enhanced deduction or allowance referred to in subsection (1) is a deduction or allowance under the applicable provision under the second or third column of the table in that subsection, and the provisions of section 14A, 14D, 14O, 14P, 14Q, 14T, 19A or 19B (whichever is applicable) apply to the deduction or allowance.[37/2014]
(6) In this section, “person” means a company or firm (including a partnership).[37IC
[37/2014]
Abusive PIC arrangements
37K.—(1) Despite the provisions of this Act, the Comptroller may disallow an amount referred to in subsection (2) of a claim for —(a)
a PIC enhanced deduction; or
(b)
a PIC cash payout,
and disallow the payment of an amount referred to in subsection (2) of a PIC bonus based on that claim, if the Comptroller has reasonable grounds to suspect that the claim arises from an abusive PIC arrangement.
[37/2014]
(2) The amount of the PIC enhanced deduction, PIC cash payout or PIC bonus that may be disallowed under subsection (1) is the amount resulting from the PIC arrangement being abusive as defined under subsection (10).[37/2014]
(3) Despite the provisions of this Act, the amount referred to in subsection (4) of a PIC cash payout or PIC bonus paid to a person that was based on a claim that arose from an abusive PIC arrangement is recoverable by the Comptroller from the person as a debt due to the Government.[37/2014]
(4) The amount of the PIC cash payout or PIC bonus that is recoverable under subsection (3) is the amount resulting from the PIC arrangement being abusive as defined under subsection (10).[37/2014]
(5) The amount that is recoverable under subsection (3) is payable at the place stated in the notice served by the Comptroller on the person within 30 days after the service of the notice.[37/2014]
(6) The Comptroller may, in his or her discretion and subject to such terms and conditions as the Comptroller may impose, extend the time within which payment under subsection (3) is to be made.[37/2014]
(7) Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 apply to the collection and recovery by the Comptroller of the amount recoverable under subsection (3) as they apply to the collection and recovery of tax.[37/2014]
(8) In this section, an arrangement is a PIC arrangement if the obtaining of a PIC cash payout, PIC bonus or PIC enhanced deduction, or a higher amount of a PIC cash payout, PIC bonus or PIC enhanced deduction, was the purpose or one of the purposes of the arrangement (called in this section the relevant purpose).[37/2014]
(9) In this section, a PIC arrangement is abusive if —(a)
it consists or makes use of one or more artificial, contrived or fraudulent steps that are intended to achieve the relevant purpose;
(b)
the arrangement results in the consideration paid or payable for the property or services in question being of a greater value than the open market value of the property or services, and there is no bona fide commercial reason for the difference in the values apart from the relevant purpose; or
(c)
in any other case, there is no bona fide commercial reason for entering into the arrangement or a transaction forming part of the arrangement apart from the relevant purpose.[37/2014]
(10) In this section, the amount of PIC enhanced deduction, PIC cash payout or PIC bonus resulting from a PIC arrangement being abusive is —(a)
if the arrangement is abusive by reason of subsection (9)(a), the amount that results or has resulted from the use of the artificial, contrived or fraudulent step or steps, excluding any amount the person concerned is entitled to if the step or steps had not been used;
(b)
if the arrangement is abusive by reason of subsection (9)(b), the amount that corresponds to the difference in the values mentioned in that provision; or
(c)
if the arrangement is abusive by reason of subsection (9)(c), the full amount.
Examples
(i)
A enters into a contract for training for A’s employees. The right to training may be exchanged for goods. Expenditure for the goods is not eligible for a PIC cash payout. A exchanged the right to training for those goods and made a claim for a PIC cash payout in respect of the expenditure. The contract and the exchange together form an abusive PIC arrangement. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the full amount of the payout.
(ii)
A, in order to obtain a higher amount of PIC cash payout, purchases more equipment than A needs for A’s business. The purchase of the excess equipment is an abusive PIC arrangement. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the amount corresponding to the price paid for the excess equipment.
(iii)
A and B, in order to help each other obtain a PIC cash payout, sell to each other equipment that performs the same function. The sales are abusive PIC arrangements. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the full amount of the payout.
(iv)
A enters into a contract for training for A’s employees. The contract price for the training includes both the value of the training and the value of other goods to be given to the trainees. Expenditure for those goods is not eligible for a PIC cash payout. The purpose for setting the price for the training in this way is to enable a higher PIC cash payout to be paid to A. The contract is an abusive PIC arrangement. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the amount corresponding to the price for those other goods.
[37/2014]
(11) This section applies only to arrangements made or entered into on or after 27 November 2014.[37/2014]
(12) In this section —“arrangement” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);
“PIC bonus” means a payment under section 37H;
“PIC cash payout” means a payment under section 37G;
“PIC enhanced deduction” means a deduction or an allowance under section 14A(1B) or (1BA), 14D(2), 14O(2) or (2A), 14P(2) or (2AA), 14Q(2) or (2A), 14T(1) or (4), 19A(2B) or (2BAA), 19B(1B) or (1BAA), or 37J.[37ID
[37/2014]
—(1) Despite the provisions of this Act, the Comptroller may disallow an amount referred to in subsection (2) of a claim for —(a)
a PIC enhanced deduction; or
(b)
a PIC cash payout,
and disallow the payment of an amount referred to in subsection (2) of a PIC bonus based on that claim, if the Comptroller has reasonable grounds to suspect that the claim arises from an abusive PIC arrangement.
[37/2014]
(2) The amount of the PIC enhanced deduction, PIC cash payout or PIC bonus that may be disallowed under subsection (1) is the amount resulting from the PIC arrangement being abusive as defined under subsection (10).[37/2014]
(3) Despite the provisions of this Act, the amount referred to in subsection (4) of a PIC cash payout or PIC bonus paid to a person that was based on a claim that arose from an abusive PIC arrangement is recoverable by the Comptroller from the person as a debt due to the Government.[37/2014]
(4) The amount of the PIC cash payout or PIC bonus that is recoverable under subsection (3) is the amount resulting from the PIC arrangement being abusive as defined under subsection (10).[37/2014]
(5) The amount that is recoverable under subsection (3) is payable at the place stated in the notice served by the Comptroller on the person within 30 days after the service of the notice.[37/2014]
(6) The Comptroller may, in his or her discretion and subject to such terms and conditions as the Comptroller may impose, extend the time within which payment under subsection (3) is to be made.[37/2014]
(7) Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 apply to the collection and recovery by the Comptroller of the amount recoverable under subsection (3) as they apply to the collection and recovery of tax.[37/2014]
(8) In this section, an arrangement is a PIC arrangement if the obtaining of a PIC cash payout, PIC bonus or PIC enhanced deduction, or a higher amount of a PIC cash payout, PIC bonus or PIC enhanced deduction, was the purpose or one of the purposes of the arrangement (called in this section the relevant purpose).[37/2014]
(9) In this section, a PIC arrangement is abusive if —(a)
it consists or makes use of one or more artificial, contrived or fraudulent steps that are intended to achieve the relevant purpose;
(b)
the arrangement results in the consideration paid or payable for the property or services in question being of a greater value than the open market value of the property or services, and there is no bona fide commercial reason for the difference in the values apart from the relevant purpose; or
(c)
in any other case, there is no bona fide commercial reason for entering into the arrangement or a transaction forming part of the arrangement apart from the relevant purpose.[37/2014]
(10) In this section, the amount of PIC enhanced deduction, PIC cash payout or PIC bonus resulting from a PIC arrangement being abusive is —(a)
if the arrangement is abusive by reason of subsection (9)(a), the amount that results or has resulted from the use of the artificial, contrived or fraudulent step or steps, excluding any amount the person concerned is entitled to if the step or steps had not been used;
(b)
if the arrangement is abusive by reason of subsection (9)(b), the amount that corresponds to the difference in the values mentioned in that provision; or
(c)
if the arrangement is abusive by reason of subsection (9)(c), the full amount.
Examples
(i)
A enters into a contract for training for A’s employees. The right to training may be exchanged for goods. Expenditure for the goods is not eligible for a PIC cash payout. A exchanged the right to training for those goods and made a claim for a PIC cash payout in respect of the expenditure. The contract and the exchange together form an abusive PIC arrangement. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the full amount of the payout.
(ii)
A, in order to obtain a higher amount of PIC cash payout, purchases more equipment than A needs for A’s business. The purchase of the excess equipment is an abusive PIC arrangement. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the amount corresponding to the price paid for the excess equipment.
(iii)
A and B, in order to help each other obtain a PIC cash payout, sell to each other equipment that performs the same function. The sales are abusive PIC arrangements. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the full amount of the payout.
(iv)
A enters into a contract for training for A’s employees. The contract price for the training includes both the value of the training and the value of other goods to be given to the trainees. Expenditure for those goods is not eligible for a PIC cash payout. The purpose for setting the price for the training in this way is to enable a higher PIC cash payout to be paid to A. The contract is an abusive PIC arrangement. The amount of the PIC cash payout that results from the arrangement being abusive for the purposes of subsections (1) and (3) is the amount corresponding to the price for those other goods.
[37/2014]
(11) This section applies only to arrangements made or entered into on or after 27 November 2014.[37/2014]
(12) In this section —“arrangement” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable);
“PIC bonus” means a payment under section 37H;
“PIC cash payout” means a payment under section 37G;
“PIC enhanced deduction” means a deduction or an allowance under section 14A(1B) or (1BA), 14D(2), 14O(2) or (2A), 14P(2) or (2AA), 14Q(2) or (2A), 14T(1) or (4), 19A(2B) or (2BAA), 19B(1B) or (1BAA), or 37J.[37ID
[37/2014]
Promoters of abusive PIC arrangements
37L.—(1) A person who promotes any PIC arrangement knowing or having reasonable grounds to believe that the arrangement is abusive shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 3 years or to both.[37/2014]
(2) In subsection (1), a person promotes a PIC arrangement if the person —(a)
designs, facilitates, organises or manages that arrangement or any part of that arrangement; or
(b)
publishes, disseminates or communicates any information, by any means or in any form, for the purpose of inducing or encouraging (whether directly or indirectly) any other person to enter into the arrangement or any transaction forming part of the arrangement.[37/2014]
(3) In subsection (1), a PIC arrangement is abusive if —(a)
it consists or makes use of one or more artificial, contrived or fraudulent steps that are intended to assist any person who enters into the arrangement or a transaction forming part of the arrangement to achieve the relevant purpose;
(b)
the arrangement will result in the consideration payable for any property or services being of a greater value than the open market value of the property or services, and there is no bona fide commercial reason for the difference in the values apart from the relevant purpose; or
(c)
in any other case, there is no bona fide commercial reason for a person to enter into the arrangement or a transaction forming part of the arrangement apart from the relevant purpose.[37/2014]
(4) The examples of abusive PIC arrangements in section 37K(10) apply for the purposes of subsection (3).[37/2014]
(5) Where, in any proceedings for an offence under subsection (1), it is proved that the arrangement in question consists or makes use of an artificial, contrived or fraudulent step which is capable of assisting any person who enters into the arrangement or a transaction forming part of the arrangement to achieve the relevant purpose, then it is presumed that the step is intended for the relevant purpose, unless the contrary is proved.[37/2014]
(6) Where, in any proceedings for an offence under subsection (1), it is proved that —(a)
the arrangement in question will result or has resulted in the consideration paid or payable for any property or services being of a greater value than the open market value of the property or services; and
(b)
the difference in the values cannot be justified on the basis of any prevailing practice of the trade, profession or business concerned (not being a practice adopted for the purpose of achieving the relevant purpose),
then it is presumed that there is no bona fide commercial reason for the difference in the values apart from the relevant purpose, unless the contrary is proved.
[37/2014]
(7) The Comptroller may compound any offence under subsection (1).[37/2014]
(8) In this section —“PIC arrangements”, “PIC cash payout”, “PIC bonus” and “PIC enhanced deduction” have the meanings given by section 37K;
“relevant purpose” means the purpose of obtaining a PIC cash payout, PIC bonus or PIC enhanced deduction, or a higher amount of PIC cash payout, PIC bonus or PIC enhanced deduction.[37IE
[37/2014]
—(1) A person who promotes any PIC arrangement knowing or having reasonable grounds to believe that the arrangement is abusive shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 3 years or to both.[37/2014]
(2) In subsection (1), a person promotes a PIC arrangement if the person —(a)
designs, facilitates, organises or manages that arrangement or any part of that arrangement; or
(b)
publishes, disseminates or communicates any information, by any means or in any form, for the purpose of inducing or encouraging (whether directly or indirectly) any other person to enter into the arrangement or any transaction forming part of the arrangement.[37/2014]
(3) In subsection (1), a PIC arrangement is abusive if —(a)
it consists or makes use of one or more artificial, contrived or fraudulent steps that are intended to assist any person who enters into the arrangement or a transaction forming part of the arrangement to achieve the relevant purpose;
(b)
the arrangement will result in the consideration payable for any property or services being of a greater value than the open market value of the property or services, and there is no bona fide commercial reason for the difference in the values apart from the relevant purpose; or
(c)
in any other case, there is no bona fide commercial reason for a person to enter into the arrangement or a transaction forming part of the arrangement apart from the relevant purpose.[37/2014]
(4) The examples of abusive PIC arrangements in section 37K(10) apply for the purposes of subsection (3).[37/2014]
(5) Where, in any proceedings for an offence under subsection (1), it is proved that the arrangement in question consists or makes use of an artificial, contrived or fraudulent step which is capable of assisting any person who enters into the arrangement or a transaction forming part of the arrangement to achieve the relevant purpose, then it is presumed that the step is intended for the relevant purpose, unless the contrary is proved.[37/2014]
(6) Where, in any proceedings for an offence under subsection (1), it is proved that —(a)
the arrangement in question will result or has resulted in the consideration paid or payable for any property or services being of a greater value than the open market value of the property or services; and
(b)
the difference in the values cannot be justified on the basis of any prevailing practice of the trade, profession or business concerned (not being a practice adopted for the purpose of achieving the relevant purpose),
then it is presumed that there is no bona fide commercial reason for the difference in the values apart from the relevant purpose, unless the contrary is proved.
[37/2014]
(7) The Comptroller may compound any offence under subsection (1).[37/2014]
(8) In this section —“PIC arrangements”, “PIC cash payout”, “PIC bonus” and “PIC enhanced deduction” have the meanings given by section 37K;
“relevant purpose” means the purpose of obtaining a PIC cash payout, PIC bonus or PIC enhanced deduction, or a higher amount of PIC cash payout, PIC bonus or PIC enhanced deduction.[37IE
[37/2014]
Penalties for false information, etc., resulting in payment under section 37G or 37H
37M.—(1) Any person who gives to the Comptroller any information under section 37G(2) that is false in any material particular, or who omits any material particular from any information or document given under that provision, shall be guilty of an offence and shall on conviction be punished with a penalty that is equal to the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to the person or any other person as a result of the offence, or which would have been made to the person or any other person if the offence had not been detected.(2) Any person who without reasonable excuse or through negligence gives to the Comptroller any information under section 37G(2) that is false in any material particular, or omits any material particular from any information or document given under that provision, shall be guilty of an offence and shall on conviction be punished with a penalty that is double the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to the person or any other person as a result of the offence, or which would have been made to the person or any other person if the offence had not been detected, and shall also be liable to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 3 years or to both.
(3) Any person who wilfully with intent to obtain, or to assist another person to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both) which the person or that other person is not entitled to —(a)
gives to the Comptroller any information under section 37G(2) that is false in any material particular or omits any material particular from any information or document given under that provision; or
(b)
gives any false answer, whether verbally or in writing, to any question or request for information asked or made by the Comptroller,
shall be guilty of an offence and shall on conviction be punished with a penalty that is treble the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to the person or that other person as a result of the offence, or which would have been made to the person or that other person if the offence had not been detected, and shall also be liable to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 3 years or to both.
(4) Any person who wilfully with intent to obtain, or to assist another person to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both) which the person or that other person is not entitled to —(a)
prepares or maintains or authorises the preparation or maintenance of any false books of account or other records or falsifies or authorises the falsification of any books of account or records; or
(b)
makes use of any fraud, art or contrivance or authorises the use of such fraud, art or contrivance,
shall be guilty of an offence and shall on conviction be punished with a penalty that is 4 times the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to the person or that other person as a result of the offence, or which would have been made to the person or that other person if the offence had not been detected, and shall also be liable to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 5 years or to both.
(4A) Where an individual has been convicted for —(a)
3 or more offences under subsection (3) or section 96;
(b)
2 or more offences under subsection (4) or section 96A; or
(c)
one offence under either subsection (3) or section 96, and one offence under either subsection (4) or section 96A,
the imprisonment the individual shall be liable to shall not be less than 6 months.
(4B) Where in any proceedings under subsection (3) it is proved that any information that is false in a material particular is given to the Comptroller under section 37G(2) by or on behalf of any person, the person who gave the information is presumed, unless the contrary is proved, to have given it with intent to obtain, or to assist the person on whose behalf the information is given to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both), as the case may be.
(4C) Where in any proceedings under subsection (4) it is proved that any false statement or entry is made in any books of account or other records maintained by or on behalf of any person, the person who made the statement or entry is presumed, unless the contrary is proved, to have made that false statement or entry with intent to obtain, or to assist the person on whose behalf the statement or entry is made to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both), as the case may be.
(5) The Comptroller may compound any offence under this section other than subsection (4).
(5A) In this section, a reference to the amount of cash payout or PIC bonus that has been made to a person as a result of an offence, or which would have been made to the person if the offence had not been detected, excludes an amount of the cash payout or PIC bonus that the person is entitled to.[37/2014]
(6) In this section —“cash payout” means a payment under section 37G;
“PIC bonus” means a payment under section 37H.[37J
—(1) Any person who gives to the Comptroller any information under section 37G(2) that is false in any material particular, or who omits any material particular from any information or document given under that provision, shall be guilty of an offence and shall on conviction be punished with a penalty that is equal to the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to the person or any other person as a result of the offence, or which would have been made to the person or any other person if the offence had not been detected.
(2) Any person who without reasonable excuse or through negligence gives to the Comptroller any information under section 37G(2) that is false in any material particular, or omits any material particular from any information or document given under that provision, shall be guilty of an offence and shall on conviction be punished with a penalty that is double the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to the person or any other person as a result of the offence, or which would have been made to the person or any other person if the offence had not been detected, and shall also be liable to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 3 years or to both.
(3) Any person who wilfully with intent to obtain, or to assist another person to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both) which the person or that other person is not entitled to —(a)
gives to the Comptroller any information under section 37G(2) that is false in any material particular or omits any material particular from any information or document given under that provision; or
(b)
gives any false answer, whether verbally or in writing, to any question or request for information asked or made by the Comptroller,
shall be guilty of an offence and shall on conviction be punished with a penalty that is treble the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to the person or that other person as a result of the offence, or which would have been made to the person or that other person if the offence had not been detected, and shall also be liable to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 3 years or to both.
(4) Any person who wilfully with intent to obtain, or to assist another person to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both) which the person or that other person is not entitled to —(a)
prepares or maintains or authorises the preparation or maintenance of any false books of account or other records or falsifies or authorises the falsification of any books of account or records; or
(b)
makes use of any fraud, art or contrivance or authorises the use of such fraud, art or contrivance,
shall be guilty of an offence and shall on conviction be punished with a penalty that is 4 times the amount of cash payout or PIC bonus (or both, as the case may be) that has been made to the person or that other person as a result of the offence, or which would have been made to the person or that other person if the offence had not been detected, and shall also be liable to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 5 years or to both.
(4A) Where an individual has been convicted for —(a)
3 or more offences under subsection (3) or section 96;
(b)
2 or more offences under subsection (4) or section 96A; or
(c)
one offence under either subsection (3) or section 96, and one offence under either subsection (4) or section 96A,
the imprisonment the individual shall be liable to shall not be less than 6 months.
(4B) Where in any proceedings under subsection (3) it is proved that any information that is false in a material particular is given to the Comptroller under section 37G(2) by or on behalf of any person, the person who gave the information is presumed, unless the contrary is proved, to have given it with intent to obtain, or to assist the person on whose behalf the information is given to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both), as the case may be.
(4C) Where in any proceedings under subsection (4) it is proved that any false statement or entry is made in any books of account or other records maintained by or on behalf of any person, the person who made the statement or entry is presumed, unless the contrary is proved, to have made that false statement or entry with intent to obtain, or to assist the person on whose behalf the statement or entry is made to obtain, a cash payout or PIC bonus (or both) or a higher amount of cash payout or PIC bonus (or both), as the case may be.
(5) The Comptroller may compound any offence under this section other than subsection (4).
(5A) In this section, a reference to the amount of cash payout or PIC bonus that has been made to a person as a result of an offence, or which would have been made to the person if the offence had not been detected, excludes an amount of the cash payout or PIC bonus that the person is entitled to.[37/2014]
(6) In this section —“cash payout” means a payment under section 37G;
“PIC bonus” means a payment under section 37H.[37J
Deduction for qualifying investments in qualifying start‑up companies
37N.—(1) Where an individual proposes to make one or more qualifying investments that complies with subsection (4) in a qualifying start‑up company or companies, the individual may apply to the Minister, or such person as the Minister may appoint, between 1 July 2010 and 31 March 2020 (both dates inclusive) to be approved as a qualifying person for the purposes of claiming a deduction under this section in respect of the expenditure incurred by the individual in making the investments.[2/2016]
(2) Where the Minister or the person appointed by the Minister is satisfied that the individual possesses the necessary experience, skills or expertise to nurture and grow a qualifying start‑up company, the Minister or appointed person may approve, by written notice, the individual as a qualifying person, subject to such conditions as the Minister or appointed person may impose.
(2A) No approval may be granted under subsection (2) after 31 March 2020, and any approval granted to a qualifying person must commence between 1 July 2010 and 31 March 2020 (both dates inclusive).[41/2020]
(3) Where a qualifying person —(a)
has incurred expenditure in making a qualifying investment that complies with subsection (4) in a qualifying start‑up company or companies; and
(b)
has directly and beneficially held the shares or convertible loans which are the subject of the qualifying investment for a continuous period of 2 years from the relevant date,
the qualifying person is to be allowed on due claim, for the year of assessment relating to the basis period in which the last day of the 2‑year period falls, a deduction, computed in accordance with subsection (5), against the remainder of the qualifying person’s statutory income (excluding specified income) after making the deduction (if any) under section 37(3)(a).
(4) For the purposes of subsection (3), the qualifying investment must be made —(a)
either —(i)
during the period that is specified to the qualifying person; or
(ii)
if the Minister or such person as the Minister may appoint so approves, during the period between 1 March 2010 and 30 June 2010 (both dates inclusive);
(b)
if it is the first qualifying investment made by the qualifying person in the qualifying start‑up company since the qualifying person is approved as such under subsection (2) and paragraph (d) does not apply, on the date of such approval or within one year from that date;
(c)
if it is not the first qualifying investment made by the qualifying person in the qualifying start‑up company since the qualifying person is approved as such under subsection (2) and paragraph (d) does not apply, within one year from the date of the first qualifying investment referred to in paragraph (b) that complies with that paragraph; and
(d)
if approval has been obtained under paragraph (a)(ii) and the qualifying person has made at least one qualifying investment in the qualifying start‑up company during the period between 1 March 2010 and 30 June 2010 (both dates inclusive), within one year from the date such qualifying investment or the first of such qualifying investments was made.[37/2014; 2/2016; 41/2020]
(5) The amount of deduction allowable to a qualifying person under subsection (3) is ascertained by the formula
where A
is the aggregate amount of expenditure incurred by the qualifying person on the qualifying investment in a qualifying start‑up company or companies or $500,000, whichever is less.
(6) For the purpose of computing the aggregate amount of expenditure incurred by a qualifying person in respect of a qualifying investment in a qualifying start‑up company or companies under subsection (5), no expenditure incurred by the qualifying person in respect of qualifying investment in any one qualifying start‑up company is to be included —(a)
if the total amount of any such expenditure that is incurred on the date of first investment and within one year from that date (but excluding any expenditure incurred on qualifying investment that is disposed of during the relevant holding period) is less than $100,000;
(b)
to the extent that the expenditure, being expenditure incurred before 24 February 2015, is matched by any investment in the company by the company known as SPRING SEEDS Capital Pte Ltd under the SPRING Start‑up Enterprise Development Scheme administered by the second‑mentioned company or any other scheme designated by the Minister or such person as the Minister may appoint;
(c)
if all the shares which are the subject of the qualifying investment are disposed of during the relevant holding period;
(d)
where the loan which is the subject of the qualifying investment is partially or fully repaid during the relevant holding period;
(e)
if all the share capital of the qualifying start‑up company is acquired by a person or partnership other than the qualifying person, or the qualifying start‑up company merges with or is consolidated with another company or is wound up, at any time during a period of 2 years from the relevant date;
(f)
[Deleted by Act 22 of 2011]
(g)
if the qualifying start‑up company is not resident in Singapore for the years of assessment relating to the basis periods falling within the relevant holding period; or
(h)
the qualifying person has acquired more than 50% of the issued share capital, or has provided more than 50% of the debt capital, of the qualifying start‑up company at any time during the relevant holding period.[2/2016]
(7) For the purpose of computing the aggregate amount of expenditure incurred by a qualifying person in respect of a qualifying investment under subsection (5), where any of the shares which are the subject of the qualifying investment are disposed of during the relevant holding period, no account is to be taken of such expenditure incurred by the qualifying person in relation to the shares that are disposed.
(8) The Minister or an authorised body may, subject to such conditions as the Minister or authorised body may impose in a particular case, waive the requirement in subsection (6)(c), (d) or (e).[Act 41 of 2020 wef 12/04/2024]
(9) Any amount of deduction for any year of assessment computed for a qualifying person in accordance with subsection (5) which is in excess of the remainder of the qualifying person’s statutory income (excluding specified income) after making the deduction (if any) under section 37(3)(a) is not available as a deduction against the qualifying person’s income for any subsequent year of assessment and is disregarded.
(10) Where —(a)
a person disposes of, after 2 years from the relevant date, the shares which are the subject of a qualifying investment in respect of which a deduction has been allowed to the person in any year of assessment under this section; and
(b)
the gains or profits from the disposal of those shares is chargeable to tax under this Act,
the amount of expenditure for which a deduction is allowed to the person under this section in respect of those shares in any year of assessment does not form part of the person’s costs of investment deductible under section 14 in computing the person’s gains or profits from the disposal which is chargeable to tax.
(11) A qualifying person must maintain and deliver to the Minister or an authorised body, in such form and manner and within such reasonable time as the Minister or authorised body may determine, the relevant records of the qualifying investment made by the qualifying person in any qualifying start‑up company and such other particulars as may be required for the purposes of this section.[Act 41 of 2020 wef 12/04/2024]
(12) In this section —“date of first investment”, in relation to a qualifying investment by a qualifying person in a qualifying start‑up company, means —(a)
unless paragraph (b) applies, the date on which a qualifying investment is first made by the qualifying person in the qualifying start‑up company since the qualifying person was approved as such under subsection (2); or
(b)
if approval has been obtained under subsection (4)(a)(ii) and the qualifying person has made at least one qualifying investment in the qualifying start‑up company during the period between 1 March 2010 and 30 June 2010 (both dates inclusive), the date of that qualifying investment or the first of such qualifying investments;
“qualifying investment”, in relation to a qualifying start‑up company, means —(a)
the acquisition using cash of —(i)
new shares not being of a preferential nature, issued by the company;
(ii)
new shares of a preferential nature issued by the company which do not fall within sub‑paragraph (iii) and which do not provide for payment of a fixed or guaranteed dividend for the relevant holding period; or
(iii)
new redeemable shares of a preferential nature issued by the company which do not carry a right to redemption during the relevant holding period and which do not provide for payment of a fixed or guaranteed dividend for the relevant holding period,
other than shares which are issued pursuant to a stock option or share award scheme or any conversion of any loan or debt securities; or
(b)
the provision of convertible loans of cash to the company where there is no provision for interest payment for the relevant holding period or loan repayment during the relevant holding period;
“qualifying start‑up company” means a company which is not one limited by guarantee and which —(a)
on the date of first investment, was incorporated in Singapore for 3 years or less and whose shares are not listed on any stock exchange in Singapore or elsewhere;
(b)
on the date of first investment, does not have any shareholder who is a relative of the qualifying person, except that this requirement may be waived for the company by the Minister or an authorised body;[Act 41 of 2020 wef 12/04/2024]
(c)
on the date of first investment, has more than 50% of its total issued share capital beneficially held by no more than 20 individual shareholders (excluding any qualifying person);
(d)
has no more than 25% of its issued share capital or 25% of its debt capital beneficially held by the qualifying person (including any of the qualifying person’s relatives) at any time within a period of 2 years prior to the date of first investment; and
(e)
throughout the relevant holding period, does not engage in any activity specified by the Minister or an authorised body for the purposes of this section;[Act 41 of 2020 wef 12/04/2024]
“relative”, in relation to any individual, means —(a)
his or her spouse;
(b)
his or her children, stepchildren, grandchildren, stepgrandchildren and their spouses;
(c)
his or her parents, including step‑parents;
(d)
his or her grandparents, including stepgrandparents;
(e)
his or her parents‑in‑law, including stepparents‑in‑law;
(f)
his or her brother, stepbrother, sister, stepsister and their spouses;
(g)
his or her spouse’s grandparents, including stepgrandparents;
(h)
his or her spouse’s brother, stepbrother, sister, stepsister and their spouses;
(i)
his or her parent’s brother, stepbrother, sister, stepsister and their spouses;
(j)
his or her parent‑in‑law’s brother, stepbrother, sister, stepsister and their spouses;
(k)
the children of the brother, stepbrother, sister or stepsister of his or her parent or step‑parent, including stepchildren, and their spouses;
(l)
the children of the brother, stepbrother, sister or stepsister of his or her parent‑in‑law or stepparent‑in‑law, including stepchildren, and their spouses;
(m)
the children of his or her brother, stepbrother, sister or stepsister, including stepchildren, and their spouses; and
(n)
the children of his or her spouse’s brother, stepbrother, sister or stepsister, including stepchildren, and their spouses;
“relevant date”, in relation to a qualifying person making a qualifying investment in a qualifying start‑up company, means —(a)
where only one qualifying investment in the company is made by the qualifying person in accordance with subsection (4) — the date of first investment; or
(b)
where more than one qualifying investment in the company is made by the qualifying person in accordance with subsection (4) — the date on which the last qualifying investment is made by the qualifying person in that company within one year after the date of first investment;
“relevant holding period”, in relation to a qualifying person making a qualifying investment in a qualifying start‑up company, means the period commencing from the date of first investment in the qualifying start‑up company to the end of the 2‑year period from the relevant date;
“specified income” means any income of the qualifying person not resident in Singapore which is subject to tax at the rate specified in section 43(3), (3A) or (4)(a).[37/2014; 41/2020]
(13) In the definition of “relative” in subsection (12), relationships that may be established by blood may also be established by adoption in accordance with any written law relating to the adoption of children.
(14) In this section, a qualifying investment is made when —(a)
in the case of an acquisition of shares in paragraph (a) of the definition of “qualifying investment” in subsection (12), the consideration for the shares is paid; or
(b)
in the case of a provision of a convertible loan in paragraph (b) of the definition of “qualifying investment” in subsection (12), the loan is disbursed.[37K
—(1) Where an individual proposes to make one or more qualifying investments that complies with subsection (4) in a qualifying start‑up company or companies, the individual may apply to the Minister, or such person as the Minister may appoint, between 1 July 2010 and 31 March 2020 (both dates inclusive) to be approved as a qualifying person for the purposes of claiming a deduction under this section in respect of the expenditure incurred by the individual in making the investments.[2/2016]
(2) Where the Minister or the person appointed by the Minister is satisfied that the individual possesses the necessary experience, skills or expertise to nurture and grow a qualifying start‑up company, the Minister or appointed person may approve, by written notice, the individual as a qualifying person, subject to such conditions as the Minister or appointed person may impose.
(2A) No approval may be granted under subsection (2) after 31 March 2020, and any approval granted to a qualifying person must commence between 1 July 2010 and 31 March 2020 (both dates inclusive).[41/2020]
(3) Where a qualifying person —(a)
has incurred expenditure in making a qualifying investment that complies with subsection (4) in a qualifying start‑up company or companies; and
(b)
has directly and beneficially held the shares or convertible loans which are the subject of the qualifying investment for a continuous period of 2 years from the relevant date,
the qualifying person is to be allowed on due claim, for the year of assessment relating to the basis period in which the last day of the 2‑year period falls, a deduction, computed in accordance with subsection (5), against the remainder of the qualifying person’s statutory income (excluding specified income) after making the deduction (if any) under section 37(3)(a).
(4) For the purposes of subsection (3), the qualifying investment must be made —(a)
either —(i)
during the period that is specified to the qualifying person; or
(ii)
if the Minister or such person as the Minister may appoint so approves, during the period between 1 March 2010 and 30 June 2010 (both dates inclusive);
(b)
if it is the first qualifying investment made by the qualifying person in the qualifying start‑up company since the qualifying person is approved as such under subsection (2) and paragraph (d) does not apply, on the date of such approval or within one year from that date;
(c)
if it is not the first qualifying investment made by the qualifying person in the qualifying start‑up company since the qualifying person is approved as such under subsection (2) and paragraph (d) does not apply, within one year from the date of the first qualifying investment referred to in paragraph (b) that complies with that paragraph; and
(d)
if approval has been obtained under paragraph (a)(ii) and the qualifying person has made at least one qualifying investment in the qualifying start‑up company during the period between 1 March 2010 and 30 June 2010 (both dates inclusive), within one year from the date such qualifying investment or the first of such qualifying investments was made.[37/2014; 2/2016; 41/2020]
(5) The amount of deduction allowable to a qualifying person under subsection (3) is ascertained by the formula
where A
is the aggregate amount of expenditure incurred by the qualifying person on the qualifying investment in a qualifying start‑up company or companies or $500,000, whichever is less.
(6) For the purpose of computing the aggregate amount of expenditure incurred by a qualifying person in respect of a qualifying investment in a qualifying start‑up company or companies under subsection (5), no expenditure incurred by the qualifying person in respect of qualifying investment in any one qualifying start‑up company is to be included —(a)
if the total amount of any such expenditure that is incurred on the date of first investment and within one year from that date (but excluding any expenditure incurred on qualifying investment that is disposed of during the relevant holding period) is less than $100,000;
(b)
to the extent that the expenditure, being expenditure incurred before 24 February 2015, is matched by any investment in the company by the company known as SPRING SEEDS Capital Pte Ltd under the SPRING Start‑up Enterprise Development Scheme administered by the second‑mentioned company or any other scheme designated by the Minister or such person as the Minister may appoint;
(c)
if all the shares which are the subject of the qualifying investment are disposed of during the relevant holding period;
(d)
where the loan which is the subject of the qualifying investment is partially or fully repaid during the relevant holding period;
(e)
if all the share capital of the qualifying start‑up company is acquired by a person or partnership other than the qualifying person, or the qualifying start‑up company merges with or is consolidated with another company or is wound up, at any time during a period of 2 years from the relevant date;
(f)
[Deleted by Act 22 of 2011]
(g)
if the qualifying start‑up company is not resident in Singapore for the years of assessment relating to the basis periods falling within the relevant holding period; or
(h)
the qualifying person has acquired more than 50% of the issued share capital, or has provided more than 50% of the debt capital, of the qualifying start‑up company at any time during the relevant holding period.[2/2016]
(7) For the purpose of computing the aggregate amount of expenditure incurred by a qualifying person in respect of a qualifying investment under subsection (5), where any of the shares which are the subject of the qualifying investment are disposed of during the relevant holding period, no account is to be taken of such expenditure incurred by the qualifying person in relation to the shares that are disposed.
(8) The Minister or an authorised body may, subject to such conditions as the Minister or authorised body may impose in a particular case, waive the requirement in subsection (6)(c), (d) or (e).[Act 41 of 2020 wef 12/04/2024]
(9) Any amount of deduction for any year of assessment computed for a qualifying person in accordance with subsection (5) which is in excess of the remainder of the qualifying person’s statutory income (excluding specified income) after making the deduction (if any) under section 37(3)(a) is not available as a deduction against the qualifying person’s income for any subsequent year of assessment and is disregarded.
(10) Where —(a)
a person disposes of, after 2 years from the relevant date, the shares which are the subject of a qualifying investment in respect of which a deduction has been allowed to the person in any year of assessment under this section; and
(b)
the gains or profits from the disposal of those shares is chargeable to tax under this Act,
the amount of expenditure for which a deduction is allowed to the person under this section in respect of those shares in any year of assessment does not form part of the person’s costs of investment deductible under section 14 in computing the person’s gains or profits from the disposal which is chargeable to tax.
(11) A qualifying person must maintain and deliver to the Minister or an authorised body, in such form and manner and within such reasonable time as the Minister or authorised body may determine, the relevant records of the qualifying investment made by the qualifying person in any qualifying start‑up company and such other particulars as may be required for the purposes of this section.[Act 41 of 2020 wef 12/04/2024]
(12) In this section —“date of first investment”, in relation to a qualifying investment by a qualifying person in a qualifying start‑up company, means —(a)
unless paragraph (b) applies, the date on which a qualifying investment is first made by the qualifying person in the qualifying start‑up company since the qualifying person was approved as such under subsection (2); or
(b)
if approval has been obtained under subsection (4)(a)(ii) and the qualifying person has made at least one qualifying investment in the qualifying start‑up company during the period between 1 March 2010 and 30 June 2010 (both dates inclusive), the date of that qualifying investment or the first of such qualifying investments;
“qualifying investment”, in relation to a qualifying start‑up company, means —(a)
the acquisition using cash of —(i)
new shares not being of a preferential nature, issued by the company;
(ii)
new shares of a preferential nature issued by the company which do not fall within sub‑paragraph (iii) and which do not provide for payment of a fixed or guaranteed dividend for the relevant holding period; or
(iii)
new redeemable shares of a preferential nature issued by the company which do not carry a right to redemption during the relevant holding period and which do not provide for payment of a fixed or guaranteed dividend for the relevant holding period,
other than shares which are issued pursuant to a stock option or share award scheme or any conversion of any loan or debt securities; or
(b)
the provision of convertible loans of cash to the company where there is no provision for interest payment for the relevant holding period or loan repayment during the relevant holding period;
“qualifying start‑up company” means a company which is not one limited by guarantee and which —(a)
on the date of first investment, was incorporated in Singapore for 3 years or less and whose shares are not listed on any stock exchange in Singapore or elsewhere;
(b)
on the date of first investment, does not have any shareholder who is a relative of the qualifying person, except that this requirement may be waived for the company by the Minister or an authorised body;[Act 41 of 2020 wef 12/04/2024]
(c)
on the date of first investment, has more than 50% of its total issued share capital beneficially held by no more than 20 individual shareholders (excluding any qualifying person);
(d)
has no more than 25% of its issued share capital or 25% of its debt capital beneficially held by the qualifying person (including any of the qualifying person’s relatives) at any time within a period of 2 years prior to the date of first investment; and
(e)
throughout the relevant holding period, does not engage in any activity specified by the Minister or an authorised body for the purposes of this section;[Act 41 of 2020 wef 12/04/2024]
“relative”, in relation to any individual, means —(a)
his or her spouse;
(b)
his or her children, stepchildren, grandchildren, stepgrandchildren and their spouses;
(c)
his or her parents, including step‑parents;
(d)
his or her grandparents, including stepgrandparents;
(e)
his or her parents‑in‑law, including stepparents‑in‑law;
(f)
his or her brother, stepbrother, sister, stepsister and their spouses;
(g)
his or her spouse’s grandparents, including stepgrandparents;
(h)
his or her spouse’s brother, stepbrother, sister, stepsister and their spouses;
(i)
his or her parent’s brother, stepbrother, sister, stepsister and their spouses;
(j)
his or her parent‑in‑law’s brother, stepbrother, sister, stepsister and their spouses;
(k)
the children of the brother, stepbrother, sister or stepsister of his or her parent or step‑parent, including stepchildren, and their spouses;
(l)
the children of the brother, stepbrother, sister or stepsister of his or her parent‑in‑law or stepparent‑in‑law, including stepchildren, and their spouses;
(m)
the children of his or her brother, stepbrother, sister or stepsister, including stepchildren, and their spouses; and
(n)
the children of his or her spouse’s brother, stepbrother, sister or stepsister, including stepchildren, and their spouses;
“relevant date”, in relation to a qualifying person making a qualifying investment in a qualifying start‑up company, means —(a)
where only one qualifying investment in the company is made by the qualifying person in accordance with subsection (4) — the date of first investment; or
(b)
where more than one qualifying investment in the company is made by the qualifying person in accordance with subsection (4) — the date on which the last qualifying investment is made by the qualifying person in that company within one year after the date of first investment;
“relevant holding period”, in relation to a qualifying person making a qualifying investment in a qualifying start‑up company, means the period commencing from the date of first investment in the qualifying start‑up company to the end of the 2‑year period from the relevant date;
“specified income” means any income of the qualifying person not resident in Singapore which is subject to tax at the rate specified in section 43(3), (3A) or (4)(a).[37/2014; 41/2020]
(13) In the definition of “relative” in subsection (12), relationships that may be established by blood may also be established by adoption in accordance with any written law relating to the adoption of children.
(14) In this section, a qualifying investment is made when —(a)
in the case of an acquisition of shares in paragraph (a) of the definition of “qualifying investment” in subsection (12), the consideration for the shares is paid; or
(b)
in the case of a provision of a convertible loan in paragraph (b) of the definition of “qualifying investment” in subsection (12), the loan is disbursed.[37K
Deduction for acquisition of shares of companies
37O.—(1) Subject to this section, where —(a)
a Singapore company (called in this section the acquiring company);
(b)
any one or more subsidiaries of the Singapore company that is or are wholly‑owned by the Singapore company, and is incorporated for the primary purpose of acquiring and holding shares in other companies (called in this section the acquiring subsidiary); or
(c)
both the acquiring company and any one or more acquiring subsidiaries,
incurs or incur capital expenditure during the period from 1 April 2010 to 31 December 2030 (both dates inclusive) for any qualifying acquisition of ordinary shares in another company (called in this section the target company), the acquiring company may claim the deductions specified in subsection (1A), in accordance with this section.
[2/2016; 41/2020]
[Act 25 of 2025 wef 08/12/2025]
(1A) The deductions for the purposes of subsection (1) are as follows:(a)
a deduction for the capital expenditure referred to in that subsection; and
(b)
a deduction of an amount equivalent to twice the amount of transaction costs incurred for qualifying acquisitions made during the period from 17 February 2012 to 31 December 2030 (both dates inclusive).[2/2016; 41/2020]
[Act 25 of 2025 wef 08/12/2025]
(2) Any claim for deduction under this section must be made at the time of lodgment of the return of income for the year of assessment relating to the basis period of the acquiring company in which the capital expenditure is incurred or within such further time as the Comptroller may allow.
(3) For the purposes of subsections (1) and (2), capital expenditure for an acquisition of ordinary shares in a target company is treated as being incurred on the date of the acquisition of those shares.
Qualifying acquisitions
(4) In this section, a qualifying acquisition of ordinary shares in a target company by an acquiring company or an acquiring subsidiary is any of the following:(a)
an acquisition made during the period from 1 April 2010 to 31 March 2015 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total more than 50% of the total number of ordinary shares in the target company where, before the date of the acquisition, such total ownership was 50% or less of the total number of ordinary shares in the target company;
(b)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition mentioned in paragraph (a);
(c)
an acquisition made during the period from 1 April 2010 to 31 March 2015 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total 75% or more of the total number of ordinary shares in the target company where —(i)
before the date of the acquisition, such total ownership was more than 50% but less than 75% of the total number of ordinary shares in the target company; and
(ii)
the date of the acquisition does not fall in the same basis period of the acquiring company as the date of the acquisition mentioned in paragraph (a);
(d)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition mentioned in paragraph (c) and is before 1 April 2016,
provided that at the end of that basis period of the acquiring company, such total ownership is more than 50% (in the case of paragraphs (a) and (b)) or 75% or more (in the case of paragraphs (c) and (d)) of the total number of ordinary shares in the target company.
[2/2016]
(4A) In this section, and subject to the applicable condition in subsection (4B) being met, each of the following is also a qualifying acquisition of ordinary shares in a target company by an acquiring company or an acquiring subsidiary:(a)
an acquisition made during the period from 1 April 2015 to 31 December 2030 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total 20% or more but 50% or less of the total number of ordinary shares in the target company, where —(i)
before the date of the acquisition, such total ownership was less than 20% of the total number of ordinary shares in the target company; and
(ii)
the date of the acquisition does not fall in the same basis period of the acquiring company as the date of the acquisition mentioned in paragraph (c);[Act 25 of 2025 wef 08/12/2025]
(b)
any other acquisition made during the period from 1 April 2015 to 31 December 2030 (both dates inclusive) the date of which falls in the same basis period of the acquiring company as that of the acquisition mentioned in paragraph (a);[Act 25 of 2025 wef 08/12/2025]
(c)
an acquisition made during the period from 1 April 2015 to 31 December 2030 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total more than 50% of the total number of ordinary shares in the target company where, before the date of the acquisition, such total ownership was 50% or less of the total number of ordinary shares in the target company;[Act 25 of 2025 wef 08/12/2025]
(d)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition mentioned in paragraph (c);
(e)
an acquisition made on or after 1 April 2015 but before 1 April 2016 that results in the acquiring company and its acquiring subsidiaries owning together in total 75% or more of the total number of ordinary shares in the target company where —(i)
before the date of the acquisition, such total ownership was more than 50% but less than 75% of the total number of ordinary shares in the target company;
(ii)
the date of the acquisition does not fall in the same basis period of the acquiring company as the date of the acquisition mentioned in paragraph (c); and
(iii)
before 1 April 2015 and not earlier than 12 months before the acquisition, the acquiring company or its acquiring subsidiary had made an acquisition of ordinary shares of any amount in the target company;
(f)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition mentioned in paragraph (e) and is before 1 April 2016.[2/2016; 41/2020]
(4B) In subsection (4A), the conditions are —(a)
in the case of paragraphs (a) and (b) of that subsection, at the end of that basis period of the acquiring company, the total ownership of ordinary shares in the target company mentioned in paragraph (a) of that subsection is between 20% and 50% (both inclusive);
(b)
in the case of paragraphs (c) and (d) of that subsection, at the end of that basis period of the acquiring company, the total ownership of ordinary shares in the target company mentioned in paragraph (c) of that subsection is more than 50%; or
(c)
in the case of paragraphs (e) and (f) of that subsection, at the end of that basis period of the acquiring company, the total ownership of ordinary shares in the target company mentioned in paragraph (e) of that subsection is 75% or more.[2/2016]
(5) An acquiring company may elect for its qualifying acquisitions to be, instead of those mentioned in the provisions in the first column of the following table, acquisitions —(a)
the dates of which fall within a prescribed period; and
(b)
which include an acquisition mentioned in the provisions set out opposite in the second column of the table,
and the provisions of this section apply to the acquisitions so elected subject to such modifications as may be prescribed:
Original acquisitions
under:
Elected acquisitions to
include an acquisition
under:
subsection (4)(a) and (b), or subsection (4)(c) and (d)
subsection (4)(a) or (c)
subsection (4A)(c) and (d), or subsection (4A)(e) and (f)
subsection (4A)(c) or (e)
[2/2016]
(5A) The election under subsection (5) may only be made for acquisitions made during the period from 1 April 2010 to 31 March 2016 (both dates inclusive).[2/2016]
(6) The election under subsection (5) must be made by the acquiring company at the time of lodgment of the return of its income for the year of assessment relating to the basis period of the acquiring company in which the date of the acquisition mentioned in subsection (4)(a) or (c) or subsection (4A)(c) or (e) (as the case may be) falls, or within such further time as the Comptroller may allow.[2/2016]
Deductions allowable in respect of capital expenditure claimed
(7) For the purpose of subsection (1) and subject to subsections (11), (11A), (11AB), (11B), (11C) and (19) and the regulations made under subsection (24), deductions in respect of capital expenditure for a qualifying acquisition of ordinary shares in a target company by an acquiring company or an acquiring subsidiary (as the case may be) are to be allowed as follows:(a)
to the extent the capital expenditure is not contingent consideration or, if it is contingent consideration, is incurred in the same basis period of the acquiring company as that in which the date of the acquisition of the shares falls, the deduction allowed is the amount specified in subsection (8) for acquisitions mentioned in subsection (4), and the amount specified in subsection (8A) for acquisitions mentioned in subsection (4A), for each of 5 successive years of assessment (called in this section the 1st, 2nd, 3rd, 4th and 5th years of assessment, respectively), beginning with the year of assessment relating to the basis period of the acquiring company in which the date of the acquisition of the shares falls;
(b)
to the extent the capital expenditure is contingent consideration that is incurred in a basis period of the acquiring company after the basis period of the acquiring company for the 1st year of assessment, the deduction allowed is —(i)
where the contingent consideration is incurred in the basis period of the acquiring company for the 2nd, 3rd or 4th year of assessment, the amount specified in subsection (9) for acquisitions mentioned in subsection (4), and the amount specified in subsection (9A) for acquisitions mentioned in subsection (4A), for that year of assessment and for each successive year of assessment up to and including the 5th year of assessment; or
(ii)
where the contingent consideration is incurred in the basis period of the acquiring company for the 5th year of assessment or a subsequent year of assessment, the amount specified in subsection (10) for acquisitions mentioned in subsection (4), and the amount specified in subsection (10A) for acquisitions mentioned in subsection (4A), for that year of assessment.[2/2016; 34/2016]
(8) Subject to subsections (13) and (19), the amount referred to in subsection (7)(a) for an acquisition mentioned in subsection (4) is calculated in accordance with the formula
where A
is the capital expenditure to the extent that it is not contingent consideration or, if it is contingent consideration, is incurred in the same basis period of the acquiring company as that in which the date of the acquisition of the shares falls.
[2/2016]
(8A) Subject to subsections (13) and (19), the amount referred to in subsection (7)(a) for an acquisition mentioned in subsection (4A) is calculated in accordance with the formula
where A
is the capital expenditure to the extent that it is not contingent consideration or, if it is contingent consideration, is incurred in the same basis period of the acquiring company as that in which the date of the acquisition of the shares falls.
[2/2016]
(9) Subject to subsections (13) and (19), the amount mentioned in subsection (7)(b)(i) for an acquisition mentioned in subsection (4) is calculated in accordance with the formula
where B
is the contingent consideration that is incurred in the basis period of the acquiring company for the 2nd, 3rd or 4th year of assessment, whichever is applicable; and
C
is —
(a)
2 (where the contingent consideration is incurred in the basis period of the acquiring company for the 2nd year of assessment);
(b)
3 (where the contingent consideration is incurred in the basis period of the acquiring company for the 3rd year of assessment); or
(c)
4 (where the contingent consideration is incurred in the basis period of the acquiring company for the 4th year of assessment),
whichever is applicable.
[2/2016]
(9A) Subject to subsections (13) and (19), the amount mentioned in subsection (7)(b)(i) for an acquisition mentioned in subsection (4A) is calculated in accordance with the formula
where B
is the contingent consideration that is incurred in the basis period of the acquiring company for the 2nd, 3rd or 4th year of assessment, whichever is applicable; and
C
is —
(a)
2 (where the contingent consideration is incurred in the basis period of the acquiring company for the 2nd year of assessment);
(b)
3 (where the contingent consideration is incurred in the basis period of the acquiring company for the 3rd year of assessment); or
(c)
4 (where the contingent consideration is incurred in the basis period of the acquiring company for the 4th year of assessment),
whichever is applicable.
[2/2016]
(10) Subject to subsections (13) and (19), the amount mentioned in subsection (7)(b)(ii) for an acquisition mentioned in subsection (4) is calculated in accordance with the formula
where D
is the contingent consideration that is incurred in the basis period of the acquiring company for the 5th year of assessment or the subsequent year of assessment, whichever is applicable.
[2/2016]
(10A) Subject to subsections (13) and (19), the amount mentioned in subsection (7)(b)(ii) for an acquisition mentioned in subsection (4A) is calculated in accordance with the formula
where D
is the contingent consideration that is incurred in the basis period of the acquiring company for the 5th year of assessment or the subsequent year of assessment, whichever is applicable.
[2/2016]
(11) The following provisions apply in determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in one or more target companies whose dates of acquisition fall within one basis period of the acquiring company:(a)
where the aggregate of the amounts of “A” mentioned in subsection (8) in respect of all such qualifying acquisitions exceeds $100 million, the amount by which the aggregate exceeds $100 million is disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the aggregate mentioned in paragraph (a) does not exceed $100 million but the aggregate of the following exceeds $100 million:(i)
the aggregate mentioned in paragraph (a);
(ii)
the aggregate of all contingent consideration in respect of all such qualifying acquisitions incurred in the basis period of the acquiring company for any year of assessment subsequent to the 1st year of assessment and in any earlier year of assessment other than the 1st year of assessment,
the amount by which the aggregate of sub‑paragraphs (i) and (ii) exceeds $100 million is to be disregarded for the purposes of the deduction to be allowed under this section.
(11A) The following provisions apply for the purpose of determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in one or more target companies whose dates of acquisition fall within one basis period of the acquiring company, and are qualifying acquisitions referred to in subsection (11AA):(a)
where the sum of the amounts of “A” mentioned in subsection (8A) in respect of all such qualifying acquisitions exceeds $20 million, the amount by which the sum exceeds $20 million is to be disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the sum mentioned in paragraph (a) does not exceed $20 million but the sum of the following exceeds $20 million:(i)
the sum mentioned in paragraph (a);
(ii)
the sum of all contingent consideration in respect of all such qualifying acquisitions incurred in the basis period of the acquiring company for any year of assessment subsequent to the 1st year of assessment and in any earlier year of assessment other than the 1st year of assessment,
the amount by which the sum of sub‑paragraphs (i) and (ii) exceeds $20 million is to be disregarded for the purposes of the deduction to be allowed under this section.
[2/2016; 34/2016]
(11AA) Subsection (11A) applies to the following qualifying acquisitions:(a)
a qualifying acquisition made before 1 April 2016 except (if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made on or after 1 April 2016) a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) that has the same target company as that of the anchor acquisition;
(b)
if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made before 1 April 2016, a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) made on or after 1 April 2016 that has the same target company as the anchor acquisition.[34/2016]
(11AB) The following provisions apply for the purpose of determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in one or more target companies whose dates of acquisition fall within one basis period of the acquiring company, and are qualifying acquisitions mentioned in subsection (11AC):(a)
where the sum of the amounts of “A” mentioned in subsection (8A) in respect of all such qualifying acquisitions exceeds $40 million, the amount by which the sum exceeds $40 million is to be disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the sum mentioned in paragraph (a) does not exceed $40 million but the sum of the following exceeds $40 million:(i)
the sum mentioned in paragraph (a);
(ii)
the sum of all contingent consideration in respect of all such qualifying acquisitions incurred in the basis period of the acquiring company for any year of assessment subsequent to the first year of assessment and in any earlier year of assessment other than the first year of assessment,
the amount by which the sum of sub‑paragraphs (i) and (ii) exceeds $40 million is to be disregarded for the purposes of the deduction to be allowed under this section.
[34/2016]
(11AC) Subsection (11AB) applies to the following qualifying acquisitions:(a)
a qualifying acquisition made on or after 1 April 2016 except (if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made before 1 April 2016) a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) that has the same target company as the anchor acquisition;
(b)
if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made on or after 1 April 2016, a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) made before 1 April 2016 that has the same target company as the anchor acquisition.[34/2016]
(11B) Despite subsections (11) and (11A), the following provisions apply in determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in target companies whose dates of acquisition fall within one basis period of the acquiring company, if the qualifying acquisitions in that basis period include at least one acquisition mentioned in subsection (4)(a) or (c), and at least one acquisition mentioned in subsection (4A)(a), (c) or (e) that is made before 1 April 2016, but does not include any acquisition mentioned in subsection (4A)(a) or (c) that is made on or after 1 April 2016:(a)
where the sum of the following exceeds $5 million:(i)
the amount determined by the formula “0.05 × A” in subsection (8) in respect of those acquisitions which are acquisitions mentioned in subsection (4);
(ii)
the amount determined by the formula “0.25 × A” in subsection (8A) in respect of those acquisitions which are acquisitions mentioned in subsection (4A),
the excess is to be disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the sum mentioned in paragraph (a) does not exceed $5 million but the sum of the following exceeds $5 million:(i)
the sum mentioned in paragraph (a);
(ii)
the amount determined by the formula “0.05 × B” in subsection (9) in respect of those acquisitions which are acquisitions mentioned in subsection (4);
(iii)
the amount determined by the formula “0.25 × B” in subsection (9A) in respect of those acquisitions which are acquisitions mentioned in subsection (4A);
(iv)
the amount determined by the formula “0.05 × D” in subsection (10) in respect of those acquisitions which are acquisitions mentioned in subsection (4);
(v)
the amount determined by the formula “0.25 × D” in subsection (10A) in respect of those acquisitions which are acquisitions mentioned in subsection (4A),
the excess is to be disregarded for the purposes of the deduction to be allowed under this section.
[2/2016; 34/2016]
(11C) Despite subsections (11), (11A) and (11AB), the following provisions apply in determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in target companies whose dates of acquisition fall within one basis period of the acquiring company, if the qualifying acquisitions in that basis period include at least one acquisition mentioned in subsection (4)(a) or (c) or subsection (4A)(a), (c) or (e) that is made before 1 April 2016, and at least one acquisition mentioned in subsection (4A)(a) and (c) that is made on or after 1 April 2016:(a)
where the sum of the following (called in this subsection X) exceeds $5 million:(i)
the sum of the amounts determined by the following formulae in respect of those acquisitions which are acquisitions mentioned in subsection (4):(A)
“0.05 × A” in subsection (8);
(B)
“0.05 × B” in subsection (9);
(C)
“0.05 × D” in subsection (10);
(ii)
the sum of the amounts determined by the following formulae in respect of those acquisitions which are acquisitions mentioned in subsection (11AA):(A)
“0.25 × A” in subsection (8A);
(B)
“0.25 × B” in subsection (9A);
(C)
“0.25 × D” in subsection (10A),
the excess is to be disregarded for the purposes of the deduction to be allowed under this section in respect of those acquisitions;
(b)
where the sum of the amounts (called in this subsection Y) determined by the following formulae in respect of those acquisitions which are acquisitions mentioned in subsection (11AC):(i)
“0.25 × A” in subsection (8A);
(ii)
“0.25 × B” in subsection (9A);
(iii)
“0.25 × D” in subsection (10A);
exceeds $10 million, the excess is to be disregarded for the purposes of the deduction to be allowed under this section in respect of those acquisitions;
(c)
despite paragraphs (a) and (b), where the sum of X and Y exceeds $10 million, the excess is to be disregarded for the purposes of the deduction to be allowed under this section for all of the acquisitions mentioned in those paragraphs.[34/2016]
(12) For the purposes of subsections (8), (8A), (9), (9A), (10), (10A), (11), (11A), (11B) and (11C), the amount of any consideration paid for any qualifying acquisition that comprises shares in the acquiring company, is the market value of the shares in the acquiring company as at the date of the acquisition of the shares and, if it is not possible to determine such value, the net asset value of those shares in the acquiring company at the end of its accounting period immediately before the date of the acquisition of those shares.[2/2016; 34/2016]
(13) Despite subsections (8), (8A), (9), (9A), (10) and (10A), where any amount of “A” referred to in subsection (8) or (8A), “B” referred to in subsection (9) or (9A), or “D” referred to in subsection (10) or (10A), that is paid by the acquiring company or the acquiring subsidiary (as the case may be) in respect of any qualifying acquisition is greater than the amount which would have been paid if the acquiring company or the acquiring subsidiary (as the case may be) were not a related party of any of the shareholders in the target company, the firstmentioned amount is substituted with the second‑mentioned amount, and any question regarding the quantum of the second‑mentioned amount is to be determined by the Comptroller.[2/2016]
[Act 33 of 2022 wef 04/11/2022]
(14) A deduction under this section to an acquiring company must be made against the balance of its statutory income after the deductions allowed under sections 37(3), 37A and 37F.
(15) Section 14C(4) and (5) applies in relation to the deduction to be allowed in this section, 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 or 37R) is a reference to the deduction to be allowed in this section;[Act 30 of 2023 wef 30/10/2023]
(b)
a reference to a specified amount of the expenditure or payments in section 14C(4) is a reference to an amount computed in accordance with the formula
where E
is the deduction to be allowed in this section;
F
is the rate of tax specified in section 43(1)(a); and
G
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.
Deductions allowable in respect of transaction costs claimed
(15A) For the purpose of subsection (1), a deduction in respect of transaction costs for qualifying acquisitions of ordinary shares in a target company is subject to the following:(a)
the deduction in relation to any transaction costs incurred must be allowed for —(i)
the year of assessment in which a claim is first made for the deduction allowable in respect of the capital expenditure incurred on the qualifying acquisition to which those transaction costs relate; or
(ii)
the year of assessment which relates to the basis period in which those transaction costs are incurred,
whichever is the later; and
(b)
the deduction is subject to a limit of $100,000 in transaction costs incurred in relation to all qualifying acquisitions of ordinary shares in all target companies (whether by the acquiring company, or by one or more of its acquiring subsidiaries, or by a combination of both) for which claims are first made in the year of assessment mentioned in paragraph (a)(i) for the deductions allowable in respect of the capital expenditure incurred on those acquisitions.
Conditions for deductions
(16) A deduction under this section for a qualifying acquisition (called the subject acquisition) may be made to an acquiring company for any year of assessment only if —(a)
where the subject acquisition is one mentioned in subsection (4)(a) or (c) or (4A)(c) or (e) —(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition (being a date on or after 17 February 2012), the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C); and
(iv)
the target company, or a subsidiary that is —(A)
if the date of the subject acquisition is before 17 February 2012, wholly‑owned by the target company directly; or
(B)
if the date of the subject acquisition is on or after 17 February 2012, wholly‑owned by the target company whether directly or indirectly,
satisfies the conditions in subsection (16D);
(b)
where the subject acquisition is one mentioned in subsection (4)(b) or (d) or (4A)(d) or (f) —(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition (being a date on or after 17 February 2012), the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C);
(iv)
the target company, or a subsidiary that is —(A)
if the date of the acquisition is before 17 February 2012, wholly‑owned by the target company directly; or
(B)
if the date of the acquisition is on or after 17 February 2012, wholly‑owned by the target company whether directly or indirectly,
satisfies the conditions in subsection (16D); and
(v)
the conditions in paragraph (a) are also satisfied in relation to —(A)
where the subject acquisition is one mentioned in subsection (4)(b) — a qualifying acquisition mentioned in subsection (4)(a);
(B)
where the subject acquisition is one mentioned in subsection (4)(d) — a qualifying acquisition mentioned in subsection (4)(c);
(C)
where the subject acquisition is one mentioned in subsection (4A)(d) — a qualifying acquisition mentioned in subsection (4A)(c); or
(D)
where the subject acquisition is one mentioned in subsection (4A)(f) — a qualifying acquisition mentioned in subsection (4A)(e);
(c)
where the subject acquisition is one mentioned in subsection (4A)(a) —(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition, the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C);
(iv)
the target company, or a subsidiary that is wholly‑owned by the target company whether directly or indirectly, satisfies the conditions in subsection (16D); and
(v)
the conditions prescribed under subsection (16E) are satisfied; and
(d)
where the subject acquisition is one mentioned in subsection (4A)(b) —(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition, the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C);
(iv)
the target company, or a subsidiary that is wholly‑owned by the target company whether directly or indirectly, satisfies the conditions in subsection (16D);
(v)
the conditions prescribed under subsection (16E) are satisfied; and
(vi)
the conditions in paragraph (c) are also satisfied in relation to a qualifying acquisition mentioned in subsection (4A)(a).[2/2016]
(16A) The conditions in subsection (16)(a)(i), (b)(i), (c)(i) and (d)(i) are —(a)
the acquiring company is carrying on a trade or business in Singapore on the date of the acquisition of the shares;
(b)
the acquiring company has in its employment at least 3 local employees at all times during the period of 12 months immediately before that date;
(c)
unless otherwise prescribed under subsection (24), the acquiring company is not connected to the target company for at least 2 years immediately before that date; and
(d)
in a case where the acquiring company is a subsidiary of another company, the acquiring company has a Singapore company as its ultimate holding company on that date.[2/2016]
[Act 33 of 2022 wef 04/11/2022]
(16B) The conditions in subsection (16)(a)(ii), (b)(ii), (c)(ii) and (d)(ii) are —(a)
the acquiring subsidiary does not carry on a trade or business in Singapore or elsewhere on the date of the acquisition of the shares;
(b)
the acquiring subsidiary does not claim any deduction for any capital expenditure or transaction costs under this section for that year of assessment or any stamp duty relief under section 15A of the Stamp Duties Act 1929; and
(c)
the acquiring subsidiary is on that date wholly‑owned by the acquiring company —(i)
directly, in the case of subsection (16)(a)(ii) or (b)(ii) where the date of the qualifying acquisition is before 17 February 2012; and
(ii)
whether directly or indirectly, in every other case.[2/2016]
(16C) The conditions in subsection (16)(a)(iii), (b)(iii), (c)(iii) and (d)(iii) are —(a)
the intermediate company is wholly‑owned (whether directly or indirectly) by the acquiring company on the date of the acquisition of the shares;
(b)
the intermediate company is incorporated for the primary purpose of acquiring and holding shares in other companies;
(c)
the intermediate company does not carry on a trade or business in Singapore or elsewhere on that date; and
(d)
the intermediate company does not claim any deduction for any capital expenditure or transaction costs under this section for that year of assessment or any stamp duty relief under section 15A of the Stamp Duties Act 1929.[2/2016]
(16D) The conditions in subsection (16)(a)(iv), (b)(iv), (c)(iv) and (d)(iv) are —(a)
the target company or the subsidiary carries on a trade or business in Singapore or elsewhere on the date of the acquisition of the shares; and
(b)
the target company or the subsidiary has in its employment at least 3 employees at all times during the period of 12 months immediately before that date.[2/2016]
(16E) For the purposes of subsections (16)(c)(v) and (d)(v) and (17)(db), the Minister may by regulations prescribe such conditions as the Minister considers necessary to ensure that the acquiring company or acquiring subsidiary is not merely a passive shareholder of the target company, including requiring the company or subsidiary to exert significant influence (within the meaning of FRS 28, SFRS(I) 1‑28, or SFRS for Small Entities) over the target company.[2/2016; 32/2019; 27/2021]
(16F) In subsection (16E), “FRS 28”, “SFRS(I) 1‑28” and “SFRS for Small Entities” mean the financial reporting standards known respectively as —(a)
Financial Reporting Standard 28 (Investments in Associates and Joint Ventures);
(b)
Singapore Financial Reporting Standard (International) 1‑28 (Investments in Associates and Joint Ventures); and
(c)
Singapore Financial Reporting Standard for Small Entities,
that are made by the Accounting Standards Committee under Part 3 of the Accounting Standards Act 2007, as amended from time to time.
[32/2019]
[Act 36 of 2022 wef 01/04/2023]
(17) No deduction in respect of any qualifying acquisition of ordinary shares in a target company may be made to the acquiring company for the year of assessment relating to the basis period of the acquiring company in which any of the following events occurs or for any subsequent year:(a)
where the qualifying acquisition is one mentioned in subsection (4) or (4A)(c), (d), (e) or (f), after the date of the acquisition of the shares, the target company issues additional ordinary shares which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to 50% or less;
(aa)
where the qualifying acquisition is one mentioned in subsection (4A)(a) or (b), after the date of the acquisition of the shares, the target company issues additional ordinary shares which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to less than 20%;
(b)
the acquiring company —(i)
ceases to carry on a trade or business in Singapore; or
(ii)
ceases to have at least 3 local employees;
(c)
where the qualifying acquisition is one mentioned in subsection (4)(a) or (b) or (4A)(c) or (d), the acquiring company or the acquiring subsidiary (as the case may be) divests of its shares in the target company which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to 50% or less, and such divestment occurs in a basis period of the acquiring company other than that for the 1st year of assessment;
(d)
where the qualifying acquisition is one mentioned in subsection (4)(c) or (d) or (4A)(e) or (f), the acquiring company or the acquiring subsidiary (as the case may be) divests of its shares in the target company which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to a percentage below 75%, and such divestment occurs in a basis period of the acquiring company other than that for the 1st year of assessment;
(da)
where the qualifying acquisition is one mentioned in subsection (4A)(a) or (b), the acquiring company or the acquiring subsidiary (as the case may be) divests its shares in the target company which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to any percentage below 20%, and such divestment occurs in a basis period of the acquiring company other than that for the 1st year of assessment;
(db)
where the qualifying acquisition is one mentioned in subsection (4A)(a) or (b), the acquiring company or the acquiring subsidiary (as the case may be) fails to satisfy any condition prescribed under subsection (16E);
(e)
the acquiring company or, if the acquiring company is a subsidiary of another company, its ultimate holding company, ceases to be a Singapore company; or[Act 33 of 2022 wef 04/11/2022]
(f)
the acquiring subsidiary and every intermediate company through which the acquiring subsidiary is indirectly owned by the acquiring company —(i)
carries on any trade or business in Singapore or elsewhere;
(ii)
claims a deduction under this section for capital expenditure or transaction costs incurred or claims any stamp duty relief under section 15A of the Stamp Duties Act 1929; or
(iii)
ceases to be wholly‑owned by the acquiring company —(A)
directly, in the case of a qualifying acquisition the date of which is before 17 February 2012; and
(B)
whether directly or indirectly, in the case of a qualifying acquisition the date of which is on or after 17 February 2012.[2/2016; 27/2021]
(18) If the Comptroller is satisfied that the shareholders of the acquiring company on the first day of the year of assessment in which the deduction is to be allowed in respect of a qualifying acquisition are not substantially the same as its shareholders on the date of the acquisition of the shares, then no deduction in respect of the qualifying acquisition may be made to the acquiring company for the year of assessment relating to the basis period of the acquiring company in which the deduction is to be allowed and for any subsequent year of assessment.
Modifications for groups of companies
(19) Where the acquiring company or the acquiring subsidiary (as the case may be) and the target company are part of the same group of companies on the date of a qualifying acquisition of ordinary shares in a target company by the acquiring company or the acquiring subsidiary (as the case may be), no deduction may be made under this section in respect of that qualifying acquisition unless the total number of ordinary shares acquired by the acquiring company or the acquiring subsidiary (as the case may be) results in an increase in the total number of ordinary shares of the target company held on that date by all companies in the group (excluding the target company) and, where there is such an increase —(a)
a deduction is only allowed under this section for; and
(b)
references in subsections (7) to (10A) to any capital expenditure for a qualifying acquisition are accordingly references to,
the capital expenditure in respect of the number of such shares that corresponds to such increase.
[2/2016]
(19A) The Minister or such person as he may appoint may, for any particular qualifying acquisition made during the period from 17 February 2012 to 31 March 2020 (both dates inclusive), waive the requirement in subsections (16A)(d) and (17)(e) in relation to the ultimate holding company of the acquiring company, subject to such conditions that the Minister or the person he has appointed may impose.[2/2016; 41/2020]
(19B) If —(a)
any requirement under subsections (16A)(d) and (17)(e) has been waived (whether before, on or after 2 December 2019) for an acquiring company in respect of any qualifying acquisition under subsection (19A); and
(b)
the acquiring company fails to comply with a condition subsequent imposed under subsection (19A) for such waiver,
then, if the Minister or the person appointed by the Minister is satisfied, having regard to the acquiring company’s representation and all the relevant circumstances of the case, that it is just and reasonable to do so, the Minister or appointed person —
(c)
may make a determination that the company is not entitled to any deduction in respect of the qualifying acquisition 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]
(19C) If a determination has been made under subsection (19B), then (despite anything in this section) —(a)
any deduction that has already been made to the acquiring company in respect of the qualifying acquisition for each year of assessment beginning with the specified year of assessment is treated for the purposes of this section as having been wrongly allowed, and the Comptroller may, subject to section 74, make an assessment or additional assessment on the company for those years of assessment to make good any tax shortfall; and
(b)
no deduction may be made to the company for the qualifying acquisition —(i)
for any year of assessment after the year or years of assessment mentioned in paragraph (a); or
(ii)
if no deduction 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]
Carry forward of deductions
(20) Subject to subsection (21), 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 deduction falling to be allowed under this section, the balance of the deduction is to be added to, and is deemed to form part of the corresponding deduction (if any) for the next succeeding year of assessment, and if no such corresponding deduction falls to be allowed for that year, is deemed to constitute the corresponding deduction for that year, and so on for subsequent years of assessment.
(21) No balance may be added to and be deemed to form part of the corresponding deduction (if any) to be given to an acquiring company under subsection (20) for a year of assessment unless the Comptroller is satisfied that the shareholders of the acquiring company on the last day of the year of assessment in which the deduction was claimed were substantially the same as the shareholders of the acquiring company on the first day of the firstmentioned year of assessment; and such balance must not be allowed in any subsequent year of assessment.
Exemption
(22) 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 subsections (18) and (21).
Deductions that ought not to have been allowed
(23) Despite section 74(1) and (4), where it appears to the Comptroller that a deduction or any part thereof under this section which has been allowed to any acquiring company in any year of assessment ought not to have been allowed by virtue of —(a)
the occurrence of any event specified in subsection (17) or (18);
(b)
the failure of the acquiring company or the acquiring subsidiary (as the case may be) to pay the consideration for acquiring the shares of the target company in full within 6 months from the date of the acquisition of the shares or, in the case of consideration that is contingent consideration, within 6 months from the date the contingent consideration is incurred;
(c)
a reduction in the consideration paid in relation to the share acquisition upon satisfaction of indemnity conditions as may be specified in the agreement for the sale of the ordinary shares of the target company; or
(d)
section 33,
the Comptroller may, at any time, for the purposes of making good any loss of tax attributable to the deduction or part thereof, assess the person who has utilised the deduction 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.
Regulations
(24) The Minister may make regulations —(a)
to provide for the disallowance of or for the adjustments to be made to the amount of any deduction allowed in any year of assessment under this section where the acquiring company or the acquiring subsidiary (as the case may be) divests itself of any of the ordinary shares it holds in the target company;
(b)
to provide for the application of this section to a business trust, subject to such modifications as may be prescribed, including treating, in prescribed circumstances, a business trust and any company whose shares are trust property thereof as companies within a group of companies, and a holding of units in a business trust as a holding of shares in a company;
(c)
to prescribe such matters as are required or authorised to be prescribed under this section; and
(d)
generally for giving full effect to or for carrying out the purposes of this section.
Interpretation
(25) In this section —“capital expenditure”, in relation to any acquisition of shares, means consideration for the shares acquired whether paid in cash or in shares of the acquiring company or both, but excludes transaction costs (including but not limited to due diligence and valuation costs) and any other similar costs;
“central hirer”, in relation to a central hiring arrangement for a group of related parties, means the person who carries out hiring functions for those parties under the arrangement;[Act 33 of 2022 wef 04/11/2022]
“central hiring arrangement” means an arrangement for a group of related parties entered into for a bona fide commercial reason, where the hiring functions of the parties in the group are carried out by a single person;[Act 33 of 2022 wef 04/11/2022]
“contingent consideration”, in relation to an acquisition of ordinary shares in a target company, means such part of the total consideration for the acquisition that would be incurred only upon the satisfaction of such conditions in respect of the target company as may be specified in the agreement for the acquisition entered into by the acquiring company or the acquiring subsidiary, as the case may be;
“group of companies” means 2 or more companies each of which is either a holding company or subsidiary of the other or any of the others;
[Deleted by Act 33 of 2022 wef 04/11/2022]
“local employee” means an individual who —(a)
is a citizen of Singapore or a Singapore permanent resident;
(b)
makes contributions in respect of the income derived from his or her employment with the acquiring company to the Central Provident Fund which are obligatory under the Central Provident Fund Act 1953; and
(c)
is any of the following:(i)
an employee of the acquiring company;
(ii)
for the year of assessment 2020 or a subsequent year of assessment — an individual who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the acquiring company —(A)
who is deployed to work solely for the acquiring company; and
(B)
whose salary and other remuneration is borne, directly or indirectly, by the acquiring company and not claimed by the central hirer as a deduction against the central hirer’s own income;
(iii)
for the year of assessment 2020 or a subsequent year of assessment — an employee of another person (called B) —(A)
who is seconded to the acquiring company under a bona fide commercial arrangement to work solely for the acquiring company; and
(B)
whose salary and other remuneration is borne, directly or indirectly, by the acquiring company and not claimed by B as a deduction against B’s own income,
but excludes a director as defined in section 4 of the Companies Act 1967;
[Act 33 of 2022 wef 04/11/2022]
“Singapore company” means a company incorporated in Singapore and resident in Singapore;
“transaction costs” means professional fees that are necessarily incurred for the qualifying acquisition of ordinary shares in the target company —(a)
including legal fees, accounting or tax advisor’s fees and valuation fees; but
(b)
excluding any professional fees (including the fees mentioned in paragraph (a)) incurred in respect of loan arrangements and costs incidental thereto, borrowing costs, and stamp duty and any other taxes, incurred for the qualifying acquisition of ordinary shares in the target company;
“ultimate holding company” has the meaning given by section 5A of the Companies Act 1967.
(26) In this section, the date of acquisition of ordinary shares in a target company is —(a)
the date on which the agreement for the sale of those shares is entered into by the acquiring company or the acquiring subsidiary, as the case may be; or
(b)
in the absence of an agreement mentioned in paragraph (a), the date of the transfer of those shares from the target company to the acquiring company or the acquiring subsidiary, as the case may be.
(27) For the purposes of subsection (16A), a company is connected with another if —(a)
at least 75% of the total number of ordinary shares in one company are beneficially held, directly or indirectly, by the other; or
(b)
at least 75% of the total number of ordinary shares in each of the 2 companies are beneficially held, directly or indirectly, by a third company.[2/2016]
[Act 33 of 2022 wef 04/11/2022]
(28) For the purposes of subsections (18), (21) and (22) —(a)
the shareholders of the acquiring company at any date are not deemed to be substantially the same as the shareholders of that company 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 the acquiring 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.
(29) In this section, a reference to capital expenditure and transaction costs excludes any such expenditure and costs to the extent that they are or are to be subsidised by grants or subsidies from the Government or a statutory board.[37L
—(1) Subject to this section, where —(a)
a Singapore company (called in this section the acquiring company);
(b)
any one or more subsidiaries of the Singapore company that is or are wholly‑owned by the Singapore company, and is incorporated for the primary purpose of acquiring and holding shares in other companies (called in this section the acquiring subsidiary); or
(c)
both the acquiring company and any one or more acquiring subsidiaries,
incurs or incur capital expenditure during the period from 1 April 2010 to 31 December 2030 (both dates inclusive) for any qualifying acquisition of ordinary shares in another company (called in this section the target company), the acquiring company may claim the deductions specified in subsection (1A), in accordance with this section.
[2/2016; 41/2020]
[Act 25 of 2025 wef 08/12/2025]
(1A) The deductions for the purposes of subsection (1) are as follows:(a)
a deduction for the capital expenditure referred to in that subsection; and
(b)
a deduction of an amount equivalent to twice the amount of transaction costs incurred for qualifying acquisitions made during the period from 17 February 2012 to 31 December 2030 (both dates inclusive).[2/2016; 41/2020]
[Act 25 of 2025 wef 08/12/2025]
(2) Any claim for deduction under this section must be made at the time of lodgment of the return of income for the year of assessment relating to the basis period of the acquiring company in which the capital expenditure is incurred or within such further time as the Comptroller may allow.
(3) For the purposes of subsections (1) and (2), capital expenditure for an acquisition of ordinary shares in a target company is treated as being incurred on the date of the acquisition of those shares.
(4) In this section, a qualifying acquisition of ordinary shares in a target company by an acquiring company or an acquiring subsidiary is any of the following:(a)
an acquisition made during the period from 1 April 2010 to 31 March 2015 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total more than 50% of the total number of ordinary shares in the target company where, before the date of the acquisition, such total ownership was 50% or less of the total number of ordinary shares in the target company;
(b)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition mentioned in paragraph (a);
(c)
an acquisition made during the period from 1 April 2010 to 31 March 2015 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total 75% or more of the total number of ordinary shares in the target company where —(i)
before the date of the acquisition, such total ownership was more than 50% but less than 75% of the total number of ordinary shares in the target company; and
(ii)
the date of the acquisition does not fall in the same basis period of the acquiring company as the date of the acquisition mentioned in paragraph (a);
(d)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition mentioned in paragraph (c) and is before 1 April 2016,
provided that at the end of that basis period of the acquiring company, such total ownership is more than 50% (in the case of paragraphs (a) and (b)) or 75% or more (in the case of paragraphs (c) and (d)) of the total number of ordinary shares in the target company.
[2/2016]
(4A) In this section, and subject to the applicable condition in subsection (4B) being met, each of the following is also a qualifying acquisition of ordinary shares in a target company by an acquiring company or an acquiring subsidiary:(a)
an acquisition made during the period from 1 April 2015 to 31 December 2030 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total 20% or more but 50% or less of the total number of ordinary shares in the target company, where —(i)
before the date of the acquisition, such total ownership was less than 20% of the total number of ordinary shares in the target company; and
(ii)
the date of the acquisition does not fall in the same basis period of the acquiring company as the date of the acquisition mentioned in paragraph (c);[Act 25 of 2025 wef 08/12/2025]
(b)
any other acquisition made during the period from 1 April 2015 to 31 December 2030 (both dates inclusive) the date of which falls in the same basis period of the acquiring company as that of the acquisition mentioned in paragraph (a);[Act 25 of 2025 wef 08/12/2025]
(c)
an acquisition made during the period from 1 April 2015 to 31 December 2030 (both dates inclusive) that results in the acquiring company and its acquiring subsidiaries owning together in total more than 50% of the total number of ordinary shares in the target company where, before the date of the acquisition, such total ownership was 50% or less of the total number of ordinary shares in the target company;[Act 25 of 2025 wef 08/12/2025]
(d)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition mentioned in paragraph (c);
(e)
an acquisition made on or after 1 April 2015 but before 1 April 2016 that results in the acquiring company and its acquiring subsidiaries owning together in total 75% or more of the total number of ordinary shares in the target company where —(i)
before the date of the acquisition, such total ownership was more than 50% but less than 75% of the total number of ordinary shares in the target company;
(ii)
the date of the acquisition does not fall in the same basis period of the acquiring company as the date of the acquisition mentioned in paragraph (c); and
(iii)
before 1 April 2015 and not earlier than 12 months before the acquisition, the acquiring company or its acquiring subsidiary had made an acquisition of ordinary shares of any amount in the target company;
(f)
any other acquisition the date of which falls in the same basis period of the acquiring company as that of the acquisition mentioned in paragraph (e) and is before 1 April 2016.[2/2016; 41/2020]
(4B) In subsection (4A), the conditions are —(a)
in the case of paragraphs (a) and (b) of that subsection, at the end of that basis period of the acquiring company, the total ownership of ordinary shares in the target company mentioned in paragraph (a) of that subsection is between 20% and 50% (both inclusive);
(b)
in the case of paragraphs (c) and (d) of that subsection, at the end of that basis period of the acquiring company, the total ownership of ordinary shares in the target company mentioned in paragraph (c) of that subsection is more than 50%; or
(c)
in the case of paragraphs (e) and (f) of that subsection, at the end of that basis period of the acquiring company, the total ownership of ordinary shares in the target company mentioned in paragraph (e) of that subsection is 75% or more.[2/2016]
(5) An acquiring company may elect for its qualifying acquisitions to be, instead of those mentioned in the provisions in the first column of the following table, acquisitions —(a)
the dates of which fall within a prescribed period; and
(b)
which include an acquisition mentioned in the provisions set out opposite in the second column of the table,
and the provisions of this section apply to the acquisitions so elected subject to such modifications as may be prescribed:
Original acquisitions
under:
Elected acquisitions to
include an acquisition
under:
subsection (4)(a) and (b), or subsection (4)(c) and (d)
subsection (4)(a) or (c)
subsection (4A)(c) and (d), or subsection (4A)(e) and (f)
subsection (4A)(c) or (e)
[2/2016]
(5A) The election under subsection (5) may only be made for acquisitions made during the period from 1 April 2010 to 31 March 2016 (both dates inclusive).[2/2016]
(6) The election under subsection (5) must be made by the acquiring company at the time of lodgment of the return of its income for the year of assessment relating to the basis period of the acquiring company in which the date of the acquisition mentioned in subsection (4)(a) or (c) or subsection (4A)(c) or (e) (as the case may be) falls, or within such further time as the Comptroller may allow.[2/2016]
(7) For the purpose of subsection (1) and subject to subsections (11), (11A), (11AB), (11B), (11C) and (19) and the regulations made under subsection (24), deductions in respect of capital expenditure for a qualifying acquisition of ordinary shares in a target company by an acquiring company or an acquiring subsidiary (as the case may be) are to be allowed as follows:(a)
to the extent the capital expenditure is not contingent consideration or, if it is contingent consideration, is incurred in the same basis period of the acquiring company as that in which the date of the acquisition of the shares falls, the deduction allowed is the amount specified in subsection (8) for acquisitions mentioned in subsection (4), and the amount specified in subsection (8A) for acquisitions mentioned in subsection (4A), for each of 5 successive years of assessment (called in this section the 1st, 2nd, 3rd, 4th and 5th years of assessment, respectively), beginning with the year of assessment relating to the basis period of the acquiring company in which the date of the acquisition of the shares falls;
(b)
to the extent the capital expenditure is contingent consideration that is incurred in a basis period of the acquiring company after the basis period of the acquiring company for the 1st year of assessment, the deduction allowed is —(i)
where the contingent consideration is incurred in the basis period of the acquiring company for the 2nd, 3rd or 4th year of assessment, the amount specified in subsection (9) for acquisitions mentioned in subsection (4), and the amount specified in subsection (9A) for acquisitions mentioned in subsection (4A), for that year of assessment and for each successive year of assessment up to and including the 5th year of assessment; or
(ii)
where the contingent consideration is incurred in the basis period of the acquiring company for the 5th year of assessment or a subsequent year of assessment, the amount specified in subsection (10) for acquisitions mentioned in subsection (4), and the amount specified in subsection (10A) for acquisitions mentioned in subsection (4A), for that year of assessment.[2/2016; 34/2016]
(8) Subject to subsections (13) and (19), the amount referred to in subsection (7)(a) for an acquisition mentioned in subsection (4) is calculated in accordance with the formula
where A
is the capital expenditure to the extent that it is not contingent consideration or, if it is contingent consideration, is incurred in the same basis period of the acquiring company as that in which the date of the acquisition of the shares falls.
[2/2016]
(8A) Subject to subsections (13) and (19), the amount referred to in subsection (7)(a) for an acquisition mentioned in subsection (4A) is calculated in accordance with the formula
where A
is the capital expenditure to the extent that it is not contingent consideration or, if it is contingent consideration, is incurred in the same basis period of the acquiring company as that in which the date of the acquisition of the shares falls.
[2/2016]
(9) Subject to subsections (13) and (19), the amount mentioned in subsection (7)(b)(i) for an acquisition mentioned in subsection (4) is calculated in accordance with the formula
where B
is the contingent consideration that is incurred in the basis period of the acquiring company for the 2nd, 3rd or 4th year of assessment, whichever is applicable; and
C
is —
(a)
2 (where the contingent consideration is incurred in the basis period of the acquiring company for the 2nd year of assessment);
(b)
3 (where the contingent consideration is incurred in the basis period of the acquiring company for the 3rd year of assessment); or
(c)
4 (where the contingent consideration is incurred in the basis period of the acquiring company for the 4th year of assessment),
whichever is applicable.
[2/2016]
(9A) Subject to subsections (13) and (19), the amount mentioned in subsection (7)(b)(i) for an acquisition mentioned in subsection (4A) is calculated in accordance with the formula
where B
is the contingent consideration that is incurred in the basis period of the acquiring company for the 2nd, 3rd or 4th year of assessment, whichever is applicable; and
C
is —
(a)
2 (where the contingent consideration is incurred in the basis period of the acquiring company for the 2nd year of assessment);
(b)
3 (where the contingent consideration is incurred in the basis period of the acquiring company for the 3rd year of assessment); or
(c)
4 (where the contingent consideration is incurred in the basis period of the acquiring company for the 4th year of assessment),
whichever is applicable.
[2/2016]
(10) Subject to subsections (13) and (19), the amount mentioned in subsection (7)(b)(ii) for an acquisition mentioned in subsection (4) is calculated in accordance with the formula
where D
is the contingent consideration that is incurred in the basis period of the acquiring company for the 5th year of assessment or the subsequent year of assessment, whichever is applicable.
[2/2016]
(10A) Subject to subsections (13) and (19), the amount mentioned in subsection (7)(b)(ii) for an acquisition mentioned in subsection (4A) is calculated in accordance with the formula
where D
is the contingent consideration that is incurred in the basis period of the acquiring company for the 5th year of assessment or the subsequent year of assessment, whichever is applicable.
[2/2016]
(11) The following provisions apply in determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in one or more target companies whose dates of acquisition fall within one basis period of the acquiring company:(a)
where the aggregate of the amounts of “A” mentioned in subsection (8) in respect of all such qualifying acquisitions exceeds $100 million, the amount by which the aggregate exceeds $100 million is disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the aggregate mentioned in paragraph (a) does not exceed $100 million but the aggregate of the following exceeds $100 million:(i)
the aggregate mentioned in paragraph (a);
(ii)
the aggregate of all contingent consideration in respect of all such qualifying acquisitions incurred in the basis period of the acquiring company for any year of assessment subsequent to the 1st year of assessment and in any earlier year of assessment other than the 1st year of assessment,
the amount by which the aggregate of sub‑paragraphs (i) and (ii) exceeds $100 million is to be disregarded for the purposes of the deduction to be allowed under this section.
(11A) The following provisions apply for the purpose of determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in one or more target companies whose dates of acquisition fall within one basis period of the acquiring company, and are qualifying acquisitions referred to in subsection (11AA):(a)
where the sum of the amounts of “A” mentioned in subsection (8A) in respect of all such qualifying acquisitions exceeds $20 million, the amount by which the sum exceeds $20 million is to be disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the sum mentioned in paragraph (a) does not exceed $20 million but the sum of the following exceeds $20 million:(i)
the sum mentioned in paragraph (a);
(ii)
the sum of all contingent consideration in respect of all such qualifying acquisitions incurred in the basis period of the acquiring company for any year of assessment subsequent to the 1st year of assessment and in any earlier year of assessment other than the 1st year of assessment,
the amount by which the sum of sub‑paragraphs (i) and (ii) exceeds $20 million is to be disregarded for the purposes of the deduction to be allowed under this section.
[2/2016; 34/2016]
(11AA) Subsection (11A) applies to the following qualifying acquisitions:(a)
a qualifying acquisition made before 1 April 2016 except (if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made on or after 1 April 2016) a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) that has the same target company as that of the anchor acquisition;
(b)
if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made before 1 April 2016, a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) made on or after 1 April 2016 that has the same target company as the anchor acquisition.[34/2016]
(11AB) The following provisions apply for the purpose of determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in one or more target companies whose dates of acquisition fall within one basis period of the acquiring company, and are qualifying acquisitions mentioned in subsection (11AC):(a)
where the sum of the amounts of “A” mentioned in subsection (8A) in respect of all such qualifying acquisitions exceeds $40 million, the amount by which the sum exceeds $40 million is to be disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the sum mentioned in paragraph (a) does not exceed $40 million but the sum of the following exceeds $40 million:(i)
the sum mentioned in paragraph (a);
(ii)
the sum of all contingent consideration in respect of all such qualifying acquisitions incurred in the basis period of the acquiring company for any year of assessment subsequent to the first year of assessment and in any earlier year of assessment other than the first year of assessment,
the amount by which the sum of sub‑paragraphs (i) and (ii) exceeds $40 million is to be disregarded for the purposes of the deduction to be allowed under this section.
[34/2016]
(11AC) Subsection (11AB) applies to the following qualifying acquisitions:(a)
a qualifying acquisition made on or after 1 April 2016 except (if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made before 1 April 2016) a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) that has the same target company as the anchor acquisition;
(b)
if the qualifying acquisitions in that basis period include an acquisition mentioned in subsection (4A)(a) or (c) (called in this paragraph the anchor acquisition) that is made on or after 1 April 2016, a qualifying acquisition mentioned in subsection (4A)(b) or (d) (as the case may be) made before 1 April 2016 that has the same target company as the anchor acquisition.[34/2016]
(11B) Despite subsections (11) and (11A), the following provisions apply in determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in target companies whose dates of acquisition fall within one basis period of the acquiring company, if the qualifying acquisitions in that basis period include at least one acquisition mentioned in subsection (4)(a) or (c), and at least one acquisition mentioned in subsection (4A)(a), (c) or (e) that is made before 1 April 2016, but does not include any acquisition mentioned in subsection (4A)(a) or (c) that is made on or after 1 April 2016:(a)
where the sum of the following exceeds $5 million:(i)
the amount determined by the formula “0.05 × A” in subsection (8) in respect of those acquisitions which are acquisitions mentioned in subsection (4);
(ii)
the amount determined by the formula “0.25 × A” in subsection (8A) in respect of those acquisitions which are acquisitions mentioned in subsection (4A),
the excess is to be disregarded for the purposes of the deduction to be allowed under this section;
(b)
where the sum mentioned in paragraph (a) does not exceed $5 million but the sum of the following exceeds $5 million:(i)
the sum mentioned in paragraph (a);
(ii)
the amount determined by the formula “0.05 × B” in subsection (9) in respect of those acquisitions which are acquisitions mentioned in subsection (4);
(iii)
the amount determined by the formula “0.25 × B” in subsection (9A) in respect of those acquisitions which are acquisitions mentioned in subsection (4A);
(iv)
the amount determined by the formula “0.05 × D” in subsection (10) in respect of those acquisitions which are acquisitions mentioned in subsection (4);
(v)
the amount determined by the formula “0.25 × D” in subsection (10A) in respect of those acquisitions which are acquisitions mentioned in subsection (4A),
the excess is to be disregarded for the purposes of the deduction to be allowed under this section.
[2/2016; 34/2016]
(11C) Despite subsections (11), (11A) and (11AB), the following provisions apply in determining the amount of deductions under subsection (7) to be allowed to the acquiring company for all qualifying acquisitions of ordinary shares in target companies whose dates of acquisition fall within one basis period of the acquiring company, if the qualifying acquisitions in that basis period include at least one acquisition mentioned in subsection (4)(a) or (c) or subsection (4A)(a), (c) or (e) that is made before 1 April 2016, and at least one acquisition mentioned in subsection (4A)(a) and (c) that is made on or after 1 April 2016:(a)
where the sum of the following (called in this subsection X) exceeds $5 million:(i)
the sum of the amounts determined by the following formulae in respect of those acquisitions which are acquisitions mentioned in subsection (4):(A)
“0.05 × A” in subsection (8);
(B)
“0.05 × B” in subsection (9);
(C)
“0.05 × D” in subsection (10);
(ii)
the sum of the amounts determined by the following formulae in respect of those acquisitions which are acquisitions mentioned in subsection (11AA):(A)
“0.25 × A” in subsection (8A);
(B)
“0.25 × B” in subsection (9A);
(C)
“0.25 × D” in subsection (10A),
the excess is to be disregarded for the purposes of the deduction to be allowed under this section in respect of those acquisitions;
(b)
where the sum of the amounts (called in this subsection Y) determined by the following formulae in respect of those acquisitions which are acquisitions mentioned in subsection (11AC):(i)
“0.25 × A” in subsection (8A);
(ii)
“0.25 × B” in subsection (9A);
(iii)
“0.25 × D” in subsection (10A);
exceeds $10 million, the excess is to be disregarded for the purposes of the deduction to be allowed under this section in respect of those acquisitions;
(c)
despite paragraphs (a) and (b), where the sum of X and Y exceeds $10 million, the excess is to be disregarded for the purposes of the deduction to be allowed under this section for all of the acquisitions mentioned in those paragraphs.[34/2016]
(12) For the purposes of subsections (8), (8A), (9), (9A), (10), (10A), (11), (11A), (11B) and (11C), the amount of any consideration paid for any qualifying acquisition that comprises shares in the acquiring company, is the market value of the shares in the acquiring company as at the date of the acquisition of the shares and, if it is not possible to determine such value, the net asset value of those shares in the acquiring company at the end of its accounting period immediately before the date of the acquisition of those shares.[2/2016; 34/2016]
(13) Despite subsections (8), (8A), (9), (9A), (10) and (10A), where any amount of “A” referred to in subsection (8) or (8A), “B” referred to in subsection (9) or (9A), or “D” referred to in subsection (10) or (10A), that is paid by the acquiring company or the acquiring subsidiary (as the case may be) in respect of any qualifying acquisition is greater than the amount which would have been paid if the acquiring company or the acquiring subsidiary (as the case may be) were not a related party of any of the shareholders in the target company, the firstmentioned amount is substituted with the second‑mentioned amount, and any question regarding the quantum of the second‑mentioned amount is to be determined by the Comptroller.[2/2016]
[Act 33 of 2022 wef 04/11/2022]
(14) A deduction under this section to an acquiring company must be made against the balance of its statutory income after the deductions allowed under sections 37(3), 37A and 37F.
(15) Section 14C(4) and (5) applies in relation to the deduction to be allowed in this section, 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 or 37R) is a reference to the deduction to be allowed in this section;[Act 30 of 2023 wef 30/10/2023]
(b)
a reference to a specified amount of the expenditure or payments in section 14C(4) is a reference to an amount computed in accordance with the formula
where E
is the deduction to be allowed in this section;
F
is the rate of tax specified in section 43(1)(a); and
G
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.
(15A) For the purpose of subsection (1), a deduction in respect of transaction costs for qualifying acquisitions of ordinary shares in a target company is subject to the following:(a)
the deduction in relation to any transaction costs incurred must be allowed for —(i)
the year of assessment in which a claim is first made for the deduction allowable in respect of the capital expenditure incurred on the qualifying acquisition to which those transaction costs relate; or
(ii)
the year of assessment which relates to the basis period in which those transaction costs are incurred,
whichever is the later; and
(b)
the deduction is subject to a limit of $100,000 in transaction costs incurred in relation to all qualifying acquisitions of ordinary shares in all target companies (whether by the acquiring company, or by one or more of its acquiring subsidiaries, or by a combination of both) for which claims are first made in the year of assessment mentioned in paragraph (a)(i) for the deductions allowable in respect of the capital expenditure incurred on those acquisitions.
(16) A deduction under this section for a qualifying acquisition (called the subject acquisition) may be made to an acquiring company for any year of assessment only if —(a)
where the subject acquisition is one mentioned in subsection (4)(a) or (c) or (4A)(c) or (e) —(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition (being a date on or after 17 February 2012), the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C); and
(iv)
the target company, or a subsidiary that is —(A)
if the date of the subject acquisition is before 17 February 2012, wholly‑owned by the target company directly; or
(B)
if the date of the subject acquisition is on or after 17 February 2012, wholly‑owned by the target company whether directly or indirectly,
satisfies the conditions in subsection (16D);
(b)
where the subject acquisition is one mentioned in subsection (4)(b) or (d) or (4A)(d) or (f) —(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition (being a date on or after 17 February 2012), the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C);
(iv)
the target company, or a subsidiary that is —(A)
if the date of the acquisition is before 17 February 2012, wholly‑owned by the target company directly; or
(B)
if the date of the acquisition is on or after 17 February 2012, wholly‑owned by the target company whether directly or indirectly,
satisfies the conditions in subsection (16D); and
(v)
the conditions in paragraph (a) are also satisfied in relation to —(A)
where the subject acquisition is one mentioned in subsection (4)(b) — a qualifying acquisition mentioned in subsection (4)(a);
(B)
where the subject acquisition is one mentioned in subsection (4)(d) — a qualifying acquisition mentioned in subsection (4)(c);
(C)
where the subject acquisition is one mentioned in subsection (4A)(d) — a qualifying acquisition mentioned in subsection (4A)(c); or
(D)
where the subject acquisition is one mentioned in subsection (4A)(f) — a qualifying acquisition mentioned in subsection (4A)(e);
(c)
where the subject acquisition is one mentioned in subsection (4A)(a) —(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition, the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C);
(iv)
the target company, or a subsidiary that is wholly‑owned by the target company whether directly or indirectly, satisfies the conditions in subsection (16D); and
(v)
the conditions prescribed under subsection (16E) are satisfied; and
(d)
where the subject acquisition is one mentioned in subsection (4A)(b) —(i)
the acquiring company satisfies the conditions in subsection (16A);
(ii)
where the subject acquisition is made by an acquiring subsidiary, the acquiring subsidiary satisfies the conditions in subsection (16B);
(iii)
where the subject acquisition is made by an acquiring subsidiary and, on the date of the acquisition, the acquiring subsidiary is indirectly owned by the acquiring company through one or more intermediate companies, every such intermediate company satisfies the conditions in subsection (16C);
(iv)
the target company, or a subsidiary that is wholly‑owned by the target company whether directly or indirectly, satisfies the conditions in subsection (16D);
(v)
the conditions prescribed under subsection (16E) are satisfied; and
(vi)
the conditions in paragraph (c) are also satisfied in relation to a qualifying acquisition mentioned in subsection (4A)(a).[2/2016]
(16A) The conditions in subsection (16)(a)(i), (b)(i), (c)(i) and (d)(i) are —(a)
the acquiring company is carrying on a trade or business in Singapore on the date of the acquisition of the shares;
(b)
the acquiring company has in its employment at least 3 local employees at all times during the period of 12 months immediately before that date;
(c)
unless otherwise prescribed under subsection (24), the acquiring company is not connected to the target company for at least 2 years immediately before that date; and
(d)
in a case where the acquiring company is a subsidiary of another company, the acquiring company has a Singapore company as its ultimate holding company on that date.[2/2016]
[Act 33 of 2022 wef 04/11/2022]
(16B) The conditions in subsection (16)(a)(ii), (b)(ii), (c)(ii) and (d)(ii) are —(a)
the acquiring subsidiary does not carry on a trade or business in Singapore or elsewhere on the date of the acquisition of the shares;
(b)
the acquiring subsidiary does not claim any deduction for any capital expenditure or transaction costs under this section for that year of assessment or any stamp duty relief under section 15A of the Stamp Duties Act 1929; and
(c)
the acquiring subsidiary is on that date wholly‑owned by the acquiring company —(i)
directly, in the case of subsection (16)(a)(ii) or (b)(ii) where the date of the qualifying acquisition is before 17 February 2012; and
(ii)
whether directly or indirectly, in every other case.[2/2016]
(16C) The conditions in subsection (16)(a)(iii), (b)(iii), (c)(iii) and (d)(iii) are —(a)
the intermediate company is wholly‑owned (whether directly or indirectly) by the acquiring company on the date of the acquisition of the shares;
(b)
the intermediate company is incorporated for the primary purpose of acquiring and holding shares in other companies;
(c)
the intermediate company does not carry on a trade or business in Singapore or elsewhere on that date; and
(d)
the intermediate company does not claim any deduction for any capital expenditure or transaction costs under this section for that year of assessment or any stamp duty relief under section 15A of the Stamp Duties Act 1929.[2/2016]
(16D) The conditions in subsection (16)(a)(iv), (b)(iv), (c)(iv) and (d)(iv) are —(a)
the target company or the subsidiary carries on a trade or business in Singapore or elsewhere on the date of the acquisition of the shares; and
(b)
the target company or the subsidiary has in its employment at least 3 employees at all times during the period of 12 months immediately before that date.[2/2016]
(16E) For the purposes of subsections (16)(c)(v) and (d)(v) and (17)(db), the Minister may by regulations prescribe such conditions as the Minister considers necessary to ensure that the acquiring company or acquiring subsidiary is not merely a passive shareholder of the target company, including requiring the company or subsidiary to exert significant influence (within the meaning of FRS 28, SFRS(I) 1‑28, or SFRS for Small Entities) over the target company.[2/2016; 32/2019; 27/2021]
(16F) In subsection (16E), “FRS 28”, “SFRS(I) 1‑28” and “SFRS for Small Entities” mean the financial reporting standards known respectively as —(a)
Financial Reporting Standard 28 (Investments in Associates and Joint Ventures);
(b)
Singapore Financial Reporting Standard (International) 1‑28 (Investments in Associates and Joint Ventures); and
(c)
Singapore Financial Reporting Standard for Small Entities,
that are made by the Accounting Standards Committee under Part 3 of the Accounting Standards Act 2007, as amended from time to time.
[32/2019]
[Act 36 of 2022 wef 01/04/2023]
(17) No deduction in respect of any qualifying acquisition of ordinary shares in a target company may be made to the acquiring company for the year of assessment relating to the basis period of the acquiring company in which any of the following events occurs or for any subsequent year:(a)
where the qualifying acquisition is one mentioned in subsection (4) or (4A)(c), (d), (e) or (f), after the date of the acquisition of the shares, the target company issues additional ordinary shares which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to 50% or less;
(aa)
where the qualifying acquisition is one mentioned in subsection (4A)(a) or (b), after the date of the acquisition of the shares, the target company issues additional ordinary shares which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to less than 20%;
(b)
the acquiring company —(i)
ceases to carry on a trade or business in Singapore; or
(ii)
ceases to have at least 3 local employees;
(c)
where the qualifying acquisition is one mentioned in subsection (4)(a) or (b) or (4A)(c) or (d), the acquiring company or the acquiring subsidiary (as the case may be) divests of its shares in the target company which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to 50% or less, and such divestment occurs in a basis period of the acquiring company other than that for the 1st year of assessment;
(d)
where the qualifying acquisition is one mentioned in subsection (4)(c) or (d) or (4A)(e) or (f), the acquiring company or the acquiring subsidiary (as the case may be) divests of its shares in the target company which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to a percentage below 75%, and such divestment occurs in a basis period of the acquiring company other than that for the 1st year of assessment;
(da)
where the qualifying acquisition is one mentioned in subsection (4A)(a) or (b), the acquiring company or the acquiring subsidiary (as the case may be) divests its shares in the target company which reduces the total ownership of the acquiring company and its acquiring subsidiaries of the ordinary shares in the target company to any percentage below 20%, and such divestment occurs in a basis period of the acquiring company other than that for the 1st year of assessment;
(db)
where the qualifying acquisition is one mentioned in subsection (4A)(a) or (b), the acquiring company or the acquiring subsidiary (as the case may be) fails to satisfy any condition prescribed under subsection (16E);
(e)
the acquiring company or, if the acquiring company is a subsidiary of another company, its ultimate holding company, ceases to be a Singapore company; or[Act 33 of 2022 wef 04/11/2022]
(f)
the acquiring subsidiary and every intermediate company through which the acquiring subsidiary is indirectly owned by the acquiring company —(i)
carries on any trade or business in Singapore or elsewhere;
(ii)
claims a deduction under this section for capital expenditure or transaction costs incurred or claims any stamp duty relief under section 15A of the Stamp Duties Act 1929; or
(iii)
ceases to be wholly‑owned by the acquiring company —(A)
directly, in the case of a qualifying acquisition the date of which is before 17 February 2012; and
(B)
whether directly or indirectly, in the case of a qualifying acquisition the date of which is on or after 17 February 2012.[2/2016; 27/2021]
(18) If the Comptroller is satisfied that the shareholders of the acquiring company on the first day of the year of assessment in which the deduction is to be allowed in respect of a qualifying acquisition are not substantially the same as its shareholders on the date of the acquisition of the shares, then no deduction in respect of the qualifying acquisition may be made to the acquiring company for the year of assessment relating to the basis period of the acquiring company in which the deduction is to be allowed and for any subsequent year of assessment.
(19) Where the acquiring company or the acquiring subsidiary (as the case may be) and the target company are part of the same group of companies on the date of a qualifying acquisition of ordinary shares in a target company by the acquiring company or the acquiring subsidiary (as the case may be), no deduction may be made under this section in respect of that qualifying acquisition unless the total number of ordinary shares acquired by the acquiring company or the acquiring subsidiary (as the case may be) results in an increase in the total number of ordinary shares of the target company held on that date by all companies in the group (excluding the target company) and, where there is such an increase —(a)
a deduction is only allowed under this section for; and
(b)
references in subsections (7) to (10A) to any capital expenditure for a qualifying acquisition are accordingly references to,
the capital expenditure in respect of the number of such shares that corresponds to such increase.
[2/2016]
(19A) The Minister or such person as he may appoint may, for any particular qualifying acquisition made during the period from 17 February 2012 to 31 March 2020 (both dates inclusive), waive the requirement in subsections (16A)(d) and (17)(e) in relation to the ultimate holding company of the acquiring company, subject to such conditions that the Minister or the person he has appointed may impose.[2/2016; 41/2020]
(19B) If —(a)
any requirement under subsections (16A)(d) and (17)(e) has been waived (whether before, on or after 2 December 2019) for an acquiring company in respect of any qualifying acquisition under subsection (19A); and
(b)
the acquiring company fails to comply with a condition subsequent imposed under subsection (19A) for such waiver,
then, if the Minister or the person appointed by the Minister is satisfied, having regard to the acquiring company’s representation and all the relevant circumstances of the case, that it is just and reasonable to do so, the Minister or appointed person —
(c)
may make a determination that the company is not entitled to any deduction in respect of the qualifying acquisition 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]
(19C) If a determination has been made under subsection (19B), then (despite anything in this section) —(a)
any deduction that has already been made to the acquiring company in respect of the qualifying acquisition for each year of assessment beginning with the specified year of assessment is treated for the purposes of this section as having been wrongly allowed, and the Comptroller may, subject to section 74, make an assessment or additional assessment on the company for those years of assessment to make good any tax shortfall; and
(b)
no deduction may be made to the company for the qualifying acquisition —(i)
for any year of assessment after the year or years of assessment mentioned in paragraph (a); or
(ii)
if no deduction 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]
(20) Subject to subsection (21), 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 deduction falling to be allowed under this section, the balance of the deduction is to be added to, and is deemed to form part of the corresponding deduction (if any) for the next succeeding year of assessment, and if no such corresponding deduction falls to be allowed for that year, is deemed to constitute the corresponding deduction for that year, and so on for subsequent years of assessment.
(21) No balance may be added to and be deemed to form part of the corresponding deduction (if any) to be given to an acquiring company under subsection (20) for a year of assessment unless the Comptroller is satisfied that the shareholders of the acquiring company on the last day of the year of assessment in which the deduction was claimed were substantially the same as the shareholders of the acquiring company on the first day of the firstmentioned year of assessment; and such balance must not be allowed in any subsequent year of assessment.
(22) 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 subsections (18) and (21).
(23) Despite section 74(1) and (4), where it appears to the Comptroller that a deduction or any part thereof under this section which has been allowed to any acquiring company in any year of assessment ought not to have been allowed by virtue of —(a)
the occurrence of any event specified in subsection (17) or (18);
(b)
the failure of the acquiring company or the acquiring subsidiary (as the case may be) to pay the consideration for acquiring the shares of the target company in full within 6 months from the date of the acquisition of the shares or, in the case of consideration that is contingent consideration, within 6 months from the date the contingent consideration is incurred;
(c)
a reduction in the consideration paid in relation to the share acquisition upon satisfaction of indemnity conditions as may be specified in the agreement for the sale of the ordinary shares of the target company; or
(d)
section 33,
the Comptroller may, at any time, for the purposes of making good any loss of tax attributable to the deduction or part thereof, assess the person who has utilised the deduction 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.
(24) The Minister may make regulations —(a)
to provide for the disallowance of or for the adjustments to be made to the amount of any deduction allowed in any year of assessment under this section where the acquiring company or the acquiring subsidiary (as the case may be) divests itself of any of the ordinary shares it holds in the target company;
(b)
to provide for the application of this section to a business trust, subject to such modifications as may be prescribed, including treating, in prescribed circumstances, a business trust and any company whose shares are trust property thereof as companies within a group of companies, and a holding of units in a business trust as a holding of shares in a company;
(c)
to prescribe such matters as are required or authorised to be prescribed under this section; and
(d)
generally for giving full effect to or for carrying out the purposes of this section.
(25) In this section —“capital expenditure”, in relation to any acquisition of shares, means consideration for the shares acquired whether paid in cash or in shares of the acquiring company or both, but excludes transaction costs (including but not limited to due diligence and valuation costs) and any other similar costs;
“central hirer”, in relation to a central hiring arrangement for a group of related parties, means the person who carries out hiring functions for those parties under the arrangement;[Act 33 of 2022 wef 04/11/2022]
“central hiring arrangement” means an arrangement for a group of related parties entered into for a bona fide commercial reason, where the hiring functions of the parties in the group are carried out by a single person;[Act 33 of 2022 wef 04/11/2022]
“contingent consideration”, in relation to an acquisition of ordinary shares in a target company, means such part of the total consideration for the acquisition that would be incurred only upon the satisfaction of such conditions in respect of the target company as may be specified in the agreement for the acquisition entered into by the acquiring company or the acquiring subsidiary, as the case may be;
“group of companies” means 2 or more companies each of which is either a holding company or subsidiary of the other or any of the others;
[Deleted by Act 33 of 2022 wef 04/11/2022]
“local employee” means an individual who —(a)
is a citizen of Singapore or a Singapore permanent resident;
(b)
makes contributions in respect of the income derived from his or her employment with the acquiring company to the Central Provident Fund which are obligatory under the Central Provident Fund Act 1953; and
(c)
is any of the following:(i)
an employee of the acquiring company;
(ii)
for the year of assessment 2020 or a subsequent year of assessment — an individual who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the acquiring company —(A)
who is deployed to work solely for the acquiring company; and
(B)
whose salary and other remuneration is borne, directly or indirectly, by the acquiring company and not claimed by the central hirer as a deduction against the central hirer’s own income;
(iii)
for the year of assessment 2020 or a subsequent year of assessment — an employee of another person (called B) —(A)
who is seconded to the acquiring company under a bona fide commercial arrangement to work solely for the acquiring company; and
(B)
whose salary and other remuneration is borne, directly or indirectly, by the acquiring company and not claimed by B as a deduction against B’s own income,
but excludes a director as defined in section 4 of the Companies Act 1967;
[Act 33 of 2022 wef 04/11/2022]
“Singapore company” means a company incorporated in Singapore and resident in Singapore;
“transaction costs” means professional fees that are necessarily incurred for the qualifying acquisition of ordinary shares in the target company —(a)
including legal fees, accounting or tax advisor’s fees and valuation fees; but
(b)
excluding any professional fees (including the fees mentioned in paragraph (a)) incurred in respect of loan arrangements and costs incidental thereto, borrowing costs, and stamp duty and any other taxes, incurred for the qualifying acquisition of ordinary shares in the target company;
“ultimate holding company” has the meaning given by section 5A of the Companies Act 1967.
(26) In this section, the date of acquisition of ordinary shares in a target company is —(a)
the date on which the agreement for the sale of those shares is entered into by the acquiring company or the acquiring subsidiary, as the case may be; or
(b)
in the absence of an agreement mentioned in paragraph (a), the date of the transfer of those shares from the target company to the acquiring company or the acquiring subsidiary, as the case may be.
(27) For the purposes of subsection (16A), a company is connected with another if —(a)
at least 75% of the total number of ordinary shares in one company are beneficially held, directly or indirectly, by the other; or
(b)
at least 75% of the total number of ordinary shares in each of the 2 companies are beneficially held, directly or indirectly, by a third company.[2/2016]
[Act 33 of 2022 wef 04/11/2022]
(28) For the purposes of subsections (18), (21) and (22) —(a)
the shareholders of the acquiring company at any date are not deemed to be substantially the same as the shareholders of that company 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 the acquiring 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.
(29) In this section, a reference to capital expenditure and transaction costs excludes any such expenditure and costs to the extent that they are or are to be subsidised by grants or subsidies from the Government or a statutory board.[37L
Treatment of unabsorbed donations attributable to exempt income
37P.—(1) If —(a)
any donation allowable under this Act for the year of assessment 2012 or any preceding year of assessment (called in this section the attributed donation) is to be deducted from any income of a company under a provision of this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in determining the amount of its income that is exempt from tax under that provision for that or any subsequent year of assessment; and
(b)
part or all of the attributed donation (called in this section the balance) has yet to be fully deducted in determining the amount of income that is exempt from tax for the year of assessment 2012,
then the following provisions apply to the balance:
(c)
subject to paragraphs (e) to (i) and subsection (2), the balance is to be deducted from the statutory income of the company for the year of assessment 2013;
(d)
subject to paragraphs (e) to (i) and section 37B as in force immediately before 7 December 2020, where the deduction under paragraph (c) cannot be made or fully made, the balance is to be deducted from the statutory income of the company for the year of assessment 2014, and so on;
(e)
any balance not deducted against the statutory income of the company for the fifth year of assessment after the year of assessment relating to the basis period in which the donation was made must be disregarded;
(f)
for the purposes of paragraphs (c) and (d), any donation made on an earlier date is deemed to have been deducted first;
(g)
where the part of the balance that may be deducted under paragraph (c) against any type of income in accordance with subsection (2) has been so deducted and a sum remains of that part of the balance after such deduction, a deduction under paragraph (d) of the sum that so remains, or any sum that remains after one or more applications of this paragraph, is to be made in the following manner:(i)
the sum is first to be deducted against the same type of income;
(ii)
any sum remaining after that deduction is to be deducted against any other type of income in accordance with section 37B of this Act in force immediately before 7 December 2020;
(h)
despite paragraphs (c) and (d), the balance must be disregarded if the Comptroller is not satisfied that the shareholders of the company on the last day of the year in which the donation was made, were substantially the same as the shareholders of the company on the first day of the year of assessment in which the balance would otherwise be deductible; and
(i)
section 37(13) to (17) applies, with the necessary modifications, for the purposes of paragraph (h).[41/2020]
(2) The deduction under subsection (1)(c) is to be made in accordance with the following provisions:(a)
section 37B of this Act in force immediately before 7 December 2020 does not apply to the deduction;
(b)
if the company only derives normal income for that year of assessment, the balance is to be deducted against the normal income for that year of assessment;
(c)
if the company only derives concessionary income for that year of assessment, the balance is to be deducted against the concessionary income for that year of assessment;
(d)
if the company derives both normal income and concessionary income, or concessionary income that is subject to tax at different concessionary rates of tax, for that year of assessment, the balance is to be deducted against each type of income in such proportion as appears reasonable to the Comptroller in the circumstances;
(e)
if the company only derives income that is exempt from tax for that year of assessment, then section 37B of this Act in force immediately before 7 December 2020 applies, with the necessary modifications, for the purpose of making a deduction of the balance under subsection (1)(d) as if the balance were unabsorbed donation in respect of income of a company subject to tax at the rate of tax specified in section 43(1)(a).[41/2020]
(3) In this section —“concessionary income” means income that is subject to tax at a concessionary rate of tax;
“concessionary rate of tax” has the meaning given by section 14C in force immediately before 29 December 2016;
“normal income” means income that is subject to tax at the rate of tax specified in section 43(1)(a).[37M
[34/2016]
—(1) If —(a)
any donation allowable under this Act for the year of assessment 2012 or any preceding year of assessment (called in this section the attributed donation) is to be deducted from any income of a company under a provision of this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in determining the amount of its income that is exempt from tax under that provision for that or any subsequent year of assessment; and
(b)
part or all of the attributed donation (called in this section the balance) has yet to be fully deducted in determining the amount of income that is exempt from tax for the year of assessment 2012,
then the following provisions apply to the balance:
(c)
subject to paragraphs (e) to (i) and subsection (2), the balance is to be deducted from the statutory income of the company for the year of assessment 2013;
(d)
subject to paragraphs (e) to (i) and section 37B as in force immediately before 7 December 2020, where the deduction under paragraph (c) cannot be made or fully made, the balance is to be deducted from the statutory income of the company for the year of assessment 2014, and so on;
(e)
any balance not deducted against the statutory income of the company for the fifth year of assessment after the year of assessment relating to the basis period in which the donation was made must be disregarded;
(f)
for the purposes of paragraphs (c) and (d), any donation made on an earlier date is deemed to have been deducted first;
(g)
where the part of the balance that may be deducted under paragraph (c) against any type of income in accordance with subsection (2) has been so deducted and a sum remains of that part of the balance after such deduction, a deduction under paragraph (d) of the sum that so remains, or any sum that remains after one or more applications of this paragraph, is to be made in the following manner:(i)
the sum is first to be deducted against the same type of income;
(ii)
any sum remaining after that deduction is to be deducted against any other type of income in accordance with section 37B of this Act in force immediately before 7 December 2020;
(h)
despite paragraphs (c) and (d), the balance must be disregarded if the Comptroller is not satisfied that the shareholders of the company on the last day of the year in which the donation was made, were substantially the same as the shareholders of the company on the first day of the year of assessment in which the balance would otherwise be deductible; and
(i)
section 37(13) to (17) applies, with the necessary modifications, for the purposes of paragraph (h).[41/2020]
(2) The deduction under subsection (1)(c) is to be made in accordance with the following provisions:(a)
section 37B of this Act in force immediately before 7 December 2020 does not apply to the deduction;
(b)
if the company only derives normal income for that year of assessment, the balance is to be deducted against the normal income for that year of assessment;
(c)
if the company only derives concessionary income for that year of assessment, the balance is to be deducted against the concessionary income for that year of assessment;
(d)
if the company derives both normal income and concessionary income, or concessionary income that is subject to tax at different concessionary rates of tax, for that year of assessment, the balance is to be deducted against each type of income in such proportion as appears reasonable to the Comptroller in the circumstances;
(e)
if the company only derives income that is exempt from tax for that year of assessment, then section 37B of this Act in force immediately before 7 December 2020 applies, with the necessary modifications, for the purpose of making a deduction of the balance under subsection (1)(d) as if the balance were unabsorbed donation in respect of income of a company subject to tax at the rate of tax specified in section 43(1)(a).[41/2020]
(3) In this section —“concessionary income” means income that is subject to tax at a concessionary rate of tax;
“concessionary rate of tax” has the meaning given by section 14C in force immediately before 29 December 2016;
“normal income” means income that is subject to tax at the rate of tax specified in section 43(1)(a).[37M
[34/2016]
Exclusion of expenditure or payment subsidised by capital grant
37Q.—(1) Despite anything in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, a deduction or an allowance under this Act or Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 may not be made or given in respect of any expenditure or payment to the extent that the expenditure or payment is or is to be subsidised by a grant or subsidy from the Government or a statutory board that is —(a)
capital in nature; and
(b)
approved by the Government or statutory board on or after 1 January 2021.[41/2020]
[Act 39 of 2023 wef 29/12/2023]
(2) Subsection (1) does not affect the operation of the following provisions:(a)
sections 14A(7), 14B(4)(e), 14C(1A), 14D(12)(b), 14EA(10), 14EB(9), 14H(3)(c), 14I(10)(b), 14U(7), 14Z(7) and (9) and 37O(29);[Act 30 of 2023 wef 30/10/2023]
[Act 25 of 2025 wef 19/02/2025]
(b)
section 41(3) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967.[37N
[41/2020]
—(1) Despite anything in this Act or the Economic Expansion Incentives (Relief from Income Tax) Act 1967, a deduction or an allowance under this Act or Part 8 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 may not be made or given in respect of any expenditure or payment to the extent that the expenditure or payment is or is to be subsidised by a grant or subsidy from the Government or a statutory board that is —(a)
capital in nature; and
(b)
approved by the Government or statutory board on or after 1 January 2021.[41/2020]
[Act 39 of 2023 wef 29/12/2023]
(2) Subsection (1) does not affect the operation of the following provisions:(a)
sections 14A(7), 14B(4)(e), 14C(1A), 14D(12)(b), 14EA(10), 14EB(9), 14H(3)(c), 14I(10)(b), 14U(7), 14Z(7) and (9) and 37O(29);[Act 30 of 2023 wef 30/10/2023]
[Act 25 of 2025 wef 19/02/2025]
(b)
section 41(3) of the Economic Expansion Incentives (Relief from Income Tax) Act 1967.[37N
[41/2020]
Cash payout under Enterprise Innovation Scheme
37R.—(1) Subject to this section, where any eligible person has incurred expenditure during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), for which a deduction or an allowance is allowable or can be made to the eligible person under any provision of this Act mentioned in subsection (3) (as qualified by that subsection), the eligible person may, in lieu of one or more of the deductions or allowances or any part thereof, make an irrevocable written election for a cash payout computed in accordance with subsection (4) in respect of —(a)
the expenditure qualifying for the deductions or allowances; or
(b)
any part of the expenditure,
(called in this section the selected expenditure), the total amount of which (together with the cash price of any intellectual property rights in respect of which an election under subsection (6) is made at the same time) is at least $400.
(2) The election under subsection (1) must —(a)
be made to the Comptroller by the eligible person —(i)
on or before the expiry of the time (including any extended time) for the eligible person to lodge the eligible person’s return of income for the year of assessment relating to the basis period in which the selected expenditure was incurred, as described in section 62; or
(ii)
within such extended time as the Comptroller may allow;
(b)
be made using the electronic service, except that the Comptroller may in any particular case or class of cases permit the election to be made in any other manner; and
(c)
be accompanied by such information and supporting document, to be given in such form and manner, as may be specified by the Comptroller.
(3) For the purposes of subsection (1), the provisions of this Act are —(a)
section 14 in respect of —(i)
expenditure on the licensing from another person of any qualifying intellectual property rights for which a deduction may be given under section 14U(1A); or
(ii)
expenditure that falls within the definition of “qualifying training expenditure” in section 14ZG(5) for which a deduction may be given under section 14ZG;
(b)
section 14A(1)(b) and (1BC);
(c)
section 14C in respect of expenditure that falls within the definition of “qualifying expenditure” in section 14D(11), for which a deduction may be given under section 14D;
(d)
section 14D(1) and (1A);
(e)
section 14EA(1);
(f)
section 14U(1A);
(g)
section 14ZG(1); and
(h)
section 19B(1AA) and (1AD) other than —(i)
a writing-down allowance made in a case where the requirements under section 19B(2A)(a) and (b) are waived; and
(ii)
a writing-down allowance made in respect of any intellectual property rights acquired under an IPR instalment agreement signed in the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive).
(4) For the purposes of subsection (1), the amount of cash payout for each year of assessment is
where A is the lower of the following:
(a)
the amount of the selected expenditure;
(b)
$100,000.
(5) The Comptroller may reject any election that is not made in accordance with subsection (2).
Cash payout in respect of IPR acquired under instalment agreement
(6) Where —(a)
an eligible person has, in the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), signed an IPR instalment agreement to acquire any intellectual property rights for use in the eligible person’s trade or business;
(b)
allowances may be made to the eligible person under section 19B(1AA) and (1AD) for capital expenditure to be incurred under the agreement; and
(c)
the cash price for the intellectual property rights (together with any selected expenditure mentioned in subsection (1) in respect of which an election is made under that subsection at the same time) is at least $400,
the eligible person may, in lieu of all those allowances, make an irrevocable written election for a cash payout.
(7) The election under subsection (6) must —(a)
be made to the Comptroller by the eligible person —(i)
on or before the expiry of the time (including any extended time) for the eligible person to lodge the eligible person’s return of income for the year of assessment relating to the basis period in which the IPR instalment agreement was signed, as described in section 62; or
(ii)
within such extended time as the Comptroller may allow;
(b)
be made using the electronic service, except that the Comptroller may in any particular case or class of cases permit the election to be made in any other manner; and
(c)
be accompanied by such information and supporting document, to be given in such form and manner, as may be specified by the Comptroller.
(8) The Comptroller may reject any election that is not made in accordance with subsection (7).
(9) Where an election under subsection (6) is made, subsection (4) applies with the following modifications:(a)
the reference to the amount of selected expenditure for a year of assessment, being the year of assessment relating to the basis period in which the IPR instalment agreement is signed, is to the aggregate of —(i)
the cash price of the intellectual property rights; and
(ii)
the expenditure mentioned in subsection (1) incurred in that basis period for which a deduction or an allowance is allowable or may be made to the eligible person, and in respect of which an election has been made under that subsection;
(b)
the reference to the amount of selected expenditure for a year of assessment excludes the amount of any capital expenditure made by the eligible person under that IPR instalment agreement in the basis period for that year of assessment.
(10) For the purpose of subsections (12) and (22), the amount of cash payout for any intellectual property rights that are the subject of an IPR instalment agreement is the amount computed under subsection (4) (as modified by subsection (9)) that is attributable to —(a)
the cash price of the intellectual property rights; or
(b)
if the amount of A is $100,000, such part of that amount that the eligible person specifies to be attributable to the cash price of the intellectual property rights.
(11) In subsections (9)(a)(i) and (10)(a), a reference to the cash price of the intellectual property rights is, in a case where section 19B(10I) applies, to the open‑market price mentioned in section 19B(10F) for those intellectual property rights.
(12) The cash payout for a year of assessment under subsection (6) for any intellectual property rights that are the subject of an IPR instalment agreement must be made to the eligible person in the following manner:(a)
the eligible person may claim an amount of cash payout for the year of assessment relating to a basis period during which the eligible person incurred capital expenditure under the agreement for those rights;
(b)
the amount of cash payout that may be made to the eligible person is the lesser of —(i)
A × 20%, where A is the amount of the capital expenditure incurred in that basis period; and
(ii)
the amount mentioned in subsection (10) after deducting any cash payout made for those rights in any preceding year of assessment or years of assessment under this subsection;
(c)
no cash payout may be made for those rights if the amount mentioned in paragraph (b)(ii) is zero;
(d)
each claim must be made in a form and be accompanied by any information and supporting document relating to the capital expenditure specified by the Comptroller;
(e)
to avoid doubt, a claim may be made for any year of assessment after the year of assessment 2028.
Cases where no election allowed
(13) No election under subsection (1) or (6) may be made by a person in respect of —(a)
any deduction allowable under any provision mentioned in subsection (3)(a)(i) and (f) unless the person is a qualifying person within the meaning of section 14U(1C) for the year of assessment in question;
(b)
any deduction allowable under any provision mentioned in subsection (3)(b) for any qualifying intellectual property registration costs in respect of an application for the registration or grant of a qualifying intellectual property right incurred by the person over the basis periods of 2 or more consecutive years of assessment, if the person had made any claim for deduction under that provision in respect of any part of such costs for a previous year of assessment; or
(c)
any allowance that may be made under any provision mentioned in subsection (3)(h) unless the person is a qualifying company for the year of assessment in question within the meaning of section 19B(1AF).
Cash payout to individuals carrying on trade, etc., through 2 or more firms
(14) For the purposes of subsections (1), (4) and (6), an individual carrying on one or more trades or businesses through 2 or more firms (excluding partnerships) must not be granted a cash payout that exceeds the amount computed in accordance with subsection (4) or that subsection as modified by subsection (9), as the case may be.
Section 14A costs deductible for 2 or more consecutive years of assessment treated as incurred on date of approval or rejection of application for registration of intellectual property rights, etc.
(15) For the purposes of this section, where —(a)
an eligible person has incurred qualifying intellectual property registration costs in respect of an application for the registration or grant of a qualifying intellectual property right for which a deduction is allowable under section 14A(1)(b) and (1BC), over the basis periods of 2 or more consecutive years of assessment;
(b)
the eligible person is not disqualified from making an election under subsection (1) by reason of subsection (13)(b); and
(c)
the eligible person makes an election under subsection (1) in respect of those costs,
the eligible person is treated as having incurred those costs during the basis period of the year of assessment in which the application or grant is approved or rejected.
When open-market price treated as section 19B expenditure
(16) Where the Comptroller has treated the open‑market price as the capital expenditure incurred for the acquisition of intellectual property rights under section 19B(10E), then the reference in this section to selected expenditure, insofar as it relates to that capital expenditure, is to the open‑market price of the intellectual property rights.
Election deemed made on full amount of section 14A or 19B expenditure
(17) Where an eligible person makes an election under subsection (1) or (6) in respect of a deduction or an allowance under section 14A(1)(b) and (1BC) or 19B(1AA) and (1AD), the election is treated as having been made on the full amount of the expenditure qualifying for the deduction or allowance and incurred on —(a)
the grant or registration of each qualifying intellectual property right in each country; or
(b)
the acquisition of each intellectual property right,
as the case may be, to which the election relates, net of any grant or subsidy from the Government or a statutory board.
(18) No part of the amount of any expenditure mentioned in subsection (17) for which an election is made or treated as having been made under subsection (1) or (6) is eligible for a deduction or an allowance against the income of the eligible person for any year of assessment.
Capital expenditure in acquiring rights in software for licensing not eligible for cash payout
(19) Despite subsections (1) and (6), where an eligible person has incurred capital expenditure in acquiring any intellectual property rights in any software for the purpose of licensing all or any part of those rights, the eligible person is not allowed to make an election under subsection (1) or (6) in respect of such expenditure.
Recovery of cash payout by Comptroller
(20) Where a cash payout has been made to a person under this section in lieu of a deduction under section 14A(1)(b) and (1BC), and the intellectual property rights or the application for the registration or grant of the rights for which the deduction is made is sold, transferred or assigned within one year after the date of filing of the application for the registration or grant of such rights, the following provisions apply:(a)
the person must give written notice to the Comptroller of the sale, transfer or assignment in the manner specified by the Comptroller within 30 days after the date of the sale, transfer or assignment;
(b)
the cash payout in respect of the intellectual property rights, or the application for the registration or grant of those rights is recoverable by the Comptroller from the person as a debt due to the Government.
(21) Where a cash payout has been made to a person pursuant to an election under subsection (1) in lieu of a writing‑down allowance under section 19B(1AA) and (1AD), and any of the following events occurs within 5 years after the acquisition of the intellectual property rights:(a)
the intellectual property rights for which the writing‑down allowance is made come to an end without being subsequently revived;
(b)
all or any part of the intellectual property rights for which the writing‑down allowance is made are sold, transferred or assigned;
(c)
the person permanently ceases to carry on the trade or business for which the intellectual property rights are used;
(d)
all or any part of the intellectual property rights in any software for which the writing‑down allowance is granted are licensed to another,
then the following provisions apply:
(e)
the person must give written notice to the Comptroller of that event in the manner specified by the Comptroller within 30 days after the date of such event;
(f)
an amount computed in accordance with the following formula is recoverable by the Comptroller from the person as a debt due to the Government:
(22) Where —(a)
an election has been made by a person under subsection (6) for a cash payout in lieu of a writing‑down allowance under section 19B(1AA) and (1AD); and
(b)
any of the events mentioned in subsection (21)(a) to (d) occurs within 5 years after the acquisition of the intellectual property rights,
then the following provisions apply:
(c)
the person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days after the date of such event;
(d)
where any amount of the cash payout has been made to the person before the occurrence of the event, an amount computed in accordance with the formula in subsection (21)(f) is recoverable by the Comptroller from the person as a debt due to the Government;
(e)
for the purposes of paragraph (d), the reference in the formula to the amount of cash payout is to the total amount of the cash payout that has been made to the person before the occurrence of the event;
(f)
the amount of the cash payout that may be made to the person for the basis period in which the event occurs and thereafter is, instead of the amount computed in accordance with subsection (12)(b), an amount computed in accordance with the formula
Record keeping
(23) Subsection (24) applies if an eligible person makes an election under subsection (1) for a cash payout in lieu of any deduction or allowances in respect of any expenditure mentioned in subsection (3) incurred by the eligible person.
(24) Despite section 67, the eligible person must keep and retain in safe custody sufficient records for a period of 7 years after the year of assessment relating to the basis period in which that expenditure is incurred, in order to enable the Comptroller or any officer authorised on behalf of the Comptroller to readily ascertain the expenditure incurred by the eligible person.
(25) Subsection (26) applies if an eligible person makes an election under subsection (6) for a cash payout in lieu of allowances that may be made for capital expenditure incurred by that eligible person under an IPR instalment agreement signed by that eligible person.
(26) Despite section 67, the eligible person must keep and retain in safe custody sufficient records for a period of 7 years after the year of assessment relating to the basis period in which that capital expenditure is incurred, in order to enable the Comptroller or any officer authorised on behalf of the Comptroller to readily ascertain the cash price for the intellectual property rights that are the subject of the IPR instalment agreement and that capital expenditure.
Other provisions
(27) The Comptroller may disallow any cash payout pursuant to an election made under subsection (1) or (6), if the Comptroller is satisfied that the person is not carrying on a trade or business at the time of disbursement of the cash payout.
(28) Where any tax, duty, interest or penalty is due under this Act, the Goods and Services Tax Act 1993, the Property Tax Act 1960 or the Stamp Duties Act 1929 by the eligible person to the Comptroller of Income Tax, the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties —(a)
the amount of cash payout made by the Comptroller to the eligible person is reduced by the amount so due; and
(b)
any amount reduced under paragraph (a) is deemed to be tax, duty, interest or penalty paid by the eligible person under the relevant Act and must (if it is due under an Act other than this Act) be paid by the Comptroller to the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, as the case may be.
(29) If an election has been made or treated as made under subsection (1) or (6) in respect of an amount of expenditure qualifying for a deduction or an allowance under section 14, 14A, 14C, 14D, 14EA, 14U, 14ZG or 19B, the amount of expenditure qualifying for the deduction or allowance under that provision is, despite anything in that provision, reduced by the firstmentioned amount.
(30) Where an eligible person has received a cash payout under subsection (1) or (6) —(a)
in respect of any expenditure that is subsequently found not to qualify for the allowance or deduction under any provision of this Act mentioned in subsection (3) or (6);
(b)
without having satisfied all of the requirements in this section (excluding the requirements in subsections (20), (21) and (22)) for the payout; or
(c)
that is in excess of that which may be given to the eligible person under this section,
the amount of the cash payout or the excess amount of the cash payout (as the case may be) is recoverable by the Comptroller from the eligible person as a debt due to the Government.
(31) For the purposes of subsections (20), (21), (22) and (30) —(a)
the amount to be repaid under each of those subsections is payable at the place stated in the notice served by the Comptroller on the eligible person within 30 days after the service of the notice or such further time as the Comptroller may, in the Comptroller’s discretion and subject to such terms and conditions as the Comptroller may impose, allow; and
(b)
sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 apply to the collection and recovery by the Comptroller of the amounts recoverable under those subsections as they apply to the collection and recovery of tax.
(31A) Where an amount of cash payout is to be made by the Comptroller to an eligible person under this section, and an amount is recoverable by the Comptroller from the eligible person as a debt due to the Government under subsection (20), (21), (22) or (30) —(a)
the amount of cash payout to be made by the Comptroller to the eligible person is reduced by the amount so due under that subsection; and
(b)
the amount of the reduction is treated as a repayment of the debt by the eligible person.[Act 25 of 2025 wef 08/12/2025]
(31B) Where the amount of cash payout to be made to an eligible person under this section is less than the sum of the amount of tax, duty, interest or penalty due from the eligible person under subsection (28) and the amount recoverable as a debt due to the Government under subsection (20), (21), (22) or (30), the Comptroller may determine the amount of reduction to be made under subsection (28)(a) or (31A)(a), or both, in a manner that he or she considers reasonable.[Act 25 of 2025 wef 08/12/2025]
Consequential adjustments to allowable deductions upon recovery of payout
(32) Unless disallowed by the Comptroller under subsection (33), where the Comptroller has recovered any amount under subsection (30)(b) or (c), the amount of the relevant expenditure mentioned in subsection (29) is to be increased by an amount determined in accordance with the formula
where A is the amount recovered by the Comptroller under subsection (30)(b) or (c).
(33) The Comptroller may disallow the increase under subsection (32) if the Comptroller is satisfied that the eligible person has —(a)
provided the Comptroller with any information or document, in connection with the election under subsection (1) or (6), which is false or misleading in a material particular;
(b)
omitted any material particular from any information or document given in connection with the election under subsection (1) or (6);
(c)
prepared or maintained or authorised the preparation or maintenance of any false books of account or other records or falsified or authorised the falsification of any books of account or other records in connection with the election under subsection (1) or (6); or
(d)
made use of any fraud, art or contrivance whatsoever or authorised the use of such fraud, art or contrivance, in connection with the election under subsection (1) or (6).
Definitions and miscellaneous provisions
(34) In this section —“cash price”, in relation to any intellectual property rights that are the subject of an IPR instalment agreement, means the price at which those rights might have been purchased for cash at the time of the signing of the agreement;
“central hirer” and “central hiring arrangement” have the meanings given by section 14ZG(5);
“eligible person” means —(a)
any company or firm (excluding a partnership) that —(i)
carries on a trade or business in Singapore; and
(ii)
employs and makes contributions to the Central Provident Fund in respect of at least 3 full‑time local employees, each earning a gross monthly salary of at least $1,400 based on its payroll, for at least 6 months (which need not be continuous) in the basis period of the applicable year of assessment (called in this subsection and subsections (35) and (36) the minimum period); or
(b)
any partner of a partnership, being a partnership that —(i)
carries on a trade or business in Singapore; and
(ii)
employs and makes contributions to the Central Provident Fund in respect of at least 3 full‑time local employees, each earning a gross monthly salary of at least $1,400 based on its payroll, for at least the minimum period;
“full-time local employee” means any Singapore citizen or Singapore permanent resident who is required to work under his or her contract of service with an employer for at least 35 hours a week, but excludes —(a)
in the case of an eligible person in paragraph (a) of the definition of that term that is a company as defined in section 4(1) of the Companies Act 1967 — a shareholder who is also a director of the eligible person; and
(b)
in the case of an eligible person in paragraph (b) of the definition of that term — any partner under a contract of service with the partnership;
“IPR instalment agreement” means an agreement for the purchase of intellectual property rights the payment for which is to be made by instalments;
“qualifying intellectual property registration costs” and “qualifying intellectual property right” have the meanings given by section 14A(6).
(35) In paragraphs (a)(ii) and (b)(ii) of the definition of “eligible person” in subsection (34), a reference to a full‑time local employee includes —(a)
a Singapore citizen or Singapore permanent resident —(i)
who is engaged by the central hirer of a central hiring arrangement for a group of related parties that includes the eligible person;
(ii)
who is deployed to work solely for the company, firm or partnership (called in this subsection and subsection (36) X) for at least the minimum period;
(iii)
who is on the payroll of the central hirer or X in that period; and
(iv)
whose salary and other remuneration (including training expenditure incurred in respect of the individual) is borne (directly or indirectly) by X in that period; or
(b)
a Singapore citizen or Singapore permanent resident —(i)
who, being an employee of another person that is a related party of X (called in this subsection and subsection (36) the employer), is seconded to a position of X under a bona fide commercial arrangement to work solely for X for at least the minimum period;
(ii)
who is on the payroll of the employer or X in that period; and
(iii)
whose salary and other remuneration (including training expenditure incurred in respect of the individual) is borne (directly or indirectly) by X in that period.
(36) In determining whether the central hirer or employer mentioned in subsection (35) satisfies the definition of “eligible person” in subsection (34), the individual mentioned in subsection (35)(a) or (b) is not treated as being employed by the central hirer or the employer based on the payroll of the central hirer or employer for the period in which the salary or other remuneration of the individual (including any training expenditure incurred in respect of him or her) is borne by X.[Act 30 of 2023 wef 30/10/2023]
—(1) Subject to this section, where any eligible person has incurred expenditure during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), for which a deduction or an allowance is allowable or can be made to the eligible person under any provision of this Act mentioned in subsection (3) (as qualified by that subsection), the eligible person may, in lieu of one or more of the deductions or allowances or any part thereof, make an irrevocable written election for a cash payout computed in accordance with subsection (4) in respect of —(a)
the expenditure qualifying for the deductions or allowances; or
(b)
any part of the expenditure,
(called in this section the selected expenditure), the total amount of which (together with the cash price of any intellectual property rights in respect of which an election under subsection (6) is made at the same time) is at least $400.
(2) The election under subsection (1) must —(a)
be made to the Comptroller by the eligible person —(i)
on or before the expiry of the time (including any extended time) for the eligible person to lodge the eligible person’s return of income for the year of assessment relating to the basis period in which the selected expenditure was incurred, as described in section 62; or
(ii)
within such extended time as the Comptroller may allow;
(b)
be made using the electronic service, except that the Comptroller may in any particular case or class of cases permit the election to be made in any other manner; and
(c)
be accompanied by such information and supporting document, to be given in such form and manner, as may be specified by the Comptroller.
(3) For the purposes of subsection (1), the provisions of this Act are —(a)
section 14 in respect of —(i)
expenditure on the licensing from another person of any qualifying intellectual property rights for which a deduction may be given under section 14U(1A); or
(ii)
expenditure that falls within the definition of “qualifying training expenditure” in section 14ZG(5) for which a deduction may be given under section 14ZG;
(b)
section 14A(1)(b) and (1BC);
(c)
section 14C in respect of expenditure that falls within the definition of “qualifying expenditure” in section 14D(11), for which a deduction may be given under section 14D;
(d)
section 14D(1) and (1A);
(e)
section 14EA(1);
(f)
section 14U(1A);
(g)
section 14ZG(1); and
(h)
section 19B(1AA) and (1AD) other than —(i)
a writing-down allowance made in a case where the requirements under section 19B(2A)(a) and (b) are waived; and
(ii)
a writing-down allowance made in respect of any intellectual property rights acquired under an IPR instalment agreement signed in the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive).
(4) For the purposes of subsection (1), the amount of cash payout for each year of assessment is
where A is the lower of the following:
(a)
the amount of the selected expenditure;
(b)
$100,000.
(5) The Comptroller may reject any election that is not made in accordance with subsection (2).
(6) Where —(a)
an eligible person has, in the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), signed an IPR instalment agreement to acquire any intellectual property rights for use in the eligible person’s trade or business;
(b)
allowances may be made to the eligible person under section 19B(1AA) and (1AD) for capital expenditure to be incurred under the agreement; and
(c)
the cash price for the intellectual property rights (together with any selected expenditure mentioned in subsection (1) in respect of which an election is made under that subsection at the same time) is at least $400,
the eligible person may, in lieu of all those allowances, make an irrevocable written election for a cash payout.
(7) The election under subsection (6) must —(a)
be made to the Comptroller by the eligible person —(i)
on or before the expiry of the time (including any extended time) for the eligible person to lodge the eligible person’s return of income for the year of assessment relating to the basis period in which the IPR instalment agreement was signed, as described in section 62; or
(ii)
within such extended time as the Comptroller may allow;
(b)
be made using the electronic service, except that the Comptroller may in any particular case or class of cases permit the election to be made in any other manner; and
(c)
be accompanied by such information and supporting document, to be given in such form and manner, as may be specified by the Comptroller.
(8) The Comptroller may reject any election that is not made in accordance with subsection (7).
(9) Where an election under subsection (6) is made, subsection (4) applies with the following modifications:(a)
the reference to the amount of selected expenditure for a year of assessment, being the year of assessment relating to the basis period in which the IPR instalment agreement is signed, is to the aggregate of —(i)
the cash price of the intellectual property rights; and
(ii)
the expenditure mentioned in subsection (1) incurred in that basis period for which a deduction or an allowance is allowable or may be made to the eligible person, and in respect of which an election has been made under that subsection;
(b)
the reference to the amount of selected expenditure for a year of assessment excludes the amount of any capital expenditure made by the eligible person under that IPR instalment agreement in the basis period for that year of assessment.
(10) For the purpose of subsections (12) and (22), the amount of cash payout for any intellectual property rights that are the subject of an IPR instalment agreement is the amount computed under subsection (4) (as modified by subsection (9)) that is attributable to —(a)
the cash price of the intellectual property rights; or
(b)
if the amount of A is $100,000, such part of that amount that the eligible person specifies to be attributable to the cash price of the intellectual property rights.
(11) In subsections (9)(a)(i) and (10)(a), a reference to the cash price of the intellectual property rights is, in a case where section 19B(10I) applies, to the open‑market price mentioned in section 19B(10F) for those intellectual property rights.
(12) The cash payout for a year of assessment under subsection (6) for any intellectual property rights that are the subject of an IPR instalment agreement must be made to the eligible person in the following manner:(a)
the eligible person may claim an amount of cash payout for the year of assessment relating to a basis period during which the eligible person incurred capital expenditure under the agreement for those rights;
(b)
the amount of cash payout that may be made to the eligible person is the lesser of —(i)
A × 20%, where A is the amount of the capital expenditure incurred in that basis period; and
(ii)
the amount mentioned in subsection (10) after deducting any cash payout made for those rights in any preceding year of assessment or years of assessment under this subsection;
(c)
no cash payout may be made for those rights if the amount mentioned in paragraph (b)(ii) is zero;
(d)
each claim must be made in a form and be accompanied by any information and supporting document relating to the capital expenditure specified by the Comptroller;
(e)
to avoid doubt, a claim may be made for any year of assessment after the year of assessment 2028.
(13) No election under subsection (1) or (6) may be made by a person in respect of —(a)
any deduction allowable under any provision mentioned in subsection (3)(a)(i) and (f) unless the person is a qualifying person within the meaning of section 14U(1C) for the year of assessment in question;
(b)
any deduction allowable under any provision mentioned in subsection (3)(b) for any qualifying intellectual property registration costs in respect of an application for the registration or grant of a qualifying intellectual property right incurred by the person over the basis periods of 2 or more consecutive years of assessment, if the person had made any claim for deduction under that provision in respect of any part of such costs for a previous year of assessment; or
(c)
any allowance that may be made under any provision mentioned in subsection (3)(h) unless the person is a qualifying company for the year of assessment in question within the meaning of section 19B(1AF).
(14) For the purposes of subsections (1), (4) and (6), an individual carrying on one or more trades or businesses through 2 or more firms (excluding partnerships) must not be granted a cash payout that exceeds the amount computed in accordance with subsection (4) or that subsection as modified by subsection (9), as the case may be.
(15) For the purposes of this section, where —(a)
an eligible person has incurred qualifying intellectual property registration costs in respect of an application for the registration or grant of a qualifying intellectual property right for which a deduction is allowable under section 14A(1)(b) and (1BC), over the basis periods of 2 or more consecutive years of assessment;
(b)
the eligible person is not disqualified from making an election under subsection (1) by reason of subsection (13)(b); and
(c)
the eligible person makes an election under subsection (1) in respect of those costs,
the eligible person is treated as having incurred those costs during the basis period of the year of assessment in which the application or grant is approved or rejected.
(16) Where the Comptroller has treated the open‑market price as the capital expenditure incurred for the acquisition of intellectual property rights under section 19B(10E), then the reference in this section to selected expenditure, insofar as it relates to that capital expenditure, is to the open‑market price of the intellectual property rights.
(17) Where an eligible person makes an election under subsection (1) or (6) in respect of a deduction or an allowance under section 14A(1)(b) and (1BC) or 19B(1AA) and (1AD), the election is treated as having been made on the full amount of the expenditure qualifying for the deduction or allowance and incurred on —(a)
the grant or registration of each qualifying intellectual property right in each country; or
(b)
the acquisition of each intellectual property right,
as the case may be, to which the election relates, net of any grant or subsidy from the Government or a statutory board.
(18) No part of the amount of any expenditure mentioned in subsection (17) for which an election is made or treated as having been made under subsection (1) or (6) is eligible for a deduction or an allowance against the income of the eligible person for any year of assessment.
(19) Despite subsections (1) and (6), where an eligible person has incurred capital expenditure in acquiring any intellectual property rights in any software for the purpose of licensing all or any part of those rights, the eligible person is not allowed to make an election under subsection (1) or (6) in respect of such expenditure.
(20) Where a cash payout has been made to a person under this section in lieu of a deduction under section 14A(1)(b) and (1BC), and the intellectual property rights or the application for the registration or grant of the rights for which the deduction is made is sold, transferred or assigned within one year after the date of filing of the application for the registration or grant of such rights, the following provisions apply:(a)
the person must give written notice to the Comptroller of the sale, transfer or assignment in the manner specified by the Comptroller within 30 days after the date of the sale, transfer or assignment;
(b)
the cash payout in respect of the intellectual property rights, or the application for the registration or grant of those rights is recoverable by the Comptroller from the person as a debt due to the Government.
(21) Where a cash payout has been made to a person pursuant to an election under subsection (1) in lieu of a writing‑down allowance under section 19B(1AA) and (1AD), and any of the following events occurs within 5 years after the acquisition of the intellectual property rights:(a)
the intellectual property rights for which the writing‑down allowance is made come to an end without being subsequently revived;
(b)
all or any part of the intellectual property rights for which the writing‑down allowance is made are sold, transferred or assigned;
(c)
the person permanently ceases to carry on the trade or business for which the intellectual property rights are used;
(d)
all or any part of the intellectual property rights in any software for which the writing‑down allowance is granted are licensed to another,
then the following provisions apply:
(e)
the person must give written notice to the Comptroller of that event in the manner specified by the Comptroller within 30 days after the date of such event;
(f)
an amount computed in accordance with the following formula is recoverable by the Comptroller from the person as a debt due to the Government:
(22) Where —(a)
an election has been made by a person under subsection (6) for a cash payout in lieu of a writing‑down allowance under section 19B(1AA) and (1AD); and
(b)
any of the events mentioned in subsection (21)(a) to (d) occurs within 5 years after the acquisition of the intellectual property rights,
then the following provisions apply:
(c)
the person must give written notice to the Comptroller of such event in the manner specified by the Comptroller within 30 days after the date of such event;
(d)
where any amount of the cash payout has been made to the person before the occurrence of the event, an amount computed in accordance with the formula in subsection (21)(f) is recoverable by the Comptroller from the person as a debt due to the Government;
(e)
for the purposes of paragraph (d), the reference in the formula to the amount of cash payout is to the total amount of the cash payout that has been made to the person before the occurrence of the event;
(f)
the amount of the cash payout that may be made to the person for the basis period in which the event occurs and thereafter is, instead of the amount computed in accordance with subsection (12)(b), an amount computed in accordance with the formula
(23) Subsection (24) applies if an eligible person makes an election under subsection (1) for a cash payout in lieu of any deduction or allowances in respect of any expenditure mentioned in subsection (3) incurred by the eligible person.
(24) Despite section 67, the eligible person must keep and retain in safe custody sufficient records for a period of 7 years after the year of assessment relating to the basis period in which that expenditure is incurred, in order to enable the Comptroller or any officer authorised on behalf of the Comptroller to readily ascertain the expenditure incurred by the eligible person.
(25) Subsection (26) applies if an eligible person makes an election under subsection (6) for a cash payout in lieu of allowances that may be made for capital expenditure incurred by that eligible person under an IPR instalment agreement signed by that eligible person.
(26) Despite section 67, the eligible person must keep and retain in safe custody sufficient records for a period of 7 years after the year of assessment relating to the basis period in which that capital expenditure is incurred, in order to enable the Comptroller or any officer authorised on behalf of the Comptroller to readily ascertain the cash price for the intellectual property rights that are the subject of the IPR instalment agreement and that capital expenditure.
(27) The Comptroller may disallow any cash payout pursuant to an election made under subsection (1) or (6), if the Comptroller is satisfied that the person is not carrying on a trade or business at the time of disbursement of the cash payout.
(28) Where any tax, duty, interest or penalty is due under this Act, the Goods and Services Tax Act 1993, the Property Tax Act 1960 or the Stamp Duties Act 1929 by the eligible person to the Comptroller of Income Tax, the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties —(a)
the amount of cash payout made by the Comptroller to the eligible person is reduced by the amount so due; and
(b)
any amount reduced under paragraph (a) is deemed to be tax, duty, interest or penalty paid by the eligible person under the relevant Act and must (if it is due under an Act other than this Act) be paid by the Comptroller to the Comptroller of Goods and Services Tax, the Comptroller of Property Tax or the Commissioner of Stamp Duties, as the case may be.
(29) If an election has been made or treated as made under subsection (1) or (6) in respect of an amount of expenditure qualifying for a deduction or an allowance under section 14, 14A, 14C, 14D, 14EA, 14U, 14ZG or 19B, the amount of expenditure qualifying for the deduction or allowance under that provision is, despite anything in that provision, reduced by the firstmentioned amount.
(30) Where an eligible person has received a cash payout under subsection (1) or (6) —(a)
in respect of any expenditure that is subsequently found not to qualify for the allowance or deduction under any provision of this Act mentioned in subsection (3) or (6);
(b)
without having satisfied all of the requirements in this section (excluding the requirements in subsections (20), (21) and (22)) for the payout; or
(c)
that is in excess of that which may be given to the eligible person under this section,
the amount of the cash payout or the excess amount of the cash payout (as the case may be) is recoverable by the Comptroller from the eligible person as a debt due to the Government.
(31) For the purposes of subsections (20), (21), (22) and (30) —(a)
the amount to be repaid under each of those subsections is payable at the place stated in the notice served by the Comptroller on the eligible person within 30 days after the service of the notice or such further time as the Comptroller may, in the Comptroller’s discretion and subject to such terms and conditions as the Comptroller may impose, allow; and
(b)
sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 apply to the collection and recovery by the Comptroller of the amounts recoverable under those subsections as they apply to the collection and recovery of tax.
(31A) Where an amount of cash payout is to be made by the Comptroller to an eligible person under this section, and an amount is recoverable by the Comptroller from the eligible person as a debt due to the Government under subsection (20), (21), (22) or (30) —(a)
the amount of cash payout to be made by the Comptroller to the eligible person is reduced by the amount so due under that subsection; and
(b)
the amount of the reduction is treated as a repayment of the debt by the eligible person.[Act 25 of 2025 wef 08/12/2025]
(31B) Where the amount of cash payout to be made to an eligible person under this section is less than the sum of the amount of tax, duty, interest or penalty due from the eligible person under subsection (28) and the amount recoverable as a debt due to the Government under subsection (20), (21), (22) or (30), the Comptroller may determine the amount of reduction to be made under subsection (28)(a) or (31A)(a), or both, in a manner that he or she considers reasonable.[Act 25 of 2025 wef 08/12/2025]
(32) Unless disallowed by the Comptroller under subsection (33), where the Comptroller has recovered any amount under subsection (30)(b) or (c), the amount of the relevant expenditure mentioned in subsection (29) is to be increased by an amount determined in accordance with the formula
where A is the amount recovered by the Comptroller under subsection (30)(b) or (c).
(33) The Comptroller may disallow the increase under subsection (32) if the Comptroller is satisfied that the eligible person has —(a)
provided the Comptroller with any information or document, in connection with the election under subsection (1) or (6), which is false or misleading in a material particular;
(b)
omitted any material particular from any information or document given in connection with the election under subsection (1) or (6);
(c)
prepared or maintained or authorised the preparation or maintenance of any false books of account or other records or falsified or authorised the falsification of any books of account or other records in connection with the election under subsection (1) or (6); or
(d)
made use of any fraud, art or contrivance whatsoever or authorised the use of such fraud, art or contrivance, in connection with the election under subsection (1) or (6).
(34) In this section —“cash price”, in relation to any intellectual property rights that are the subject of an IPR instalment agreement, means the price at which those rights might have been purchased for cash at the time of the signing of the agreement;
“central hirer” and “central hiring arrangement” have the meanings given by section 14ZG(5);
“eligible person” means —(a)
any company or firm (excluding a partnership) that —(i)
carries on a trade or business in Singapore; and
(ii)
employs and makes contributions to the Central Provident Fund in respect of at least 3 full‑time local employees, each earning a gross monthly salary of at least $1,400 based on its payroll, for at least 6 months (which need not be continuous) in the basis period of the applicable year of assessment (called in this subsection and subsections (35) and (36) the minimum period); or
(b)
any partner of a partnership, being a partnership that —(i)
carries on a trade or business in Singapore; and
(ii)
employs and makes contributions to the Central Provident Fund in respect of at least 3 full‑time local employees, each earning a gross monthly salary of at least $1,400 based on its payroll, for at least the minimum period;
“full-time local employee” means any Singapore citizen or Singapore permanent resident who is required to work under his or her contract of service with an employer for at least 35 hours a week, but excludes —(a)
in the case of an eligible person in paragraph (a) of the definition of that term that is a company as defined in section 4(1) of the Companies Act 1967 — a shareholder who is also a director of the eligible person; and
(b)
in the case of an eligible person in paragraph (b) of the definition of that term — any partner under a contract of service with the partnership;
“IPR instalment agreement” means an agreement for the purchase of intellectual property rights the payment for which is to be made by instalments;
“qualifying intellectual property registration costs” and “qualifying intellectual property right” have the meanings given by section 14A(6).
(35) In paragraphs (a)(ii) and (b)(ii) of the definition of “eligible person” in subsection (34), a reference to a full‑time local employee includes —(a)
a Singapore citizen or Singapore permanent resident —(i)
who is engaged by the central hirer of a central hiring arrangement for a group of related parties that includes the eligible person;
(ii)
who is deployed to work solely for the company, firm or partnership (called in this subsection and subsection (36) X) for at least the minimum period;
(iii)
who is on the payroll of the central hirer or X in that period; and
(iv)
whose salary and other remuneration (including training expenditure incurred in respect of the individual) is borne (directly or indirectly) by X in that period; or
(b)
a Singapore citizen or Singapore permanent resident —(i)
who, being an employee of another person that is a related party of X (called in this subsection and subsection (36) the employer), is seconded to a position of X under a bona fide commercial arrangement to work solely for X for at least the minimum period;
(ii)
who is on the payroll of the employer or X in that period; and
(iii)
whose salary and other remuneration (including training expenditure incurred in respect of the individual) is borne (directly or indirectly) by X in that period.
(36) In determining whether the central hirer or employer mentioned in subsection (35) satisfies the definition of “eligible person” in subsection (34), the individual mentioned in subsection (35)(a) or (b) is not treated as being employed by the central hirer or the employer based on the payroll of the central hirer or employer for the period in which the salary or other remuneration of the individual (including any training expenditure incurred in respect of him or her) is borne by X.[Act 30 of 2023 wef 30/10/2023]
Penalties for false information, etc., resulting in payment under section 37R
37S.—(1) Any person who —(a)
gives to the Comptroller any information under section 37R(2) or (7) that is false in any material particular; or
(b)
omits any material particular from any information or document given under that provision to the Comptroller,
shall be guilty of an offence and shall on conviction be punished with a penalty that is equal to the amount of cash payout that has been made to the person or any other person as a result of the offence, or which would have been made to the person or any other person if the offence had not been detected.
(2) Any person who, without reasonable excuse or through negligence —(a)
gives to the Comptroller any information under section 37R(2) or (7) that is false in any material particular; or
(b)
omits any material particular from any information or document given under that provision to the Comptroller,
shall be guilty of an offence and shall on conviction be punished with a penalty that is double the amount of cash payout that has been made to the person or any other person as a result of the offence, or which would have been made to the person or any other person if the offence had not been detected, and shall also be liable to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 3 years or to both.
(3) Any person who wilfully with intent to obtain, or to assist another person to obtain, a cash payout or a higher amount of cash payout which the person or that other person is not entitled to —(a)
gives to the Comptroller any information under section 37R(2) or (7) that is false in any material particular or omits any material particular from any information or document given under that provision; or
(b)
gives any false answer, whether verbally or in writing, to any question or request for information asked or made by the Comptroller,
shall be guilty of an offence and shall on conviction be punished with a penalty that is treble the amount of cash payout that has been made to the person or that other person as a result of the offence, or which would have been made to the person or that other person if the offence had not been detected, and shall also be liable to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 3 years or to both.
(4) Any person who wilfully with intent to obtain, or to assist another person to obtain, a cash payout or a higher amount of cash payout which the person or that other person is not entitled to —(a)
prepares or maintains or authorises the preparation or maintenance of any false books of account or other records or falsifies or authorises the falsification of any books of account or other records; or
(b)
makes use of any fraud, art or contrivance or authorises the use of such fraud, art or contrivance,
shall be guilty of an offence and shall on conviction be punished with a penalty that is 4 times the amount of cash payout that has been made to the person or that other person as a result of the offence, or which would have been made to the person or that other person if the offence had not been detected, and shall also be liable to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 5 years or to both.
(5) Where an individual has been convicted of —(a)
3 or more offences under subsection (3) or section 37M(3) or 96;
(b)
2 or more offences under subsection (4) or section 37M(4) or 96A; or
(c)
one offence under either subsection (3) or section 37M(3) or 96, and one offence under either subsection (4) or section 37M(4) or 96A,
the imprisonment the individual shall be liable to shall not be less than 6 months.
(6) Where in any proceedings under subsection (3) it is proved that any information that is false in a material particular is given to the Comptroller under section 37R(2) or (7) by or on behalf of any person, the person who gave the information is presumed, unless the contrary is proved, to have given it with intent to obtain, or to assist the person on whose behalf the information is given to obtain, a cash payout or a higher amount of cash payout.
(7) Where in any proceedings under subsection (4) it is proved that any false statement or entry is made in any books of account or other records maintained by or on behalf of any person, the person who made the statement or entry is presumed, unless the contrary is proved, to have made that false statement or entry with intent to obtain, or to assist the person on whose behalf the statement or entry is made to obtain, a cash payout or a higher amount of cash payout.
(8) The Comptroller may compound any offence under this section other than subsection (4).
(9) In this section, a reference to the amount of cash payout that has been made to a person as a result of an offence, or which would have been made to the person if the offence had not been detected, excludes an amount of the cash payout that the person is entitled to.
(10) In this section, “cash payout” means a payment under section 37R.[Act 30 of 2023 wef 30/10/2023]
—(1) Any person who —(a)
gives to the Comptroller any information under section 37R(2) or (7) that is false in any material particular; or
(b)
omits any material particular from any information or document given under that provision to the Comptroller,
shall be guilty of an offence and shall on conviction be punished with a penalty that is equal to the amount of cash payout that has been made to the person or any other person as a result of the offence, or which would have been made to the person or any other person if the offence had not been detected.
(2) Any person who, without reasonable excuse or through negligence —(a)
gives to the Comptroller any information under section 37R(2) or (7) that is false in any material particular; or
(b)
omits any material particular from any information or document given under that provision to the Comptroller,
shall be guilty of an offence and shall on conviction be punished with a penalty that is double the amount of cash payout that has been made to the person or any other person as a result of the offence, or which would have been made to the person or any other person if the offence had not been detected, and shall also be liable to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 3 years or to both.
(3) Any person who wilfully with intent to obtain, or to assist another person to obtain, a cash payout or a higher amount of cash payout which the person or that other person is not entitled to —(a)
gives to the Comptroller any information under section 37R(2) or (7) that is false in any material particular or omits any material particular from any information or document given under that provision; or
(b)
gives any false answer, whether verbally or in writing, to any question or request for information asked or made by the Comptroller,
shall be guilty of an offence and shall on conviction be punished with a penalty that is treble the amount of cash payout that has been made to the person or that other person as a result of the offence, or which would have been made to the person or that other person if the offence had not been detected, and shall also be liable to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 3 years or to both.
(4) Any person who wilfully with intent to obtain, or to assist another person to obtain, a cash payout or a higher amount of cash payout which the person or that other person is not entitled to —(a)
prepares or maintains or authorises the preparation or maintenance of any false books of account or other records or falsifies or authorises the falsification of any books of account or other records; or
(b)
makes use of any fraud, art or contrivance or authorises the use of such fraud, art or contrivance,
shall be guilty of an offence and shall on conviction be punished with a penalty that is 4 times the amount of cash payout that has been made to the person or that other person as a result of the offence, or which would have been made to the person or that other person if the offence had not been detected, and shall also be liable to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 5 years or to both.
(5) Where an individual has been convicted of —(a)
3 or more offences under subsection (3) or section 37M(3) or 96;
(b)
2 or more offences under subsection (4) or section 37M(4) or 96A; or
(c)
one offence under either subsection (3) or section 37M(3) or 96, and one offence under either subsection (4) or section 37M(4) or 96A,
the imprisonment the individual shall be liable to shall not be less than 6 months.
(6) Where in any proceedings under subsection (3) it is proved that any information that is false in a material particular is given to the Comptroller under section 37R(2) or (7) by or on behalf of any person, the person who gave the information is presumed, unless the contrary is proved, to have given it with intent to obtain, or to assist the person on whose behalf the information is given to obtain, a cash payout or a higher amount of cash payout.
(7) Where in any proceedings under subsection (4) it is proved that any false statement or entry is made in any books of account or other records maintained by or on behalf of any person, the person who made the statement or entry is presumed, unless the contrary is proved, to have made that false statement or entry with intent to obtain, or to assist the person on whose behalf the statement or entry is made to obtain, a cash payout or a higher amount of cash payout.
(8) The Comptroller may compound any offence under this section other than subsection (4).
(9) In this section, a reference to the amount of cash payout that has been made to a person as a result of an offence, or which would have been made to the person if the offence had not been detected, excludes an amount of the cash payout that the person is entitled to.
(10) In this section, “cash payout” means a payment under section 37R.[Act 30 of 2023 wef 30/10/2023]
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
