Section 97M

income other than the qualifying income shall be excluded and separately assessed;

there shall be deducted in arriving at the qualifying income —

all direct costs and expenses incurred in respect of that qualifying income;

all indirect expenses which are reasonably and properly attributable to that qualifying income; and

donations allowable under the Income Tax Act which the Comptroller may allocate as he thinks fit;

the allowances provided for in sections 16 to 22 (where applicable) of the Income Tax Act attributable to the qualifying income during the tax relief period shall be taken into account notwithstanding that no claim for those allowances has been made;

where in any year of assessment full effect cannot, by reason of an insufficiency of qualifying income for that year of assessment, be given to those allowances, the balance of the allowances shall be added to, and be deemed to form part of, the corresponding allowances, if any, for the next succeeding year of assessment, and, if no such corresponding allowances fall to be made for that year, shall be deemed to constitute the corresponding allowances for that year, and so on for subsequent years of assessment, and shall, during the tax relief period, only be made against the qualifying income and the balance of such allowances shall not be available as a deduction against any other income;

for the purposes of paragraphs (b)(ii) and (c), the amounts attributable to the qualifying income shall be determined on such basis as the Comptroller thinks reasonable and proper;

where the overseas enterprise has, during its tax relief period, incurred a loss for any year in respect of any qualifying activity, that loss shall during the tax relief period only be deducted against the qualifying income and the balance of such losses shall not be available as a deduction against any other income;

for the purposes of paragraphs (b), (c) and (f), expenses, donations, allowances and losses attributable to any qualifying income derived from outside Singapore shall only be deducted against such income and the balance of such expenses, donations, allowances and losses shall not be available as a deduction against any other income ; and

subject to sections 23 and 37 of the Income Tax Act (Cap. 134), any allowances and lossesattributable to any qualifying income derived from Singapore which remain unabsorbed at the end of its tax relief period shall be available for deduction in its post tax relief period.