Clause 14

Where market development expenditure is incurred on or after the 1st day of January 1966, by a person carrying on a trade or business which is an approved market development enterprise there shall be allowed a further deduction equal to the amount of such market development expenditure in addition to the deduction allowable under section 14 of this Ordinance.(2) Where due to an insufficiency of income, any part of such market development expenditure cannot be allowed as a deduction in any year of assessment, such expenditure shall be deemed to be a loss available for carry forward under the provisions of section 37 of this Ordinance.(3) For the purposes of this section —“approved market development enterprise” means an enterprise approved by an order made by the Minister, subject to such conditions as he may think fit to impose, including the period during which the approval will operate;“average annual expenditure” means a sum equal to one-third of the amount of expenditure incurred in direct advertising in recognised advertising media during the basis periods for the three years of assessment immediately preceding the basis period for the year of assessment in which the deduction is claimed: Provided that, where an approved market development enterprise has carried on trade or business for a period of less than three years, the average annual expenditure shall be ascertained by dividing the total amount of such expenditure incurred prior to the basis period for the year of assessment in which the deduction is claimed, by the number of months in which the enterprise has carried on trade or business and multiplying the resultant by twelve;“market development expenditure” means prescribed expenditure incurred by an approved market development enterprise, primarily and principally for the purpose of seeking opportunities, or in creating or increasing a demand, for —

the use or consumption within Singapore of goods which have been manufactured, produced, assembled or processed in Singapore;

the export from Singapore of goods which have been manufactured, produced, assembled, processed, packed, graded or sorted in Singapore.“prescribed expenditure” means —

in the case of expenditure in respect of the use or consumption of goods within Singapore, advertising expenses incurred in any basis period in promoting a demand for goods made in Singapore, subject to the following limitations: —

where the trade or business has been in existence during prior years of assessment, the prescribed expenditure shall be an amount equal to the excess of the expenditure incurred in the basis period over the average annual expenditure, but no such deduction shall exceed fifty per cent of the average annual expenditure or one hundred thousand dollars, whichever is the less;

where the trade or business has not been in existence during any prior year of assessment, the deduction shall not exceed one hundred thousand dollars;

in the case of expenditure in respect of the export of goods from Singapore, the following classes of expenditure made by a company: —

advertising expenses paid to persons not resident in Singapore in respect of advertisements placed in recognised media such as newspapers and trade journals;

expenses directly attributable to the provision, without charge, of samples, to prospective customers outside Singapore, including the cost of delivery of such samples;

expenses directly attributable to carrying out export market research or the obtaining of export matketing information;

expenses directly attributable to the preparation of tenders for the supply of goods (not of the same kind and specifications regularly manufactured by the tenderer) to prospective customers outside Singapore;

expenses by way of fares only (and not in respect of accommodation, sustenance or entertainment) in respect of travel to another country outside Singapore by a recognised employee of the company possessing authority to conclude sales of goods on behalf of the employer.(4) (a) No expenditure shall be allowable as a further deduction under this section, which would not be allowable as a deduction under the provisions of section 14 of this Ordinance.(b)Where the amount of any market development expenditure exceeds the amount which, in the opinion of the Comptroller, would reasonably be expected to be payable in the ordinary course of business for the purposes for which the expenditure was incurred, the Comptroller may, to the extent of the excess, disallow a deduction under this section.(c)Where expenditure is incurred in respect of travel to another country by two or more employees of a company at the same time, the deduction allowable under this section shall be limited to the cost of travel of one such employee only, unless the company proves to the satisfaction of the Comptroller that it was reasonably necessary for more than one employee to travel to the other country.”.