Singapore legislation
Clause 19
of Economic Expansion Incentives (Relief from Income Tax) Bill
Clause 19
Tax relief
(1)
Subject to the provisions of this Act, an expanding enterprise shall be entitled, during its tax relief period, to relief in the manner provided by this section.
(2)
The income of the expanding enterprise in respect of its trade or business to which its expansion certificate relates (hereinafter in this Part referred to as the “expansion income”) shall be ascertained, for any accounting period during its tax relief period, in accordance with the provisions of the Income Tax Ordinance (Cap. 166), save that no deduction which might otherwise fall to be made under the provisions of sections 19, 19A, 20, 21 and 22 of that Ordinance shall be made in respect of any new capital expenditure incurred by such expanding enterprise.
(3)
Where an expanding enterprise carries on trading activities other than those to which its expansion certificate relates, the expansion income to be ascertained for the purposes of this section shall be determined in such manner as appears to the Comptroller to be reasonable in the circumstances.
(4)
Where in the opinion of the Comptroller the carrying on of such trading activities is subordinate or incidental to the carrying on of the trade or business to which its expansion certificate relates, the income or loss arising from such activities shall be deemed to form part of the expansion income of the expanding enterprise.
(5)
The expansion income so ascertained shall be compared with the corresponding income of the expanding enterprise for the accounting period immediately preceding the tax relief period (hereinafter in this Part referred to as the “pre-relief income”) and relief shall be given to the following extent: —
where the pre-relief income equals or exceeds the expansion income no relief shall be given;
where the expansion income exceeds the pre-relief income the amount of the excess shall be allowed as a deduction but the deduction allowable shall not exceed the sum which bears the same proportion to the expansion income as the new capital expenditure on productive equipment bears to the total of such new capital expenditure and the value at original cost of the productive equipment owned and used by the expanding enterprise prior to its expansion.
(6)
Where an expanding enterprise has been approved as a pioneer enterprise or as an export enterprise or as both, the deduction allowable under this section shall be ascertained by reference to the expansion income of the expanding enterprise, including any part of such income which may be exempted under Part II or Part IV of this Act (hereinafter in this Part referred to as the “exempted income”) but shall be so limited that the total of the exempted income and the deduction in respect of the expansion income do not exceed one hundred per centum of the expansion income.
(7)
Where, for the purposes of providing relief under this section, it is necessary to compare the income of different accounting periods, and any such period is greater or less than twelve months, the income of such period shall be adjusted on a time basis to determine a notional income for a period of twelve months.