Clause 7

The income of a pioneer enterprise in respect of its old trade or business shall be ascertained in accordance with the provisions of the Income Tax Ordinance (Cap. 166) after making such adjustments as may be necessary in consequence of any direction given under section 9 of this Act:Provided that in determining the income of the pioneer enterprise, the allowances provided for in sections 16, 17, 18, 19, 20, 21 and 22 of the Income Tax Ordinance shall be taken into account notwithstanding that no claim for such allowances has been made:And provided further that where in any year of assessment full effect cannot, by reason of an insufficiency of profits for that year of assessment, be given to such allowances, then 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.(2) Notwithstanding the provisions of subsection (1) of this section, where a pioneer enterprise has incurred or is intending to incur a fixed capital expenditure of —

not less than one thousand million dollars; or

not less than one hundred and fifty million dollars but less than one thousand million dollars, and —

more than fifty per centum of the paid-up capital of the pioneer enterprise is held by persons permanently resident in Singapore; and

in the opinion of the Minister the pioneer enterprise will promote or enhance the economic or technological development of Singapore,and where in either case an asset is used for the purposes of the new trade or business of the pioneer enterprise, any capital expenditure incurred by the pioneer enterprise in respect of such asset within its tax relief period shall, for the purposes of sections 16, 17, 18, 19, 19A, 20, 21 and 22 of the Income Tax Ordinance, be deemed to have been incurred on the day immediately following the last day of its tax relief period:Provided that where the carrying on of a separate trade or business has been permitted under subsection (1) of section 8 of this Act, and an industrial building, plant or machinery is used both for the purposes of that trade or business and the trade or business relating to the relevant pioneer product, the provisions of this subsection shall apply to such building, plant or machinery:And provided further that where a pioneer enterprise is the holder of two pioneer certificates in respect of different periods of time, and capital expenditure has been incurred in respect of any industrial building, plant or machinery which is jointly used in carrying on the trade or business of the two pioneer industries, no deduction shall be made in respect of such expenditure under any of the provisions contained in sections 16, 17, 18, 19, 19A, 20, 21 and 22 of the Income Tax Ordinance (Cap. 166) until after the expiration of the tax relief period which is later in time.(3) For the purposes of subsection (2) of this section, “fixed capital expenditure” shall have the same meaning as is assigned to that expression in subsection (5) of section 5 of this Act.”.