Clause 10

subject to paragraph (d), any balance in the normal investment allowance account at the end of the basis period for the year of assessment before the transitional year shall only be used for deduction against the chargeable normal income of the company for the transitional year;

where the company has incurred any fixed capital expenditure before the relevant date, any investment allowance given to the company for the fixed capital expenditure shall be credited to the normal investment allowance account;

where the company has incurred any fixed capital expenditure on or after the relevant date, any investment allowance given to the company for the fixed capital expenditure shall be credited to the concessionary investment allowance account; and

the normal investment allowance account for the transitional year shall be debited with the amount of chargeable normal income for the transitional year not exceeding the credit in that account; and any remaining balance in that account for that year shall be debited from that account and credited to the concessionary investment allowance account for use against the chargeable concessionary income of the company for the transitional year and subsequent years of assessment.(6) Notwithstanding section 71, as from the relevant date, where the income of a company which is derived from an approved project is subject to tax as normal income instead of as concessionary income —

subject to paragraph (d), any balance in the concessionary investment allowance account at the end of the basis period for the year of assessment before the transitional year shall only be used for deduction against the chargeable concessionary income of the company for the transitional year;

where the company has incurred any fixed capital expenditure before the relevant date, any investment allowance given to the company for the fixed capital expenditure shall be credited to the concessionary investment allowance account;

where the company has incurred any fixed capital expenditure on or after the relevant date, any investment allowance given to the company for the fixed capital expenditure shall be credited to the normal investment allowance account; and

the concessionary investment allowance account for the transitional year shall be debited with the amount of chargeable concessionary income for the transitional year not exceeding the credit in that account; and any remaining balance in that account for that year shall be debited from that account and credited to the normal investment allowance account for use against the chargeable normal income of the company for the transitional year and subsequent years of assessment.(7) Notwithstanding section 71(4), where the Comptroller is satisfied that a company has permanently ceased to derive any concessionary income in the basis period for any year of assessment —

the concessionary investment allowance account shall be debited with the amount of chargeable concessionary income of the company for that year of assessment not exceeding the credit in that account;

any remaining balance in the concessionary investment allowance account shall be debited from that account; and

an adjusted amount of any remaining balance referred to in paragraph (b) shall be credited to the normal investment allowance account for use against the chargeable normal income of the company for that year of assessment and subsequent years of assessment, and for this purpose“adjusted amount” means the amount ascertained in accordance with the formula where Ais the amount of any remaining balance referred to in paragraph (b);Bis the concessionary rate of tax for that year of assessment at which the concessionary income is subject to tax; andCis the rate of tax under section 43(1)(a) of the Income Tax Act [Cap. 134] for that year of assessment.(8) In this section —“relevant date” means the date in the basis period relating to any transitional year on which the income of an approved project is subject to tax as concessionary income instead of as normal income, or vice versa;“transitional year” means any year of assessment relating to the basis period in which the income of an approved project is from the relevant date subject to tax as concessionary income instead of as normal income, or vice versa.(9) As from the date of commencement of the Economic Expansion Incentives (Relief from Income Tax) (Amendment) Act 1994 —

any remaining balance in the investment allowance account kept by a company at the end of the basis period relating to the year of assessment 1993 in respect of an approved project from which normal income of the company is derived shall be transferred to the normal investment allowance account; and

any remaining balance in the investment allowance account kept by a company at the end of the basis period relating to the year of assessment 1993 in respect of an approved project from which concessionary income of the company is derived shall be transferred to the concessionary investment allowance account.”.