Clause 15

Subject to this section, where a company carrying on a trade or business has incurred on or after 23rd February 2001 capital expenditure in acquiring any approved intellectual property rights for use in that trade or business, writing-down allowances in respect of that expenditure shall be made to it during a writing-down period of 5 years beginning with the year of assessment relating to the basis period in which that expenditure is incurred.(2) The writing-down allowances to be made to a company under this section for any year of assessment shall be an amount equal to 20% of the capital expenditure incurred by it on the acquisition of the approved intellectual property rights.(3) Any capital expenditure incurred on the acquisition of any approved intellectual property rights by a company before the commencement of its trade or business shall be treated for the purpose of this section as if it had been incurred by it on the first day it commences that trade or business.(4) Where writing-down allowances have been made to any company under this section in respect of any approved intellectual property rights and, before the end of the writing-down period, any of the following events occurs:

the rights come to an end without being subsequently revived;

the company sells, transfers or assigns all or any part of those rights;

the company permanently ceases to carry on the trade or business; or

the company breaches any condition under which the approval for those rights was granted,no writing-down allowance in respect of the approved intellectual property rights shall be made to that company for the year of assessment relating to the basis period in which the event occurs or for any subsequent year of assessment, and any writing-down allowances made under subsection (1) shall be brought to charge as if the writing-down allowances were not made, and deemed as income for the year of assessment relating to the basis period in which the event occurs.(5) Where a company to whom writing-down allowances have been made under subsection (1) in respect of any approved intellectual property rights sells, transfers or assigns all or any part of those rights after the writing-down period, there shall be made on the company for the year of assessment relating to the basis period in which the sale, transfer or assignment occurs, a charge in an amount equal to the price which the rights were sold, transferred or assigned or in an amount equal to the capital expenditure incurred in acquiring the rights, whichever is the less.(6) For the purposes of subsection (5), where there is more than one sale, transfer or assignment of any part of any approved intellectual property rights, the amount of the capital expenditure incurred in acquiring the approved intellectual property rights for the year of assessment relating to the basis period in which the sale, transfer or assignment of that part of the rights occurs shall be ascertained in accordance with the formulawhere Ais the capital expenditure incurred in acquiring the approved intellectual property rights; andBis the total amount of any charges made under this section in any previous years of assessment in respect of that expenditure.(7) In this section —“approved” means approved by the Minister or such other person as he may appoint;“capital expenditure” does not include legal fees, registration fees, stamp duty and other costs related to the acquisition of any approved intellectual property rights;“intellectual property rights” means the right to do or authorise the doing of anything which would, but for that right, be an infringement of any patent, copyright, trademark, registered design, geographical indication, lay-out design of integrated circuit, trade secret or information that has commercial value.(8) For the purpose of this section, any sale, transfer or assignment of any approved intellectual property rights which occurs after the date on which the trade or business of a company permanently ceases shall be deemed to have occurred immediately before the cessation.(9) Notwithstanding the repeal of section 19B by the Income Tax (Amendment) Act 2001, the repealed section 19B shall continue to apply and have effect to any approved know-how or patent rights for which writing-down allowances had been made before the repeal as if that Act had not been enacted.”.