Clause 15

by deleting subsection (1) and substituting the following subsection:“(1) Where any person carrying on a hotel trade or business at any hotel premises proposes to carry out a project for any refurbishment of the hotel premises, he may apply to the Minister, or such person as he may appoint, on or before 30th June 2003 for that project (which shall be completed on or before 30th June 2006) to be approved for the purposes of claiming a deduction under this section in respect of expenditure incurred by him on the refurbishment project.”; and

by deleting subsection (8) and substituting the following subsections:“(8) Subject to subsection (8A), as soon as a deduction is allowed under this section to a company resident in Singapore, an amount (referred to in this section as further deduction) computed in accordance with the formulashall be credited to an account (referred to in this section as further deduction account) to be kept by the company for the purposes of this section, where A and B have the same meanings as in subsection (5).(8A) Where the company is a transferor company within the meaning of section 37C(19) and where any amount of further deduction allowed under this section is transferred to a claimant company as part of the loss specified under section 37C(14)(b) —

the sum transferred shall not be credited to the further deduction account to be kept by the transferor company;

for the purposes of this section, upon the transfer of the sum under paragraph (a), the sum transferred shall be credited to the further deduction account to be kept by the claimant company; and

in relation to the sum transferred under paragraph (a), subsections (8B) to (8I) and subsection (14) shall apply to the claimant company.(8B) Where for any year of assessment the further deduction account of the company is in credit, the company shall —

debit from that account such amount as would have been the chargeable income had the further deduction not been allowed or the amount of the credit in that account, whichever is the less; and

credit the amount debited under paragraph (a) to an account to be called a tax exempt account which shall be kept by the company for the purposes of this section,and any remaining balance in the further deduction account shall be carried forward to be used by the company in the first subsequent year of assessment when the company has chargeable income had the further deduction not been allowed, and so on for subsequent years of assessment until the credit in the further deduction account has been fully used.(8C) Where the tax exempt account is in credit at the date on which any dividends are paid by the company out of the amount credited to that account, an amount equal to those dividends or to that credit, whichever is the less, shall be debited to the tax exempt account.(8D) So much of the amount of any dividends so debited to the tax exempt account as is received by a shareholder of the company shall, if the Comptroller is satisfied with the entries in the account, be exempt from tax in the hands of the shareholder.(8E) Any dividends debited to the tax exempt account shall be treated as having been distributed to the shareholders of the company or any particular class of the shareholders in accordance with the proportion of their shareholdings in the company.(8F) Where an amount of dividends exempt from tax under this section has been received by a shareholder, if that shareholder is a company, any dividends paid by that company to its shareholders, to the extent that the Comptroller is satisfied that those dividends are paid out of that amount, shall be exempt from tax in the hands of those shareholders.(8G) Notwithstanding subsections (8D) and (8F), no dividend paid on any share of a preferential nature shall be exempt from tax under this section in the hands of the shareholder.(8H) Section 44 shall not apply to any dividends or part thereof which are exempt from tax under this section.(8I) The company shall deliver to the Comptroller a copy of the tax exempt account made up to any date specified by him whenever called upon to do so by notice in writing.”.