Clause 12

Subject to subsections (2) and (3), the qualifying income of a development and expansion company shall be ascertained in accordance with the provisions of the Income Tax Act after making such adjustments as may be necessary in consequence of any direction given under section 19P.(2) In determining the qualifying income of a development and expansion company for the basis period for any year of assessment —

the allowances provided for in sections 16, 17, 18, 19, 19A, 19B, 19C, 19D, 20, 21 and 22 of the Income Tax Act shall be taken into account notwithstanding that no claim for such allowances has been made;

the allowances referred to in paragraph (a) for that year of assessment shall firstly be deducted against the qualifying income of the company, and any unabsorbed allowances shall be deducted against the other income of the company subject to tax at a different rate of tax under this Act or the Income Tax Act (Cap. 134) in accordance with subsection (3);

the balance, if any, of the allowances after the deduction in paragraph (b) shall be available for deduction for any subsequent year of assessment in accordance with sections 22A and 23 of the Income Tax Act and shall be made in the manner provided in that paragraph;

any loss incurred for that basis period shall be deducted in accordance with subsection (3) against the other income of the company subject to tax at a different rate of tax under this Act or the Income Tax Act;

the balance, if any, of the losses after the deduction in paragraph (d) shall be available for deduction for any subsequent year of assessment in accordance with section 37 of the Income Tax Act firstly against the qualifying income of the company, and any balance of the losses shall be deducted against the other income of the company subject to tax at a different rate of tax under this Act or the Income Tax Act in accordance with subsection (3);

any unabsorbed donation for that year of assessment shall be deducted in accordance with subsection (3) against the other income of the company subject to tax at a different rate of tax under this Act or the Income Tax Act; and

the balance, if any, of the donations after the deduction in paragraph (f) shall be available for deduction for any subsequent year of assessment in accordance with section 37 of the Income Tax Act firstly against the qualifying income of the company, and any balance of the donations shall be deducted against the other income of the company subject to tax at a different rate of tax under this Act or the Income Tax Act in accordance with subsection (3).(3) Section 37B of the Income Tax Act shall apply, with the necessary modifications, in relation to the deduction of the allowances provided for in sections 16, 17, 18, 19, 19A, 19B, 19C, 19D, 20, 21 and 22 of that Act, the losses or donations under section 37 of that Act in respect of the qualifying income of a development and expansion company and such part of its income as is subject to tax at a different rate of tax under this Act or the Income Tax Act (Cap. 134).(4) For the purpose of the application under subsection (3), any reference in section 37B of the Income Tax Act to income of a company subject to tax at a higher or lower rate of tax or income of the company subject to tax at a higher or lower rate of tax, as the case may be, shall be read as a reference to its qualifying income.Ascertainment of income from other trade or business19N.—

Where, during its tax relief period, a development and expansion company carries on any trade or business other than its qualifying activities, separate accounts shall be maintained in respect of that other trade or business and in respect of the same accounting period; and the income from that other trade or business shall be computed and assessed in accordance with the Income Tax Act with such adjustments as the Comptroller thinks reasonable and proper.(2) Where, in the opinion of the Comptroller, the carrying on of such other trade or business is subordinate or incidental to the carrying on of the qualifying activities of the development and expansion company, the income or loss arising from such other trade or business shall be deemed to form part of the income or loss of the company from its qualifying activities.Deduction of losses19O. The Minister may, in relation to development and expansion companies, by regulations provide for —

the manner in which expenses, capital allowances and donations allowable under the Income Tax Act are to be deducted; and

the deduction of capital allowances, losses and donations otherwise than in accordance with sections 23 and 37 of the Income Tax Act.Power to give directions19P. For the purposes of this Act and the Income Tax Act (Cap. 134), the Comptroller may direct that —

any sum payable to a development and expansion company in its tax relief period which might reasonably and properly have been expected to be payable, in the normal course of business, after the end of that period shall be treated as not having been payable in that period but as having been payable on such date, after that period, as the Comptroller thinks fit; and (b)any expense incurred by a development and expansion company within one year after the end of its tax relief period which might reasonably and properly have been expected to be incurred, in the normal course of business, during its tax relief period shall be treated as not having been incurred within that year but as having been incurred for the purposes of its qualifying activities and on such date, during its tax relief period, as the Comptroller thinks fit.”.