Clause 14

by inserting, immediately after paragraph (b) of subsection (1), the following paragraph:“(ba)payments made by that person to a research and development organisation for undertaking on his behalf, partly in Singapore and partly outside Singapore, research and development related to that trade or business;”;

by deleting the word “and” at the end of subsection (1)(c);

by deleting the full-stop at the end of paragraph (d) of subsection (1) and substituting a semi-colon, and by inserting immediately thereafter the following paragraphs:“(e)payments made by that person under any cost‑sharing agreement during the basis period for the year of assessment 2012 or a subsequent year of assessment, in respect of research and development that is related to that trade or business (excluding any payment made by him for the right to become a party to the cost-sharing agreement), regardless of who undertakes the research and development so long as it is undertaken wholly or partly for himself or on his behalf; and

payments made by that person during the basis period for any year of assessment between the year of assessment 2012 and the year of assessment 2015 (both years inclusive), under any cost-sharing agreement in respect of research and development that is undertaken in Singapore and is not related to that trade or business (excluding any payment made by him for the right to become a party to the cost-sharing agreement), regardless of who undertakes the research and development so long as it is undertaken wholly or partly for himself or on his behalf.”;

by deleting the words “subsection (1)(d)” in subsection (3) and substituting the words “subsection (1)(ba) or (d)”;

by inserting, immediately after subsection (3), the following subsection:“(3A) For the purposes of subsection (1)(e) in respect of research and development that is undertaken wholly or partly outside Singapore, a claim for deduction shall be allowed to a person only if —

there is an undertaking by the person that any benefit which may arise from the conduct of the research and development shall accrue, wholly or partly, to the person; and

the claim is made by the person in such manner and subject to such conditions as the Comptroller may require.”;

by deleting the words “subsection (1)(aa) and (c)” in subsection (4) and substituting the words “subsection (1)(aa), (c) and (f)”;

by inserting, immediately after subsection (4), the following subsection:“(4A) Where a person to whom deductions have been allowed for payments referred to in subsection (1)(e) or (f) becomes entitled to any royalty or other payments (in one lump sum or otherwise) for the use of or right to use any technology or know-how developed from the research and development activities conducted under the cost-sharing agreement, such royalty or payments shall be deemed to be income of that person that is derived from Singapore for the year of assessment which relates to the basis period in which he becomes entitled to the royalty or payments.”; and

by inserting, immediately after the definition of “concessionary rate of tax” in subsection (5), the following definition:“ “cost-sharing agreement” means any agreement or arrangement made by 2 or more persons to share the expenditure of research and development activities to be carried out under the agreement or arrangement;”.