Clause 15

by deleting the definitions of U and V in subsection (1) and substituting the following definitions:“U is the amount of qualifying expenditure incurred during the basis period on any local research and development undertaken directly by the person, including on that part undertaken in Singapore of any mixed research and development undertaken directly by that person, but excluding any capital expenditure on plant, machinery, land or buildings or on alterations, additions or extensions to buildings or in the acquisition of rights in or arising out of research and development; andV is the aggregate of the following:

the amount referred to in subsection (2A) of payments made during the basis period by the person to a research and development organisation for undertaking local research and development on his behalf, including for that part undertaken in Singapore of any mixed research and development that is undertaken by a research and development organisation on his behalf; and

the amount referred to in subsection (2A) of payments made during the basis period (being the basis period for any year of assessment between the year of assessment 2012 and the year of assessment 2015 (both years inclusive)) by the person under a cost-sharing agreement (excluding any payment made by him for the right to become a party to the cost-sharing agreement) —

for any local research and development; or

for that part of any mixed research and development that is undertaken in Singapore,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 definitions of W and X in subsection (2) and substituting the following definitions:“W is the amount of qualifying expenditure incurred during the basis period on any foreign research and development undertaken directly by the person, including on that part undertaken outside Singapore of any mixed research and development undertaken directly by that person, but excluding any capital expenditure on plant, machinery, land or buildings or on alterations, additions or extensions to buildings or in the acquisition of rights in or arising out of research and development;X is the aggregate of the following:

the amount referred to in subsection (2A) of payments made during the basis period by the person to a research and development organisation for undertaking any foreign research and development on his behalf, including for that part undertaken outside Singapore of any mixed research and development that is undertaken by a research and development organisation on his behalf; and

the amount referred to in subsection (2A) of payments made during the basis period (being the basis period for any year of assessment between the year of assessment 2012 and the year of assessment 2015 (both years inclusive)) by the person under a cost-sharing agreement (excluding any payment made by him for the right to become a party to the cost-sharing agreement) —

for any foreign research and development; or

for that part of any mixed research and development that is undertaken outside Singapore,regardless of who undertakes the research and development so long as it is undertaken wholly or partly for himself or on his behalf;”;

by inserting, immediately after subsection (2), the following subsections:“(2A) The amount of any of the payments in the definitions of V and X in subsections (1) and (2) is —

if more than 60% of all the payments made during the basis period to the research and development organisation or under the cost‑sharing agreement to which the definition applies are qualifying expenditure, the actual amount of the qualifying expenditure; or

in all other cases, 60% of all such payments,and where there is more than one research and development organisation or cost-sharing agreement, the aggregate of all the amounts computed in this manner of the payments to every organisation or under every agreement.(2B) In subsections (1) and (2) —“foreign research and development” means research and development that is undertaken outside Singapore, and that is related to the trade or business of the first-mentioned person in subsection (1);“local research and development” means research and development that is undertaken in Singapore;“mixed research and development” means research and development that is undertaken partly in Singapore and partly outside Singapore, and that is related to the trade or business of the first‑mentioned person in subsection (1) or (2), as the case may be.”;

by deleting the words “section 14D(1)(aa) and (c)” in subsection (9) and substituting the words “section 14D(1)(aa), (c) and (f)”;

by inserting, immediately after the definition of “consumables” in subsection (11), 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;”; and

by deleting subsection (12) and substituting the following subsection:“(12) In this section —

a reference to a person undertaking research and development includes —

a reference to a research and development organisation undertaking research and development on his behalf; and

for any year of assessment between the year of assessment 2012 and the year of assessment 2015 (both years inclusive), a reference to any person undertaking research and development under a cost‑sharing agreement of which the first‑mentioned person is a party, so long as the research and development is undertaken wholly or partly for the first‑mentioned person or on his behalf; and

a reference to any expenditure or payment excludes any such expenditure or payment to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board.”.