Clause 23

by inserting, immediately after the words “Subject to this section” in subsection (2), the words “and section 37IC”;

by inserting, immediately after subsection (2), the following subsection:“(2A) Subject to this section and section 37IC, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2016, 2017 or 2018, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under section 14, a deduction for qualifying training expenditure incurred for the purposes of those trades and businesses computed in accordance with the following formula:where A is —

for the year of assessment 2016, the lower of the following:

such expenditure incurred during the basis period for that year of assessment;

$1,200,000;

for the year of assessment 2017, the lower of the following:

such expenditure incurred during the basis period for that year of assessment;

the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and

for the year of assessment 2018, the lower of the following:

such expenditure incurred during the basis period for that year of assessment;

the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).”;

by inserting, immediately after subsection (5), the following subsection:“(5AA) In subsection (2A) —

if the person does not carry on any trade or business during the basis period for any one year of assessment between the years of assessment 2016 and 2018 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;

if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the years of assessment 2016 and 2018 (both years inclusive), the reference to “$1,200,000” in the paragraphs of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and

to avoid doubt, no deduction shall be made from the substituted amount in subsection (2A)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (2A)(a)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2016, and no deduction shall be made from the substituted amount in subsection (2A)(c)(ii) of the lower of the amounts specified in subsection (2A)(b)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2017.”;

by deleting the words “subsections (1) and (2)” in subsections (5A) and (5B) and substituting in each case the words “subsections (1), (2) and (2A)”;

by deleting the words “the year of assessment 2015” in subsections (5A) and (5B) and substituting in each case the words “the year of assessment 2018”;

by deleting the words “subsection (1) or (2)” in subsections (5A), (5B) and (7) and substituting in each case the words “subsection (1), (2) or (2A)”;

by inserting, immediately before the definition of “employee” in subsection (6), the following definitions:“ “central hirer”, in relation to a central hiring arrangement for a group of related parties, means the person who carries out hiring functions for those parties under the arrangement;“central hiring arrangement” means an arrangement for a group of related parties entered into for a bona fide commercial reason, where the hiring functions of the parties in the group are carried out by a single person;”;

by inserting, immediately after the definition of “employee” in subsection (6), the following definition:“ “employee”, for the purposes of the year of assessment 2014 and subsequent years of assessment, and in relation to a person carrying on a trade or business (referred to in this definition as the first person), includes —

an individual —

who is engaged by the central hirer of a central hiring arrangement for a group of related parties which includes the first person, and who is deployed to work solely for the first person; and

whose salary and other remuneration (including training expenditure incurred in respect of the individual) is borne, directly or indirectly, by the first person and not claimed by the central hirer as a deduction against the central hirer’s own income; and

an individual —

being an employee of another person, who is seconded to the first person under a bona fide commercial arrangement to work solely for the first person; and

whose salary and other remuneration (including training expenditure in respect of the individual) is borne, directly or indirectly, by the first person and not claimed by the other person as a deduction against the other person’s own income;”; and

by deleting the full‑stop at the end of the definition of “qualifying training expenditure” in subsection (6) and substituting a semi‑colon, and by inserting immediately thereafter the following definition:“ “related parties” has the same meaning as in section 13(16).”.