Clause 12

by deleting paragraph (b) of the definition of V in subsection (1) and substituting the following paragraph:“(b)the amount in one of the following sub‑paragraphs, whichever is applicable:

in the case of a year of assessment between the years of assessment 2012 and 2017 (both years inclusive), the amount in subsection (2A) of payments made during the basis period by the person under a cost‑sharing agreement —

for any local research and development; or

for such 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 the person or on the person’s behalf;

in the case of a year of assessment between the years of assessment 2018 and 2025 (both years inclusive), if the person makes any payment during the basis period under a cost‑sharing agreement, the sum of certain expenditure and payments (up to the amount in subsection (2AA)) that a party to the agreement (whether or not that person) has agreed to bear, and for which a deduction has not previously been allowed to the firstmentioned person under this sub‑paragraph, namely —

qualifying expenditure incurred by that person in undertaking a local research and development, or such part of a mixed research and development that is undertaken in Singapore; and

the amount mentioned in subsection (2AB) of payments made by that person to a research and development organisation for undertaking a local research and development, or a part of a mixed research and development in Singapore, on that person’s behalf.”;

by inserting, immediately before the words “the amount referred to in subsection (2A)” in paragraph (b) of the definition of X in subsection (2)(b), the words “subject to subsection (2AD),”;

by deleting the words “(excluding any payment made by him for the right to become a party to the cost‑sharing agreement)” in paragraph (b) of the definition of X in subsection (2)(b);

by deleting the words “the definitions of V and X in subsections (1) and (2)” in subsection (2A) and substituting the words “paragraphs (a) and (b)(i) of the definition of V in subsection (1), and paragraphs (a) and (b) of the definition of X in subsection (2)”; (e)by inserting, immediately after subsection (2A), the following subsections:“(2AA) The amount mentioned in paragraph (b)(ii) of the definition of V in subsection (1) is the amount of the payments made during the basis period by the person under the cost‑sharing agreement.(2AB) In paragraph (b)(ii)(B) of the definition of V in subsection (1), the amount is the higher of the following:

the part of those payments made to the research and development organisation that are qualifying expenditure; (b)60% (or such other percentage as may be prescribed by rules made under section 7) of the sum of all of the payments made to the research and development organisation.(2AC) For the purposes of paragraph (b)(ii) of the definition of V in subsection (1) (read with subsections (2AA) and (2AB)), where there is more than one cost‑sharing agreement or research and development organisation —

first, calculate each amount in those provisions relating to a cost‑sharing agreement or research and development organisation for every agreement or organisation; and

then, add up all amounts calculated under paragraph (a).(2AD) The amount mentioned in paragraph (b) of the definition of X in subsection (2)(b) is, in the case of the year of assessment 2018, subject to a maximum amount computed in accordance with the formula where —

A is the amount of the payments made during the basis period by the person under the cost‑sharing agreement; and

B is the amount computed under paragraph (b)(ii) of the definition of V in subsection (1) in relation to the same cost‑sharing agreement that qualifies for the deduction under subsection (1).”; and

by inserting, immediately after subsection (12), the following subsections:“(13) In this section —

a reference to a payment made by a person under a cost‑sharing agreement is a reference to the expenditure that is allocated to the person for the person to bear under the cost‑sharing agreement, and the time the payment for any part of the expenditure becomes payable or (if no such payment is needed) the time of the allocation, is treated as the time the payment is made; and

a reference to a payment made by a person under a cost‑sharing agreement excludes any payment for the right to be a party to the cost‑sharing agreement.(14) Subsection (13) is deemed to have effect for every year of assessment to which each provision of this section containing the reference mentioned in subsection (13) applies.”.