Clause 20

Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for any year of assessment between the years of assessment 2019 and 2025 (both years inclusive), there is to be allowed in respect of all of the person’s trades and businesses, in addition to the deduction allowed under section 14 or 14D (as the case may be), a deduction of the amount of the expenditure incurred during the basis period for the purposes of those trades and businesses on the licensing from another person of any qualifying intellectual property rights, up to $100,000.(2) For the purposes of subsection (1), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the years of assessment 2019 and 2025 (both years inclusive), incurred expenditure on the licensing from another person of any qualifying intellectual property rights in respect of such firms for the purposes of the individual’s trade or business, the deductions that may be allowed to the individual for that expenditure in respect of all of the individual’s trades and businesses must not exceed the maximum amount mentioned in subsection (1).(3) For the purposes of subsection (1), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the years of assessment 2019 and 2025 (both years inclusive), incurred expenditure on the licensing from another person of any qualifying intellectual property rights for the purposes of the partnership’s trade or business, the deductions that may be allowed to all the partners of the partnership for that expenditure in respect of all the trades and businesses of the partnership must not exceed the maximum amount mentioned in subsection (1).(4) No deduction may be allowed to a person under this section in respect of —

any expenditure that is not allowed as a deduction under section 14 or 14D (as the case may be);

any expenditure incurred by that person on licensing from its related party, of any qualifying intellectual property rights, where such rights were acquired or developed (in whole or in part) by the related party; or

any qualifying intellectual property rights for which a writing‑down allowance has been previously made to that person under section 19B.(5) The Minister may by order exempt a person from subsection (4)(b) in respect of such transaction as may be specified in the order.(6) In this section —“qualifying intellectual property rights” has the same meaning as in section 14W(8);“related party” has the same meaning as in section 13(16).(7) In this section, a reference to expenditure incurred on the licensing from another person of qualifying intellectual property rights excludes any such expenditure to the extent that it is or is to be subsidised by grants or subsidies from the Government or a statutory board.(8) In this section, “expenditure incurred on the licensing from another person of qualifying intellectual property rights” means the licence fees but excludes —

expenditure for the transfer of ownership of any of those rights; and

legal fees and other costs related to the licensing of such rights.”.