Clause 39

by inserting, immediately after subsection (1), the following subsections:“(1A) Despite subsection (1) but subject to the other provisions of this section, a person may, instead of deducting any qualifying deduction for the year of assessment 2020 in accordance with subsection (1), deduct the qualifying deduction for that year of assessment against the person’s assessable income for the 3 years of assessment immediately preceding the year of assessment 2020.(1B) A qualifying deduction under subsection (1A) must be deducted in the following order:

the deduction must first be made against the person’s assessable income for the year of assessment 2017 or any balance of the income after applying subsection (1C);

any balance of the qualifying deduction after the deduction in paragraph (a) must then be made against the person’s assessable income for the year of assessment 2018 or any balance of the income after applying subsection (1C);

any balance of the qualifying deduction after the deduction in paragraph (b) must then be made against the person’s assessable income for the year of assessment 2019.(1C) Where a person is entitled under both subsections (1) and (1A) to make deductions in the year of assessment 2017 or 2018 against the person’s assessable income for that year of assessment, then the deductions must be made in the following manner:

the assessable income for that year of assessment must so far as possible be deducted by the amount of the qualifying deduction for the year of assessment 2018 or 2019 (as the case may be) that the person is entitled to so deduct under subsection (1);

any balance of the assessable income for the firstmentioned year of assessment must so far as possible be deducted by the amount of the qualifying deduction for the year of assessment 2020 or the balance of the qualifying deduction mentioned in subsection (1B)(b), as the case may be.”;

by inserting, immediately after subsection (3), the following subsection:“(3A) Despite subsection (3), where a person makes an election under subsection (6) for the deduction of any qualifying deduction for the year of assessment 2020 in accordance with subsection (1A), the amount of the qualifying deduction to be deducted against the assessable income for any of the 3 years of assessment immediately preceding it is the lower of —

the amount of the qualifying deduction available for deduction for the second‑mentioned year of assessment under subsection (1B); and

the amount of the assessable income of the person for the second-mentioned year of assessment or (if applicable) the amount of the assessable income of the person for that year of assessment against which the deduction may be made under subsection (1C)(b).”;

by inserting, immediately after the words “immediate preceding year of assessment” wherever they appear in subsection (4), the words “or (as the case may be) any of the 3 immediate preceding years of assessment”;

by deleting subsection (4) and substituting the following subsection:“(4) Subject to the provisions of this section, section 37B (as it applies in a case mentioned in section 37B(1)(b)) applies, with the necessary modifications, to the deduction of any qualifying deduction by any company for any year of assessment against its assessable income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment, as if —

the qualifying deduction for the year of assessment is qualifying deduction for an earlier year of assessment;

the income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment is income for the year of assessment concerned; and

in section 37B(4) and (5) —

a reference to unabsorbed allowances, losses or donations or UALD is a reference to qualifying deduction;

a reference to corresponding allowances, losses or donations is a reference to allowances or losses; and

a reference to chargeable income of the company is a reference to assessable income for the immediate preceding year of assessment or (as the case may be) any of the 3 immediate preceding years of assessment of the company.”;

by deleting the words “the reference to “higher rate of tax” or “lower rate of tax” in section 37B” in subsection (4A) and substituting the words “any reference to “rate of tax” in section 37B”;

by deleting the words “under this section” in subsection (6) and substituting the words “under subsection (1) or any of the 3 immediate preceding years of assessment under subsection (1A)”;

by deleting the words “this section” in subsection (8) and substituting the words “subsection (1)”;

by inserting, immediately after subsection (8), the following subsection:“(8A) Despite subsection (8), where the Comptroller discovers that any deduction made under subsection (1A) against the assessable income of any person for the year of assessment 2017 or 2018 has become excessive, the Comptroller may make an assessment on the person on the amount which, in the Comptroller’s opinion, ought to have been charged to tax in that year of assessment —

in the case of the year of assessment 2017 — within 7 years after the expiration of the year of assessment; or

in the case of the year of assessment 2018 — within 6 years after the expiration of the year of assessment.”;

by inserting, immediately after the words “income for the immediate preceding year of assessment” in subsections (11) and (12), the words “or (as the case may be) any of the 3 immediate preceding years of assessment”;

by deleting the words “basis period for the immediate preceding year of assessment” in subsection (11) and substituting the words “basis period for the year of assessment in which the allowance is claimed”; and

by deleting the words “last day of the immediate preceding year of assessment” in subsection (12) and substituting the words “last day of the year of assessment in which the allowance is claimed”.