Clause 13

in subsection (1), replace “2025” wherever it appears with “2028”;

after subsection (1), insert —“(1A) Subject to this section and section 37R, for the purpose of ascertaining the income of a person carrying on any trade or business during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), there is allowed in respect of all of the person’s trades and businesses, in addition to the deductions allowed under subsection (1) and section 14C, a deduction for expenditure or payments for research and development undertaken by the person, of an amount computed in accordance with the formulawhere —

T is the lower of the following:

the aggregate of U and V;

$400,000; and

U and V have the meanings given by subsection (1).”;

in subsection (2B), in the definition of “mixed research and development”, after “subsection (1)”, insert “, (1A)”;

after subsection (6), insert —“(6A) For the purpose of subsection (1A), 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 2024 and 2028 (both years inclusive), incurred qualifying expenditure or made payments in respect of such firms entitling the individual to a deduction under subsection (1A), the deduction that may be allowed to the individual for those expenditure or payments in respect of all of the individual’s trades and businesses must not exceed the amount computed in accordance with subsection (1A) for that year of assessment.(6B) For the purpose of subsection (1A), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the years of assessment 2024 and 2028 (both years inclusive), incurred qualifying expenditure or made payments entitling the partners of the partnership to a deduction under subsection (1A), the aggregate of the deductions that may be allowed to all the partners of the partnership for those expenditure or payments in respect of all of the trades and businesses of the partnership must not exceed the amount computed in accordance with subsection (1A) for that year of assessment.”; (e)in subsection (9), after “subsection (1)” wherever it appears, insert “, (1A)”;

in subsection (9)(a) and (b), after “section 37G” wherever it appears, insert “or 37R”; and

in subsection (12)(a)(ii), replace “2025” with “2028”.