Section 54
Exemption from income tax: general
of Economic Expansion Incentives (Relief from Income Tax) Act 1967
(1)
Subject to subsection (2) and section 55, where for any year of assessment, the normal IIA account of a company is in credit and the company has, for that year of assessment, any net chargeable normal income —
an amount of the net chargeable normal income, not exceeding the credit in the account, is exempt from tax and the account is to be debited with such amount; and
any remaining balance in the account is to be carried forward to be used in the manner referred to in paragraph (a) for every subsequent year of assessment when the company has net chargeable normal income, until the credit in the account has been fully used up.
(2)
Where, for any year of assessment, the company has any net chargeable concessionary income and the normal IIA account is in credit, the company may elect for any amount of the net chargeable concessionary income, not exceeding the credit in the account, to be exempt from tax and the account to be debited with such amount, and if the company so elects, that amount of income is so exempt from tax and the account is to be so debited.
(3)
A company must make the election under subsection (2) for any year of assessment at the time of lodgment of the return of income for that year of assessment.
(4)
Subject to section 56, where for any year of assessment, the concessionary IIA account of a company is in credit and the company has, for that year of assessment, any net chargeable concessionary income —
an amount of the net chargeable concessionary income, not exceeding the credit in the account, is exempt from tax and the account is to be debited with such amount; and
any remaining balance in the account is to be carried forward to be used in the manner referred to in paragraph (a) for every subsequent year of assessment when the company has net chargeable concessionary income, until the credit in the account has been fully used up.
(5)
Where the Comptroller is satisfied that a company has permanently ceased to derive any concessionary income in the basis period for any year of assessment —
the concessionary IIA account is to be debited with the amount of net chargeable concessionary income or the credit in the account, whichever is the less, for that year of assessment;
any remaining balance in the concessionary IIA account is to be debited from that account; and
an adjusted amount of any remaining balance referred to in paragraph (b) is to be credited to the normal IIA account to be used in accordance with subsection (1) for every subsequent year of assessment when the company has net chargeable normal income, until the credit in the account has been fully used up.
(6)
In subsection (5)(c), “adjusted amount” means the amount ascertained by the formula —where Ais the amount of any remaining balance referred to in subsection (5)(b);Bis the concessionary rate of tax for the year of assessment referred to in subsection (5) at which the concessionary income is subject to tax; andCis the rate of tax under section 43(1)(a) of the Income Tax Act 1947 for the year of assessment referred to in subsection (5).
(7)
Any amount of net chargeable concessionary income of a company debited from the concessionary IIA account under subsection (5)(a) is exempt from tax.[97ZE