Income Tax (Amendment) Bill

by inserting, immediately after the word “products” in the fifth line of the definition of “research and development”, the word “, produce,”; and

by deleting the word “manufacturing” in the definition of “research and development organisation”.

any new product, or any new method in the manufacture or processing of goods or materials; or

a substantial improvement in any product, or in any method in the manufacture or processing of goods or materials,which involves novelty or originality but does not include a computer program unless it is in the nature of a new computer operating system or new language used in a computer program;“rights in the approved invention or approved product innovation” means the rights relating to any patent, copyright, industrial design or know-how of an approved invention or approved product innovation.”.

Notwithstanding any other provisions of this Act, the Minister may by regulations —

provide that tax on gains or profits derived from the disposal of securities by an approved investment company shall be levied and paid for each year of assessment upon such amount as may be determined by reference to the period during which those securities have been held;

provide for the deduction of such amount of allowances under section 19, 19A, 20, 21 or 23 to be granted in such manner as may be prescribed;

provide for the deduction of such amount of losses arising from the disposal of securities as may be determined by reference to the period during which those securities have been held;

provide for the deduction of such amounts of expenses and donations allowable under this Act in such manner as may be prescribed.(2) For the purposes of this section —“approved” means approved by the Minister or such other person as he may appoint;“investment company” means any company whose business consists wholly or mainly in the making of investments and the principal part of whose income is derived therefrom, and includes any unit trust;“securities” means —

debentures, stocks, shares, bonds or notes issued by a government or company; or

any right or option in respect of any such debentures, stocks, shares, bonds or notes.”.

by deleting the words “debited to the account” in the first line of subsection (6) and substituting the words “exempt from tax under this section”; and

by inserting, immediately after subsection (6), the following subsection:“(6A) Notwithstanding subsections (4) and (6), no dividend paid on or after the commencement of the Income Tax (Amendment) Act 1989 on any share of a preferential nature shall be exempt from tax in the hands of the shareholder.”.

Where an investment company has been approved under section 10A, the provisions of this section shall have effect.(2) As soon as any amount of the income has been determined to be not chargeable to tax in accordance with regulations prescribed under section 10A, the net amount of that income shall be credited to a special account (referred to in this section as the account) to be kept by the investment company for the purposes of this section.(3) Subsections (3) to (8) of section 13B shall apply with such modifications as may be necessary in respect of any dividends paid out of the account of that investment company.(4) In this section, “net amount” in relation to the income referred to in subsection (2) for any year of assessment means the amount of that income less —

expenses and donations allowable under this Act for that year of assessment which are determined in accordance with regulations prescribed under section 10A as attributable to that income;

any amount of loss for that year of assessment arising from the disposal of securities which is determined in accordance with regulations prescribed under section 10A by reference to the period during which those securities have been held and which is not deductible under those regulations;

any amount of allowances for that year of assessment under section 19, 19A, 20, 21 or 23 which is determined in accordance with regulations prescribed under section 10A as attributable to that income; and

any amount of the expenses, donations, allowances and losses referred to in paragraphs (a), (b) and (c) which have not been deducted in arriving at the net amount of the income for any previous year of assessment.”.

by deleting the words “manufacturing” in subsection (1);

by deleting the words “1st April 1979” in subsection (1) and substituting the words “the respective dates referred to in subsection (1A)”;

by inserting, immediately after subsection (1), the following subsection:“(1A) For the purposes of subsection (1) —

any person carrying on a manufacturing trade or business shall only be allowed as deduction expenditure incurred on or after 1st April 1979; and

any person carrying on a trade or business for the provision of specified services shall only be allowed as deduction expenditure incurred on or after 1st April 1988.”;

by inserting, immediately after the definition of “approved” in subsection (2)(a), the following definition:“(aa)“specified services” means —

services and activities which relate to the development of computer programs;

services and activities which relate to the technology involved in acquiring, storing, processing or distributing information by the use of computers or computer programs;

services and activities which relate to technology applied to agriculture, horticulture or the farming of livestock, fish or other forms of aquatic life;

laboratory and testing services;

services and activities which relate to medical research; and

any other services or activities as may be prescribed by the Minister;”; and

by deleting the word “manufacturing” in subsection (2)(b).

by deleting the word “or” at the end of subsection (1)(a);

by deleting the comma at the end of subsection (1)(b) and substituting the word “; or”, and by inserting immediately thereafter the following paragraph:“(c)a person carrying on a trade or business for the provision of any specified services has incurred expenditure on or after 1st April 1988, in undertaking directly by himself, or in paying a research and development organisation to undertake on his behalf, an approved research and development project in Singapore which is related to that trade or business,”; and

by deleting subsection (4) and substituting the following subsection:“(4) For the purposes of this section —“approved” means approved by the Minister or such other person as he may appoint;“specified services” has the same meaning as in section 14D.”.

by inserting, immediately after the word “activities” in paragraph (i), the words “for any manufacturing trade or business”;

by deleting the word “or” at the end of paragraph (j); and

by deleting the comma at the end of paragraph (k) and substituting the word “; or”, and by inserting immediately thereafter the following paragraph“(l)for prescribed purposes and where such building or structure has been approved by the Minister or such other person as he may appoint,”.