Clause 24

by deleting subsections (1) and (2) and substituting the following subsections:“(1) 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 the year of assessment 2011 or the year of assessment 2012, there shall be allowed, in respect of all his trades and businesses, the following deductions for qualifying design expenditure incurred for the purposes of those trades and businesses during each basis period:

where such expenditure is allowable as a deduction under section 14, a deduction of 300% of A, in addition to the deduction allowed under that section; and

where such expenditure is not allowable as a deduction under section 14, a deduction of 400% of A,where A is —

for the year of assessment 2011, the lower of the following:

such expenditure incurred during the basis period for that year of assessment; and

$800,000; and

for the year of assessment 2012, the lower of the following:

such expenditure incurred during the basis period for that year of assessment; and

the balance after deducting from $800,000 the lower of the amounts specified in paragraph (i)(A) and (B).

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 the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, there shall be allowed, in respect of all his trades and businesses, the following deductions for qualifying design expenditure incurred for the purposes of those trades and businesses during the basis period:

where such expenditure is allowable as a deduction under section 14, a deduction of 300% of A, in addition to the deduction allowed under that section; and

where such expenditure is not allowable as a deduction under section 14, a deduction of 400% of A,where A is —

for the year of assessment 2013, the lower of the following:

such expenditure incurred during the basis period for that year of assessment; and

$1,200,000;

for the year of assessment 2014, the lower of the following:

such expenditure incurred during the basis period for that year of assessment; and

the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (i)(A) and (B); and

for the year of assessment 2015, the lower of the following:

such expenditure incurred during the basis period for that year of assessment; and

the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (i)(A) and (B), and the lower of the amounts specified in paragraph (ii)(A) and (B).

In subsection (1), the amount under paragraph (i)(B) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2012, and the balance under paragraph (ii)(B) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011.

In subsection (2) —

if the person does not carry on any trade or business during the basis period for any one year of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;

if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and

for the avoidance of doubt, no deduction shall be made from the substituted amount in subsection (2)(ii)(B) or (iii)(B) of the lower of the amounts specified in subsection (2)(i)(A) and (B) if the person does not carry on any trade or business during the basis period for the year of assessment 2013, and no deduction shall be made from the substituted amount in subsection (2)(iii)(B) of the lower of the amounts specified in subsection (2)(ii)(A) and (B) if the person does not carry on any trade or business during the basis period for the year of assessment 2014.”;

by deleting the words “the amount computed in accordance with subsection (1) or, in the case of the year of assessment 2011 or the year of assessment 2012, the amount computed in accordance with subsection (2) for that year of assessment” in subsections (3) and (4) and substituting in each case the words “the amount computed in accordance with subsection (1) or (2) (as the case may be) for that year of assessment”;

by inserting, immediately before the words “in Singapore” in paragraphs (a) and (b) of the definition of “qualifying design expenditure” in subsection (6), the word “primarily”;

by inserting, immediately after the words “in Singapore” in paragraph (a) of the definition of “qualifying design expenditure” in subsection (6), the word “and”; and

by inserting, immediately after subsection (7), the following subsection:“(7A) For the purpose of the definition of “qualifying design expenditure” in subsection (6), an industrial or product design project is undertaken primarily in Singapore if at least 3 of the 5 of the following design phases of the project are carried out wholly in Singapore:

design research;

idea generation;

concept development;

technical development; and

communication.”.