Singapore legislation
Regulation 4A
Regulation 4A
Determination of exempt income, and deductions
Subregulation 1
In determining the income of a person to be exempted from tax under section 13(1)(bc) or (bd) of the Act —
the Comptroller shall have regard to such expenses and capital allowances allowable under the Act as are, in his opinion, to be deducted in ascertaining such income; and
there shall be deducted from that income any allowances under section 19, 19A, 20, 21 or 22 of the Act attributable to that income notwithstanding that no claim for those allowances has been made.
Subregulation 2
Any balance of the allowances mentioned in paragraph (1)(b) shall only be deducted against any income referred to in section 13(1)(bc) or (bd) of the Act of the person for subsequent years of assessment, and shall not be deducted against any other income of the person.
Subregulation 3
Any losses incurred in respect of any qualifying debt securities referred to in section 13(1)(bc) or (bd) of the Act shall only be deducted against any income referred to in section 13(1)(bc) or (bd) of the Act of the person for subsequent years of assessment, and shall not be deducted against any other income of the person.
Subregulation 4
Any balance of the allowances mentioned in paragraph (2) and losses mentioned in paragraph (3) remaining unabsorbed on the date the tax exemption ceases shall, subject to paragraphs (5), (6) and (7) be available as a deduction against any other income of the person for the year of assessment which relates to the basis period in which the tax exemption ceases, and any subsequent year of assessment.
Subregulation 5
Section 37A of the Act shall, with the necessary modifications, apply to a deduction under paragraph (4) as if the balance of the allowances or losses available as a deduction under that paragraph were unabsorbed allowances or losses in respect of the income of a company subject to tax at a lower rate of tax under that section, and for this purpose the rate of tax shall be taken to be the concessionary rate of tax in accordance with the regulations made under section 43H of the Act.
Subregulation 6
Allowances may be deducted under paragraph (4) only if the person continues to carry on the trade or business in respect of the gains or profits of which the allowances falls to be made, and the allowances shall be disregarded if he has ceased to do so.
Subregulation 7
Sections 23(4) to (8) and 37(12) to (17) of the Act shall apply, with the necessary modifications, to a deduction under paragraph (4).
Subregulation 8
In paragraph (4), the tax exemption ceases when the person ceases to be in a position to derive income referred to in section 13(1)(bc) or (bd) of the Act, whether because the qualifying debt securities have reached maturity, the person has disposed of them or otherwise.