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Modifications to section 37G of Act (Cash payout under Productivity and Innovation Credit Scheme)

Income Tax (Amalgamation of Companies) Regulations 2011

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—(1) Where the date of amalgamation falls within the basis period for the year of assessment 2011, then, for the purpose of computing the amount of cash payout to be given under section 37G of the Act to the amalgamated company for the year of assessment 2011 or 2012, the references to “$200,000” in section 37G(3)(a)(ii) and (b)(ii)of the Act shall each be read as a reference to the amount computed in accordance with the formula:where Y1is the aggregate of every amount of expenditure for which an amalgamating company has made an election for a cash payout in lieu of a deduction or allowance under section 37G of the Act for the year of assessment 2011.(2) Where the date of amalgamation falls within the basis period for the year of assessment 2012, then, for the purpose of computing the amount of cash payout to be given under section 37G of the Act to the amalgamated company for the year of assessment 2012, the reference to “$200,000” in section 37G(3)(b)(ii) of the Act shall be read as a reference to the amount computed in accordance with the formula:where Y2is the aggregate of every amount of expenditure for which an amalgamating company has made an election for a cash payout in lieu of a deduction or allowance under section 37G of the Act for the year of assessment 2011 or 2012.(3) Where the date of amalgamation falls within the basis period for the year of assessment 2013, 2014, 2015 or 2016, then, for the purpose of computing the amount of cash payout to be given under section 37G of the Act to the amalgamated company, the reference to “$100,000” in section 37G(4)(b) of the Act shall be read as a reference to the amount computed in accordance with the formula:where Y3is the aggregate of every amount of expenditure for which an amalgamating company has made an election for a cash payout in lieu of a deduction or allowance under section 37G of the Act for the year of assessment 2013, 2014, 2015 or 2016, as the case may be.(3A) Where the date of amalgamation falls within the basis period for the year of assessment 2017, then, for the purpose of computing the amount of cash payout to be given under section 37G of the Act to the amalgamated company —(a)in the case where subsection (4AA)(a) of that section applies to the amalgamated company — the reference to $100,000 in subsection (4) of that section; or(b)in the case where subsection (4AA)(b) of that section applies to the amalgamated company — every reference to $100,000 in that subsection,is a reference to the amount computed in accordance with the formula $100,000 – Y4, where Y4 is the total of every amount of expenditure for which an amalgamating company has made an election for a cash payout in lieu of a deduction or an allowance under section 37G of the Act for the year of assessment 2017.(3B) Where the date of amalgamation falls within the basis period for the year of assessment 2018, then, for the purpose of computing the amount of cash payout to be given under section 37G of the Act to the amalgamated company —(a)in the case where subsection (4AB)(a) of that section applies to the amalgamated company — every reference to $100,000 in subsection (4AA)(b) of that section; or(b)in the case where subsection (4AB)(b) of that section applies to the amalgamated company — the reference to $100,000 in that subsection,is a reference to the amount computed in accordance with the formula $100,000 – Y5, where Y5 is the total of every amount of expenditure for which an amalgamating company has made an election for a cash payout in lieu of a deduction or an allowance under section 37G of the Act for the year of assessment 2018.(4) For the purpose of determining the applicability of section 37G(3A) of the Act (reduction of the selected expenditure used for computing the cash payout where the person which elected for the payout did not carry on a trade, profession or business during a specified basis period) to an amalgamating company and the amalgamated company in a case where the date of amalgamation falls within the basis period for the year of assessment 2011 or 2012 —(a)in the case of an amalgamating company, any trade or business carried on by the amalgamated company on or after the date of amalgamation shall be deemed to have been carried on by the amalgamating company as if the amalgamating company existed on or after that date; and(b)in the case of the amalgamated company, any trade or business carried on by any of the amalgamating companies prior to the date of amalgamation shall be deemed to have been carried on by the amalgamated company as if the amalgamated company existed prior to that date.

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