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Modifications to provisions of Act in relation to Enterprise Innovation Scheme

Income Tax (Amalgamation of Companies) Regulations 2011

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—(1) Where the date of amalgamation falls within the basis period for any year of assessment mentioned in an EIS provision, then, for the purpose of applying that provision to the amalgamated company in respect of any EIS expenditure under the EIS provision incurred by it during the basis period for that year of assessment —(a)the reference to $400,000 in that EIS provision (other than section 14EA(1)) is a reference to the amount computed in accordance with the formula $400,000 – X1, where X1 is the total EIS expenditure under that EIS provision for which a deduction or allowance is allowed or made to an amalgamating company for that year of assessment under that EIS provision; and(b)the reference to $50,000 in section 14EA(1) of the Act is a reference to the amount computed in accordance with the formula $50,000 – X2, where X2 is the total EIS expenditure under section 14EA(1) for which a deduction is allowed to an amalgamating company for that year of assessment under section 14EA(1).(2) Where the date of amalgamation falls within the basis period for any year of assessment mentioned in section 14U(1B) of the Act, then, for the purpose of applying that provision to the amalgamated company in respect of the total expenditure which may be given deduction or allowance under section 14U(1A) of the Act and section 19B(1AD) of the Act for that year of assessment, the reference to $400,000 in that section is a reference to the amount computed in accordance with the formula $400,000 – Y, where Y is the total of the expenditure which may be given a deduction under section 14U(1A) of the Act and the expenditure which may be given an allowance under section 19B(1AD) of the Act for which a deduction or allowance is allowed or made to an amalgamating company for that year of assessment.(3) To avoid doubt, the deduction or allowance which may be allowed or made to the amalgamated company under the provisions mentioned in paragraph (1) or (2) is subject to section 37R(29) of the Act.(4) In this regulation —“EIS provision” means any of the following provisions of the Act:(a)section 14A(1BC);(b)section 14D(1A);(c)section 14EA(1);(d)section 14U(1A);(e)section 14ZG(1);(f)section 19B(1AD);“Enterprise Innovation Scheme expenditure” or “EIS expenditure”, in relation to any EIS provision, means —(a)in the case of section 14A(1BC) of the Act, qualifying intellectual property registration costs under that provision;(b)in the case of section 14D(1A) of the Act, expenditure or payments for research and development undertaken by a person under that section;(c)in the case of section 14EA(1) of the Act, qualifying expenditure for a qualifying innovation project under that provision;(d)in the case of section 14U(1A) of the Act, expenditure on the licensing from another person of qualifying intellectual property rights under that provision;(e)in the case of section 14ZG(1) of the Act, qualifying training expenditure under that provision; and(f)in the case of section 19B(1AD) of the Act, capital expenditure in acquiring any intellectual property right under that provision.

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