Singapore legislation
Regulation 2
of Income Tax (Concessionary Rate of Tax for Intellectual Property Income) Regulations 2021
Regulation 2
Definitions
Subregulation 1
In these Regulations —
Definition
“approval date”, in relation to an approved company, means the date on which the company is approved as such;
Definition
“cost‑sharing agreement” means any agreement or arrangement entered into by an approved company and one or more other persons to share the expenditure of research and development activities to be carried out under the agreement or arrangement, whether the agreement or arrangement was entered into by the approved company before, on or after it became an approved company;
Definition
“elected qualifying IPR” means any qualifying IPR elected or treated as elected by the approved company for a year of assessment under section 43X(7) or (8) of the Act;
Definition
“family of qualifying IPRs” means 2 or more intellectual property rights mentioned in paragraphs (a), (b) and (c) of the definition of “qualifying IPR” that are interlinked;
Definition
“qualifying intellectual property income”, in relation to an approved company, means royalties or other income receivable by the approved company, in so much of a basis period for a year of assessment as falls within the tax relief period for that approved company, as consideration for the commercial exploitation of an elected qualifying IPR;
Definition
“qualifying intellectual property right” or “qualifying IPR” means any of the following:
any patent under the Patents Act 1994 or the equivalent law of any country or territory (called in these Regulations a patent); (b)an application for a patent under the Patents Act 1994 or the equivalent law of any country or territory (called in these Regulations a patent application);
any copyright subsisting in software by virtue of the Copyright Act 2021 or the equivalent law of any country or territory (called in these Regulations a software copyright),and includes a family of qualifying IPRs.
Subregulation 2
In the definition of “family of qualifying IPRs” in paragraph (1), a qualifying IPR (A) is interlinked with another qualifying IPR (B), if —
it is reasonable to conclude that it is not possible to identify which part of a specific source of income for the whole of the basis period (or the part of the basis period) concerned is derived solely from using A, and which part of such income is derived solely from using B;
it is reasonable to conclude that it is not possible to identify which part of any expenditure incurred in the research and development resulting in the creation of those rights is incurred solely in the creation of A, and which part of such expenditure is incurred solely in the creation of B; or
A and B are part of a chain of 3 or more qualifying IPRs each of which is interlinked with another in the manner described in sub‑paragraph (a) or (b).
Subregulation 3
In these Regulations, an approved company ceases to have a qualifying IPR if —
for a qualifying IPR that is a software copyright — the approved company sells, transfers or assigns the software copyright or the copyright expires; (b)for a qualifying IPR that is a patent —
the patent comes to an end without being subsequently revived;
the approved company sells, transfers or assigns the patent; or
a final order, judgment or decision revoking the patent or confirming such revocation has been made by a court or other competent authority under the Patents Act 1994 or the equivalent law of any country or territory;
for a qualifying IPR that is a patent application —
the approved company withdraws or abandons the patent application; (ii)the approved company sells, transfers or assigns the patent application; or
a final order, judgment or decision refusing the patent application or confirming such refusal has been made by a court or other competent authority under the Patents Act 1994 or the equivalent law of any country or territory; and
for a qualifying IPR that is a family of qualifying IPRs — the approved company ceases to have every qualifying IPR in the family of qualifying IPRs.
Subregulation 4
For the purposes of these Regulations, an agreement or arrangement is entered into by an approved company and another person at arm’s length if the conditions of the agreement or arrangement do not differ from conditions that would be made or imposed if the approved company and that other person were not related parties and dealing independently with one another in comparable circumstances.
Subregulation 5
For the purposes of these Regulations, a person (X) is a related party of an approved company (Y) if —
X, directly or indirectly, controls Y;
Y, directly or indirectly, controls X; or
X and Y are, directly or indirectly, controlled by a common person.