Singapore legislation
Regulation 5
of Income Tax (Concessionary Rate of Tax for Intellectual Property Income) Regulations 2021
Regulation 5
Deemed income
Subregulation 1
This regulation applies where —
an approved company has been assessed to tax under section 43X(1) of the Act for qualifying intellectual property income of the approved company that is derived from a patent application (not being a patent application in relation to a software in which copyright subsists); and
the Comptroller discovers, in any year of assessment (called in this regulation the discovery year of assessment), that the approved company has ceased to have the patent application.
Subregulation 2
The approved company is deemed to have derived, in the basis period for the discovery year of assessment, an amount of income chargeable to tax at the rate of tax under section 43(1)(a) of the Act.
Subregulation 3
The amount of deemed income in paragraph (2) is derived by the formulawhere —
A is the sum of the qualifying intellectual property income derived by the approved company from the patent application in the basis period for each year of assessment before the discovery year of assessment, that has been subject to tax at the concessionary rate under section 43X(1) of the Act, but adding back all expenses, allowances, losses and donations deducted from it under regulation 3(3);
B is the sum of —
the amount of expenses incurred in each basis period mentioned in sub‑paragraph (a) that was deducted under regulation 3(3); (ii)the amount of allowances that arose in each basis period mentioned in sub‑paragraph (a) that was deducted under regulation 3(3); and
the amount of donations made in each basis period mentioned in sub‑paragraph (a) that was deducted under regulation 3(3);
M is the rate of tax under section 43(1)(a) of the Act for the discovery year of assessment; and
N is the concessionary rate of tax under section 43X(1) of the Act applicable to the approved company in the year of assessment immediately before the discovery year of assessment.