Singapore legislation
Regulation 7
of Income Tax (Deduction for Acquisition of Shares of Companies) Regulations 2012
Regulation 7
Adjustment of deductions allowable following divestments in relevant divestment period
Subregulation 1
Subject to regulations 8 and 9, where —
the acquiring company or the acquiring subsidiary, as the case may be, has made qualifying acquisitions or elected qualifying acquisitions in a relevant acquisition period; and
the acquiring company or the acquiring subsidiary, as the case may be, has also divested any of its ordinary shares in the target company in the relevant divestment period relating to those acquisitions,then, the amount of allowable deduction for those acquisitions under section 37L(7) of the Act shall be computed in accordance with the formula referred to in paragraph (2) for the year of assessment relating to the basis period in which the acquisition referred to in section 37L(4)(a) or (c) or (4A)(a), (c) or (e) of the Act, regulation 3(a)(i)(A) or (b)(i)(A), or regulation 3A(2)(a)(i)(A) or (b)(i)(A) (as the case may be) falls, and subsequent years of assessment.
Subregulation 2
The formula referred to in paragraph (1) is —where His the total number of ordinary shares in the target company acquired by the acquiring company or the acquiring subsidiary, as the case may be, through the qualifying acquisitions or elected qualifying acquisitions, as the case may be, in the relevant acquisition period;Iis the total number of ordinary shares in the target company divested by the acquiring company or the acquiring subsidiary, as the case may be, during the relevant acquisition period;Jis —
in the case of qualifying acquisitions, zero; and
in the case of elected qualifying acquisitions, the total number of ordinary shares in the target company divested during the relevant specified period relating to those elected qualifying acquisitions, if any; andKis —
in the case of qualifying acquisitions, zero; and
in the case of elected qualifying acquisitions, the total number of ordinary shares in the target company acquired during the relevant specified period relating to those elected qualifying acquisitions, if any; andLis the total of all amounts computed in accordance with the formula in —
section 37L(8) of the Act (read with section 37L(11), (11B), (11C) and (12) of the Act); or
section 37L(8A) of the Act (read with section 37L(11A), (11AB), (11B), (11C) and (12) of the Act),for the qualifying acquisitions or elected qualifying acquisitions (when read with regulation 4), as the case may be.
Subregulation 3
For the purpose of the formula in paragraph (2), where the part of the formula “(J – K)” gives a result that is less than zero, that part of the formula shall be treated as zero.