The IRAS revised the e-Tax Guide on Capital Allowances upon Expiry of Pioneer Tax Incentive Period on 29 August 2014 to reflect relevant changes made to the EEIA and ITA since the first edition of this guide was published on 15 Jul 1994.
a. re-numbering sections 10(1A) and 10(1B) of the EEIA as sections 10(2) and 10(3) respectively; and
b. including sections 18B, 18C, 19A and 19B of the ITA in sections 10(2) and 10(3) of the EEIA.
In essence, where the tax relief period of the company expires during the basis period for any YA, section 10(3) of the EEIA provides that CA shall be computed as if the “old” trade or business had not been permanently ceased at the end of the tax relief period. The CA shall be apportioned between the “old” and “new” trade or business, in a manner that appears reasonable to the Comptroller as provided in paragraph 4 of the e-Tax Guide.
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