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Exemption from income tax where company derives concessionary income or mixed income before a date, and normal income from that date

Economic Expansion Incentives (Relief from Income Tax) Act 1967

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—(1) Despite section 54(1) to (4), this section applies where —(a)the company derives concessionary income or both normal income and concessionary income from an approved project before a date (called in this section the relevant date) in the basis period for a year of assessment (called in this section the transitional year);(b)in the case where the company derives both normal income and concessionary income from an approved project before the relevant date, the Minister, or such person as the Minister may appoint, has directed under section 53(3) for any IIA given for any fixed capital expenditure on any qualifying equipment for the project to be credited wholly to the concessionary IIA account; and(c)the company derives normal income from the approved project commencing from the relevant date to the end of the basis period for the transitional year.(2) Subject to subsection (5), any credit in the concessionary IIA account at the end of the basis period for the year of assessment immediately before the transitional year is to be debited with the amount of net chargeable concessionary income of the company for the transitional year.(3) Where the company has incurred any fixed capital expenditure on any qualifying equipment before the relevant date in the basis period for the transitional year, any IIA given to the company for the fixed capital expenditure for the transitional year is to be credited to the concessionary IIA account.(4) Where the company has incurred any fixed capital expenditure on any qualifying equipment on or after the relevant date in the basis period for the transitional year, any IIA given to the company for the fixed capital expenditure for the transitional year is to be credited to the normal IIA account.(5) The concessionary IIA account is to be debited with the amount of net chargeable concessionary income for the transitional year or the credit in that account, whichever is the less; and any remaining balance in that account is to be debited from that account and credited to the normal IIA account to be used in accordance with section 54(1), (2) and (3) for the transitional year and every subsequent year of assessment when the company has net chargeable normal income or net chargeable concessionary income, until the credit in the normal IIA account has been fully used up.(6) Any amount of net chargeable concessionary income of a company debited from the concessionary IIA account under subsection (2) or (5) is exempt from tax.[97ZG

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