1965-HKRS29-8-32_Part02 — Page 17

Amendment

of section 12.

Amendment

of section 16,

Addition of new sections

Provided that any payment made by an employer to a person after that person has left his employ which, if it had been made on the last day of that employment, would have been included in that person's assessable income for the year of assessment in which he ceased to derive income from that employment, shall be deemed to have accrued to that person on the last day of that employment.”.

8. Subsection (2A) of section 12 of the principal Ordinance is amended by the deletion of the words "and may then be apportioned in relation to the extent to which the machinery or plant concerned is or has been used in the production of such assessable income" and the substitution therefor of the following-

"and shall then, where appropriate, be apportioned, in the case of an annual allowance, in relation to the extent to which the machinery or plant concerned is used in the production of such assessable income, or, in the case of a balancing allowance or charge, in relation to the extent to which the machinery or plant concerned has been used in the production of assessable income".

9.

Section 16 of the principal Ordinance is amended—

(a) by the deletion, in subsection (1), of the words "wholly and exclusively" and the substitution therefor of the following-

"to the extent to which they are":

(b) by the insertion, after paragraph (g) of subsection (1), of the

following new paragraph-

"(ga) the payments and expenditure specified in sections

16B and 16C, as provided therein;”; and

(c) by the deletion, in subsection (2), of the words "and may then be apportioned" and the substitution therefor of the following- "and shall then, where appropriate, be apportioned",

10. The principal Ordinance is amended by the addition, after 168 and 16C. section 16A, of the following new sections-

"Expenditure

on scientific research.

16B. (1) Notwithstanding anything in section 17, in ascertaining the profits from any trade or business in respect of which a person is chargeable to tax under this Part for any year of assessment there shall, subject to subsection (2), be deducted the following payments made, and expenditure

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incurred, by such person during the basis period for that year of assessment (other than any amount which is allow- able as a deduction apart from this section), namely—

(a) payments to-

(i) an approved research institute for scientific research related to that trade or business; or

(ii) an approved research institute, the object of which is the undertaking of scientific research related to the class of trade or business to which that trade or business belongs; and

(b) expenditure on scientific research related to that trade or business, including capital expenditure except to the extent that it is expenditure on land or buildings or on alterations, additions or exten- sions to buildings.

(2) Where any payment or expenditure to which this section refers is made or incurred outside the Colony and the trade or business in relation to which it is so made or incurred is carried on partly in and partly out of the Colony, the deduction allowable under this section shall be such part of the amount which would otherwise be allowable as is reasonable in the circumstances.

(3) (a) Where any plant or machinery, representing scientific research expenditure of a capital nature which pursuant to paragraph (b) of subsection (1) has been allowed as a deduction in ascertaining the profits from a trade or business, ceases to be used by the person carrying on the trade or business for scientific research related to that trade or business and is then or thereafter sold by him, the proceeds of sale shall be treated as a trading receipt of the trade or business accruing at the time of the sale or, if the sale occurs on or after the date on which the trade or business is permanently discontinued, accruing immediately before the discontinuance. (b) Where any such plant or machinery is destroyed, it shall for the purposes of paragraph (a) be