INCOME TAX (DEDUCTION OF PRE-COMMENCEMENT OF BUSINESS TRAINING EXPENSES) RULES 1996

INCOME TAX (DEDUCTION OF PRE-COMMENCEMENT OF

BUSINESS TRAINING EXPENSES) RULES 1996

 

PU (A) 160

 

IN exercise of the powers conferred by paragraph 154(1)(b) of the Income Tax Act 1967, the Minister makes the following rules :

 

RULE 1           CITATION AND COMMENCEMENT

 

1          These rules may be cited as the Income Tax (Deduction of Pre-commencement of Business Training Expenses) Rules 1996 and shall effect from the year of assessment 1996 and subsequent years of assessment.

 

RULE 2           INTERPRETATION

 

2       For the purposes of these Rules –

 

“potential employee” means an employee of a company who has been contracted as an employee prior to the commencement of the employer’s business; and

 

“qualifying training expenses” means expenditure incurred –

 

(a)     on the training of potential employees to impart basic skills to enable the company to commence its business;

 

(b)     within the period of one year prior to the commencement of business; and

 

(c)     being of the kind allowable under Section 33 of the Income Tax Act 1967

 

RULE 3           DEDUCTION FOR TRAINING EXPENSES OF POTENTIAL EMPLOYEES

 

3          Subject to rules 2 and 4, for the purposes of ascertaining the adjusted income of a company from a business under the Act, shall be allowed as a deduction, qualifying training expenses incurred by the company in respect of the training of potential employees prior to the commencement of its business.

 

RULE 4           EXEMPTION

 

4          Companies qualifying for a deduction under these Rules shall not include –

 

(a)        a company receiving training grants from the Governments; or

 

(b)        a small or medium scale company (not participating in the Human Resources Development Fund Scheme) claiming double deduction of training expenses under the Income Tax (Deduction for Approved Training) Rules 1992.

 

 

Made 23 March 1996