S.L. 123.7 Art. 6Deductions in respect of expenditure of a capital nature on intellectual property or any intellectual property rights.

(1) Where any person claims a deduction in accordance with the second proviso to article 14(1)(m) of the Act in respect of expenditure of a capital nature on intellectual property or any intellectual property rights (hereinafter referred to as

"expenditure"), the amount deductible in respect of any year of assessment shall be computed as follows:

(a) there shall be deducted that part of the said expenditure which would otherwise have been deductible by reference to the minimum period allowed in accordance with the first proviso to article 14(1)(m) of the Act; and

(b) there shall also be deducted that part of the said expenditure remaining after computing the deduction in accordance with paragraph (a):

Provided that where the deduction or a part thereof allowable in accordance with paragraph (b) cannot for any year be

*These rules shall apply with effect from the year of assessment 2024. given effect to in full because there is no or insufficient qualifying income in that year of assessment, the expenditure provided for in said paragraph (b) shall not be available for deduction against any other income for the said year, or available for surrender in accordance with articles 16 to 22 of the Act, but shall be carried forward for deduction and be added to the deduction due for the following year and be deemed to be part of that deduction, or if there is no such deduction for that year, be deemed to be the deduction for that year and so on for subsequent years:

Provided further that, subject to the provisions of the third proviso to article 14(1)(m) of the Act, the aggregate of the deductions made in accordance with paragraphs (a) and (b) shall not in any case exceed the amount of the said expenditure.

(2) With respect to the year of assessment 2024, a claim for deduction in accordance with the second proviso to article 14(1)(m) of the Act may also be made with respect to any expenditure brought forward during the said year which, due to the provisions of the first proviso to article 14(1)(m) of the Act, had not been so deducted in the years of assessment preceding the year of assessment 2024, and in such case, the amount deductible in respect of the year of assessment 2024 and any subsequent year of assessment shall be computed as follows:

(a) there shall be deducted that part of the said expenditure which would otherwise have been deductible by reference to the period chosen in preceding years of assessment and allowed in accordance with the first proviso to article 14(1)(m) of the Act; and

(b) there shall also be deducted that part of the said expenditure remaining after computing the deduction in accordance with paragraph (a):

Provided that where the deduction or part thereof allowable in accordance with paragraph (b) cannot for any year be given effect to in full because there is no or insufficient qualifying income in that year of assessment, the expenditure under this part shall not be available for deduction against any other income for the said year, or available for surrender in accordance with articles 16 to 22 of the Act, but shall be carried forward for deduction and added to the deduction due for the following year and shall be deemed to be part of that deduction, or if there is no such deduction for that year, be deemed to be the deduction for that year and so on for subsequent years:

Provided further that, subject to the provisions of the third proviso to article 14(1)(m) of the Act, the aggregate of the deductions made in accordance with paragraphs (a) and (b) in conjunction with any other deductions made in the years of assessment preceding the year of assessment 2024 shall not in any case exceed the amount of the said expenditure.

(3) For the avoidance of doubt, nothing in sub-rules (1) and (2) shall be construed as allowing any person to deduct or carry forward the expenditure in circumstances where the deduction of such would not have otherwise constituted an allowable loss in accordance with article 14(1)(g) of the Act.