Section 106
of Investment Incentives Order, 2001
Section 106
(1)
Where any eligible holding company has incurred any loss arising from –
(a)
the sale of shares held by it in a venture company; or
(b)
the liquidation of a venture company, the loss shall be allowed as a deduction against the statutory income of the company in accordance with subsection 2 of section 30 of the Income Tax Act as if the loss were incurred from a trade or business carried on by it.
(2)
Where any eligible holding company has incurred any loss arising from –
(a)
the sale of shares held by it in a technology investment company or an overseas investment company; or
(b)
the liquidation of a technology investment company or an overseas investment company, the loss shall be allowed as a deduction against its statutory income in accordance with subsection (2) of section 30 of the Income Tax Act as if the loss were incurred from a trade or business carried on by it.
Incorporating amendments until S 5/2011
(Cleancopy) NANI/H.AFIF/fiqah _ as of 11th March 2020
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BLUV as at 16th February 2011
(3)
Notwithstanding subsections (l) and (2), no deduction shall be allowed in respect of any loss referred to in those subsection if –
(a)
the shares in respect of which the loss was incurred were held by an eligible holding company in a venture company, or by an eligible holding company in a technology investment company or in an overseas investment company, for a period of less than 3 years from the date of issue of the shares, unless the loss was incurred as a result of the liquidation of the venture company, technology investment company or overseas investment company; or
(b)
the sale of shares or liquidation occurred after 8 years from the date of approval under this Part of the venture company, technology investment company or overseas investment company.
(4)
For the purposes of subsections (1) and (2), the loss shall be the excess of the purchase price of the shares –
(a)
over the proceeds from the sale; and where the open market value at the date of the sale (or the value of net asset backing as determined by the Collector in the case of a company not quoted on any stock exchange) of the shares is greater than the sale proceeds, that value shall be deemed to be the proceeds from the sale; or
(b)
over the proceeds from the liquidation, as the case may be.
Prohibition of other trade or business.