• A qualifying building or structure (referred to as LIA building or structure in this circular) must be built on land that is zoned as Business 1 or Business 2 (excluding Business 1 White or Business 2 White) under the Urban Redevelopment Authority (URA) Master Plan as at the date the development application is made to URA.

• The principal activities of the user of an approved LIA building or structure must fall within one of the qualifying activities

• The user of the approved LIA building or structure must carry out one of the qualifying activities as its principal activity in the building or structure. At least 80% of the total floor area of the approved LIA building or structure must be used by a single user for carrying out of the principal activity.

• The building or structure must also meet the GPR benchmark relevant to the qualifying activities of the single user (relevant GPR benchmark). The relevant GPR benchmark shall be the prevailing GPR benchmark at the date the development application is made to the URA.

• The GPR benchmarks will be reviewed every three years. The latest benchmarks have been reviewed and updated as of 1st August 2013. Please refer to Annex A for the respective prevailing GPR benchmarks for each qualifying activity.

• The LIA incentive will be available to an owner or a buyer of an existing building or structure only if the owner or buyer incurs additional capital expenditure to renovate or extend the existing building or structure to increase the building’s/structure’s GPR and the new GPR of the building or structure meets or exceeds the relevant GPR benchmark. This is applicable even if the GPR of the existing building or structure already meets or exceeds the relevant GPR benchmark before the renovation or extension works. In such cases, subject to approval, the LIA incentive will only be available on the qualifying capital expenditure incurred on the renovation or extension works but not on the purchase price of the existing building or structure.

• An initial allowance at 25% of the qualifying capital expenditure incurred on the construction or renovation/extension of the approved LIA building or structure will be granted in the year of assessment relating to the basis period during which the capital expenditure is incurred.

• Upon completion of the construction or renovation/extension works and where the completed building or structure meets the relevant GPR benchmark, annual allowance at 5% of the qualifying capital expenditure incurred on the construction or renovation/extension of the building or structure will be granted for each year of assessment where at least 80% of the total floor area of the building or structure is in use by a single user for carrying out the qualifying activity. For any basis period where less than 80% of the total floor area is used by the single user for the qualifying activity, the annual allowance will not be granted for the year of assessment relating to that basis period.

• As the initial allowance is granted while the building or structure is under construction or renovation/extension, in cases where the completed building or structure fails to meet the relevant GPR benchmark, the initial and/or annual allowances will be recovered through re-assessment of preceding tax years.

• If an approved LIA building ceases permanently to be used or ceases permanently to be used for the approved qualifying activity at any time when there is still a balance of qualifying capital expenditure remaining to be claimed, the LIA incentive recipient must notify the EDB of the disuse of the LIA building. No further annual allowances will be granted to the taxpayer from the year of assessment relating to the basis period during which the permanent disuse occurs and the LIA incentive shall be terminated with effect from that year of assessment.

• If the predominant use of the approved LIA building changes from a qualifying activity to a different qualifying activity at any time when there is still a balance of qualifying capital expenditure remaining to be claimed, EDB must be notified of the change. The taxpayer shall re-apply to EDB at the point of the change in activity. The new application shall be assessed by EDB according to prevailing criteria and benchmarks at the time of application. If approval is granted by EDB, the taxpayer shall be allowed to continue to claim the LIA under the new qualifying activity.

• When the approved LIA building is sold at any time when there is still a balance of qualifying capital expenditure remaining to be claimed or after the qualifying capital expenditure has been fully claimed, any balance of the qualifying capital expenditure still remaining will be disregarded and there will not be any balancing adjustment on the seller of the building.

• Where the LIA building is transferred to an amalgamated company under a qualifying amalgamation under section 34C of the ITA, the annual allowances will be given to the amalgamated company until the remaining qualifying capital expenditure is fully claimed, subject to the amalgamated company meeting the same conditions for the LIA incentive. The taxpayer is required to notify the EDB of the amalgamation.

• When there is insufficient income in any year of assessment to absorb the initial or annual allowances, any unutilised LIA can be carried forward to offset against the taxpayer’s income in future years of assessment, subject to the taxpayer meets the prevailing conditions for carrying forward of unutilised allowances. Any unutilised allowances can also qualify for carryback under the Carry-Back Relief System or for transfer under the Group Relief System, subject to the taxpayer meets the prevailing conditions under those systems.

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How to Apply for JTC Land Intensification Allowance (LIA)?

• A building owner who proposes to construct or renovate/extend a building or structure that meets the above qualifying criteria may apply to the EDB for the LIA incentive, if the development application in respect of the construction or renovation/extension works is submitted to the URA on or after 23 February 2010. All applications must be made to the EDB with the completed application form and a copy of the notice of written permission issued by URA. Please refer to Annex B for a flowchart of the application process.

• Upon approval by EDB, the applicant will receive a letter of offer from EDB, stating the terms and conditions attached to the offer. The approval is subject to the completed building or structure meeting the relevant GPR benchmark.

• Upon the completion of the construction or renovation/extension of the building, the approved applicant is required to submit a verification form (which will be attached to the letter of offer), within 3 months, to the EDB with a declaration made by a qualified person (either a registered architect or a registered professional engineer) to confirm the GPR of the completed building or structure for which LIA incentive has been offered.

• A copy of the notice of Written Permission (with proposed GPR) issued by URA OR

• A copy of the notice of Written Permission equivalent (with proposed GPR) issued by JTC

• The letter must be retained and submitted to IRAS upon request.

• The verification form will be issued to the LIA incentive recipient together with the letter of offer from EDB.

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• (a) Extension to qualifying building or structure on airport land and port land;
• (b) Expansion of qualifying activities to certain logistics activities; and
• (c) Introduction of a 10% incremental gross plot ratio (GPR) criterion for existing buildings that have met or exceeded the GPR benchmark