Comparison View

Formal Consolidation |  Amended Act 29 of 2012
Exemption of gains or profits from disposal of ordinary shares
13Z.—(1)  There shall be exempt from tax any gains or profits derived by a company (referred to in this section as the divesting company) from the disposal of ordinary shares in another company (referred to in this section as the investee company) which are legally and beneficially owned by the divesting company immediately before the disposal, being a disposal —
(a)during the period between 1st June 2012 and 31st May 2017 (both dates inclusive); and
(b)after the divesting company has, at all times during a continuous period of at least 24 months ending on the date immediately prior to the date of disposal of such shares, legally and beneficially owned at least 20% of the ordinary shares in that investee company.
(2)  Subsection (1) shall only apply if the divesting company provides, at the time of lodgment of its return of income for the year of assessment relating to the basis period in which the disposal occurs, or within such further time as the Comptroller may in his discretion allow, such information and supporting documents as may be specified by the Comptroller.
(3)  In determining the amount of gains or profits which are exempt from tax under subsection (1) for any year of assessment, there shall be deducted all outgoings and expenses wholly and exclusively incurred by the divesting company in the production of such gains or profits, including —
(a)the price paid in acquiring those shares;
(b)any sum payable by way of interest upon any money borrowed by the divesting company, where the Comptroller is satisfied that the interest was payable on capital employed to acquire the shares;
(c)any sum payable in the basis period for the year of assessment 2008 or a subsequent year of assessment in lieu of interest or for the reduction thereof, upon any money borrowed by the divesting company, being a sum of a type prescribed under section 14(1)(a)(ii), where the Comptroller is satisfied that it was payable on capital employed to acquire the shares;
(d)any legal costs incurred for the acquisition or disposal of the shares;
(e)any amount paid in respect of stamp duty for the acquisition or disposal of the shares; and
(f)any other expenses allowable under this Act which are directly attributable to those gains or profits.
(4)  In determining for the purposes of subsection (1) whether the divesting company legally and beneficially owns at any time at least 20% of the ordinary shares in the investee company, the divesting company shall be treated as the legal and beneficial owner of any ordinary shares in that investee company during the borrowing period when the legal interest in such shares had been transferred by the divesting company to another under a securities lending or repurchase arrangement.
(5)  Where —
(a)gains or profits derived from the disposal of ordinary shares by the divesting company is exempt from tax under subsection (1); and
(b)one or more of the amounts referred to in subsection (6) which are attributable to any of the shares disposed of, have been allowed as a deduction to the divesting company for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of,
then the amounts in paragraph (b) shall be regarded as income of the divesting company that is chargeable to tax for the second-mentioned year of assessment.
(6)  Subsection (5) shall apply to the following amounts:
(a)any amount provided for a diminution in the value of the shares;
(b)any amount written off against the value of the shares;
(c)any impairment loss for the shares;
(d)any loss recognised in accordance with FRS 39 or SFRS for Small Entities (as the case may be), in determining the profit or loss or expense in respect of the shares.
(7)  Where —
(a)gains or profits derived from the disposal of ordinary shares by the divesting company is exempt from tax under subsection (1); and
(b)any write-back for a diminution in the value of the shares, or profit recognised in accordance with FRS 39 or SFRS for Small Entities (as the case may be), which is attributable to any of the shares, has been charged to tax as income of the divesting company for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of,
then the write-back or profit referred to in paragraph (b) shall be regarded as an expense allowable under this Act to the divesting company for the second-mentioned year of assessment.
(8)  This section shall not apply to —
(a)the disposal of shares the gains or profits of which are included as part of the income of a company referred to in section 26;
(b)the disposal of shares in a company which is in the business of trading or holding Singapore immovable properties (excluding property development), where the shares are not listed on a stock exchange in Singapore or elsewhere; or
(c)the disposal of shares by a partnership, limited partnership or limited liability partnership one or more of the partners of which is a company or are companies.
(9)  In this section —
“borrowing period” and “securities lending or repurchase arrangement” have the meanings given to those expressions in section 10N(12);
“disposal”, in relation to shares, means the transfer of both the legal and beneficial interests in the shares to another;
“FRS 39” and “SFRS for Small Entities” have the meanings given to those expressions in section 34A(10).
[Act 29 of 2012 wef 01/06/2012]
Informal Consolidation | Amended Act 19 of 2013
Exemption of gains or profits from disposal of ordinary shares
13Z.—(1)  There shall be exempt from tax any gains or profits derived by a company (referred to in this section as the divesting company) from the disposal of ordinary shares in another company (referred to in this section as the investee company) which are legally and beneficially owned by the divesting company immediately before the disposal, being a disposal —
(a)during the period between 1st June 2012 and 31st May 2017 (both dates inclusive); and
(b)after the divesting company has, at all times during a continuous period of at least 24 months ending on the date immediately prior to the date of disposal of such shares, legally and beneficially owned at least 20% of the ordinary shares in that investee company.
(2)  Subsection (1) shall only apply if the divesting company provides, at the time of lodgment of its return of income for the year of assessment relating to the basis period in which the disposal occurs, or within such further time as the Comptroller may in his discretion allow, such information and supporting documents as may be specified by the Comptroller.
(3)  In determining the amount of gains or profits which are exempt from tax under subsection (1) for any year of assessment, there shall be deducted all outgoings and expenses wholly and exclusively incurred by the divesting company in the production of such gains or profits, including —
(a)the price paid in acquiring those shares;
(b)any sum payable by way of interest upon any money borrowed by the divesting company, where the Comptroller is satisfied that the interest was payable on capital employed to acquire the shares;
(c)any sum payable in the basis period for the year of assessment 2008 or a subsequent year of assessment in lieu of interest or for the reduction thereof, upon any money borrowed by the divesting company, being a sum of a type prescribed under section 14(1)(a)(ii), where the Comptroller is satisfied that it was payable on capital employed to acquire the shares;
(d)any legal costs incurred for the acquisition or disposal of the shares;
(e)any amount paid in respect of stamp duty for the acquisition or disposal of the shares; and
(f)any other expenses allowable under this Act which are directly attributable to those gains or profits.
(4)  In determining for the purposes of subsection (1) whether the divesting company legally and beneficially owns at any time at least 20% of the ordinary shares in the investee company, the divesting company shall be treated as the legal and beneficial owner of any ordinary shares in that investee company during the borrowing period when the legal interest in such shares had been transferred by the divesting company to another under a securities lending or repurchase arrangement.
(5)  Where —
(a)gains or profits derived from the disposal of ordinary shares by the divesting company is exempt from tax under subsection (1); and
(b)one or more of the amounts referred to in subsection (6) which are attributable to any of the shares disposed of, have been allowed as a deduction to the divesting company for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of,
then the amounts in paragraph (b) shall be regarded as income of the divesting company that is chargeable to tax for the second-mentioned year of assessment.
(6)  Subsection (5) shall apply to the following amounts:
(a)any amount provided for a diminution in the value of the shares;
(b)any amount written off against the value of the shares;
(c)any impairment loss for the shares;
(d)any loss recognised in accordance with FRS 39 or SFRS for Small Entities (as the case may be), in determining the profit or loss or expense in respect of the shares.
(7)  Where —
(a)gains or profits derived from the disposal of ordinary shares by the divesting company is exempt from tax under subsection (1); and
(b)any write-back for a diminution in the value of the shares, or profit recognised in accordance with FRS 39 or SFRS for Small Entities (as the case may be), which is attributable to any of the shares, has been charged to tax as income of the divesting company for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of,
then the write-back or profit referred to in paragraph (b) shall be regarded as an expense allowable under this Act to the divesting company for the second-mentioned year of assessment.
(8)  This section shall not apply to —
(a)the disposal of shares the gains or profits of which are included as part of the income of a company referred to in section 26;
(b)the disposal of shares in a company which is in the business of trading or holding Singapore immovable properties (excluding property development), where the shares are not listed on a stock exchange in Singapore or elsewhere; or
(c)the disposal of shares by a partnership, limited partnership or limited liability partnership one or more of the partners of which is a company or are companies.
(9)  In this section —
“borrowing period” and “securities lending or repurchase arrangement” have the meanings given to those expressions in section 10N(12);
“disposal”, in relation to shares, means the transfer of both the legal and beneficial interests in the shares to another;
“FRS 39” and “SFRS for Small Entities” have the meanings given to those expressions in section 34A(10).
[Act 29 of 2012 wef 01/06/2012]