PART 3 10.—(1) Income tax is, subject to the provisions of this Act, payable at the rate or rates specified hereinafter for each year of assessment upon the income of any person accruing in or derived from Singapore or received in Singapore from outside Singapore in respect of —| (a) | gains or profits from any trade, business, profession or vocation, for whatever period of time such trade, business, profession or vocation may have been carried on or exercised; | | (b) | gains or profits from any employment; | | (c) | [Deleted by Act 29 of 1965] | | (d) | dividends, interest or discounts; | | (e) | any pension, charge or annuity; | | (f) | rents, royalties, premiums and any other profits arising from property; and | | (g) | any gains or profits of an income nature not falling within any of the preceding paragraphs. |
(2) In subsection (1)(b), “gains or profits from any employment” means —| (a) | any wages, salary, leave pay, fee, commission, bonus, gratuity, perquisite or allowance (other than a subsistence, travelling, conveyance or entertainment allowance which is proved to the Comptroller’s satisfaction to have been expended for purposes other than those in respect of which no deduction is allowed under section 15) paid or granted in respect of the employment whether in money or otherwise; | | (b) | the value of any food, clothing or lodging provided or paid for by the employer; | | (c) | for the year of assessment 2014 and any preceding year of assessment, the annual value of any place of residence provided by the employer and for the purposes of this paragraph —| (i) | if the remuneration received by a director of a company is less than the annual value of the premises, the full annual value is deemed to be gains or profits of the employment; | | (ii) | except as provided in sub‑paragraph (i), if the annual value of the premises exceeds 10% of the gains or profits from the employment mentioned in paragraphs (a) and (b) less the rent (if any) paid by the employee for the use of the premises, the excess is disregarded; | | (iii) | where the premises are shared, “place of residence” means the part of the premises occupied by the person chargeable; |
| | (ca) | for any year of assessment between the years of assessment 2015 and 2019 (both years inclusive), the annual value of any place of residence provided by the employer (or the part thereof occupied by the employee if the premises are shared with another) less the rent (if any) paid by the employee for the use of the premises; | | (cb) | for the year of assessment 2020 and subsequent years of assessment, either —| (i) | the rent paid by the employer for any place of residence provided by the employer (or the part of such place of residence occupied by the employee if the premises are shared with another), including for any furniture and fittings in that place or part; or | | (ii) | if no such rent is paid, the annual value of such place or part, less any rent paid by the employee for the place or part; |
| | (d) | any sum standing to the account of any individual in any pension or provident fund or society which the individual is entitled to withdraw upon retirement or which is withdrawn therefrom. [45/2018] |
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| (2A) For the purposes of subsection (2)(ca) and (cb)(ii), in a case where no annual value or separate annual value is ascribed to any place of residence in the Valuation List prepared under section 10 of the Property Tax Act 1960, the annual value is to be ascertained in accordance with the definition of that term in section 2 of that Act. [37/2014; 45/2018] |
(2AA) Where the Comptroller is not satisfied that the rent mentioned in subsection (2)(cb)(i) is reasonable after having regard to the rent that a lessee might reasonably be expected to pay under a lease of the place or part (including the furniture and fittings) if it were unoccupied and offered for renting, the Comptroller may adopt either —| (a) | the annual value of the place of residence provided by the employer (or the part of such place of residence occupied by the employee if the premises are shared with another), less any rent paid by the employee for the place or part; or | | (b) | in a case where no annual value or separate annual value is ascribed to such place of residence in the Valuation List prepared under section 10 of the Property Tax Act 1960, such other value as appears to the Comptroller to be reasonable in the circumstances. [45/2018] |
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(2AB) In a case where —| (a) | subsection (2)(cb)(i) applies; and | | (b) | the rent paid by the employer under that provision includes rent for any furniture and fittings in the place or part, |
| then, despite subsection (2)(a), no further account is to be taken of those furniture and fittings in determining the gains or profits of the employee from the employment. |
[45/2018] |
| (2AC) However (and to avoid doubt), subsection (2AB) does not apply in a case where the Comptroller exercises his or her power under subsection (2AA). [45/2018] |
| (2B) For the purposes of subsection (2), the Minister may, for the purposes of such year of assessment as he or she may specify, by regulations prescribe the value of any furniture and fittings in any place of residence. [37/2014] |
| (3) Any sum realised under any insurance against loss of profits must be taken into account in the ascertainment of any profits or income. |
(4) Where, under section 17, 20 or 21, a balancing charge falls to be made, the amount thereof is deemed to be income chargeable with tax under this Act, except in the case of a balancing charge in respect of —| (a) | a Singapore ship which is owned by a shipping enterprise within the meaning of section 13A or by an approved shipping investment enterprise within the meaning of section 13P at the time the balancing charge falls to be made in respect of the Singapore ship, but only up to the amount ascertained in accordance with the formula | | is the amount of allowances under section 19 or 19A made to the enterprise in respect of the Singapore ship against any income exempt from tax under section 13A or 13P; |
| | | is the total amount of allowances under section 19 or 19A which have been made in respect of the ship during the period it is owned by the enterprise; and |
| | | is the amount of balancing charge; |
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| | (b) | a foreign ship or provisionally registered ship the income derived from the operation of which is exempt from tax under section 13A or 13E, or the income derived from the chartering or finance leasing of which is exempt from tax under section 13P (as the case may be) but only up to the amount ascertained in accordance with the formula | | is the amount of allowances under section 19 or 19A made to the enterprise in respect of the foreign ship or provisionally registered ship against any income exempt from tax under section 13A, 13E or 13P, as the case may be; |
| | | is the total amount of allowances under section 19 or 19A which have been made in respect of the ship during the period it is owned by the enterprise; and |
| | | is the amount of balancing charge. |
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[Act 33 of 2022 wef 04/11/2022] |
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(5) In subsection (4) —| “foreign ship” has the meaning given by section 13E(6); |
| “Singapore ship” and “provisionally registered ship” have the meanings given by section 13A(16). [2/2016] [Act 33 of 2022 wef 04/11/2022] |
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| (5A) In subsection (4), “finance leasing” has the meaning given by section 13P(20). [2/2016] |
(6) Any gains or profits, directly or indirectly, derived by any person from a right or benefit granted on or after 1 January 2003, whether granted in the person’s name or in the name of the person’s nominee or agent, to acquire shares in any company are, where the right or benefit is obtained by that person by reason of any office or employment held by the person, deemed to be income chargeable to tax under subsection (1)(b), accruing at such time and of such amount as determined under the following provisions:| (a) | where the right or benefit is exercised, assigned, released or acquired — at the time of the exercise, assignment, release or acquisition of the right or benefit and the gains or profits are the price of the shares in the open market at that time, less any amount paid for the shares; | | (b) | despite paragraph (a), where the right or benefit granted is subject to any restriction on the sale of the shares so acquired — at the time the restriction ceases to apply and the gains or profits are the price of the shares in the open market at that time, less any amount paid for the shares; | | (c) | if it is not possible to determine the gains or profits under paragraph (a) or (b), the Comptroller may use the net asset value of the shares, less any amount paid for the shares, as the basis for determining the gains or profits; | | (d) | despite paragraphs (a) and (c), any gains or profits derived by the person by any exercise of a right or benefit to acquire shares in any company listed on the Singapore Exchange are computed in accordance with the formula | | | | (i) | if the shares are not treasury shares, the price of the shares in the open market at the last transaction on the date on which the shares are first listed on the Singapore Exchange after the acquisition of the shares by the person; and |
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| | | (ii) | if the shares are treasury shares, the price of the shares in the open market at the last transaction on the date an appropriate entry is made in the Depository Register by the Central Depository (Pte) Ltd to effect the acquisition of the treasury shares by the person; and |
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| | | is the amount paid for such shares; |
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| | (e) | “shares” includes stocks. |
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| (6A) To avoid doubt, section 10(5) in force immediately before 10 December 2002 continues to apply to any gains or profits directly or indirectly derived by the exercise, assignment or release of any right or benefit to acquire shares (including stocks) in a company granted to a person before 1 January 2003, whether in his or her name or in the name of his or her nominee or agent, where the right or benefit was obtained by that person by reason of any office or employment held by him or her. |
(7) Despite subsection (6), where —| (a) | the right or benefit to acquire shares in a company is granted on or after 1 January 2003 to an individual while he or she is exercising an employment in Singapore; and | | (b) | immediately before he or she ceases that employment —| (i) | the individual is neither a citizen of Singapore nor a Singapore permanent resident, or being a Singapore permanent resident is leaving Singapore permanently; and | | (ii) | the right or benefit is not exercised, assigned, released or acquired by him or her, or the restriction on the sale of the shares has not ceased to apply, |
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| any gains or profits from the right or benefit are — |
| (c) | deemed to be income derived by the individual one month before the date of cessation of employment or the date the right or benefit is granted, whichever is the later; and | | (d) | computed based on the price of the shares in the open market on that date, less the amount paid for the shares. |
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(7A) The Comptroller may, if he or she thinks fit and subject to such condition as he or she may impose, accept from the employer of an individual to whom subsection (7) applies an undertaking —| (a) | to make a return, in such form and by such time as the Comptroller may determine, of any gains or profits derived by the individual from the right or benefit to acquire shares in a company as computed under subsection (6); | | (b) | to pay to the Comptroller any tax assessed on such gains or profits; and | | (c) | to pay the penalties specified in the undertaking for any failure to comply with paragraph (a) or (b). |
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| (7B) Where the Comptroller accepts an undertaking from the employer of an individual under subsection (7A), subsection (7) does not apply to the individual and the individual is to be assessed in accordance with subsection (6). |
| (7C) If any condition imposed by the Comptroller under subsection (7A) has not been complied with by the employer of an individual, then despite the undertaking given by the employer, the gains or profits derived by the individual from the right or benefit to acquire shares in a company are to be assessed in accordance with subsection (7) and are deemed to be income accruing to the individual in the year in which the condition is not complied with. |
| (8) Subsection (6)(c) applies, with the necessary modifications, to gains or profits derived by an individual mentioned in subsection (7). |
(8A) For the purpose of subsection (1)(d) —| (a) | any discount on any debt security is deemed to accrue when the debt security is redeemed; | | (b) | subject to any exemption from tax provided under this Act, the discount is deemed to be income chargeable to tax of the holder of the debt security immediately before such redemption; and | | (c) | the discount on any debt security is deemed to be an amount equal to the difference between —| (i) | the amount payable to the holder of the debt security upon the maturity or any earlier redemption of the debt security; and | | (ii) | the amount paid by the first holder of the debt security for the issue of the debt security. |
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| (8B) In subsection (8A), “debt security” has the meaning given by section 43H(4). |
(9) For the purposes of subsection (1)(e), the income derived from an annuity for any year is deemed to be an amount equal to 3% of the total consideration payable or paid for the purchase of the annuity except that the whole amount of the annuity is deemed to be income if —| (a) | the person deriving income from the annuity has previously received sums equal to the total consideration for the annuity exclusive of the amounts deemed to be income under this subsection; or | | (b) | the annuity is purchased by the employer of the person deriving on or after 1 January 1993 such income in lieu of any pension or other benefit payable during the person’s employment or upon his or her retirement. |
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| (10) Subsection (9) does not apply to any annuity purchased under the SRS. |
| (11) [Deleted by Act 27 of 2009] |
(12) Where a person derives interest from a negotiable certificate of deposit or derives gains or profits from the sale thereof, the person’s income is treated as follows:| (a) | in the case of a financial institution, the interest and the gains or profits are deemed to be income from a trade or business under subsection (1)(a); | | (b) | in any other case, the interest and the gains or profits are deemed to be income from interest under subsection (1)(d) subject to the following provisions:| (i) | if the interest is received by a subsequent holder of a certificate of deposit, the income derived from such interest excludes the amount by which the purchase price exceeds the issued price of the certificate, except where that amount has been excluded in the computation of any previous interest derived by the person in respect of that certificate; and | | (ii) | where a subsequent holder sells a certificate after receiving interest therefrom, the gains or profits are deemed to be the amount by which the sale price exceeds the issued price or the purchase price, whichever is the lower; and |
| | (c) | for the purposes of paragraph (b), where a subsequent holder purchases a certificate at a price which is less than the issued price and holds the certificate until its maturity, the amount by which the issued price exceeds the purchase price is deemed to be interest derived by the person. |
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(13) Any maintenance payment received by —| (a) | a child under a maintenance order or a deed of separation; or | | (b) | a parent under a maintenance order made under the Maintenance of Parents Act 1995, |
| is not deemed to be income for the purposes of subsection (1). |
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(14) For the purposes of subsection (1)(a) and (f), the income derived by any author, composer or choreographer, or any company in which he or she beneficially owns all the issued shares, from any royalties or other payments received as consideration for the assignment of or for the right to use the copyright in any literary, dramatic, musical or artistic work, is deemed to be —| (a) | the amount of the royalties or other payments remaining after the deductions allowable under Parts 5 and 6 have been made; or | | (b) | an amount equal to 10% of the gross amount of the royalties or other payments, |
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| (15) Subsection (14) does not apply to royalties or payments received in respect of any work published in any newspaper or periodical. |
(16) For the purposes of subsection (1)(a) and (f), the income derived by an individual who is the inventor, author, proprietor, designer or creator (as the case may be) of an approved intellectual property or approved innovation, or by any company in which he or she beneficially owns all the issued shares, from any royalties or other payments received as consideration for the assignment of or the rights in the approved intellectual property or approved innovation is deemed to be —| (a) | the amount of the royalties or other payments remaining after the deductions allowable under Parts 5 and 6 have been made; or | | (b) | an amount equal to 10% of the gross amount of the royalties or other payments, |
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| (16A) Subsection (16) does not apply to any income mentioned in that subsection that is derived in the basis period for the year of assessment 2017 or any subsequent year of assessment. [2/2016] |
| (17) Despite subsection (16), where it appears to the Comptroller that any amount of income which has been determined under that subsection for the purposes of subsection (1)(a) or (f) ought not to have been so determined for any year of assessment, the Comptroller may, within 6 years (if that year of assessment is 2007 or a preceding year of assessment) or 4 years (if that year of assessment is 2008 or a subsequent year of assessment) after the end of that year of assessment, make such assessment or additional assessment upon the individual as may be necessary in order to make good any loss of tax. |
(18) In subsection (16) —| “approved” means approved for such period not exceeding 5 years by the Minister or such person as the Minister may appoint; |
“innovation” means —| (a) | any new product or new service, or any new method used in the manufacture or processing of goods or materials or in the provision of services; or | | (b) | any substantial improvement in any product or in the provision of any service, or in any method used in the manufacture or processing of goods or materials or in the provision of services, |
| which involves novelty or originality; |
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| “rights in the approved intellectual property or approved innovation” means the rights relating to any patent, copyright, trade mark, industrial design, layout‑design of integrated circuit, or know‑how of an approved intellectual property or approved innovation, where a substantial part of the work in producing the approved intellectual property or approved innovation is undertaken in Singapore. |
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(19) Any distribution made by a unit trust approved under section 10A out of gains or profits derived on or after 1 July 1989 from the disposal of securities and which have not been subject to tax is deemed to be income if received by a unit holder except where the unit holder is —| (a) | an individual resident in Singapore; or | | (b) | a person who is not resident in Singapore and has no permanent establishment in Singapore. |
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(20) Subject to subsection (20G), any distribution made by a designated unit trust for any year of assessment to any unit holder out of —| (a) | gains or profits derived from Singapore or elsewhere from the disposal of securities; | | (b) | interest (other than interest for which tax has been deducted under section 45); and | | (c) | dividends derived from outside Singapore and received in Singapore, |
| which do not form part of the statutory income of the designated unit trust by virtue of section 35(12) is, subject to subsection (21), deemed to be income of the unit holder if the unit holder is not a foreign investor. |
[37/2014; 2/2016] |
(20A) Subject to subsection (20G), any distribution made by a designated unit trust for any year of assessment to any unit holder out of —| (a) | gains or profits derived on or after 27 February 2004 from —| (i) | foreign exchange transactions; | | (ii) | transactions in futures contracts; | | (iii) | transactions in interest rate or currency forwards, swaps or option contracts; and | | (iv) | transactions in forwards, swaps or option contracts relating to any securities or financial index; |
| | (b) | distributions from foreign unit trusts derived from outside Singapore and received in Singapore on or after 27 February 2004; | | (c) | fees and compensatory payments (other than fees and compensatory payments for which tax has been deducted under section 45A) derived on or after 27 February 2004 from securities lending or repurchase arrangements with —| (i) | a person who is neither a resident of nor a permanent establishment in Singapore; | | (ii) | the Monetary Authority of Singapore; | | (iii) | a bank licensed under the Banking Act 1970; | | (iv) | a merchant bank licensed under the Banking Act 1970; | | (v) | a finance company licensed under the Finance Companies Act 1967; | | (vi) | a holder of a capital markets services licence licensed to carry on business in the following regulated activities under the Securities and Futures Act 2001 in force immediately before 8 October 2018, or a company exempted under that Act from holding such a licence:| (A) | dealing in securities (other than any person licensed under the Financial Advisers Act 2001); | | (B) | fund management; | | (C) | securities financing; | | (D) | providing custodial services for securities, |
| where the fees and compensatory payments are derived before 8 October 2018; |
| | (via) | a holder of a capital markets services licence licensed to carry on business in the following regulated activities under the Securities and Futures Act 2001 on or after 8 October 2018, or a company exempted under that Act from holding such a licence:| (A) | dealing in capital markets products (other than any person licensed under the Financial Advisers Act 2001); | | (B) | fund management; | | (C) | product financing; or | | (D) | providing custodial services, |
| where the fees and compensatory payments are derived on or after 8 October 2018; |
| | (vii) | a collective investment scheme or closed‑end fund as defined in the Securities and Futures Act 2001 that is constituted as a corporation; | | (viii) | the Central Depository (Pte) Limited; | | (ix) | an insurer licensed or regulated under the Insurance Act 1966 or exempted under that Act from being licensed or regulated; or | | (x) | a trust company licensed under the Trust Companies Act 2005; |
| | (d) | rents and any other income derived from any immovable property situated outside Singapore and received in Singapore on or after 27 February 2004; | | (e) | discount derived from outside Singapore and received in Singapore on or after 27 February 2004; | | (f) | discount from —| (i) | qualifying debt securities issued during the period from 27 February 2004 to 16 February 2006 (both dates inclusive) which mature within one year from the date of issue of those securities; or | | (ii) | qualifying debt securities issued during the period from 17 February 2006 to 31 December 2028 (both dates inclusive); [Act 30 of 2023 wef 30/10/2023] |
| | (g) | gains or profits derived on or after 27 February 2004 from the disposal of debentures, stocks, shares, bonds or notes issued by supranational bodies; | | (h) | early redemption fee and redemption premium from qualifying debt securities issued during the period from 15 February 2007 to 31 December 2028 (both dates inclusive); and [Act 30 of 2023 wef 15/02/2023] [Act 30 of 2023 wef 30/10/2023] | | (i) | such other income directly attributable to qualifying debt securities issued on or after a prescribed date, as may be prescribed by regulations, |
| which do not form part of the statutory income of the designated unit trust by virtue of section 35(12) is deemed to be income of the unit holder if the unit holder is not a foreign investor. |
[37/2014; 2/2016; 4/2017; 45/2018; 1/2020] |
(20B) If —| (a) | the income of the trustee of a unit trust, unit trust scheme or exchange traded fund interest scheme (called in this section the unit trust) did not form part of the trustee’s statutory income for one or more past years of assessment by reason of section 35(12); and | | (b) | any of the events set out in the first column of the following table occurs, |
| then a person to whom this subsection applies is treated as having derived, on the date in the second column of the table opposite to that event (called in this subsection and subsections (20C), (20E), (20G) and (20H) the corresponding date), an amount of income that is equal to the prescribed amount of any income referred to in paragraph (a) that has yet to be distributed to any unit holder by the corresponding date: |
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| 1. | The unit trust is dissolved, and is a designated unit trust for the year of assessment for the basis period in which the dissolution occurred |
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| | | | 2. | The unit trust is not a designated unit trust within the meaning of section 35 for any year of assessment |
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| | | Last day of the basis period for the immediately preceding year of assessment |
| | 3. | The trustee fails to elect under section 35(12B) for section 35(12) to apply to the trustee’s income for any year of assessment |
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| | | Last day of the basis period for the immediately preceding year of assessment |
| | 4. | The trustee elects under section 35(12B) for section 35(12) to apply to the trustee’s income derived in only a part of the basis period for any year of assessment |
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| | | Last day of that part of the basis period |
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[37/2014; 2/2016] |
| (20C) Subsection (20B) does not apply if the corresponding date is before 1 June 2015. [37/2014] |
(20D) Subsection (20B) applies to the following persons:| (a) | a unit holder who is not an individual and not a foreign investor; | | (b) | a unit holder who is an individual and not a foreign investor, and who holds the units for the purposes of a trade, profession or business; | | (c) | a partner who is not an individual and not a foreign investor, of a partnership which is a unit holder; | | (d) | a partner who is an individual and not a foreign investor, of a partnership in Singapore which is a unit holder. [37/2014] |
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(20E) For the purposes of subsection (20B) —| (a) | the income referred to in paragraph (a) of that subsection includes the income of the trustee that did not form part of the trustee’s statutory income for one or more years of assessment by reason of section 35(12) or (12A) in force immediately before 1 September 2014; | | (b) | the prescribed amount of the income referred to in paragraph (a) of that subsection which is treated as the income of a person referred to in subsection (20D)(a) or (b), is —| (i) | the amount of that income that would have been distributed to the person in accordance with the terms of the trust deed of the unit trust, had the income been distributed to unit holders on the corresponding date; or | | (ii) | if it is not possible to ascertain that amount under the terms of the trust deed, such part of that income as the total number of units held by the person bears to the total number of units of the unit trust as of the corresponding date; |
| | (c) | the prescribed amount of the income referred to in paragraph (a) of that subsection which is treated as the income of a person referred to in subsection (20D)(c) or (d), is the share of the following amount that the person would have been entitled to as a partner of the partnership:| (i) | the amount of that income that would have been distributed in accordance with the terms of the trust deed of the unit trust to the partnership, had the income been distributed to unit holders on the corresponding date; or | | (ii) | if it is not possible to ascertain that amount under the terms of the trust deed, such part of that income as the total number of units held by the partnership bears to the total number of units of the trust as of the corresponding date; and |
| | (d) | where the person referred to in subsection (20D) is an individual resident in Singapore, the prescribed amount of the income referred to in subsection (20B)(a) does not include the amount of any gains or profits referred to in subsection (20)(a). [37/2014] |
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(20F) The trustee of the unit trust to which subsection (20B) applies must, within such reasonable time after the occurrence of the event mentioned in that subsection as the Comptroller may specify and in such form and manner as the Comptroller may specify, give notice of the occurrence to —| (a) | the Comptroller; and | | (b) | every person referred to in subsection (20D). [37/2014] |
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(20G) Where subsection (20B) has applied in relation to a unit trust —| (a) | the amount of the income referred to in subsection (20B)(a) that has yet to be distributed to the unit holders of the unit trust by the corresponding date in question is treated, for the purposes of any subsequent application of subsection (20B) in relation to that unit trust, as having been distributed by the unit trust to its unit holders immediately after that corresponding date; and | | (b) | subsections (20) and (20A) do not apply to any subsequent distribution by the unit trust to its unit holders of any income referred to in paragraph (a). [2/2016] |
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(20H) Where —| (a) | by reason of the application of subsection (20B) in relation to a unit trust, a person is treated as having derived on the corresponding date in question an amount of income that is equal to the prescribed amount of income referred to in subsection (20B)(a); and | | (b) | at any time after that corresponding date, the person disposes of units in the unit trust, |
| then the amount of any gains or profits derived from that disposal that is chargeable with tax under subsection (1)(a) is to be reduced by the amount of the income referred to in subsection (20E)(b)(i) or (ii) or (c)(i) or (ii) (whichever is applicable), that corresponds to the units disposed of. |
[2/2016] |
| (21) Where any distribution made out of gains or profits referred to in subsection (20)(a) is made to a unit holder who is an individual resident in Singapore, the distribution, if made on or after 28 February 1998, is not deemed to be income of that unit holder. |
| (22) Where a designated unit trust had also been approved under section 10A, any distribution made by the designated unit trust out of any income (including gains or profits from the disposal of securities) derived by it during the period the designated unit trust was approved under section 10A is treated as income of a unit holder in accordance with subsection (19) and section 35(11) and (15). |
(23) In subsections (20), (20A), (20B), (20D), (21) and (22) —| [Deleted by Act 30 of 2023 wef 15/02/2023] |
| “compensatory payment” has the meaning given by section 10H(12); |
| “designated unit trust”, in relation to any year of assessment, has the meaning given by section 35(14); |
| “early redemption fee” and “redemption premium” have the meanings given by section 13(16); [Act 30 of 2023 wef 15/02/2023] |
| “financial index” includes any currency, interest rate, share, stock or bond index; |
“foreign investor” —| (a) | in relation to an individual, means an individual who is not resident in Singapore; | | (b) | in relation to a company, means a company which is neither resident in Singapore nor carrying on business through a permanent establishment in Singapore, and not less than 80% of the total number of the issued shares of which are beneficially owned, directly or indirectly, by persons who are not citizens of Singapore and not resident in Singapore; and | | (c) | in relation to a trust fund, means a trust fund where at least 80% of the value of the fund is beneficially held, directly or indirectly, by foreign investors referred to in paragraph (a) or (b) and, unless waived by the Minister or an authorised body, where —| (i) | the fund is created outside Singapore; and | | (ii) | the trustees of the fund are neither citizens of Singapore nor resident in Singapore, nor do they carry out duties as such trustees through a permanent establishment in Singapore; [Act 41 of 2020 wef 06/12/2022] |
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| “qualifying debt securities” has the meaning given by section 13(16); |
“securities” means —| (a) | debentures, stocks, shares, bonds or notes issued by a government or company; | | (b) | any right or option in respect of any such debentures, stocks, shares, bonds or notes; or | | (c) | units in any unit trust within the meaning of section 10A; |
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| “securities lending or repurchase arrangement” has the meaning given by section 10H(12). [37/2014; 32/2019] |
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| (24) For the purposes of subsection (2)(d), the sum standing to the account of any individual in any pension or provident fund or society, other than a pension or provident fund to which section 10B applies, is deemed to accrue to the individual on the date he or she is entitled to the sum upon retirement or on the date he or she withdraws any sum before his or her retirement (as the case may be) except that where upon his or her retirement an individual is entitled to elect under the rules or constitution of the pension or provident fund or society as to the manner and amount of the sum to be withdrawn, only the amount so withdrawn is deemed to be income of the individual accruing on the date of withdrawal. |
(25) To avoid doubt, it is declared that the amounts described in the following paragraphs are income received in Singapore from outside Singapore whether or not the source from which the income is derived has ceased:| (a) | any amount from any income derived from outside Singapore which is remitted to, transmitted or brought into, Singapore; | | (b) | any amount from any income derived from outside Singapore which is applied in or towards satisfaction of any debt incurred in respect of a trade or business carried on in Singapore; and | | (c) | any amount from any income derived from outside Singapore which is applied to purchase any movable property which is brought into Singapore. |
|
| (26) Any payment accrued to a self‑employed individual under section 9, 12A, 12AB, 12B, 12E, 12H or 12HA of the Child Development Co‑Savings Act 2001 is deemed to be income from his or her trade, business, profession or vocation chargeable to tax under subsection (1)(a). [Act 30 of 2023 wef 01/05/2013] [Act 30 of 2023 wef 01/11/2021] |
| (27) Where any income is derived by a special purpose vehicle under any approved Islamic debt securities arrangement entered into on or after 17 February 2006, the income is deemed to have been derived at the end of the arrangement by the originator of the arrangement. |
(28) In subsection (27) —| “approved” means approved by the Minister or an authorised body, subject to such conditions as the Minister or authorised body may impose; [Act 41 of 2020 wef 06/12/2022] |
| “Islamic debt securities” has the meaning given by section 43H(4); |
“Islamic debt securities arrangement” means an arrangement under which —| (a) | immovable properties in Singapore are acquired by a special purpose vehicle from a person (called in this subsection and subsection (27) the originator) where the acquisition is funded through the issuance of Islamic debt securities by the special purpose vehicle; | | (b) | the immovable properties are leased by the special purpose vehicle to the originator; and | | (c) | the immovable properties are reacquired by the originator upon the maturity of the Islamic debt securities; |
|
| “special purpose vehicle” means a company whose only business is to acquire the originator’s immovable properties in Singapore, lease them back to the originator and transfer such properties to the originator upon the maturity of the Islamic debt securities. |
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10A.—(1) Despite any other provisions of this Act, the Minister may by regulations —| (a) | provide that tax on gains or profits derived on or after 1 July 1989 from the disposal of securities by an approved unit trust is to be levied and paid for each year of assessment by the trustees upon such percentage of the gains or profits and in such manner as may be prescribed; | | (b) | provide for the deduction of such percentage of the losses arising from the disposal of securities in such manner as may be prescribed; | | (c) | provide for the deduction of expenses allowable under this Act to be granted in such manner as may be prescribed; | | (d) | provide for the deduction of tax by the trustees of the unit trust on any distribution received by a unit holder which is deemed to be income under section 10(19). |
| (1A) No unit trust may be approved as an approved unit trust under this section after 18 February 2019. [32/2019] |
(2) In this section —| “approved” means approved by the Minister or such person as the Minister may appoint; |
| “securities” has the meaning given by section 10(23); |
| “unit” means a right or an interest (whether described as a unit, a sub‑unit or otherwise) which may be acquired under a unit trust; |
| “unit trust” means any trust established for the purpose, or having the effect, of providing facilities for the participation by persons as beneficiaries under a trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property. [10B [32/2019] |
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| Excess provident fund contributions, etc., deemed to be income |
10B.—(1) Despite section 13(1)(j), where in any year, contributions have been made by an employer in respect of an employee under section 7 of the Central Provident Fund Act 1953 —| (a) | any part of the employer’s contributions, in respect of ordinary or additional wages paid to the employee in that year, which is not obligatory under that Act; or | | (b) | the employer’s contributions in respect of that part of the additional wages which exceeds the specified amount paid to the employee in that year, |
| are deemed to be income accruing to the employee for the year in which the wages are paid. |
| (2) Despite subsection (1)(a), where in any year, contributions obligatory by reason of a contract of employment are made by any relevant employer to the Central Provident Fund in respect of overseas ordinary wages or overseas additional wages paid to an employee in that year, that part of such contributions up to the relevant amount is not deemed to be income accruing to the employee. |
| (3) Subsection (2) does not apply to contributions made by an employer in any year from 1 January 1999 to the Central Provident Fund in respect of an employee who holds a professional visit pass or a work pass in that year. |
| (4) [Deleted by Act 32 of 2019] |
| (5) [Deleted by Act 32 of 2019] |
| (5A) Despite subsection (1)(a) but subject to subsection (6), where a contribution is made by an employer in 2013 or any subsequent year to the medisave account of the employer’s employee maintained under the Central Provident Fund Act 1953, the contribution up to the maximum amount mentioned in subsection (5B) is not deemed to be income accruing to the employee. |
(5B) The maximum amount is —| (a) | $1,500 per year (for contributions made before 2018); or | | (b) | $2,730 per year (for contributions made in 2018 and in each subsequent year), |
| less any previous contribution that is made to the medisave account in that year by the employer in the employer’s capacity as a person of a prescribed description in section 13(1)(jd) (if applicable), and that is exempt from tax under that provision. |
[39/2017] |
| (6) Subsection (5A) does not apply to contributions made by an employer in any year from 1 January 1999 to the Central Provident Fund in respect of an employee who holds a professional visit pass or a work pass in that year. [32/2019] |
| (7) [Deleted by Act 7 of 2007] |
| (8) Where in any year contributions under section 7 of the Central Provident Fund Act 1953 have been made in respect of an employee employed by 2 or more employers and the employers are related to each other, subsection (1)(b) applies as if all the ordinary and additional wages from those related employers and the contributions on those wages were paid by one employer. |
| (9) For the purposes of subsection (8), one employer is deemed to be related to another where one of them, directly or indirectly, has the ability to control the other or where both of them, directly or indirectly, are under the control of a common person. |
| (10) Subsections (1) to (9) apply, with the necessary modifications, to contributions made by an employer to a designated pension or provident fund as if those contributions were the employer’s contributions to the Central Provident Fund. |
| (11) Where in any year contributions have been made by an employer in respect of an employee to any pension or provident fund constituted outside Singapore, the whole of the contributions made to that pension or provident fund is deemed to be income accruing to the employee for the year in which the contributions are paid. |
(12) In this section —| “additional wages” has the meaning given by the Central Provident Fund Act 1953; |
| “designated pension or provident fund” means an approved pension or provident fund designated by the Minister under section 39(8); |
| “employer’s contributions” means the contributions made by any employer under section 7(1) of the Central Provident Fund Act 1953 less the amount of contributions recoverable by the employer from the wages of an employee under section 7(2) of that Act; |
| “ordinary wages” has the same meaning as “ordinary wages for the month” in the Central Provident Fund Act 1953; |
| “overseas additional wages” means additional wages paid in respect of the performance of any duty for any period outside Singapore; |
| “overseas ordinary wages” means ordinary wages paid in respect of the performance of any duty for any period outside Singapore; |
| “overseas total wages”, in relation to any year, means the total of the overseas ordinary wages and overseas additional wages in that year received by an employee; |
“relevant amount” means the amount of contributions which would have been required to be made by the relevant employer had such contributions been obligatory under the Central Provident Fund Act 1953 in respect of —| (a) | the overseas total wages paid to an employee in any year less the aggregate in that year of such part of the overseas ordinary wages that are paid to the employee in every month in that year which exceeds —| (i) | for a month before September 2011 — $4,500; | | (ii) | for the month of September 2011 or any subsequent month before January 2016 — $5,000; | | (iii) | for the month of January 2016 or any subsequent month before September 2023 — $6,000; | | (iv) | for the month of September 2023 or any subsequent month before January 2024 — $6,300; | | (v) | for the month of January 2024 or any subsequent month before January 2025 — $6,800; | | (vi) | for the month of January 2025 or any subsequent month before January 2026 — $7,400; or | | (vii) | for the month of January 2026 or any subsequent month — $8,000; or [Act 30 of 2023 wef 01/09/2023] |
| | (b) | $79,333 (in relation to the year 2011), $85,000 (in relation to the years 2012, 2013, 2014 and 2015) or $102,000 (in relation to the year 2016 and every subsequent year), |
|
| “relevant employer” means any company incorporated or registered under the Companies Act 1967 or any person registered under the Business Names Registration Act 2014; |
“specified amount” means —| (a) | [Deleted by Act 2 of 2016] | | (b) | [Deleted by Act 33 of 2022 wef 04/11/2022] | | (c) | in relation to the year 2011, the difference between $79,333 and the total ordinary wages paid to the employee in that year; and for this purpose, any amount of ordinary wages paid to the employee for any month in the year in excess of $4,500 (being a month before September 2011) or $5,000 (being the month of September 2011 or any subsequent month) is disregarded; | | (d) | in relation to the year 2012, 2013, 2014 or 2015, the difference between $85,000 and the total ordinary wages paid to the employee in that year; and for this purpose, any amount of ordinary wages paid to the employee for any month in the year in excess of $5,000 is disregarded; and | | (e) | in relation to the year 2016 and every subsequent year, the difference between $102,000 and the total ordinary wages paid to the employee in that year; and for this purpose, the amount of ordinary wages mentioned in each of the following sub-paragraphs that is paid to the employee for every month specified in that sub-paragraph is disregarded: | (i) | for the month of January 2016 or any subsequent month before September 2023 — any amount in excess of $6,000; | | (ii) | for the month of September 2023 or any subsequent month before January 2024 — any amount in excess of $6,300; | | (iii) | for the month of January 2024 or any subsequent month before January 2025 — any amount in excess of $6,800; | | (iv) | for the month of January 2025 or any subsequent month before January 2026 — any amount in excess of $7,400; | | (v) | for the month of January 2026 or any subsequent month — any amount in excess of $8,000; [Act 30 of 2023 wef 01/09/2023] |
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|
| “total wages”, in relation to any year, means the total of the ordinary and additional wages in that year received by an employee; |
| “year” means any year from 1 January to 31 December. [10C [29/2014; 2/2016] |
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| Income from finance or operating lease |
10C.—(1) Despite any other provisions of this Act, the Minister may by regulations provide for the circumstances in which the Comptroller may direct that allowances under section 19, 19A, 20, 21, 22 or 23 in respect of any machinery or plant which is leased under a finance lease entered into on or after 1 April 1990 are not to be made to the lessor but to the lessee as though the machinery or plant had been sold by the lessor to the lessee.(2) In determining the income of a lessor from the leasing of any machinery or plant, other than those which have been treated as though they had been sold pursuant to regulations made under subsection (1), the following provisions apply:| (a) | the Comptroller must determine the manner and extent to which —| (i) | allowances under section 19, 19A, 20, 21, 22 or 23 and any expenses and donations allowable under this Act are to be deducted; | | (ii) | any loss may be deducted under section 37; |
| | (b) | where the lessor derives income from onshore leasing or offshore leasing or both and such income is subject to tax under section 42(1) or 43(1), the allowances under section 19, 19A, 20, 21, 22 or 23 in respect of finance leasing are only available as a deduction against the income from finance leasing, and any balance of the allowances is not, subject to paragraph (d), available as a deduction against any other income or available for transfer under section 37B, 37C or 37E; | | (c) | where the lessor is a leasing company which derives income from onshore leasing as well as from offshore leasing subject to the concessionary rate of tax under section 43F, any balance of the allowances under section 19, 19A, 20, 21, 22 or 23 in respect of onshore finance leasing in any year of assessment after deduction against the income from such leasing is available as a deduction against any income from offshore finance leasing for that year of assessment, and any balance of the allowances is not, subject to paragraph (d), available as a deduction against any other income or available for transfer under section 37B; | | (d) | where the lessor referred to in paragraph (b) or (c) ceases to derive income from finance leasing in the basis period for any year of assessment, any balance of the allowances after the deduction in paragraph (b) or (c) is available as a deduction against any other income for that year of assessment and for any subsequent year of assessment in accordance with section 23; | | (e) | where the lessor is a leasing company which derives income from onshore leasing as well as from offshore leasing subject to the concessionary rate of tax under section 43F —| (i) | the allowances under section 19, 19A, 20, 21, 22 or 23 in respect of operating leasing must firstly be available as a deduction against the income from such leasing, and any balance of the allowances is available as a deduction against any other income; and | | (ii) | any losses incurred in respect of finance leasing or operating leasing are available as a deduction against any other income. |
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(2A) The income of a lessor during any basis period from the finance leasing of any machinery or plant that is treated as sold by the lessor to the lessee pursuant to regulations made under subsection (1), is determined by the formula A – B, where —| (a) | A is the total of all payments liable to be made during the basis period by the lessee to the lessor under the finance lease; and | | (b) | B is that part of those payments that is attributable to the repayment of principal. [45/2018] |
|
(3) In this section —| “finance lease” means a lease of any machinery or plant (including any arrangement or agreement in connection with the lease) which has the effect of transferring substantially the obsolescence, risks or rewards incidental to ownership of such machinery or plant to the lessee; |
| “finance leasing” means the leasing of any machinery or plant under any finance lease; |
| “leasing company”, “offshore finance leasing” and “offshore leasing” have the meanings given by section 43F(9); |
| “onshore finance leasing” means the onshore leasing of any machinery or plant under any finance lease; |
| “onshore leasing” means the leasing, other than offshore leasing, of any machinery or plant; |
| “operating leasing” means the leasing of any machinery or plant, other than finance leasing. [10D |
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| Ascertainment of income from business of making investments |
10D.—(1) Despite any other provisions of this Act, in determining the income of a company or trustee of a property trust derived from any business of the making of investments, the following provisions apply:| (a) | any outgoings and expenses incurred by the company or trustee of a property trust in respect of investments of that business which do not produce any income are not allowed as a deduction under section 14 for that business or other income of the company or trustee of a property trust; | | (b) | any outgoings and expenses incurred by the company or trustee of a property trust in respect of investments of that business which produce any income are only available as a deduction under section 14 against the income derived from such investments and any excess of such outgoings and expenses over such income in any year is disregarded; | | (c) | the allowances under sections 19, 19A, 20 and 21 relating to that business are only available as a deduction against the income derived from investments of that business which produce any income and the balance of the allowances in any year is disregarded. |
| (1A) Where subsection (1) would apply to the originator of any approved Islamic debt securities arrangement if that arrangement had not been entered into, that subsection continues to apply to the originator as if the arrangement had not been entered into. |
(1B) Where the investment mentioned in subsection (1) is an immovable property, that subsection only applies if the company or trustee of the property trust —| (a) | is the legal owner of the investment; or | | (b) | otherwise has a proprietary interest in the investment (including a lease or an easement) and would receive consideration if the proprietary interest is disposed of or transferred, whether in whole or in part. [41/2020] |
|
(2) In this section —| “approved Islamic debt securities arrangement” and “originator” have the meanings given by section 10(28); |
| “business of the making of investments” includes the business of letting immovable properties; |
| “immovable property‑related assets” means debt securities and shares issued by property companies, mortgaged‑backed securities, other property trust funds, and assets incidental to the ownership of immovable properties; |
| “investments” means securities, immovable properties and immovable property‑related assets; |
| “property trust” means a trust which invests in immovable properties or immovable property‑related assets. [10E |
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| Ascertainment of income from certain public‑private partnership arrangements |
10E.—(1) Where —| (a) | a contract is entered into on or after 29 December 2009 between the Government or any approved statutory body and any person under a public‑private partnership arrangement; and | | (b) | the contract is or contains a finance lease recognised as such by the lessor in accordance with FRS 17 read with INT FRS 104, FRS 116, SFRS(I) 1‑17 read with SFRS(I) INT 4, or SFRS(I) 16, the Government or the approved statutory body being the lessee and the person being the lessor, |
| (c) | despite any provisions under Part 6, the allowances under section 16, 17, 18B, 18C, 19, 19A, 20, 21, 22 or 23 in respect of any building or structure, or any machinery or plant, which is a subject of that finance lease, are not to be made to the person, but to the Government or the approved statutory body, as the case may be; and | | (d) | the person must not be assessed to tax on that part of the lease payment under that finance lease that is attributable to repayment of principal. [45/2018] |
(1A) Despite any other provision of this Act, where —| (a) | a person provides any services in the basis period for the year of assessment 2012 or any subsequent year of assessment under a public‑private partnership arrangement —| (i) | that is the subject of a contract entered into between the person and the Government or any approved statutory body; and | | (ii) | to which INT FRS 112 or SFRS(I) INT 12 applies; and |
| | (b) | the person recognises in the person’s financial statements, prepared in accordance with INT FRS 112 or SFRS(I) INT 12 (as the case may be), that income of a certain amount has been derived from such services, |
| then that amount is deemed as income derived by that person from those services for that basis period. |
[45/2018] |
| (1B) Despite subsection (1A), the person mentioned in that subsection may elect in accordance with subsection (1D) for the Comptroller to assess to tax any deemed income mentioned in subsection (1A) from providing any FRS 11 construction or upgrade services, FRS 115 construction or upgrade services, or SFRS(I) 15 construction or upgrade services, under the public‑private partnership arrangement, as income derived by the person in the basis period in which those services are completed. [39/2017; 32/2019] |
(1C) Where an election has been made in accordance with subsection (1D), then, despite any other provision of this Act —| (a) | the income referred to in subsection (1B) is deemed as income derived by the person in the basis period in which the FRS 11 construction or upgrade services, FRS 115 construction or upgrade services, or SFRS(I) 15 construction or upgrade services (as the case may be) are completed; and | | (b) | any expenditure for which a deduction or an allowance may be allowed or made to the person under Parts 5 and 6 in respect of those services is treated as having been incurred in that basis period. [39/2017; 32/2019] |
|
(1D) The election must be made by written notice to the Comptroller —| (a) | at the time of lodgment of the return of income for the year of assessment relating to the basis period in which the person first provides the FRS 11 construction or upgrade services, FRS 115 construction or upgrade services, or SFRS(I) 15 construction or upgrade services (as the case may be), being the year of assessment 2012 or any subsequent year of assessment; or | | (b) | at such later time as the Comptroller may allow. [39/2017; 32/2019] |
|
| (1E) The election made under subsection (1D) is irrevocable. |
(2) In this section —| “approved” means approved by the Minister or such person as the Minister may appoint; |
| “FRS 11 construction or upgrade services” means any construction or upgrade services (as the case may be) to which FRS 11 applies; |
| “FRS 115 construction or upgrade services” means any construction or upgrade services (as the case may be) to which FRS 115 applies; |
“FRS 11”, “FRS 17”, “FRS 115”, “FRS 116”, “INT FRS 104”, “INT FRS 112”, “SFRS(I) 1‑17”, “SFRS(I) 15”, “SFRS(I) 16”, “SFRS(I) INT 4” and “SFRS(I) INT 12” mean the financial reporting standards known respectively as —| (a) | Financial Reporting Standard 11 (Construction Contracts); | | (b) | Financial Reporting Standard 17 (Leases); | | (c) | Financial Reporting Standard 115 (Revenue from Contracts with Customers); | | (d) | Financial Reporting Standard 116 (Leases); | | (e) | Interpretation of Financial Reporting Standard 104 (Determining whether an Arrangement contains a Lease); | | (f) | Interpretation of Financial Reporting Standard 112 (Service Concession Arrangements); | | (g) | Singapore Financial Reporting Standard (International) 1‑17 (Leases); | | (h) | Singapore Financial Reporting Standard (International) 15 (Revenue from Contracts with Customers); | | (i) | Singapore Financial Reporting Standard (International) 16 (Leases); | | (j) | Singapore Financial Reporting Standard (International) Interpretation 4 (Determining whether an Arrangement contains a Lease); and | | (k) | Singapore Financial Reporting Standard (International) Interpretation 12 (Service Concession Arrangements), |
| that are made by the Accounting Standards Committee under Part 3 of the Accounting Standards Act 2007, as amended from time to time; |
[Act 36 of 2022 wef 01/04/2023] |
| “SFRS(I) 15 construction or upgrade services” means any construction or upgrade services (as the case may be) to which SFRS(I) 15 applies. [10F [39/2017; 45/2018; 32/2019] |
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| Ascertainment of income from business of hiring out motor cars or providing driving instruction or chauffeur services |
10F.—(1) Despite any other provisions of this Act, in determining the income derived by any person for any year of assessment from any business of hiring out motor cars or of providing driving instruction using motor cars, the following provisions apply:| (a) | any outgoings and expenses incurred in respect of that business for that year of assessment and allowable under this Act may only be deducted against the income derived from that business and any excess of such outgoings and expenses over such income is not available as a deduction against any other income of the person or be available for transfer under section 37B, 37C or 37E for that year of assessment and any subsequent year of assessment; | | (b) | the allowances under sections 19, 19A, 20, 21 and 22 relating to that business for that year of assessment are only available as a deduction against the income derived from that business and any excess of such allowances over such income is not available as a deduction against any other income of the person or be available for transfer under section 37B, 37C or 37E for that year of assessment and any subsequent year of assessment. [41/2020] |
| (1A) Subsection (1) applies in determining the income derived by any person for the year of assessment 2021 or a subsequent year of assessment from any business of providing chauffeur services using motor cars as it applies in determining the income derived by a person from any business mentioned in that subsection. [41/2020] |
| (2) In this section, “motor car” means a car which is constructed or adapted for the carriage of not more than 7 passengers exclusive of the driver and the weight of which unladen does not exceed 3,000 kilograms. [10H |
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| Withdrawals from Supplementary Retirement Scheme |
| 10G.—(1) Where the amount of withdrawals made by an SRS member from his or her SRS account in any year exceeds the amount the SRS member contributed to his or her SRS account in that year, the excess amount withdrawn from his or her SRS account is, subject to subsections (3), (3G), (6), (7), (8) and (9), deemed to be income of the SRS member chargeable to tax under section 10(1)(g). [2/2016] | (2) Except where a withdrawal is made by the Official Assignee or the trustee in bankruptcy of an SRS member who is a bankrupt or where a withdrawal is made under subsection (3), (3G), (4) or (8) or deemed to be withdrawn under subsection (6), (7) or (9), a penalty of 5% of the amount withdrawn which is deemed to be income of an SRS member under subsection (1) is payable by the SRS member and must be deducted by the SRS operator from the amount so withdrawn. [2/2016] |
| (2A) The Minister may, for any good cause, remit, wholly or in part, any penalty payable by any SRS member under subsection (2). |
(3) Subject to subsection (3G), only 50% of the following withdrawals made by an SRS member from his or her SRS account are deemed to be income of the SRS member chargeable to tax under section 10(1)(g):| (a) | withdrawal of all the funds standing in his or her SRS account at the same time if the SRS member is neither a citizen of Singapore nor a Singapore permanent resident on the date of the withdrawal and for a continuous period of at least 10 years before that date, and has maintained his or her SRS account for a period of not less than 10 years from the date of his or her first contribution to his or her SRS account; | | (b) | any withdrawal on or after the SRS member has attained the prescribed minimum retirement age prevailing at the time when the SRS member made his or her first contribution to his or her SRS account; or | | (c) | any withdrawal made on the ground that the SRS member is physically or mentally incapacitated from ever continuing in any employment, is mentally disordered and incapable of managing himself or herself or his or her affairs or has a terminal illness or disease. [2/2016] [Act 30 of 2023 wef 30/10/2023] |
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(3A) Subject to subsection (3C), where an SRS member has used funds in his or her SRS account for any investment, any payment to the SRS member thereafter, being —| (a) | any gains or profits from the investment made; | | (b) | any part of the funds the SRS member invested; or | | (c) | any proceeds from the sale or liquidation of such investment, |
| is considered a withdrawal by the SRS member from his or her SRS account for the purposes of subsections (1), (2) and (3)(b) and (c). |
|
| (3B) Subsection (3A) applies even if the SRS account has been closed before the payment mentioned in that subsection, and in that event the person to whom the payment is made is treated as if the person is still an SRS member for the purposes of subsections (1), (2), (2A) and (3)(b) and (c). |
| (3C) Subsection (3A) does not apply to any payment received after any balance remaining or sum standing in the SRS account is deemed withdrawn under subsection (6), (7) or (9). |
(3D) Where any funds in an SRS account have been used for investment, then all the funds standing in the SRS account are considered as having been withdrawn at the same time for the purposes of subsections (3)(a) and (3G) if, and only if, every investment has either been sold or liquidated, or is one which has been deducted from the balance in the SRS account, and —| (a) | in the case of every investment that has been sold or liquidated, amounts which the financial product provider declared to the SRS member to be all the gains or profits from the investment, all funds used for the investment, and all the proceeds from the sale or liquidation have been returned to the account and these, together with all funds standing in the SRS account, are withdrawn at the same time; and | | (b) | in the case of every investment which has been deducted from the balance in the SRS account, the date of the deduction is the same as the date on which the withdrawal referred to in paragraph (a) takes place. [37/2014; 2/2016] |
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(3E) Where —| (a) | an SRS member has used funds in his or her SRS account for any investment; and | | (b) | the investment is one which has been deducted from the balance in the SRS account, |
| then an amount equal to the value of the investment as determined in the manner prescribed by regulations made under subsection (11), is considered as having been withdrawn by the SRS member from his or her SRS account on the date of the deduction for the purposes of subsections (1), (2), (3) and (3G). |
[37/2014; 2/2016] |
(3F) In subsections (3D) and (3E) —| (a) | an investment is one which has been deducted from the balance in an SRS account if the SRS operator in question has, in accordance with the regulations made under subsection (11), approved the deduction of the sums representing the investment from the balance in the SRS account; and | | (b) | the date of the deduction is the date of the approval referred to in paragraph (a). [37/2014] |
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(3G) Where an SRS member makes a withdrawal of all of the funds standing in the SRS account of the SRS member on the ground that the SRS member has a terminal illness or disease, then an amount determined in the following manner (if more than zero) is treated as the SRS member’s income chargeable to tax under section 10(1)(g): | | is the amount of the withdrawal; and |
| | | is the amount determined under subsection (9A). |
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[2/2016] [Act 30 of 2023 wef 30/10/2023] |
(4) Where any contribution made by an SRS member in any year to his or her SRS account exceeds his or her SRS contribution cap for that year (called in this section excess contribution) —| (a) | the aggregate of the excess contribution and, unless the Comptroller otherwise directs, an amount equal to 5% of the excess contribution, to be compounded yearly in accordance with regulations made under this section; or | | (b) | the total amount standing in his or her SRS account, |
| whichever amount is the lower, must be withdrawn by the SRS member from his or her SRS account by 31 December of the year in which he or she has been notified by the Comptroller of the excess contribution; and that amount is deemed to be the SRS member’s income chargeable to tax under section 10(1)(g) for that year. |
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| (5) Where an SRS member is eligible to make a withdrawal under subsection (3)(b), all the funds (excluding any life annuity) standing in his or her SRS account must be withdrawn not later than 10 years from the date the SRS member made his or her first withdrawal under subsection (3)(b). |
| (6) Upon the expiry of the period referred to in subsection (5), any balance (excluding any life annuity and any amount not withdrawn under subsection (4)) remaining in the SRS account is deemed to be withdrawn by the SRS member and 50% of such balance is deemed to be the SRS member’s income chargeable to tax under section 10(1)(g) for the year in which the period expires. |
(6A) Where an SRS member —| (a) | made his or her first withdrawal under subsection (3)(b); and | | (b) | subsequently made one or more contributions to his or her SRS account during the period from 1 October 2008 to 31 December 2008 (both dates inclusive), |
| (c) | any withdrawal made under subsection (3)(b) prior to the date of the first of the SRS member’s contributions referred to in paragraph (b) is disregarded for the purpose of determining the period referred to in subsection (5); and | | (d) | the date of the SRS member’s first withdrawal made under subsection (3)(b) after the date of the first of his or her contributions referred to in paragraph (b) is deemed to be the date the SRS member made his or her first withdrawal under subsection (3)(b) for the purpose of determining the period referred to in subsection (5). |
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(6B) Where an SRS member —| (a) | had made one or more withdrawals under subsection (3)(b) of all the funds standing in his or her SRS account and had closed his or her SRS account (called in this subsection the first SRS account); and | | (b) | subsequently opened another SRS account during the period from 1 October 2008 to 31 December 2008 (both dates inclusive) (called in this subsection the second SRS account), |
| (c) | the reference to the date the SRS member made his or her first withdrawal under subsection (3)(b) for the purpose of determining the period referred to in subsection (5) is a reference to the date the SRS member makes his or her first withdrawal after he or she opened the second SRS account; and | | (d) | for the purposes of subsection (1) and section 39(2)(o), both the first SRS account and the second SRS account are deemed to be the same account as if the first SRS account had never been closed. |
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| (7) Where an SRS member is eligible to make a withdrawal under subsection (3)(c), he or she must withdraw all the funds (excluding any life annuity) standing in his or her SRS account not later than 10 years from the date he or she makes the first withdrawal; and upon the expiry of that period, any balance (excluding any life annuity and any amount not withdrawn under subsection (4)) remaining in his or her SRS account is deemed to be withdrawn by the SRS member and 50% of such balance is deemed to be the SRS member’s income chargeable to tax under section 10(1)(g). |
(8) Only 50% of any annuity payment made under a life annuity purchased by an SRS member under the SRS is deemed to be income of the SRS member chargeable to tax under section 10(1)(g) upon —| (a) | the expiry of the period referred to in subsection (5); | | (b) | the expiry of the period referred to in subsection (7); or | | (c) | the closure of the SRS account of the SRS member —| (i) | on or after the date the SRS member attains the prescribed minimum retirement age prevailing at the time the SRS member makes the first contribution to the SRS account; or | | (ii) | on or after the date the SRS member becomes physically or mentally incapacitated from ever continuing in any employment, becomes mentally disordered and incapable of managing himself or herself or his or her affairs, or is diagnosed to have a terminal illness or disease. [2/2016] [Act 30 of 2023 wef 30/10/2023] |
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(9) When an SRS member dies, any sum standing in the SRS account of the SRS member is treated as withdrawn on the date of death, and an amount determined in the following manner (if more than zero) is treated as the SRS member’s income chargeable to tax under section 10(1)(g): | | is the amount treated as withdrawn; and |
| | | is the amount determined under subsection (9A). |
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[2/2016] |
(9A) For the purposes of subsections (3G) and (9), the amount B referred to in those subsections is — | | | | (a) | if the SRS member made a withdrawal under subsection (3)(b) or (c) (not being a withdrawal under subsection (3G)) in any year before the relevant year, the total number of years (a part of a year being treated as a full year) in the period — |
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| | | (i) | beginning with the year in which the SRS member made the first such withdrawal; and |
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| | | (ii) | ending with the year immediately before the relevant year, |
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| | | | or, if the first year and the last year in the period are (or are part of) the same year, one; or |
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| | | (b) | if the SRS member made his or her first withdrawal under subsection (3)(b) or (c) (not being a withdrawal under subsection (3G)) in the relevant year, or did not make any such withdrawal, zero; and |
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| | | | | | | (b) | the sum of the following withdrawals made in the relevant year (which is not a withdrawal under subsection (3G)): |
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| | | (i) | every withdrawal made under subsection (3)(b); |
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| | | (ii) | every withdrawal made under subsection (3)(c). |
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[2/2016] |
(9B) In subsection (9A), “relevant year” means —| (a) | the year in which the SRS member makes the withdrawal under subsection (3G); or | | (b) | the year of death of the SRS member, |
[2/2016] |
| (10) For the purposes of this section, the use of funds in his or her SRS account by an SRS member for investment in savings or investment products offered under the SRS and for disbursement of any charges in relation to the operation of his or her SRS account is deemed not to be a withdrawal from his or her SRS account. |
| (11) The Minister may by regulations establish a Supplementary Retirement Scheme to provide for voluntary cash contributions by individuals and by their employers on their behalf to accounts operated by SRS operators so as to encourage individuals to save for their old age. |
(12) Without limiting subsection (11), regulations made under that subsection may provide for —| (a) | the opening and the type of account for any SRS member into which contributions may be made; | | (b) | the SRS contribution cap, the mode and manner of the contributions and withdrawals that can be made by any SRS member; | | (c) | the method of valuation of investment products acquired under the SRS; | | (d) | the method of computing income deemed to accrue from excess contributions made by any SRS member; | | (e) | the suspension or closure of SRS accounts and the circumstances in which the SRS accounts may be suspended or closed; | | (f) | the terms and conditions governing the relationship between the Government, SRS operators, SRS members and the Comptroller under the SRS; | | (g) | the purposes for which the contributions made under the SRS can be utilised and invested, the persons with whom investments may be made and the terms and conditions of the investment and withdrawal under the SRS; | | (h) | the consequences for any contravention of the regulations, including making any act or omission in contravention of such regulations an offence and prescribing the penalties for such offence; | | (i) | the requirements and obligations to be observed by SRS members, SRS operators and financial product providers under the SRS; and | | (j) | generally for giving full effect to or for carrying out the purposes of this section. |
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(12A) Without limiting subsections (11) and (12), regulations made under subsection (11) may, for the purposes of subsections (3D), (3E) and (3F) and section 45EA (which relates to collection of tax by an SRS operator for payment to the Comptroller on the value of an investment deducted from an SRS account of a non‑citizen) —| (a) | provide for the manner and time of valuation of any investment; | | (b) | enable an SRS operator to approve the deduction of the sums representing an investment from the balance in an SRS account under such circumstances as may be specified, and impose duties on the SRS operator before and after giving the approval; and | | (c) | for the purposes of section 45EA, prescribe different methods of reckoning the value of an investment under different circumstances. [37/2014] |
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| (13) This section does not apply to any SRS member whose SRS account is opened and subsequently closed within the same year. |
(14) In this section, unless the context otherwise requires —| (a) | a reference to an SRS member making a contribution to his or her SRS account includes the SRS member’s employer making a contribution to that account on the SRS member’s behalf; and | | (b) | a reference to a contribution of an SRS member to his or her SRS account includes a contribution by the SRS member’s employer to that account on the SRS member’s behalf. [10L |
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| Securities lending or repurchase arrangement |
10H.—(1) For the purpose of determining whether an amount, other than any fee payable under a securities lending or repurchase arrangement, should be taken into account in ascertaining the gains or profits from any transfer of securities under the arrangement in respect of which a transferor is chargeable to tax, the transferor is to be treated as if —| (a) | the transfer of the transferred securities had not been made; | | (b) | the transferor had held the transferred securities at all times during the borrowing period; and | | (c) | the return of the transferred securities or equivalent securities had not been made at the end of the borrowing period. |
(2) Despite subsection (1), where a transferor is a person who carries on a trade or business of sale and purchase of securities, any gains or profits derived by the transferor from any transfer of securities under a securities lending or repurchase arrangement are chargeable to tax under section 10(1)(a) if subsequent to the transfer of the transferred securities —| (a) | the transferred securities are redeemed; | | (b) | the transferee accepts a takeover offer for the transferred securities upon the direction of the transferor; | | (c) | the arrangement is terminated because the transferor or transferee is unable to perform any of the obligations specified in the arrangement, unless the transferor applies the collateral held by the transferor to re‑acquire equivalent securities under the terms of the arrangement; | | (d) | the transferee sells the transferred securities to the issuer of such securities upon the direction of the transferor; or | | (e) | any other event occurs which, in the Comptroller’s opinion, results in the condition specified in paragraph (a)(iii) or (iv) of the definition of “securities lending or repurchase arrangement” not fulfilled, |
| and the gains or profits are deemed to arise at the time any of the events referred to in paragraph (a), (b), (c), (d) or (e) occurs. |
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(3) Where a transferee is a person who carries on a trade or business of sale and purchase of securities, any gains or profits derived by the transferee from any transfer of securities under a securities lending or repurchase arrangement are chargeable to tax under section 10(1)(a), and the gains or profits are deemed to arise at the time any of the following events occurs:| (a) | the transferee disposes of the transferred securities to a person other than the transferor; | | (b) | subsequent to such disposal, the transferee returns equivalent securities to the transferor or any of the events specified in subsection (2) occurs, whichever is the earlier. |
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| (4) For the purposes of computing the gains or profits of a transferee under subsection (3), the transferee is to be treated as if the transferee had acquired the transferred securities from or returned equivalent securities to the transferor (as the case may be) for a consideration equal to the market value of the transferred securities at the beginning of the borrowing period under the securities lending or repurchase arrangement. |
| (5) Where any distribution of dividend or interest in respect of transferred securities is made to a Singapore‑based transferee and received by a transferor under a securities lending or repurchase arrangement, the distribution must be included in the statutory income of the transferor of the year in which the distribution is made to the transferee, and be assessed as if the distribution had been made to the transferor. |
| (6) [Deleted by Act 19 of 2013] |
| (7) A Singapore‑based transferee (other than a transferee under a buy and sell back arrangement in respect of qualifying debt securities or foreign debt securities) is not entitled to any tax credit under section 50 or 50A for any distribution received by the transferee from outside Singapore in respect of transferred securities under a securities lending or repurchase arrangement. |
(8) Where any compensatory payment derived under a securities lending or repurchase arrangement by a transferor from a Singapore‑based transferee is in place of —| (a) | any dividend which is exempt from tax or interest which is derived from qualifying debt securities, the transferor is to be assessed at the tax rate that would have been applicable to the dividend or interest (as the case may be) had it been made directly to the transferor; or | | (b) | [Deleted by Act 19 of 2013] | | (c) | a distribution of income derived from outside Singapore and where the transferor is resident in Singapore, no tax credit under section 50 or 50A is allowed to the transferor. |
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(9) Section 45 applies in relation to —| (a) | any distribution of interest (other than interest derived from qualifying debt securities) in respect of transferred securities; and | | (b) | any compensatory payment in place of —| (i) | any distribution of income derived from outside Singapore; or | | (ii) | [Deleted by Act 19 of 2013] | | (iii) | any interest (other than interest derived from qualifying debt securities), |
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| made under a securities lending or repurchase arrangement by a Singapore‑based transferee to a transferor who is not resident in Singapore, as that section applies to any interest paid by a person to another person not known to the firstmentioned person to be resident in Singapore, and for the purpose of such application, any reference in that section to interest is a reference to such distribution of interest or compensatory payment. |
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| (10) For the purposes of this section, the Comptroller may specify such requirement and obligation to be observed, and such information in respect of any transferor, transferee or transferred securities to be furnished, by the depository agent of the transferor or transferee. |
| (11) The Minister may make regulations to provide generally for giving full effect to or for carrying out the purposes of this section. |
(12) In this section —| “borrowing period”, in relation to any transferred securities, means the period commencing from the date the securities are transferred by the transferor to the transferee and ending on the date the securities or equivalent securities are returned to the transferor or are regarded as being disposed of by the transferor under subsection (2), whichever is the earlier; |
“commercial purpose”, in relation to any securities lending or repurchase arrangement, means —| (a) | the settling of a sale of securities, whether by the transferee or another person; | | (b) | the replacement, in whole or in part, of the transferred securities obtained by the transferee under any earlier securities lending or repurchase arrangement; | | (c) | the on‑lending of the transferred securities to another person; | | (d) | the fulfillment by the transferee of its existing obligations arising from an uncovered written option position using transferred securities; | | (e) | the hedging and arbitrage transactions entered into or to be entered into by the transferee; | | (f) | the liquidity management by the transferee; | | (g) | the holding of the transferred securities, without being disposed of, as collateral against the obligations of the counterparty to the securities lending or repurchase arrangement; or | | (h) | any other purpose as the Minister (or such person as the Minister may appoint) may in writing allow; |
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| “compensatory payment”, in relation to any transferred securities, means a payment made during the borrowing period to a transferor in place of any distribution of interest, dividend or right to purchase warrants, options or additional securities in respect of the transferred securities under circumstances in which the transferee does not receive such distribution to be passed on to the transferor, and includes any amount which is in place of interest and is deducted from the price paid by the transferor to acquire equivalent securities or re‑acquire the transferred securities under a buy and sell back arrangement in respect of qualifying debt securities, Singapore Government securities or foreign debt securities; |
“equivalent securities”, in relation to any transferred securities, means securities which are identical in type, nominal value (where applicable), description and amount to the transferred securities and includes —| (a) | the securities into which the transferred securities have been converted, subdivided or consolidated; | | (b) | the proceeds of the redemption of the transferred securities; | | (c) | the cash or securities representing the proceeds of the acceptance of the takeover of the transferred securities; | | (d) | if there is a call on partly‑paid securities and if the transferor has paid to the transferee the sum due on the call, the paid‑up securities; | | (e) | if there is a bonus issue, the transferred securities together with the securities allotted by way of bonus; | | (f) | if there is a rights issue and if the transferor has directed the transferee to take up the issue and has paid to the transferee any sum due on the issue, the transferred securities together with the securities allotted under the rights issue or, if the transferor has directed the transferee to sell the rights, the transferred securities together with the proceeds from the disposal of the rights; | | (g) | if any distribution is made in the form of securities or a certificate which may be exchanged for securities or an entitlement to acquire securities, the transferred securities together with the securities or certificate or entitlement equivalent to those allotted; and | | (h) | if the transferee is unable to return the transferred securities, such amount of money or securities equivalent to the transferred securities; |
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| “foreign debt securities” means securities, other than stocks and shares, denominated in any foreign currency (including bonds and notes) issued by foreign governments, foreign banks outside Singapore and companies not incorporated and not resident in Singapore; |
| “qualifying debt securities” has the meaning given by section 13(16); |
| “securities” includes any collateral that is provided in the form of securities but does not include stocks and shares of any company resident in Singapore which are not listed on any stock exchange in Singapore or elsewhere; |
“securities lending or repurchase arrangement” means any written arrangement made on or after 23 November 2001 —| (a) | under which —| (i) | a person (called in this section the transferor) transfers the legal interest in any securities (called in this section the transferred securities) to another person (called in this section the transferee) for any commercial purpose; | | (ii) | the transferor re‑acquires the transferred securities or acquires equivalent securities from the transferee at a later time; | | (iii) | the transferor retains the risk of loss or opportunity for gain in respect of the transferred securities; | | (iv) | the transferor does not dispose of (by transfer, declaration of trust or otherwise) the right to receive any part of the total consideration payable or to be given by the transferee under the arrangement; and | | (v) | if any distribution is made in respect of the transferred securities during the borrowing period, the transferor receives from the transferee the distribution or compensatory payment equal to the value of the distribution; and |
| | (b) | where —| (i) | the transferor and transferee are dealing with each other at arm’s length; and | | (ii) | the transferor or transferee or both of them do not enter into the arrangement with the purpose, or main purpose, of avoiding, reducing or deferring any tax chargeable under this Act; |
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| “Singapore‑based transferee” means a transferee who is resident in Singapore (except in respect of any business carried on outside Singapore through a permanent establishment outside Singapore) or which is a permanent establishment in Singapore; |
| “Singapore Government securities” and “debt securities” have the meanings given by section 43H. |
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| (13) This section has effect despite anything to the contrary in this Act, except that this section does not affect the chargeability to tax of any income of a transferor or transferee under section 10 unless otherwise provided in this section. [10N |
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| Additional Tier 1 capital instruments |
| 10I.—(1) Any distribution that is liable to be made in respect of an AT1 instrument in the basis period for the year of assessment 2015 or a subsequent year of assessment is deemed for the purposes of this Act, and for that year of assessment, as interest derived from a debt security. [37/2014] (2) In this section —“AT1 instrument” means a security (not being shares) commonly known as Additional Tier 1 capital instrument which —| (a) | is issued in Singapore but not through a branch situated outside Singapore; and | | (b) | satisfies any of the following:| (i) | according to MAS Notice 637, may be used to satisfy the capital adequacy requirement of a bank incorporated in Singapore with a full banking licence, under section 10(2) of the Banking Act 1970; [Act 18 of 2022 wef 30/06/2022] | | (ii) | according to a direction issued under section 28(3) of the Monetary Authority of Singapore Act 1970 as in force immediately before the date of commencement of the Financial Holding Companies Act 2013 and to MAS Notice 637, may be used to satisfy the capital adequacy requirement of any other financial institution within the meaning of section 27A(6) of the Monetary Authority of Singapore Act 1970 as in force immediately before the date of commencement of the Financial Holding Companies Act 2013; [Act 18 of 2022 wef 30/06/2022] | | (iii) | according to MAS Notice FHC-N637, may be used to satisfy the capital adequacy requirement of a financial holding company designated under section 4 of the Financial Holding Companies Act 2013; [Act 18 of 2022 wef 30/06/2022] [Act 18 of 2022 wef 30/06/2022] |
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| “full banking licence” has the meaning given by the Banking (Fees) Notification; |
| “MAS Notice FHC-N637” means the notice commonly known as MAS Notice FHC-N637 that is issued by the Monetary Authority of Singapore under section 36(1) of the Financial Holding Companies Act 2013, and includes any notice that replaces it; [Act 18 of 2022 wef 30/06/2022] |
| “MAS Notice 637” means the notice commonly known as MAS Notice 637 that is issued by the Monetary Authority of Singapore pursuant to sections 10(2), 10A(1), 10B(1) and 65(2) of the Banking Act 1970, and includes any notice that replaces it. [10O [37/2014; 5/2016; 41/2020] |
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| Tax treatment for trading stock appropriated for non‑trade or capital purpose |
| 10J.—(1) This section applies where, at any time on or after 16 November 2021, a person carrying on a trade or business appropriates any trading stock of that trade or business for a purpose other than for sale or disposal in the ordinary course of any of the person’s trades or businesses in circumstances that give rise to a reasonable inference that the appropriation is permanent. [27/2021] (2) Without limiting the generality of the expression, a person appropriates trading stock for a purpose other than for sale or disposal in the ordinary course of any of the person’s trades or businesses if the person —| (a) | holds or uses the trading stock as a capital asset; or | | (b) | donates the trading stock. [27/2021] |
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(3) The following is treated for the purposes of this Act as the person’s income for the firstmentioned trade or business in subsection (1) for the year of assessment relating to the basis period in which the date of appropriation of the trading stock falls:| (a) | where the appropriation is by way of a donation of the trading stock that qualifies for a deduction under section 37(3)(b), (e) or (f) for any year of assessment — an amount equal to the person’s cost of acquiring, making or constructing the trading stock; | | (b) | in any other case — an amount equal to the open market value of the trading stock as at the date of the appropriation. [27/2021] |
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| (4) Section 14 applies for the purpose of ascertaining such part of the income mentioned in subsection (3) that is chargeable with tax under this Act, as if the trading stock were sold on the date of the appropriation. [27/2021] |
| (5) Where this section applies, then the person must, at the time of lodgment of the person’s return of income for the year of assessment relating to the basis period in which the trading stock is appropriated, or such later time as the Comptroller may allow, give notice of the appropriation and specify the particulars of the appropriation in the form and manner specified by the Comptroller. [27/2021] |
(6) The Minister may by rules made under section 7, and subject to any condition specified in the rules —| (a) | exempt any person or class of persons from subsection (5); or | | (b) | provide that subsection (5) does not apply in a particular case or class of cases. [27/2021] |
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| (7) Rules made for the purposes of subsection (6) may be made to take effect from (and including) 16 November 2021. [27/2021] |
| (8) Where subsection (3) applies to a person for a year of assessment and that person has not been assessed accordingly in that year of assessment, any income arising because of that subsection is treated as the person’s income for the year of assessment in which the Comptroller discovers sufficient facts on which the Comptroller may reasonably conclude that there has been such appropriation. [27/2021] |
(9) In this section —“open market value”, in relation to any trading stock, means —| (a) | the amount that would be realised if the trading stock had been sold on the open market on the date of appropriation of the trading stock; or | | (b) | where the Comptroller is satisfied by reason of the special nature of the trading stock that it is not practicable to determine the amount mentioned in paragraph (a), such other value as appears to the Comptroller to be reasonable in the circumstances; |
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“trading stock”, in relation to a trade or business —| (a) | means property of any description (whether movable or immovable) —| (i) | that is sold in the ordinary course of trade or business; or | | (ii) | that would be so sold if it were mature or if its manufacture, preparation or construction were complete; but |
| | (b) | does not include any material used in the manufacture, preparation or construction of any property mentioned in paragraph (a). [10P [27/2021] |
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| Tax treatment for covered bond transactions |
10K.—(1) This section applies where —| (a) | an approved covered bond company derives income from any cover pool for covered bonds issued by a bank incorporated in Singapore (directly or through its overseas branch), being covered bonds that are issued in compliance with the MAS Notice during the period from 15 February 2023 to 31 December 2028 (both dates inclusive); and | | (b) | the bank had transferred the cover pool to the approved covered bond company under a covered bond transaction entered into during that period, for the purpose of securing the bank’s liabilities under the covered bonds. |
| (2) Despite any provision in this Act, if (and only if) the conditions prescribed by rules made under section 7 for the purposes of this section are complied with, then any income derived by the approved covered bond company from the cover pool is treated for the purposes of this Act as income of the bank (and not that of the approved covered bond company) for the year of assessment relating to the basis period in which the income is derived. |
| (3) Rules made under section 7 for the purposes of this section may provide for the deduction of expenses, allowances and losses otherwise than in accordance with this Act. |
(4) In this section —“approved covered bond company” means a company incorporated and resident in Singapore, that is —| (a) | incorporated principally to enter into a covered bond transaction with a bank incorporated in Singapore that issues (directly or through its overseas branch) covered bonds; and | | (b) | approved by the Minister or an authorised body for the purposes of this section; |
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| “cover pool”, in relation to any covered bonds, means the pool of assets against which the covered bonds are collateralised; |
“covered bond” means any bond, note or other debenture, where payment of the liabilities to the holder thereof and any liabilities arising from the enforcement of the rights of the holder, is —| (a) | secured by a cover pool; and | | (b) | recoverable from the issuer of the bond, note or debenture, regardless of whether the cover pool is sufficient to pay off such liabilities; |
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“covered bond transaction” means —| (a) | the issue of any covered bonds; and | | (b) | the transfer, by the issuer of the covered bonds, of the cover pool for those covered bonds to another entity for the purpose of securing the liabilities of the issuer under those covered bonds; |
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| “MAS Notice” means the applicable notice of the Monetary Authority of Singapore relating to the issuance of covered bonds given under section 55 of the Banking Act 1970; |
| “overseas branch”, in relation to a bank incorporated in Singapore, means a branch of the bank situated outside Singapore. [Act 30 of 2023 wef 15/02/2023] |
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| Gains from the sale of foreign assets |
10L.—(1) Despite anything in this Act, gains from the sale or disposal by an entity (called in this section the seller entity) of a relevant group of any movable or immovable property situated outside Singapore at the time of such sale or disposal or any rights or interest thereof (called in this section a foreign asset), that are received in Singapore from outside Singapore, are treated as income chargeable to tax under section 10(1)(g) for the year of assessment relating to the basis period in which the gains are received in Singapore.(2) Subsection (1) only applies if —| (a) | the gains would not otherwise be chargeable to tax as income under section 10(1); or | | (b) | the gains would otherwise be exempt from tax under this Act. |
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| (3) Subsection (1) applies only to gains from a sale or disposal of a foreign asset that occurs on or after 1 January 2024. |
| (4) In this section, unless the circumstances require otherwise, the time when the foreign asset vests in the buyer or transferee under the law governing the sale or disposal, is treated as the time of the sale or disposal of the foreign asset. |
(5) In this section —| (a) | an entity is a member of a group if its assets, liabilities, income, expenses and cash flows —| (i) | are included in the consolidated financial statements of the parent entity of the group; or | | (ii) | are excluded from the consolidated financial statements of the parent entity of the group solely on size or materiality grounds or on the grounds that the entity is held for sale; and |
| | (b) | a group is a relevant group if —| (i) | the entities of the group are not all incorporated, registered or established in a single jurisdiction; or | | (ii) | any entity of the group has a place of business in more than one jurisdiction. |
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| (6) Subsection (1) does not apply to the prescribed percentage of gains from the sale or disposal of any qualifying intellectual property right as defined in section 43X(13) that are received in Singapore from outside Singapore. |
(7) In subsection (6), the prescribed percentage is the percentage of the qualifying intellectual property income (as defined in section 43X(13)) mentioned in paragraph (c), that would have qualified for the concessionary rate of tax under section 43X —| (a) | had the seller entity been approved as an approved company under that section on 1 January 2024 and its tax relief period under that section had included the basis period in which the sale or disposal occurred; | | (b) | had the seller entity made an election in respect of the qualifying intellectual property right under section 43X(7) for the year of assessment for that basis period; and | | (c) | had qualifying intellectual property income been derived from that qualifying intellectual property right in that basis period. |
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(8) Subsection (1) does not apply to the gains from a sale or disposal of a foreign asset (not being an intellectual property right) that is —| (a) | carried out as part of, or incidental to, the business activities of a prescribed financial institution; | | (b) | carried out as part of, or incidental to, the business activities or operations of an entity, being activities or operations from which the entity derives income that is exempt from tax, or that is taxed at a concessionary rate of tax, under section 13A, 13E, 13P, 43C, 43E, 43I, 43J, 43L, 43N, 43P, 43Q, 43R or 43U for the year of assessment for the basis period in which the sale or disposal occurred; | | (c) | carried out as part of, or incidental to, the business activities or operations of an entity, being activities or operations from which the entity derives income that is exempt from tax, or that is taxed at a concessionary rate of tax, under Part 2, 3 or 4 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 for the year of assessment for the basis period in which the sale or disposal occurred; or | | (d) | carried out by an entity that is an excluded entity in the basis period in which the sale or disposal occurred. |
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(9) For the purpose of subsection (1), the following amounts of gains from the sale or disposal of any foreign asset are treated as received in Singapore from outside Singapore:| (a) | any amount from such gains that is remitted to, or transmitted or brought into, Singapore; | | (b) | any amount from such gains that is applied in or towards satisfaction of any debt incurred in respect of a trade or business carried on in Singapore; | | (c) | any amount from such gains that is applied to the purchase of any movable property which is brought into Singapore. |
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(10) For the purpose of subsection (1), where the sale or disposal of a foreign asset by the seller entity was at a price less than the open‑market price for the foreign asset, the Comptroller may treat the following amount as the amount of the gains received in Singapore from outside Singapore:| (a) | A is the amount of the gains actually received in Singapore from outside Singapore; | | (b) | B is the open-market price for the foreign asset; and | | (c) | C is the actual price for the sale or disposal of the foreign asset. |
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(11) In subsection (10), the open-market price for a foreign asset is either —| (a) | the price which the foreign asset could have been sold for in the open market on the date of its sale or disposal; or | | (b) | where the Comptroller is satisfied by reason of the special nature of the foreign asset that it is not practicable to determine the price mentioned in paragraph (a), such other value as appears to the Comptroller to be reasonable in the circumstances. |
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(12) Subject to subsection (13), in ascertaining the amount of any gains chargeable to tax under subsection (1), there is to be deducted —| (a) | any expenditure incurred by the seller entity to acquire, create or improve the foreign asset (including any expenditure that would be deductible under section 14(1)(a) if the foreign asset were capital employed in acquiring income), to protect or preserve the value of the foreign asset, or to sell or dispose of the foreign asset; and | | (b) | any loss incurred by the seller entity from the sale or disposal of any other foreign asset —| (i) | where, had the sale or disposal resulted in gains (after deducting any expenditure under paragraph (a)) and all of those gains had been received in Singapore, they would have been chargeable to tax under subsection (1); and | | (ii) | to the extent it has not already been deducted against any gains chargeable to tax under subsection (1). |
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(13) The following are not deductible under subsection (12):| (a) | any expenditure deducted under this Act against any other income (whether or not chargeable to or exempt from tax); | | (b) | capital expenditure computed by the following formula:| (i) | D is the amount of capital expenditure for which any allowance (including any balancing allowance) is made under this Act against any other income (whether or not chargeable to or exempt from tax); and | | (ii) | E is the amount of any balancing charge (or similar charge) made under this Act on the sale or disposal of the foreign asset. |
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| (14) Where not all the gains from the sale or disposal of a foreign asset are received in Singapore in the same basis period, a portion of the amount deductible under subsection (12)(a) as the Comptroller considers reasonable is deductible for each basis period in which any such gains are received in Singapore. |
(15) In this section, the situation of property, and any right or interest therein, is determined in accordance with the following provisions:| (a) | any immovable property, or any right or interest in immovable property, is situated where the immovable property is physically located; | | (b) | any tangible movable property, or any right or interest in such property, that is not the subject of any other paragraph in this subsection, is situated where the tangible movable property is physically located; | | (c) | a ship or aircraft, or any right or interest in a ship or aircraft, is situated where the owner, or the person entitled to the right or interest, is resident; | | (d) | a secured or unsecured debt (other than a judgment debt or securities), or any right or interest in such secured or unsecured debt, is situated where the creditor is resident; | | (e) | a judgment debt, or any right or interest in a judgment debt, is situated where the judgment is recorded; | | (f) | any shares, equity interests or securities issued by any municipal or governmental authority, or by any body created by such authority, or any right or interest in such shares, equity interests or securities, are situated where that authority is established; | | (g) | subject to paragraph (f), any shares in or securities issued by a company, or any right or interest in such shares or securities, are situated where the company is incorporated; | | (h) | subject to paragraph (f), any equity interests in any entity which is not a company, or any right or interest in such equity interests, are situated where the operations of the entity are principally carried out; | | (i) | subject to paragraph (f) (and despite paragraphs (g) and (h)), any registered shares, equity interests or securities, or any right or interest in any registered shares, equity interests or securities, are situated where the shares, equity interests or securities are registered or, if registered in more than one register, where the principal register is situated; | | (j) | goodwill relating to a trade, business or profession is situated where the trade, business or profession is principally carried on; | | (k) | any intellectual property right, or any licence or other right in respect of any intellectual property right, is situated where the owner of the intellectual property right, licence or right is resident; | | (l) | any intangible movable property, or any right or interest in any intangible movable property, that is not the subject of any paragraph in this subsection, is situated where the ownership rights in respect of the property, right or interest would be primarily enforceable. |
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(16) In this section —| “consolidated financial statements” means financial statements prepared by an entity in accordance with generally accepted accounting standards, in which the assets, liabilities, income, expenses and cash flows of the entity, and the entities in which it has a controlling interest, are presented as those of a single economic unit; |
| “controlling interest”, in relation to an entity, means an equity interest in the entity such that the holder of the interest is required by the law or a regulatory body of the jurisdiction it is resident in, to consolidate in its financial statements the assets, liabilities, income, expenses and cash flows of the entity on a line-by-line basis in accordance with generally accepted accounting standards; |
| “debt securities” has the meaning given by section 43H(4); |
“entity” means —| (a) | any legal person (including a limited liability partnership) but not an individual; | | (b) | a general partnership or limited partnership; or | | (c) | a trust; |
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| “equity interest”, in relation to an entity, means an interest that carries rights to the profits, capital or reserves of the entity and is accounted for as equity under generally accepted accounting standards; |
“excluded entity”, in relation to a basis period, means —| (a) | a pure equity-holding entity that satisfies all of the following conditions in that basis period:| (i) | the entity submits to a public authority any return, statement or account required under the written law under which it is incorporated or registered, being a return, statement or account which it is required by that law to submit to that authority on a regular basis; | | (ii) | the operations of the entity are managed and performed in Singapore (whether by its employees or by other persons where the activities performed by such other persons for the entity are subject to the direct and effective control of the entity); | | (iii) | the entity has adequate human resources and premises in Singapore to carry out the operations of the entity; or |
| | (b) | an entity that is not a pure equity-holding entity and that satisfies all of the following conditions in that basis period:| (i) | the operations of the entity are managed and performed in Singapore (whether by its employees or by other persons where the activities performed by such other persons for the entity are subject to the direct and effective control of the entity); | | (ii) | the entity has adequate economic substance in Singapore, taking into account the following considerations:| (A) | the number of full-time employees of the entity (or other persons managing or performing the entity’s operations) in Singapore; | | (B) | the qualifications and experience of such employees or other persons; | | (C) | the amount of business expenditure incurred by the entity in respect of its operations in Singapore; | | (D) | whether the key business decisions of the entity are made by persons in Singapore; |
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| “parent entity”, in relation to a group, means an entity that has a controlling interest in all the other members of the group; |
“prescribed financial institution” means —| (a) | a bank licensed under the Banking Act 1970; | | (b) | a merchant bank licensed under the Banking Act 1970; | | (c) | a finance company licensed under the Finance Companies Act 1967; | | (d) | an insurer licensed or regulated under the Insurance Act 1966; or | | (e) | a holder of a capital markets services licence under the Securities and Futures Act 2001; |
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“pure equity-holding entity” means an entity —| (a) | whose function is to hold shares or equity interests in any other entity; and | | (b) | that has no income other than —| (i) | dividends or similar payments from the shares or equity interests; | | (ii) | gains on the sale or disposal of the shares or equity interests; or | | (iii) | income incidental to its activities of holding shares or equity interests in any other entity; |
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| “securities” means debentures and debt securities; |
| “shares” includes stocks. |
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(17) In this section, where an entity is a trust —| (a) | references to anything done by, to or in relation to the entity are to that thing done by, to or in relation to the trustee of the trust; and | | (b) | references to gains, income or property (or any right or interest thereof) of the entity are to those gains, income or property (or any right or interest thereof) of the trustee of the trust derived or held by it in its capacity as the trustee of the trust. [Act 30 of 2023 wef 01/01/2024] |
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| Ascertainment of income of clubs, trade associations, etc. |
11.—(1) A body of persons, whether corporate or unincorporate, that carries on a club or similar institution and receives from its members not less than half of its gross receipts on revenue account (including entrance fees and subscriptions) is not deemed to carry on a business; but where less than half of such gross receipts are received from members, the whole of the income from transactions both with members and others (including entrance fees and subscriptions) is deemed to be receipts from a business, and the body of persons is chargeable in respect of the profits therefrom.(2) Where a body of persons, whether corporate or unincorporate, carries on a trade or professional association in such circumstances that more than half of its receipts by way of entrance fees and subscriptions from Singapore members are claimed or claimable as allowable deductions for the purposes of section 14 —| (a) | the body of persons is deemed to carry on a business; | | (b) | the whole of its income from transactions with Singapore members and persons who are not members (including entrance fees and subscriptions) is deemed to be receipts from a business; and | | (c) | the body of persons is chargeable in respect of the profits from the business. |
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| (3) For the purposes of subsection (2), “body of persons” includes a company limited by guarantee approved by the Minister or such person as the Minister may appoint, subject to such conditions as the Minister or appointed person may impose. |
(4) In this section —| “members”, in relation to a body of persons, means those persons who are entitled to vote at a general meeting of the body at which effective control is exercised over its affairs; |
“Singapore members” means members that are —| (a) | persons, other than companies, resident in Singapore; | | (b) | companies incorporated in Singapore (excluding branches or offices located outside Singapore); or | | (c) | in the case of companies incorporated outside Singapore, the branches or offices of the companies located within Singapore. |
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Trading operations carried on partly in Singapore 12.—(1) Where a non‑resident person carries on a trade or business of which only part of the operations is carried on in Singapore, the gains or profits of the trade or business are deemed to be derived from Singapore to the extent to which such gains or profits are not directly attributable to that part of the operations carried on outside Singapore.| Non‑resident shipping and air transport |
(2) Where a non‑resident person carries on —| (a) | the business of shipowner or charterer; or | | (b) | the business of air transport, |
| and any ship or aircraft owned or chartered by the non‑resident person calls at a port, an aerodrome or an airport in Singapore, the non‑resident person’s full profits arising from the carriage of passengers, mail, livestock or goods shipped, or loaded into an aircraft, in Singapore are deemed to accrue in Singapore. |
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| (2A) Subsection (2) does not apply to passengers, mail, livestock or goods which are brought to Singapore solely for transhipment, or for transfer from one aircraft to another or from an aircraft to a ship or from a ship to an aircraft. |
| (2B) In subsections (2) and (2A), “ship” has the meaning given by section 2(1) of the Merchant Shipping Act 1995. [2/2016] |
| Cable or wireless undertakings |
| (3) Where a non‑resident person carries on in Singapore the business of transmitting messages by cable or by any form of wireless apparatus, the non‑resident person’s full profits arising from the transmission in Singapore of any such messages, whether originating in Singapore or elsewhere, to places outside Singapore are deemed to accrue in Singapore. |
| Employment exercised in Singapore |
| (4) The gains or profits from any employment exercised in Singapore are deemed to be derived from Singapore whether the gains or profits from such employment are received in Singapore or not. |
| Employment exercised outside Singapore on behalf of Government |
| (5) The gains or profits from any employment exercised outside Singapore on behalf of the Government by any individual in the discharge of governmental functions are deemed to be derived from Singapore except where such individual is not a citizen or a resident of Singapore. |
(6) There is deemed to be derived from Singapore —| (a) | any interest, commission, fee or any other payment in connection with any loan or indebtedness or with any arrangement, management, guarantee, or service relating to any loan or indebtedness which is —| (i) | borne, directly or indirectly, by a person resident in Singapore or a permanent establishment in Singapore except in respect of any business carried on outside Singapore through a permanent establishment outside Singapore or any immovable property situated outside Singapore; or | | (ii) | deductible against any income accruing in or derived from Singapore; or |
| | (b) | any income derived from loans where the funds provided by such loans are brought into or used in Singapore. |
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| (6AA) To avoid doubt, the reference to interest in subsection (6) is, in the case of an arrangement that is a finance lease of any machinery or plant that is treated as sold by the lessor to the lessee pursuant to regulations made under section 10C(1), a reference to the part of any payment by the lessee that is income of the lessor under section 10C(2A). [45/2018] |
(6A) Subsection (6) does not apply to any payment for —| (a) | any arrangement, management or service relating to any loan or indebtedness, where such arrangement, management or service is performed outside Singapore for or on behalf of a person resident in Singapore or a permanent establishment in Singapore by a non‑resident person who —| (i) | in the event the non‑resident person is not an individual, is not incorporated, formed or registered in Singapore; and | | (ii) | in any event —| (A) | does not by himself, herself or itself or in association with others, carry on a business in Singapore and does not have a permanent establishment in Singapore; or | | (B) | carries on a business in Singapore (by himself, herself or itself or in association with others) or has a permanent establishment in Singapore, but the arrangement, management or service is not performed through that business carried on in Singapore or that permanent establishment; and |
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| | (b) | any guarantee relating to any loan or indebtedness, where the guarantee is provided for or on behalf of a person resident in Singapore or a permanent establishment in Singapore by a guarantor who is a non‑resident person who —| (i) | in the event the non‑resident person is not an individual, is not incorporated, formed or registered in Singapore; and | | (ii) | in any event —| (A) | does not by himself, herself or itself or in association with others, carry on a business in Singapore and does not have a permanent establishment in Singapore; or | | (B) | carries on a business in Singapore (by himself, herself or itself or in association with others) or has a permanent establishment in Singapore, but the giving of the guarantee is not effectively connected with that business carried on in Singapore or that permanent establishment. |
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(7) There is deemed to be derived from Singapore —| (a) | royalty or other payment in one lump sum or otherwise for the use of or the right to use any movable property; | | (b) | any payment for the use of or the right to use scientific, technical, industrial or commercial knowledge or information or for the rendering of assistance or service in connection with the application or use of such knowledge or information; | | (c) | any payment for the management or assistance in the management of any trade, business or profession; or | | (d) | rent or other payment under any agreement or arrangement for the use of any movable property, |
| which is borne, directly or indirectly, by a person resident in Singapore or a permanent establishment in Singapore (except in respect of any business carried on outside Singapore through a permanent establishment outside Singapore) or which is deductible against any income accruing in or derived from Singapore. |
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| (7AA) Any payment by the lessee to the lessor under a finance lease of any machinery or plant that is not treated as sold by the lessor to the lessee pursuant to regulations made under section 10C(1), is treated as a payment under an agreement or arrangement for the use of movable property under subsection (7)(d). [45/2018] |
(7AB) Subsection (7)(d) excludes any rent or other payments under any agreement or arrangement for the use outside Singapore of any tangible movable property, where —| (a) | such use is for or incidental to the purpose of a trip to a country outside Singapore that is made for the purpose of a trade, business, profession or vocation carried on —| (i) | in Singapore by a person resident in Singapore; or | | (ii) | through a permanent establishment in Singapore; or |
| | (b) | such use is for or incidental to the purpose of maintaining a representative office outside Singapore that is maintained for the purpose of a trade, business, profession or vocation carried on in Singapore. [32/2019] |
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(7A) Subsection (7) does not apply to any payment for —| (a) | the rendering of assistance or service in connection with the application or use of scientific, technical, industrial or commercial knowledge or information, where such rendering of assistance or service is performed outside Singapore for or on behalf of a person resident in Singapore or a permanent establishment in Singapore by a non‑resident person who —| (i) | in the event the non‑resident person is not an individual, is not incorporated, formed or registered in Singapore; and | | (ii) | in any event —| (A) | does not by himself, herself or itself or in association with others, carry on a business in Singapore and does not have a permanent establishment in Singapore; or | | (B) | carries on a business in Singapore (by himself, herself or itself or in association with others) or has a permanent establishment in Singapore, but the rendering of assistance or service is not performed through that business carried on in Singapore or that permanent establishment; |
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| | (b) | the management or assistance in the management of any trade, business or profession, where such management or assistance is performed outside Singapore for or on behalf of a person resident in Singapore or a permanent establishment in Singapore by a non‑resident person who —| (i) | in the event the non‑resident person is not an individual, is not incorporated, formed or registered in Singapore; and | | (ii) | in any event —| (A) | does not by himself, herself or itself or in association with others, carry on a business in Singapore and does not have a permanent establishment in Singapore; or | | (B) | carries on a business in Singapore (by himself, herself or itself or in association with others) or has a permanent establishment in Singapore, but the management or assistance is not performed through that business carried on in Singapore or that permanent establishment; and |
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| | (c) | the use of or the right to use software, information or digitised goods, not being a right to commercially exploit in one form or another the copyright in such software, information or digitised goods such as the right to —| (i) | reproduce, modify or adapt, and distribute the software, information or digitised goods; or | | (ii) | prepare a derivative work based on the software, information or digitised goods for distribution. [37/2014] |
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(7B) In subsection (7A)(c) —| “digitised goods” means text, images or sounds that are transferred through a handphone, fixed‑line phone, cable network, satellite, the Internet or other forms of electronic transmission, but does not include software; |
“information” means —| (a) | any information in any newspaper or magazine article or report, including financial and business data (such as foreign exchange, stock and property data), and other proprietary data; and | | (b) | any information obtained solely for research purposes. [37/2014] |
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| Commission or other payment of licensed international market agent |
(8) There is deemed to be derived from Singapore any commission or other payment paid to a licensed international market agent for organising or conducting a casino marketing arrangement with a casino operator in Singapore which is —| (a) | borne, directly or indirectly, by a person resident in Singapore or a permanent establishment in Singapore except in respect of any business carried on outside Singapore through a permanent establishment outside Singapore; or | | (b) | deductible against any income accruing in or derived from Singapore. |
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| (9) In this section, “casino marketing arrangement”, “casino operator” and “international market agent” have the meanings given by the Casino Control Act 2006. |
| (10) In this section, “finance lease” has the meaning given by section 10C. [45/2018] |
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