PART 4 | EXEMPTION FROM INCOME TAX |
13.—(1) There is exempt from tax —| (a) | subject to subsection (2) and such conditions as may be prescribed by regulations, the interest derived from —| (i) | any qualifying debt securities issued during the period from 28 February 1998 to 31 December 2028 (both dates inclusive) by any person who is not resident in Singapore and who does not have any permanent establishment in Singapore; and [Act 30 of 2023 wef 30/10/2023] | | (ii) | any qualifying debt securities issued during the period from 27 February 1999 to 31 December 2028 (both dates inclusive) by any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the qualifying debt securities are not obtained from the operation; [Act 30 of 2023 wef 30/10/2023] |
| | (aa) | subject to subsection (2A) and such conditions as may be prescribed by regulations, the discount from any qualifying debt securities issued during the period from 17 February 2006 to 31 December 2028 (both dates inclusive), by —| (i) | any person who is not resident in Singapore and who does not have any permanent establishment in Singapore; or | | (ii) | any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the qualifying debt securities are not obtained from the operation; [Act 30 of 2023 wef 30/10/2023] |
| | (ab) | subject to subsection (2B) and such conditions as may be prescribed by regulations, any amount payable from any Islamic debt securities which are qualifying debt securities, and issued during the period from 1 January 2005 to 31 December 2028 (both dates inclusive), to any person —| (i) | who is not resident in Singapore and who does not have any permanent establishment in Singapore; and | | (ii) | who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the qualifying debt securities are not obtained from the operation; [Act 30 of 2023 wef 30/10/2023] |
| | (b) | subject to subsections (2C) and (2D) and such conditions as may be prescribed by regulations —| (i) | the interest derived by any person from any qualifying project debt securities issued during the period from 1 November 2006 to 31 December 2025 (both dates inclusive); [Act 33 of 2022 wef 04/11/2022] | | (ii) | the discount, early redemption fee and redemption premium derived by any person from any qualifying project debt securities issued during the period from 15 February 2007 to 31 December 2025 (both dates inclusive); and [Act 33 of 2022 wef 04/11/2022] [Act 30 of 2023 wef 15/02/2023] | | (iii) | such other income derived by any person that is directly attributable to qualifying project debt securities issued on or after a prescribed date, as may be prescribed by regulations; |
| | (ba) | subject to subsection (2F) and such conditions as may be prescribed by regulations, the early redemption fee and redemption premium from any qualifying debt securities issued during the period from 15 February 2007 to 31 December 2028 (both dates inclusive) that are derived by any person —| (i) | who is not resident in Singapore and who does not have any permanent establishment in Singapore; and | | (ii) | who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the qualifying debt securities are not obtained from the operation; [Act 30 of 2023 wef 15/02/2023] [Act 30 of 2023 wef 30/10/2023] |
| | (bb) | subject to subsection (2G) and such conditions as may be prescribed by regulations, such other income directly attributable to qualifying debt securities issued on or after a prescribed date as may be prescribed by regulations, that is derived by any person —| (i) | who is not resident in Singapore and who does not have any permanent establishment in Singapore; and | | (ii) | who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the qualifying debt securities are not obtained from the operation; |
| | (bc) | subject to subsections (2H) and (2HA) and such conditions as may be prescribed by regulations —| (i) | the interest, discount, early redemption fee and redemption premium derived by any person from any qualifying debt securities (excluding Singapore Government Securities) which —| (A) | are issued during the period from 16 February 2008 to 31 December 2018 (both dates inclusive); | | (B) | have an original maturity of not less than 10 years; | | (C) | either —| (CA) | if they are issued before 28 June 2013, cannot be redeemed, called, exchanged or converted within 10 years from the date of their issue; or | | (CB) | if they are issued on or after 28 June 2013, cannot have their tenure shortened to less than 10 years from the date of their issue, except under such circumstances as may be prescribed by regulations; and |
| | (D) | cannot be re‑opened with a resulting tenure of less than 10 years to the original maturity date; and [Act 30 of 2023 wef 15/02/2023] |
| | (ii) | such other income, as may be prescribed by regulations, derived by any person that is directly attributable to qualifying debt securities (excluding Singapore Government Securities) which —| (A) | are issued on or after such date as may be prescribed by regulations; | | (B) | have an original maturity of not less than 10 years; | | (C) | cannot have their tenure shortened to less than 10 years from the date of their issue, except under such circumstances as may be prescribed by regulations; and | | (D) | cannot be re‑opened with a resulting tenure of less than 10 years to the original maturity date; |
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| | (bd) | subject to subsection (2I) and such conditions as may be prescribed by regulations, any amount payable to any person from any Islamic debt securities —| (i) | which are qualifying debt securities and issued during the period from 16 February 2008 to 31 December 2018 (both dates inclusive); and | | (ii) | the amount payable from which is not deductible against any income of the issuer of those securities accruing in or derived from Singapore; |
| | (c) | the official emoluments payable from Commonwealth funds to members of Commonwealth forces, and to persons in the service of a Commonwealth government, in Singapore, in respect of their offices under such Commonwealth government, if such emoluments are subject to income tax in such Commonwealth country; | | (d) | any gains or profits arising from sums standing in the SRS account of any SRS member except where section 10G(13) applies; | | (e) | the income of any institution, authority, person or fund specified in the First Schedule; | | (f) | the income of —| (i) | any bona fide friendly society approved by the Comptroller; | | (ii) | any co‑operative society registered under the Co‑operative Societies Act 1979; |
| | (g) | [Deleted by Act 29 of 2012] | | (h) | any sum received by way of commutation of pensions granted under any written law relating to pensions in Singapore or, in the case of any other pension scheme, any sum received by way of commutation of pensions by an individual under such a scheme to the extent of such sum as the Comptroller may determine relating to the period of employment of that individual with the employer before 1 January 1993; | | (i) | sums received by way of death gratuities or as consolidated compensation for death or injuries; | | (j) | sums standing to the account of an individual in the Central Provident Fund or any approved pension or provident fund designated by the Minister under section 39(8) or withdrawn therefrom; | | (ja) | sums standing to the account of an individual in an approved pension or provident fund (other than the Central Provident Fund or any approved pension or provident fund designated by the Minister under section 39(8)) to the extent of the sum standing to his or her account as at 31 December 1992 and of such interest on that sum as the Comptroller may determine for the period 1 January 1993 to the date of his or her retirement (both dates inclusive) and which are withdrawn only upon or after his or her retirement in accordance with the rules or constitution of the fund; | | (jb) | any retiring gratuity received by an individual from an approved pension or provident fund (other than the Central Provident Fund or any approved pension or provident fund designated by the Minister under section 39(8)) to the extent of such amount of the gratuity as the Comptroller may determine relating to the period of employment of that individual with the employer before 1 January 1993; | | (jc) | [Deleted by Act 32 of 2019] | | (jd) | any voluntary contribution in cash made in 2013 or any subsequent year by a person of a description prescribed by the Minister, to the medisave account maintained under the Central Provident Fund Act 1953 of a self‑employed individual, up to —| (i) | $1,500 per year (for contributions made before 2018); or | | (ii) | $2,730 per year (for contributions made in 2018 and in each subsequent year), |
| less any previous contribution that is made to the same medisave account in the same year by the person of the prescribed description in the person’s capacity as an employer (if applicable), and that is not treated as income under section 10B(5A); |
| | (k) | sums derived from, or received in, Singapore as pensions, being —| (i) | wound or disability pensions granted to members or former members of a Commonwealth force; | | (ii) | pensions granted to dependent relatives of any such member killed on war service or who died as a result of war service injuries; or | | (iii) | wound or disability pensions granted to members or former members of civil defence organisations; |
| | (l) | pensions granted to any person under the provisions of the Widows’ and Orphans’ Pension Act 1904 or under any approved scheme within the meaning of that Act and pensions paid, by or out of any approved pension or provident fund or society, to or for the benefit of the widow or children of a deceased contributor to such fund or society; | | (m) | the income of any trade union registered under the Trade Unions Act 1940 insofar as such income is not derived from a trade or business carried on by such trade union; | | (n) | any income derived in the basis period for any year of assessment before the year of assessment 2018 by any person who is not resident in Singapore from trading in Singapore through consignees in any of the following commodities produced outside Singapore:| (i) | rubber; | | (ii) | copra; | | (iii) | pepper; | | (iv) | tin; | | (v) | tin‑ore; | | (vi) | gambia; | | (vii) | sago flour; | | (viii) | cloves; |
| | (o) | [Deleted by Act 32 of 2019] | | (oa) | payments liable to be made on or after 17 February 2012 to a person not resident in Singapore (excluding any permanent establishment in Singapore) for the charter of any ship (as defined in section 2(1) of the Merchant Shipping Act 1995) under any agreement or arrangement; | | (p) | [Deleted by Act 34 of 2016] | | (q) | the investment income of any approved pension or provident fund or society; | | (r) | the income derived during the period from 3 May 2002 to 31 March 2023 (both dates inclusive) by an individual not resident in Singapore from acting as an arbitrator, and for this purpose, “arbitrator” means an individual appointed for any arbitration which is governed by the Arbitration Act 2001 or the International Arbitration Act 1994 or would have been governed by either of those Acts had the place of arbitration been Singapore; [Act 33 of 2022 wef 04/11/2022] | | (ra) | the income derived during the period from 1 April 2015 to 31 March 2023 (both dates inclusive) by a qualifying mediator who is not resident in Singapore, for providing the services of a mediator for a mediation —| (i) | that takes place in Singapore; or | | (ii) | that would have taken place in Singapore but for the settlement of the dispute or withdrawal of the claim in question; [Act 33 of 2022 wef 04/11/2022] |
| | (rb) | the income derived during the period from 1 April 2015 to 31 March 2023 (both dates inclusive) by an individual who is not resident in Singapore, for providing the services of a mediator for a qualifying mediation —| (i) | that takes place in Singapore; or | | (ii) | that would have taken place in Singapore but for the settlement of the dispute or withdrawal of the claim in question; [Act 33 of 2022 wef 04/11/2022] |
| | (s) | [Deleted by Act 39 of 2017] | | (t) | the income derived on or after 20 August 1968 from interest on moneys held on deposit in an approved bank in Singapore by —| (i) | a non‑resident individual; and | | (ii) | a person, other than an individual, if that person does not, by itself or in association with others, carry on a business in Singapore and does not have a permanent establishment in Singapore; |
| | (ta) | the income derived from interest on moneys held on deposit in an approved bank in Singapore by a non‑resident person (not being an individual nor a permanent establishment in Singapore) who carries on any operation in Singapore through a permanent establishment in Singapore if the funds used by that person to make the deposit are not obtained from the operation; | | (u) | [Deleted by Act 34 of 2016] | | (ua) | [Deleted by Act 34 of 2016] | | (v) | the interest received from such Asian Dollar Bonds issued on or before 31 December 2018 as may be approved in writing by the Minister or such person as the Minister may appoint if the interest is received by —| (i) | a non‑resident individual; and | | (ii) | a person, other than an individual, if that person does not, by itself or in association with others, carry on a business in Singapore and does not have a permanent establishment in Singapore; |
| | (w) | the income derived from an employment exercised on board a Singapore ship, as defined in the Merchant Shipping Act 1995, if the employment is exercised substantially outside Singapore; | | (x) | the income derived by a person resident in Singapore from any pension granted under any written law relating to pensions in Singapore, or from any pension paid under such other pensions scheme as may be approved by the Minister by notification in the Gazette to the extent of such amount of the pension as the Comptroller may determine relating to the period of employment of that person with the employer before 1 January 1993; | | (y) | such income as may be prescribed by regulations under section 43A, 43C, 43D or 43H; | | (z) | [Deleted by Act 29 of 2012] | | (za) | any dividends paid on or after 1 January 2008 by any company resident in Singapore; | | (zb) | any subsidy, allowance or benefit provided by an employer to an employee for the attendance by any child of the employee at an early childhood development centre licensed under the Early Childhood Development Centres Act 2017; | | (zc) | [Deleted by Act 34 of 2016] | | (zd) | the interest derived on or after 1 January 2005 by any individual from a deposit of moneys held in Singapore with an approved bank or a finance company licensed under the Finance Companies Act 1967; | | (ze) | the following income derived from Singapore on or after 1 January 2004 by any individual:| (i) | any interest from debt securities; | | (ii) | any discount from debt securities which mature within one year from the date of issue of those securities; | | (iii) | any income from an annuity, except income from —| (A) | any annuity purchased by the employer of an individual in lieu of any pension or other benefit payable during the individual’s employment or upon the individual’s retirement; and | | (B) | any annuity purchased under SRS; |
| | (iv) | any income from any life insurance policy, except income referred to in section 10(3); | | (v) | any distribution made by the trustee of any collective investment scheme constituted as a unit trust (excluding any real estate investment trust and approved REIT exchange‑traded fund) authorised under section 286 of the Securities and Futures Act 2001 and the units of which are offered to the public for subscription, that is income or deemed to be income of the individual; | | (va) | any distribution made by the trustee of a collective investment scheme constituted as a unit trust and authorised under section 286 of the Securities and Futures Act 2001, that is an approved REIT exchange‑traded fund and the units of which are offered to the public for subscription, where the distribution —| (A) | is not made out of a distribution that is in turn made out of income of the kinds mentioned in section 43(2A)(a)(i), (ii), (iii), (iv) and (v); and | | (B) | is income or treated as income of the individual; |
| | (vi) | any fee or compensatory payment from securities lending or repurchase arrangements, |
| except where such income is derived through a partnership in Singapore or is derived from the carrying on of a trade, business or profession; |
| | (zf) | any amount payable from Islamic debt securities on or after 1 January 2005 to any individual, except where such amount is derived by the individual through a partnership in Singapore or from the carrying on of a trade, business or profession; | | (zg) | any distribution made by any trustee‑manager of a registered business trust; | | (zh) | any distribution made by any trustee of a real estate investment trust of any income of the kinds mentioned in section 43(2A)(a)(i), (ii), (iii), (iv) and (v) to an individual, except where such distribution is derived by the individual through a partnership in Singapore or is derived from the carrying on of a trade, business or profession; | | (zi) | the following income derived from Singapore on or after 17 February 2006 by any individual:| (i) | any discount from debt securities; | | (ii) | any distribution made by any restricted Singapore scheme out of income derived from Singapore or received in Singapore on or after 17 February 2006, that is income or deemed to be income of the individual, |
| except where such income is derived through a partnership in Singapore or is derived from the carrying on of a trade, business or profession; |
| | (zj) | any income from any structured product offered by a financial institution derived from Singapore —| (i) | by an individual, in the basis period relating to the year of assessment 2008 and any subsequent year of assessment, except where such income is derived through a partnership in Singapore or is derived from the carrying on of a trade, business or profession; | | (ii) | by a non‑resident person (not being an individual) if —| (A) | it does not, by itself or in association with others, carry on a business in Singapore, and does not have a permanent establishment in Singapore; and | | (B) | the contract in respect of the structured product between it and the financial institution takes effect during the period from 1 January 2007 to 31 December 2026 (both dates inclusive) and —| (BA) | if such contract is renewed or extended, the period for which the contract is renewed or extended commences before 1 January 2027; or [Act 33 of 2022 wef 04/11/2022] | | (BB) | if such contract is varied, the effective date of the variation is before 1 January 2027; or [Act 33 of 2022 wef 04/11/2022] |
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| | (iii) | by a non‑resident person (not being an individual) who carries on any operation in Singapore through a permanent establishment in Singapore if —| (A) | the funds used by that person to invest in the structured product are not obtained from the operation; and | | (B) | the contract in respect of the structured product between that person and the financial institution takes effect during the period from 1 January 2007 to 31 December 2026 (both dates inclusive) and —| (BA) | if such contract is renewed or extended, the period for which the contract is renewed or extended commences before 1 January 2027; or [Act 33 of 2022 wef 04/11/2022] | | (BB) | if such contract is varied, the effective date of the variation is before 1 January 2027; [Act 33 of 2022 wef 04/11/2022] |
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| | (zk) | any early redemption fee or redemption premium from debt securities derived from Singapore on or after 15 February 2007 by any individual, except where such income is derived through a partnership in Singapore or is derived from the carrying on of a trade, business or profession; [Act 30 of 2023 wef 15/02/2023] | | (zl) | such other income directly attributable to debt securities as may be prescribed by regulations derived from Singapore on or after a prescribed date by any individual, except where such income is derived through a partnership in Singapore or is derived from the carrying on of a trade, business or profession; | | (zm) | the income of any charity registered or exempt from registration under the Charities Act 1994; | | (zn) | [Deleted by Act 32 of 2019] | | (zo) | any sum accrued to a woman on or after 1 January 2011 by way of maintenance in accordance with an order of court or a deed of separation; | | (zp) | any contribution to the Central Provident Fund in respect of an individual, and any cash payment to an individual, made by the Government under the Workfare Bonus Scheme, the Workfare Special Payment scheme, the Workfare Special Bonus scheme or such other similar scheme involving similar contributions or payments by the Government as the Minister may, by notification in the Gazette, approve; | | (zq) | any contribution to the Central Provident Fund in respect of an individual, and any cash payment to an individual, made by the Government under the Workfare Income Supplement Scheme established under Part 6A of the Central Provident Fund Act 1953; | | (zr) | any contribution by the Government to the PSE account, or an account in the Central Provident Fund, of an individual who is or was a national serviceman, as part of the National Service Housing, Medical and Education Awards; | | (zs) | any distribution made to an individual by a trustee of an approved REIT exchange‑traded fund, out of a distribution from a real estate investment trust that is in turn made out of income of the kinds mentioned in section 43(2A)(a)(i), (ii), (iii), (iv) and (v), but not where the firstmentioned distribution is derived by the individual as a partner in a partnership which is in Singapore or is derived from the carrying on of a trade, business or profession; [Act 30 of 2023 wef 01/01/2024] | | (zt) | subject to subsection (2J), income of an entity (called in this section a sovereign risk pooling entity) that is established and operated for the sole object of insuring against risks faced by one or more governments (called in this section the insured governments) that arise directly or indirectly from a disaster (whether natural or man‑made), subject to the following conditions:| (i) | the sovereign risk pooling entity is not established or operated for the object of deriving a profit and its income and capital may only be applied towards its sole object; | | (ii) | its capital is provided only by governments, entities wholly‑owned by governments, and organisations that are not established or operated for the object of deriving a profit; | | (iii) | a government (not being an insured government) or an entity or organisation mentioned in sub‑paragraph (ii) does not enjoy any risk coverage or receive any benefit in any form (including dividends) from the sovereign risk pooling entity; | | (iv) | benefits of any insurance provided by the sovereign risk pooling entity, as well as any distribution of the entity’s property if it ceases operation, accrue only to the insured governments; and [Act 30 of 2023 wef 01/01/2024] |
| | (zu) | any gains from the sale or disposal of an asset that are treated as income under section 10L and are assessable as the income of an individual under the provisions of this Act. [37/2014; 2/2016; 34/2016; 19/2017; 39/2017; 45/2018; 32/2019; 41/2020; 27/2021] [Act 30 of 2023 wef 01/01/2024] |
| (1A) To avoid doubt, the reference to a charter of a ship in subsection (1)(oa) excludes a finance lease of the ship. [41/2020] |
(2) Subsection (1)(a) does not, unless otherwise approved by the Minister or an authorised body, apply to any interest derived from any qualifying debt securities issued during the period from 10 May 1999 to 31 December 2028 (both dates inclusive) where 50% or more of those securities which are outstanding at any time during the life of the issue are beneficially held or funded, directly or indirectly, by related parties of the issuer of those securities and where such interest is derived by —| (a) | any related party of the issuer of those securities; or | | (b) | any other person where the funds used by such person to acquire those securities are obtained, directly or indirectly, from any related party of the issuer of those securities. [37/2014; 45/2018] [Act 41 of 2020 wef 06/12/2022] [Act 30 of 2023 wef 30/10/2023] |
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(2A) Subsection (1)(aa) does not, unless otherwise approved by the Minister or an authorised body, apply to any discount derived from any qualifying debt securities where 50% or more of those securities which are outstanding at any time during the life of the issue are beneficially held or funded, directly or indirectly, by related parties of the issuer of those securities and where such discount is derived by —| (a) | any related party of the issuer of those securities; or | | (b) | any other person where the funds used by such person to acquire those securities are obtained, directly or indirectly, from any related party of the issuer of those securities. [37/2014] [Act 41 of 2020 wef 06/12/2022] |
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(2B) Subsection (1)(ab) does not, unless otherwise approved by the Minister or an authorised body, apply to any amount payable from any Islamic debt securities which are qualifying debt securities where 50% or more of those securities which are outstanding at any time during the life of the issue are beneficially held or funded, directly or indirectly, by related parties of the issuer of those securities and where the amount is payable to —| (a) | any related party of the issuer of those securities; or | | (b) | any other person where the funds used by such person to acquire those securities are obtained, directly or indirectly, from any related party of the issuer of those securities. [37/2014] [Act 41 of 2020 wef 06/12/2022] |
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(2C) Subsection (1)(b) does not, unless otherwise approved by the Minister or an authorised body, apply to —| (a) | any interest derived from any qualifying project debt securities issued during the period from 1 November 2006 to 31 December 2025 (both dates inclusive); [Act 33 of 2022 wef 04/11/2022] | | (b) | any discount, early redemption fee or redemption premium derived from any qualifying project debt securities issued during the period from 15 February 2007 to 31 December 2025 (both dates inclusive); or [Act 33 of 2022 wef 04/11/2022] [Act 30 of 2023 wef 15/02/2023] | | (c) | such other income directly attributable to qualifying project debt securities issued on or after a prescribed date, as may be prescribed by regulations, |
| if 50% or more of those securities which are outstanding at any time during the life of the issue are beneficially held or funded, directly or indirectly, by related parties of the issuer of those securities. |
[37/2014; 39/2017] [Act 41 of 2020 wef 06/12/2022] |
(2D) Subsection (1)(b) does not apply to —| (a) | any interest derived from any qualifying project debt securities issued during the period from 1 November 2006 to 31 December 2025 (both dates inclusive); [Act 33 of 2022 wef 04/11/2022] | | (b) | any discount, early redemption fee or redemption premium derived from any qualifying project debt securities issued during the period from 15 February 2007 to 31 December 2025 (both dates inclusive); or [Act 33 of 2022 wef 04/11/2022] [Act 30 of 2023 wef 15/02/2023] | | (c) | such other income directly attributable to qualifying project debt securities issued on or after a prescribed date, as may be prescribed by regulations, |
| if the securities are held by less than 4 persons at any time during the life of the issue, unless — |
| (d) | approval has been granted by the Minister or an authorised body to such application; [Act 41 of 2020 wef 06/12/2022] | | (e) | each person holding the securities is either —| (i) | a company resident in Singapore; or | | (ii) | a trustee of a real estate investment trust (REIT), being a trustee that is resident in Singapore and that holds the securities for the benefit of the unitholders of the REIT; [Act 33 of 2022 wef 04/11/2022] |
| | (f) | the company or REIT is listed on the Singapore Exchange either on the date of issue of the securities or within 6 months from that date; and [Act 33 of 2022 wef 04/11/2022] | | (g) | the income from the securities received by the company or trustee is declared to be distributable to the shareholders of the company or unitholders of the REIT (as the case may be) within 6 months from the end of the basis period in which it is received. [37/2014; 39/2017] [Act 33 of 2022 wef 04/11/2022] |
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| (2E) Regulations made under subsection (1)(b), (bc) and (bd) may provide for the determination of the amount of income of the person to be exempted and for the deduction of expenses, allowances and losses of the person otherwise than in accordance with this Act. |
(2F) Subsection (1)(ba) does not, unless otherwise approved by the Minister or an authorised body, apply to any early redemption fee or redemption premium derived from any qualifying debt securities where —| (a) | 50% or more of those securities which are outstanding at any time during the life of the issue are beneficially held or funded, directly or indirectly, by related parties of the issuer of those securities; and | | (b) | such fee, premium or cost is derived by —| (i) | any related party of the issuer of those securities; or | | (ii) | any other person where the funds used by such person to acquire those securities are obtained, directly or indirectly, from any related party of the issuer of those securities. [37/2014] [Act 41 of 2020 wef 06/12/2022] [Act 30 of 2023 wef 15/02/2023] |
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(2G) Subsection (1)(bb) does not, unless otherwise approved by the Minister or an authorised body, apply to such other income directly attributable to qualifying debt securities as may be prescribed by regulations under that provision where —| (a) | 50% or more of those securities which are outstanding at any time during the life of the issue are beneficially held or funded, directly or indirectly, by related parties of the issuer of those securities; and | | (b) | such income is derived by —| (i) | any related party of the issuer of those securities; or | | (ii) | any other person where the funds used by such person to acquire those securities are obtained, directly or indirectly, from any related party of the issuer of those securities. [37/2014] [Act 41 of 2020 wef 06/12/2022] |
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(2H) Subsection (1)(bc) does not, unless otherwise approved by the Minister or an authorised body, apply to any interest, discount, early redemption fee or redemption premium derived from any qualifying debt securities or such other income directly attributable to qualifying debt securities as may be prescribed by regulations under that provision where —| (a) | 50% or more of those securities which are outstanding at any time during the life of the issue are beneficially held or funded, directly or indirectly, by related parties of the issuer of those securities; and | | (b) | such income is derived by —| (i) | any related party of the issuer of those securities; or | | (ii) | any other person where the funds used by such person to acquire those securities are obtained, directly or indirectly, from any related party of the issuer of those securities. [37/2014] [Act 41 of 2020 wef 06/12/2022] [Act 30 of 2023 wef 15/02/2023] |
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(2HA) Subsection (1)(bc) does not apply to —| (a) | any interest, discount, early redemption fee or redemption premium from qualifying debt securities issued on or after 28 June 2013; or [Act 30 of 2023 wef 15/02/2023] | | (b) | such other income, directly attributable to qualifying debt securities as may be prescribed by regulations under that provision, |
| that is derived on or after the date on which the tenure of any portion of those qualifying debt securities is shortened to less than 10 years from the date of their issue, where the shortening of the tenure occurs under such circumstances as may be prescribed by regulations made under that provision. |
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(2I) Subsection (1)(bd) does not, unless otherwise approved by the Minister or an authorised body, apply to any amount payable from any Islamic debt securities which are qualifying debt securities where 50% or more of those securities which are outstanding at any time during the life of the issue are beneficially held or funded, directly or indirectly, by related parties of the issuer of those securities and where the amount is payable to —| (a) | any related party of the issuer of those securities; or | | (b) | any other person where the funds used by such person to acquire those securities are obtained, directly or indirectly, from any related party of the issuer of those securities. [37/2014] [Act 41 of 2020 wef 06/12/2022] |
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(2J) Despite any other provisions of this Act, in determining for any year of assessment the income of a sovereign risk pooling entity whose income is exempt under subsection (1)(zt) —| (a) | any outgoings and expenses incurred by the entity in the production of its income for any year of assessment, and allowable under this Act, may only be deducted against its income for that year of assessment, and any excess of such outgoings and expenses over the income must be disregarded; and | | (b) | the allowances under sections 19, 19A, 20, 21 and 22 relating to the production of its income for a year of assessment may only be deducted against that income, and any excess of such allowances over the income must be disregarded. [45/2018] |
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| (3) Nothing in subsection (1) is to be construed to exempt in the hands of the recipients any dividends, interest, bonuses, salaries or wages paid wholly or in part out of income so exempted. |
| Income made for purpose which will promote or enhance economic or technological development |
| (4) Where the Minister is of the opinion that any payment in the nature of any income referred to in section 12(6) or (7) is made for any purpose which will promote or enhance the economic or technological development of Singapore, the Minister may, by notification in the Gazette, provide that the income is, subject to such conditions as the Minister may impose, exempt from tax wholly or in part and either generally or in respect of certain classes of persons; and such income is as from the date and to the extent specified by the notification exempt from tax. |
| (5) [Deleted by Act 49 of 2004] |
| Income derived by short‑term visiting employees |
| (6) There is exempt from tax any income accruing in or derived from Singapore in respect of gains or profits from any employment exercised in Singapore for not more than 60 days in the year preceding any year of assessment by a person who is not resident in Singapore in that year of assessment. |
(7) Subsection (6) does not apply to —| (a) | the emoluments received by a director of a company; or | | (b) | the gains or profits of public entertainers, as defined in section 40A, whose visits are not substantially supported from public funds of the government of another country. |
|
| Income received from outside Singapore |
(7A) There is exempt from tax any income arising from sources outside Singapore and received in Singapore —| (a) | by any individual who is not resident in Singapore; and | | (b) | on or after 1 January 2004 by any individual who is resident in Singapore if the Comptroller is satisfied that the tax exemption would be beneficial to the individual, but excludes such income received by the individual through a partnership in Singapore. |
|
(8) Where the conditions specified in subsection (9) are satisfied, there is exempt from tax —| (a) | any dividend derived from any territory outside Singapore; | | (b) | any profit derived from any trade or business carried on by a branch in any territory outside Singapore of a company resident in Singapore; and | | (c) | any income derived from any professional, consultancy and other services rendered in any territory outside Singapore only if the Comptroller is satisfied that the income is derived, for the purposes of this Act, from outside Singapore, |
| and received in Singapore — |
| (d) | on or after 1 June 2003 by any person, not being an individual, resident in Singapore; | | (e) | during 1 June 2003 to 31 December 2003 (both dates inclusive) by any individual resident in Singapore; and | | (f) | on or after 1 January 2004 by any individual resident in Singapore through a partnership in Singapore. [37/2014] |
|
| (8A) [Deleted by Act 39 of 2017] |
| (8B) [Deleted by Act 39 of 2017] |
| (8C) [Deleted by Act 39 of 2017] |
| (8D) [Deleted by Act 39 of 2017] |
(9) The conditions referred to in subsection (8) are —| (a) | the income is subject to tax of a similar character to income tax (by whatever name called) under the law of the territory from which the income is received; | | (b) | at the time the income is received in Singapore by the person resident in Singapore, the highest rate of tax of a similar character to income tax (by whatever name called) levied under the law of the territory from which the income is received on any gains or profits from any trade or business carried on by any company in that territory at that time is not less than 15%; and | | (c) | the Comptroller is satisfied that the tax exemption would be beneficial to the person resident in Singapore. |
|
| (9A) To avoid doubt, in subsection (9)(a), income is subject to tax if tax has been paid, or tax (not being deferred tax) is to be paid on that income. |
| (9B) The Minister or such person as the Minister may appoint may in any particular case waive the condition referred to in subsection (9)(a), subject to such conditions as the Minister or appointed person may impose. |
(10) Where the income referred to in subsection (8) consists of dividends paid by a company, the tax referred to in subsection (9)(a) is —| (a) | where the company is resident in the territory from which the dividends are received, the tax paid in that territory by the company in respect of its income out of which the dividends are paid; and | | (b) | the tax paid on the dividends in the territory from which the dividends are received. |
|
| (11) The Minister may make regulations generally to give full effect to or for carrying out the purposes of subsection (8). |
(12) The Minister may by order —| (a) | exempt from tax wholly or in part; or | | (b) | provide that tax at such concessionary rate of tax be levied and paid on, |
| the income received by a person resident in Singapore from such source in any country outside Singapore as may be specified in the order. |
|
(12A) Every order made under subsection (12) still in force on 1 January 2026, that exempts from tax any of the following, applies on or after that date (and despite anything in the order) only to income described in subsection (12B):| (a) | any income received in Singapore by the trustee of a real estate investment trust; | | (b) | any income received in Singapore by the trustee of a sub‑trust of a real estate investment trust where all rights or interests in the property of the sub-trust are held for the benefit of the beneficiaries of the real estate investment trust; | | (c) | any income received in Singapore by a company incorporated in Singapore the share capital of which is 100% owned (whether directly or indirectly) by the trustee of a real estate investment trust. [34/2016; 32/2019] [Act 33 of 2022 wef 04/11/2022] |
|
(12B) Subsection (12A) applies to income received in Singapore by the trustee or the company and exempt from tax by the order, that is paid out of income or gains —| (a) | relating to any immovable property situated outside Singapore that is acquired (directly or indirectly) by the trustee or the company before 1 January 2026; and | | (b) | derived, either at a time the trustee or the company owns (directly or indirectly) the property, or from the disposal by the trustee or the company of its interest in that property. [34/2016; 32/2019] [Act 33 of 2022 wef 04/11/2022] |
|
| (12C) To avoid doubt, any exemption on or after 1 January 2026 referred to in subsection (12A) is subject to the conditions and restrictions of the exemption as prescribed in the order, insofar as those conditions and restrictions remain applicable. [37/2014; 2/2016; 32/2019] |
(13) An order made under subsection (12) may —| (a) | be either general or specific; | | (b) | prescribe the conditions subject to which the income will be exempt from tax or be taxed at a concessionary rate of tax; | | (c) | provide that the Minister may require all or any of the conditions referred to in paragraph (b) to be complied with to the Comptroller’s satisfaction; | | (d) | prescribe a condition requiring the person to satisfy the Comptroller that all or any of the conditions referred to in paragraph (b) have been complied with before the income is received in Singapore. |
|
| (13A) The conditions referred to in subsection (13) need not be included in the order for the purpose of publication in the Gazette. |
| (14) [Deleted by Act 19 of 2013] |
| (15) The Minister may, at any time, by rules made under section 7, add to, vary or amend the list of commodities mentioned in subsection (1)(n). |
(16) In this section —| “approved bank” means a bank or merchant bank licensed under the Banking Act 1970; |
| “approved bond intermediary” means a financial institution approved as such by the Minister or such person as the Minister may appoint; |
| “approved REIT exchange‑traded fund” has the meaning given by section 43(10); |
| [Deleted by Act 30 of 2023 wef 15/02/2023] |
| “child”, in relation to an employee, means any legitimate child, illegitimate child, stepchild, child adopted in accordance with any written law relating to the adoption of children and any child whom the employee is the legal guardian; |
| “debt securities” has the meaning given by section 43H; |
| “deposit”, in relation to any deposit of moneys referred to in subsection (1)(t), (ta) or (zd) which is made on or after 7 October 2004 and which matures on or after 2 June 2005, means a deposit which falls within the meaning of deposit in section 4B of the Banking Act 1970 and is treated as such by the Monetary Authority of Singapore for the purposes of that section; |
| “early redemption fee”, in relation to debt securities, qualifying debt securities or qualifying project debt securities, means any fee payable by the issuer of the securities on the early redemption of the securities; [Act 30 of 2023 wef 15/02/2023] |
| “finance lease”, in relation to a ship, means a lease of the ship (including any arrangement or agreement made in connection with the lease) that has the effect of transferring substantially the obsolescence, risks or rewards incidental to ownership of the ship to the lessee; |
| “financial derivative” means a derivative the payoffs of which are linked, whether in whole or in part, to the payoffs or performance of any financial assets, securities, financial instruments or indices, but does not include a derivative the payoffs of which are wholly linked to the payoffs or performance of commodities; |
| “financial institution” means an institution licensed or approved by the Monetary Authority of Singapore, and includes an institution approved as a Finance and Treasury Centre under section 43E; |
| “financial sector incentive (bond market) company” means a company approved as such by the Minister or such person as he may appoint; |
| “financial sector incentive (capital market) company” means a company approved as such by the Minister or an authorised body; [S 759/2022] [Act 41 of 2020 wef 06/12/2022] |
| “financial sector incentive (project finance) company” means a company approved as such by the Minister or such person as the Minister may appoint; |
| “financial sector incentive (standard tier) company” has the meaning given by section 43H(4); |
| “Islamic debt securities” has the meaning given by section 43H(4); |
| “medisave contribution ceiling” has the meaning given by section 39(13); |
| “national serviceman” has the meaning given by the Enlistment Act 1970; |
| [Deleted by Act 30 of 2023 wef 15/02/2023] |
| “PSE account” has the meaning given by the Education Endowment and Savings Schemes Act 1992; |
“qualifying debt securities” means —| (a) | Singapore Government securities issued during the period from 28 February 1998 to 31 December 2028 (both dates inclusive); [Act 30 of 2023 wef 30/10/2023] | | (b) | bonds, notes, commercial papers, certificates of deposits and AT1 instruments within the meaning of section 10I(2), which are arranged in accordance with regulations made for this purpose —| (i) | by any financial institution in Singapore and issued during the period from 28 February 1998 to 31 December 2013 (both dates inclusive); | | (ii) | by any approved bond intermediary and issued —| (A) | during the period from 27 February 1999 to 31 December 2028 (both dates inclusive) under any prescribed programme the arrangement of which is completed on or before 31 December 2003; or [Act 30 of 2023 wef 30/10/2023] | | (B) | during the period from 27 February 1999 to 31 December 2003 (both dates inclusive) in any other case; |
| | (iii) | by any financial sector incentive (bond market) company and issued during the period from 1 January 2004 to 31 December 2018 (both dates inclusive); [Act 30 of 2023 wef 15/02/2023] | | (iv) | by any financial sector incentive (standard tier) company or financial sector incentive (capital market) company and issued during the period from 1 January 2014 to 31 December 2023 (both dates inclusive); or [Act 30 of 2023 wef 15/02/2023] | | (v) | by any of the following persons and issued during the period from 15 February 2023 to 31 December 2028 (both dates inclusive):| (A) | a bank or merchant bank licensed under the Banking Act 1970; | | (B) | a finance company licensed under the Finance Companies Act 1967; | | (C) | a person who holds a capital markets services licence under the Securities and Futures Act 2001 to carry on a business in any of the following regulated activities: | (CA) | advising on corporate finance; | | (CB) | dealing in capital markets products; |
| | (D) | such other person as may be prescribed by rules made under section 7; [Act 30 of 2023 wef 15/02/2023] |
|
| | (c) | Islamic debt securities which are arranged in accordance with regulations made for this purpose —| (i) | by any financial institution in Singapore and issued during the period from 1 January 2005 to 31 December 2013 (both dates inclusive); | | (ii) | by any financial sector incentive (bond market) company and issued during the period from 1 January 2005 to 31 December 2018 (both dates inclusive); [Act 30 of 2023 wef 15/02/2023] | | (iii) | by any financial sector incentive (standard tier) company or financial sector incentive (capital market) company and issued during the period from 1 January 2014 to 31 December 2023 (both dates inclusive); or | | (iv) | by any of the following persons and issued during the period from 15 February 2023 to 31 December 2028 (both dates inclusive):| (A) | a bank or merchant bank licensed under the Banking Act 1970; | | (B) | a finance company licensed under the Finance Companies Act 1967; | | (C) | a person who holds a capital markets services licence under the Securities and Futures Act 2001 to carry on a business in any of the following regulated activities:| (CA) | advising on corporate finance; | | (CB) | dealing in capital markets products; |
| | (D) | such other person as may be prescribed by rules made under section 7; or [Act 30 of 2023 wef 15/02/2023] |
|
| | (d) | debt securities whose values are derived from insured loss events underlying them, that are issued by a Special Purpose Reinsurance Vehicle during the period between 20 December 2018 and 31 December 2028 (both dates inclusive), where —| (i) | if the date of issue is between 20 December 2018 and 31 December 2023 (both dates inclusive) — at least 20% of the issue costs for the issue are required to be paid to persons or partnerships carrying on any trade, business or profession in Singapore; or | | (ii) | if the date of issue is between 1 January 2024 and 31 December 2028 (both dates inclusive) — at least 30% of the issue costs for the issue are required to be paid to persons or partnerships carrying on any trade, business or profession in Singapore, [Act 30 of 2023 wef 30/10/2023] |
|
| but, unless otherwise approved by the Minister or an authorised body, excludes any debt securities issued on or after 10 May 1999 and any Islamic debt securities issued on or after 1 January 2005 which, during its primary launch — |
| (e) | are issued to less than 4 persons; and | | (f) | 50% or more of the issue of debt securities or Islamic debt securities is beneficially held or funded, directly or indirectly, by related parties of the issuer of those debt securities or Islamic debt securities; [S 759/2022] [Act 41 of 2020 wef 06/12/2022] |
|
| “qualifying mediation” means a mediation that is administered by a body or an organisation that provides services for the conduct of mediation (called in this section a mediation service provider), and that is prescribed under section 7; |
| “qualifying mediator” means an individual who is certified or accredited under a mediator certification or accreditation scheme prescribed under section 7; |
“qualifying project debt securities” means debt securities —| (a) | which are arranged in accordance with regulations made for this purpose —| (i) | by any financial institution in Singapore and issued during the period from 1 November 2006 to 31 December 2013 (both dates inclusive); | | (ii) | by any financial sector incentive (bond market) company or financial sector incentive (project finance) company and issued during the period from 1 November 2006 to 31 December 2023 (both dates inclusive); [Act 33 of 2022 wef 04/11/2022] [Act 30 of 2023 wef 15/02/2023] | | (iii) | by any financial sector incentive (standard tier) company or financial sector incentive (capital market) company and issued during the period from 1 January 2014 to 31 December 2023 (both dates inclusive); or [Act 33 of 2022 wef 04/11/2022] [Act 30 of 2023 wef 15/02/2023] | | (iv) | by any of the following persons and issued during the period from 15 February 2023 to 31 December 2025 (both dates inclusive):| (A) | a bank or merchant bank licensed under the Banking Act 1970; | | (B) | a finance company licensed under the Finance Companies Act 1967; | | (C) | a person who holds a capital markets services licence under the Securities and Futures Act 2001 to carry on a business in any of the following regulated activities: | (CA) | advising on corporate finance; | | (CB) | dealing in capital markets products; |
| | (D) | such other person as may be prescribed by rules made under section 7; [Act 30 of 2023 wef 15/02/2023] |
|
| | (b) | the interest and other income directly attributable to which are funded primarily by cash flows from an infrastructure asset or project prescribed by regulations (called in this definition a prescribed asset or project); and | | (c) | the proceeds from the issue of which are only used to acquire, develop or invest in a prescribed asset or project, or to refinance a previous borrowing which was only used for that purpose; where the gearing ratio of such prescribed asset or project is approved by the Minister or an authorised body in a case where the debt securities are issued by a person in Singapore or the prescribed asset or project is in Singapore, [S 759/2022] [Act 41 of 2020 wef 06/12/2022] |
| but does not include, except with the approval of the Minister or an authorised body (which approval may be subject to such conditions as the Minister may impose), any debt securities — |
| (d) | which are issued to less than 4 persons; or | | (e) | 50% or more of the issue of which is beneficially held or funded, directly or indirectly, by related parties of the issuer of those debt securities; [Act 41 of 2020 wef 06/12/2022] |
|
| “real estate investment trust” has the meaning given by section 43(10); |
| “redemption premium”, in relation to debt securities, qualifying debt securities or qualifying project debt securities, means any premium payable by the issuer of the securities on the redemption of the securities upon their maturity or on the early redemption of the securities; [Act 30 of 2023 wef 15/02/2023] |
| “registered business trust” and “trustee‑manager” have the meanings given by the Business Trusts Act 2004; |
| [Deleted by Act 33 of 2022 wef 04/11/2022] |
| “restricted Singapore scheme” means a collective investment scheme constituted as a unit trust that is a restricted Singapore scheme within the meaning of the regulations made under the Securities and Futures Act 2001 for the purpose of section 305 of that Act; |
| “securities lending or repurchase arrangement” has the meaning given by section 10H(12); |
| “Singapore Government securities” has the meaning given by section 43H; |
“structured product” means a sum of money paid on terms under which —| (a) | it may not be repaid in full and the return from which is, partly or wholly, determined by the performance of any embedded derivative instrument; and | | (b) | its repayment may be in money or money’s worth, |
| but does not include any sum paid in respect of any debt securities, units of a real estate investment trust, units of a unit trust, loan, stand‑alone financial derivative or such other financial product as the Minister may by regulations prescribe; |
|
| “unit trust” has the meaning given by section 10A. [37/2014; 2/2016; 39/2017; 45/2018; 32/2019; 1/2020; 41/2020; 27/2021] |
|
(16A) In paragraph (d) of the definition of “qualifying debt securities” in subsection (16) —| “issue costs”, in relation to an issue of debt securities, means legal fees, modelling fees, arranger or underwriting fees, rating agency fees, audit fees, claim review fees, indenture trustee fees, listing or trustee fees, loss reserve specialist and administrator fees, and other fees that are connected with or incidental to the issue; |
| “Special Purpose Reinsurance Vehicle” has the meaning given by regulation 2 of the Insurance (General Provisions and Exemptions for Special Purpose Reinsurance Vehicles) Regulations 2018. [32/2019] |
|
| (16B) In paragraphs (b)(v) and (c)(iv) of the definition of “qualifying debt securities” and paragraph (a)(iv) of the definition of “qualifying project debt securities” in subsection (16), “advising on corporate finance” and “dealing in capital markets products” have the meanings given by the Second Schedule to the Securities and Futures Act 2001. [Act 30 of 2023 wef 15/02/2023] |
| (17) For the purposes of the definitions of “qualifying mediation” and “qualifying mediator” in subsection (16), the Minister may prescribe a description of mediation service providers and a description of mediator certification or accreditation schemes that are set out on a specified website of the Ministry of Law, as amended from time to time. [2/2016] |
(18) In subsection (2D) —| (a) | an umbrella VCC that holds securities for one sub‑fund is treated as a different person from the same umbrella VCC that holds securities for another sub‑fund; | | (b) | an umbrella VCC that holds securities for one sub‑fund is considered a company that satisfies subsection (2D)(e) and (f) if —| (i) | the umbrella VCC is resident in Singapore; and | | (ii) | the sub‑fund is listed on the Singapore Exchange on the date of issue of the securities or within 6 months from that date; |
| | (c) | income that is received by an umbrella VCC from securities held by it for one sub‑fund satisfies subsection (2D)(g) if the income is declared to be distributable to holders of its shares in respect of that sub‑fund within 6 months from the end of the basis period in which the income is received. [28/2019] |
|
| (19) In paragraph (e) of the definition of “qualifying debt securities” and paragraph (d) of the definition of “qualifying project debt securities” in subsection (16), an umbrella VCC to which securities are issued during their primary launch for the purpose of one sub‑fund, is treated as a different person from the same umbrella VCC to which securities are issued during their primary launch for the purpose of another sub‑fund. [28/2019] |
| (20) A reference in this section to a related party of the issuer of qualifying debt securities or qualifying project debt securities is, if the securities are issued by or to an umbrella VCC in relation to any of its sub‑funds, a reference to a person that is related to the sub‑fund in such manner as may be prescribed by rules made under section 7, and rules made for this purpose may make different provisions for different circumstances. [28/2019] |
|
| Exemption of shipping profits |
13A.—(1) There is exempt from tax the income of a shipping enterprise derived or deemed to be derived from the operation of Singapore ships or foreign ships as hereinafter provided.| (1A) For income derived before 19 February 2020, such exemption in respect of Singapore ships is backdated to the date of provisional registration if the owner has subsequently obtained a permanent certificate of registry in respect of the ship. [41/2020] |
| (1B) For the year of assessment 2009 and subsequent years of assessment, the income of a shipping enterprise mentioned in this section includes income derived from foreign exchange and risk management activities which are carried out in connection with and incidental to the operation by the shipping enterprise of Singapore ships. |
| (1C) The income of a shipping enterprise mentioned in this section includes income derived at any time in the period between 22 February 2010 and 23 February 2015 (both dates inclusive) by the shipping enterprise from the provision of ship management services to any qualifying company in respect of Singapore ships owned or operated by the qualifying company. [2/2016] |
(1CA) The income of a shipping enterprise mentioned in this section includes income derived on or after 1 June 2011 by the shipping enterprise from —| (a) | the sale of a Singapore ship or a provisionally registered ship; | | (b) | the assignment to another of all its rights as the buyer under a contract for the construction of a ship that, at the time of the assignment, is intended to be registered or is provisionally registered under the Merchant Shipping Act 1995; or | | (c) | the sale of all of the issued ordinary shares in a special purpose company of the shipping enterprise where, at the time of the sale of the shares, the special purpose company —| (i) | owns a Singapore ship or a provisionally registered ship; or | | (ii) | is the buyer under a contract for the construction of a ship that, at that time, is intended to be registered or is provisionally registered under the Merchant Shipping Act 1995, |
| and the special purpose company does not at that time own any foreign ship. |
[2/2016; 41/2020] |
|
(1CB) The income referred to in subsection (1CA) does not include —| (a) | income of the shipping enterprise derived before 12 December 2018 as a lessor of a ship under a finance lease that is treated as a sale under section 10C; or | | (b) | income of the shipping enterprise that is derived as part of a business of trading in ships or of constructing ships for sale. [41/2020] |
|
| (1CC) [Deleted by Act 41 of 2020] |
| (1CD) The income of a shipping enterprise mentioned in this section includes income derived on or after 24 February 2015 by the shipping enterprise from providing prescribed ship management services to a qualifying company in respect of Singapore ships owned or operated by the qualifying company. [2/2016] |
(1CE) The income of a shipping enterprise mentioned in this section includes income derived on or after 24 February 2015 by the shipping enterprise from —| (a) | any mobilisation or holding of any ship used or to be used for offshore oil or gas activity outside the limits of the port of Singapore; or | | (b) | the demobilisation of any ship after it has been so used, |
| where the mobilisation, holding or demobilisation is undertaken by the shipping enterprise itself using a Singapore ship. |
[2/2016] |
(1CF) The income of a shipping enterprise mentioned in this section includes income derived on or after 24 February 2015 by the shipping enterprise from —| (a) | any mobilisation or holding of a Singapore ship owned or operated by the shipping enterprise and used or to be used for offshore oil or gas activity outside the limits of the port of Singapore; or | | (b) | the demobilisation of a Singapore ship owned or operated by the shipping enterprise after it has been so used. [2/2016] |
|
| (1CG) The income of a shipping enterprise mentioned in this section includes income derived on or after 24 February 2015 by the shipping enterprise from the leasing of any container (other than finance leasing) carried out in connection with its operation of Singapore ships and that is incidental to such operation. [2/2016] |
(1CH) The income of a shipping enterprise mentioned in this section includes income derived on or after 25 March 2016 by the shipping enterprise from —| (a) | any mobilisation or holding of any ship used or to be used for offshore renewable energy activity, or offshore mineral activity, outside the limits of the port of Singapore; or | | (b) | the demobilisation of any ship after it has been so used, |
| where the mobilisation, holding or demobilisation is undertaken by the shipping enterprise itself using a Singapore ship. |
[34/2016] |
(1CI) The income of a shipping enterprise mentioned in this section includes income derived on or after 25 March 2016 by the shipping enterprise from —| (a) | any mobilisation or holding of a Singapore ship owned or operated by the shipping enterprise and used or to be used for offshore renewable energy activity, or offshore mineral activity, outside the limits of the port of Singapore; or | | (b) | the demobilisation of a Singapore ship owned or operated by the shipping enterprise after it has been so used. [34/2016] |
|
| (1CJ) The income of a shipping enterprise mentioned in this section includes income derived on or after 25 March 2016 from foreign exchange and risk management activities that are carried out in connection with and incidental to any activity mentioned in subsection (1CH) or (1CI). [34/2016] |
| (1CK) The income of a shipping enterprise mentioned in this section includes income derived on or after 29 December 2016, from foreign exchange and risk management activities that are carried out in connection with and incidental to any activity mentioned in subsection (1CD), (1CE) or (1CF). [34/2016] |
| (1CL) The income of a shipping enterprise mentioned in this section includes income derived on or after 12 December 2018 by the shipping enterprise from foreign exchange and risk management activities that are carried out in connection with or incidental to the finance leasing of a Singapore ship for use outside the limits of the port of Singapore. [32/2019] |
| (1CM) A reference to a Singapore ship in subsection (1), (1B), (1CD), (1CE), (1CF), (1CG), (1CH), (1CI) or (1CL) includes a provisionally registered ship. [41/2020] |
| (1CN) Subsection (1CM) only applies to income derived in relation to the provisionally registered ship on or after 19 February 2020. [41/2020] |
| (1D) This section does not apply to income of a shipping enterprise, being an international shipping enterprise approved under section 13E, derived in the basis period for the year of assessment 2012 or any subsequent year of assessment from the operation of foreign ships. |
| (2) A shipping enterprise must maintain separate accounts for the income derived or deemed to be derived from the operation of each ship. [41/2020] |
| (2A) Where expenses have been incurred by a shipping enterprise which are not directly attributable to a ship, the Comptroller may allocate as expenses such amounts as might reasonably and properly have been incurred in the normal course of its business in respect of such ship. [41/2020] |
(3) In determining the income of a shipping enterprise from the operation of ships —| (a) | the capital allowances provided under sections 16, 17, 18, 18B, 18C, 19, 19A, 20, 21 and 22 may only be made against the income exempt under this section, and the balance of such allowances is not available as a deduction against any other income; and | | (b) | a loss incurred by a shipping enterprise in respect of any activity referred to in subsection (1), (1B), (1C), (1CD), (1CE), (1CF), (1CG), (1CH), (1CI), (1CJ) or (1CK) for any basis period may only be deducted against the income from any activity referred to in any of those subsections, and the balance of such loss is not available as a deduction against any other income. [2/2016; 34/2016; 41/2020] |
|
| (3A) Where a shipping enterprise incurs a loss on any sale or assignment mentioned in subsection (1CA) in any basis period, that loss may only be deducted against the gains derived from another sale or assignment mentioned in subsection (1CA) in that same basis period, and the balance of the loss is not available as a deduction against any other income. |
| (4) The Comptroller must for each year of assessment issue to a shipping enterprise a statement (to be included in a notice of any assessment served on the shipping enterprise under section 76) showing the amount of income derived from the operation of ships by the shipping enterprise; and Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if such statement were a notice of assessment. [41/2020] |
| (5) Subject to subsection (8) where any statement issued under subsection (4) has become final and conclusive, the amount of income shown in the statement does not form part of the statutory income of a shipping enterprise for the year of assessment to which the statement relates and is exempt from tax. |
| (5A) [Deleted by Act 19 of 2013] |
| (6) [Deleted by Act 19 of 2013] |
| (7) A shipping enterprise must deliver to the Comptroller a copy of the accounts mentioned in subsection (2) made up to any date specified by the Comptroller whenever called upon to do so by written notice. |
| (8) Despite subsections (1) to (7), where it appears to the Comptroller that any income of a shipping enterprise which has been exempted from tax ought not to have been so exempted for any year of assessment, the Comptroller may, at any time within 4 years after the expiry of that year of assessment, make such assessment or additional assessment upon the shipping enterprise as may appear to be necessary in order to make good any loss of tax. |
| (9) Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if an assessment under subsection (8) were a notice of assessment. |
| (10) This section does not affect the operation of section 27 in ascertaining the income of a non‑resident person owning or operating ships. [41/2020] |
(11) Where —| (a) | income derived in the basis period for a year of assessment from the operation of a ship is exempt from tax under this section; and | | (b) | in that or a subsequent basis period, the registry of the ship under the Merchant Shipping Act 1995 is closed, deemed closed or suspended, |
| then the capital allowances in respect of that ship for the year of assessment of the basis period mentioned in paragraph (b) and subsequent years of assessment are to be calculated on the residue of expenditure or reducing value of the assets after taking into account the capital allowances provided for in sections 16, 17, 18, 18B, 18C, 19, 19A, 20, 21 and 22 for those years of assessment during which income derived from the operation of the ship was exempt from tax under this section, even if no claim for such allowances was made. |
[41/2020] |
| (12) Subsections (3) and (11) have effect despite any other provisions of this Act. |
| (13) Despite anything in this section, a shipping enterprise may at any time elect that its income derived or deemed to be derived from the operation of all its Singapore ships and provisionally registered ships be taxed at the rate prescribed by section 43(1)(a). [41/2020] |
| (14) An election under subsection (13) must be made by a shipping enterprise by written notice to the Comptroller and is irrevocable. |
(15) Where a shipping enterprise has made an election under subsection (13) —| (a) | subsections (1) to (10) do not apply to the income derived or deemed to be derived from the operation of Singapore ships and provisionally registered ships by the shipping enterprise for the year of assessment immediately following the year in which the election is made and for subsequent years of assessment; | | (b) | any capital allowances or the balance thereof which were not made against the income of the shipping enterprise exempt under this section for any year of assessment during which its income was exempt from tax are not available to be made under section 23 against its income (other than income exempt under this section) for the year of assessment immediately following the year in which the election is made and for subsequent years of assessment; | | (c) | any loss or the balance thereof incurred by the shipping enterprise in respect of the operation of a Singapore ship or a provisionally registered ship for any year of assessment which was not deducted against its income exempt under this section for any year of assessment during which its income was exempt from tax is not available as a deduction under section 37(3)(a) against its income (other than income exempt under this section) for the year of assessment immediately following the year in which the election is made and for subsequent years of assessment; and | | (d) | any capital allowances in respect of a Singapore ship or a provisionally registered ship of the shipping enterprise for the year of assessment immediately following the year in which the election is made and for subsequent years of assessment, are to be calculated in accordance with subsection (11) as if the registry of the ship under the Merchant Shipping Act 1995 is closed, deemed closed or suspended. [41/2020] |
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(16) In this section —| “container” has the meaning given by section 43P(7); |
| “demobilisation”, in relation to a ship, means the standing down and restoration of the ship to the state it was in before mobilisation; |
“finance leasing” means —| (a) | in relation to a container, a lease of the container (including any arrangement or agreement made in connection with the lease) that has the effect of transferring substantially the obsolescence, risks or rewards incidental to ownership of the container to the lessee; and | | (b) | in relation to a ship, a lease of the ship (including any arrangement or agreement made in connection with the lease) that has the effect of transferring substantially the obsolescence, risks or rewards incidental to ownership of the ship to the lessee; |
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| “foreign ship” means a seagoing ship other than a Singapore ship or provisionally registered ship; |
| “holding”, in relation to a ship, means keeping the ship on a standby mode for use in offshore oil or gas activity, offshore renewable energy activity or offshore mineral activity; |
| “mobilisation”, in relation to a ship, means bringing the ship to a state of readiness for use in offshore oil or gas activity, offshore renewable energy activity or offshore mineral activity, and includes moving the ship to the deployment site, and outfitting and re‑engineering the ship to bring it to a state of readiness for use in such activity; |
“operation” means —| (a) | in relation to a Singapore ship or provisionally registered ship —| (i) | the carriage of passengers, mail, livestock or goods outside the limits of the port of Singapore; | | (ii) | towing or salvage operations outside the limits of the port of Singapore; | | (iii) | the charter of the ship for use outside the limits of the port of Singapore; | | (iv) | for the year of assessment 2007 and subsequent years of assessment, the use outside the limits of the port of Singapore of the ship as a dredger, seismic ship or ship used for offshore oil or gas activity; | | (v) | the use, on or after 25 March 2016, outside the limits of the port of Singapore of the ship for offshore renewable energy activity or offshore mineral activity; or | | (vi) | the finance leasing of the ship for use outside the limits of the port of Singapore, but only where the income in question —| (A) | is derived from the finance leasing on or after 12 December 2018; and | | (B) | is not derived by the shipping enterprise as part of a business of trading in ships or constructing ships for sale; and |
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| | (b) | in relation to a foreign ship, the carriage of passengers, mail, livestock or goods shipped in Singapore, except where such carriage arises solely from transhipment from Singapore, or is only within the limits of the port of Singapore; |
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| “prescribed ship management services” means activities that support or are incidental to owning or operating a ship, and which are prescribed as prescribed ship management services under section 7; |
| “provisionally registered ship” means a ship that is provisionally registered under the Merchant Shipping Act 1995, but excludes one whose registry is closed, deemed closed or suspended; |
| “qualifying company”, in relation to a shipping enterprise, means a company at least 50% of the total number of the issued ordinary shares of which are beneficially and directly owned by the enterprise; |
| “ship” has the meaning given by section 2(1) of the Merchant Shipping Act 1995; |
“ship management services” means any of the following activities in respect of a ship:| (a) | making a purchase or sale of it, or a decision regarding its ownership; | | (b) | deciding on its flag and registry; | | (c) | sourcing for and deciding on financing for its acquisition; | | (d) | awarding contracts, entering into alliances, or deciding on pooling, in respect of it; | | (e) | securing its employment or its cargo; | | (f) | planning its route and tonnage, including the issuance of voyage instructions; | | (g) | appointing a ship manager, ship agent or stevedore for it; | | (h) | collecting or arranging for the collection of freight, charter hire, or other payment in exchange for its use; | | (i) | arranging insurance for it; | | (j) | undertaking crew‑related matters for it, including the provision of qualified crew, the appointment of a crew manager, the provision of crew training or the arrangement of crew insurance; | | (k) | arranging or supervising dry‑docking, repair, overhaul, alteration, maintenance or lay‑up of it; | | (l) | ensuring that it is adequately equipped with supplies, provisions, spares, stores and lubricating oil; | | (m) | supervising its construction, conversion or registration; | | (n) | liaising with the relevant competent authorities or bodies on safety and manning requirements for it and any other similar matters; |
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| “shipping enterprise” means any company owning or operating Singapore ships, provisionally registered ships or foreign ships; |
| “Singapore ship” means a ship in respect of which a certificate of registry (other than a provisional certificate of registry) has been issued under the Merchant Shipping Act 1995 and its registry is not closed or deemed to be closed or suspended; |
| “special purpose company”, in relation to a shipping enterprise, means a company that is wholly‑owned by the shipping enterprise and whose only business or intended business is the operation of Singapore ships. [2/2016; 34/2016; 39/2017; 32/2019; 41/2020] |
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| Assessment of income not entitled to exemption under section 43A, 43C, 43D or 43H |
13B.—(1) Despite section 13(1)(y), where it appears to the Comptroller that any income of a person which has been exempted from tax under regulations made under section 43A, 43C, 43D or 43H, ought not to have been so exempted for any year of assessment, the Comptroller may, at any time within 4 years after the expiry of that year of assessment, make such assessment or additional assessment upon the person as may appear to be necessary in order to make good any loss of tax.| (2) Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if an assessment under subsection (1) were a notice of assessment. |
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| Exemption of income of trustee of trust fund arising from funds managed by fund manager in Singapore |
13C.—(1) There is exempt from tax such income as the Minister may by regulations prescribe of the trustee of any prescribed trust fund arising from funds managed in Singapore by any fund manager.(2) The Minister may by regulations —| (a) | make such transitional and saving provisions as the Minister may consider necessary or expedient in relation to the repeal of section 13C in force immediately before 1 September 2007; | | (b) | provide for the determination of the amount of income of the trustee of any prescribed trust fund to be exempt from tax; and | | (c) | make provision generally for giving full effect to or for carrying out the purposes of this section. |
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(3) This section does not apply to —| (a) | a trustee of a trust fund that is constituted on or after 1 April 2014; or | | (b) | a trustee of a trust fund that —| (i) | is constituted before 1 April 2014; and | | (ii) | is not a prescribed trust fund at any time before that date. |
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| (4) This section does not apply to any income derived on or after 1 April 2014 except to the extent allowed by subsection (5). [37/2014] |
(5) This section continues to apply to income mentioned in subsection (1) of a trustee of a trust fund that is derived on or after 1 April 2014 and before the end of the basis period of that trustee in which that date falls, if —| (a) | the trustee has a basis period that ends on a date other than 31 March; and | | (b) | the trustee makes an election, at the time of lodgment of the return of income for the year of assessment 2015 or 2016 (as the case may be), or such later time as the Comptroller may allow, to apply this section to such income. [37/2014] |
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| Exemption of income of prescribed persons arising from funds managed by fund manager in Singapore |
13D.—(1) There is exempt from tax such income as the Minister may by regulations prescribe of any prescribed person arising from funds managed in Singapore by any fund manager.(1A) Subsection (1) does not apply to any income of a prescribed person that is —| (a) | derived in the prescribed person’s capacity as a trustee of a pension or provident fund approved under section 5; | | (b) | derived in the prescribed person’s capacity as a trustee of a designated unit trust referred to in section 35(14) in a basis period or part of a basis period for a year of assessment, where the person has elected under section 35(12) for that provision to apply to any of the person’s income in that basis period or that part of the basis period; | | (c) | derived in the prescribed person’s capacity as a trustee of a real estate investment trust within the meaning of section 43(10); or | | (d) | exempt from tax under section 13U. [2/2016] |
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(2) Where —| (a) | income of any prescribed person, being a company, has been exempt from tax under subsection (1) in any year of assessment; and | | (b) | a person (called in this section the relevant owner), either alone or together with the relevant owner’s associates, beneficially owns on the relevant day issued securities of the prescribed person the value of which is more than the prescribed percentage of the total value of all issued securities of the prescribed person on the relevant day, |
| then the relevant owner is liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the formula |
| | is the percentage which the value of the issued securities of the prescribed person beneficially owned on the relevant day by the relevant owner bears to the total value of all issued securities of the prescribed person on the relevant day; |
| | | is the amount of income of the prescribed person as reflected in the audited account of the prescribed person for the basis period relating to that year of assessment; and |
| | | is the tax rate specified in section 43(1)(a) applicable to that year of assessment. |
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(3) Subsection (2) does not apply to a relevant owner if —| (a) | the Comptroller permits the relevant owner to take steps to reduce the ownership of the issued securities by the relevant owner or the relevant owner’s associates within such period as the Comptroller may specify, being a period of no more than 3 months from the relevant day; and | | (b) | by the end of the specified period, the value of the issued securities beneficially owned by the relevant owner together with the relevant owner’s associates is no more than the prescribed percentage of the total value of all issued securities of the prescribed person on the relevant day. |
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(4) Where —| (a) | income of any prescribed person, being the trustee of a trust fund, has been exempt from tax under subsection (1) in any year of assessment; and | | (b) | a person (called in this section the relevant beneficiary), either alone or together with the relevant beneficiary’s associates, beneficially owns on the relevant day any part of the trust fund the value of which is more than the prescribed percentage of the total value of the trust fund on the relevant day, |
| then the relevant beneficiary is liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the formula |
| | is the percentage which the value of the part of the trust fund beneficially owned on the relevant day by the relevant beneficiary bears to the total value of the trust fund on the relevant day; |
| | | is the amount of income of the prescribed person as reflected in the audited account of the prescribed person for the basis period relating to that year of assessment; and |
| | | is the tax rate specified in section 43(1)(c) applicable to that year of assessment. |
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(5) Subsection (4) does not apply to a relevant beneficiary if —| (a) | the Comptroller permits the relevant beneficiary to take steps to reduce the ownership of the trust fund by the relevant beneficiary or the relevant beneficiary’s associates within such period as the Comptroller may specify, being a period of no more than 3 months from the relevant day; and | | (b) | by the end of the specified period, the value of the part of the trust fund beneficially owned by the relevant beneficiary together with the relevant beneficiary’s associates is no more than the prescribed percentage of the total value of the trust fund on the relevant day. |
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(6) Despite subsections (2) and (4), where —| (a) | income of any prescribed person, being a company or the trustee of a trust fund, has been exempt from tax under subsection (1) in any year of assessment; | | (b) | a person, either alone or together with the person’s associates, beneficially owns on the relevant day —| (i) | if the prescribed person is a company, any issued securities of the prescribed person; or | | (ii) | if the prescribed person is the trustee of a trust fund, any part of the trust fund; and |
| | (c) | the person mentioned in paragraph (b) is a non‑bona fide entity, |
| then the person mentioned in paragraph (b) is not liable to pay the penalty mentioned in subsection (2) or (4); but a person (called in this section the liable person) who — |
| (d) | beneficially owns on the relevant day equity interests of the person mentioned in paragraph (b); and | | (e) | is not himself, herself or itself a non‑bona fide entity, |
| is liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the formula specified in subsection (6A) if, and only if, the total of — |
| (f) | the value of the equity interests of the prescribed person or of the trust fund for which the prescribed person is the trustee (as the case may be) that are beneficially owned by the liable person on the relevant day; and | | (g) | the value of the equity interests of the prescribed person or of the trust fund for which the prescribed person is the trustee (as the case may be) that are beneficially owned by the associates of the liable person on the relevant day, |
| exceeds the prescribed percentage of the total value of all the equity interests of the prescribed person or of the trust fund (as the case may be) on that day. |
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(6A) The formula for the penalty referred to in subsection (6) is as follows: | | is the percentage which the value of the equity interests of the prescribed person or of the trust fund for which the prescribed person is the trustee (as the case may be) beneficially owned on the relevant day by the liable person bears to the total value of all equity interests of the prescribed person or of the trust fund on the relevant day; |
| | | is the amount of income of the prescribed person as reflected in the audited account of the prescribed person for the basis period relating to that year of assessment; and |
| | | is the tax rate applicable to that year of assessment as specified in section 43(1)(a) (if the prescribed person is a company) or 43(1)(c) (if the prescribed person is a trustee of a trust fund). |
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| (6B) Subsection (3) or (5) (whichever is applicable) applies, with the necessary modifications, to the liable person as it applies to a relevant owner or relevant beneficiary as if the reference to subsection (2) or (4) (as the case may be) is a reference to subsection (6). |
(7) For the purposes of subsections (6)(d), (f) and (g) and (6A), if —| (a) | a person beneficially owns (including by virtue of one or more applications of this subsection) equity interests of a person (called in this subsection a first level entity); and | | (b) | the first level entity beneficially owns equity interests of another person (called in this subsection a second level entity), |
| then the firstmentioned person is taken to beneficially own equity interests of the second level entity; and the percentage which the value of those equity interests bears to the total value of all equity interests of the second level entity is computed in accordance with the formula |
| | is the percentage which the value of equity interests of the first level entity beneficially owned by the firstmentioned person bears to the total value of all equity interests of the first level entity; and |
| | | is the percentage which the value of equity interests of the second level entity beneficially owned by the first level entity bears to the total value of all equity interests of the second level entity. |
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(7A) Subsection (7) also has effect for the purpose of determining, under subsections (6)(f) and (g) and (6A), the beneficial ownership of a person in the equity interests of a trust fund for which a prescribed person is a trustee, with the following modifications:| (a) | the reference in subsection (7)(b) to the equity interests of another person (when applied to that trust fund) is to be read as the equity interests in that fund; | | (b) | the reference in the definition of B under subsection (7) to the value of equity interests of the second level entity beneficially owned by the first level entity (when applied to that trust fund) is to be read as the value of the part of the trust fund beneficially owned by the first level entity; | | (c) | the reference in the definition of B under subsection (7) to the total value of all equity interests of the second level entity (when applied to that trust fund) is to be read as the total value of the trust fund. |
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| (7B) The Minister or an authorised body may at any time, in the discretion of the Minister or authorised body and subject to such conditions as the Minister or authorised body may impose, remit or refund, wholly or in part, the penalty that is payable or paid by a person under subsection (2), (4) or (6); and section 92(2B) to (2E) applies, with the necessary modifications, to any non‑compliance with any such condition as it applies to the non‑compliance with a condition imposed under section 92(2). [37/2014] [Act 41 of 2020 wef 06/12/2022] |
(8) Regulations made under this section may —| (a) | provide for the determination of the amount of income of any prescribed person to be exempt from tax; | | (b) | provide for the circumstances under which a person would be considered to be an associate for the purposes of this section; | | (c) | exempt any person or class of persons from subsection (2), (4) or (6); and | | (d) | make provision generally for giving full effect to or for carrying out the purposes of this section. |
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(9) In this section —“equity interest” means —| (a) | in relation to a company, any issued security of that company; | | (aa) | in relation to a trust fund for which a prescribed person is a trustee, any part of the trust fund; or | | (b) | in relation to a person other than a company, such right or interest as may be prescribed; |
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“issued securities”, in relation to a company, means —| (a) | issued debentures of, or issued stocks or shares in, the company; | | (b) | any right, option or derivative in respect of any such debentures, stocks or shares; | | (ba) | any other instrument that confers or represents a legal or beneficial ownership interest in the company; or | | (c) | such other securities of the company as may be prescribed; |
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“non‑bona fide entity” means a person not resident in Singapore (excluding a permanent establishment in Singapore) who —| (a) | is set up solely for the purpose of avoiding or reducing payment of tax or penalty under this Act; or | | (b) | does not carry out any substantial business activity for a genuine commercial reason; |
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“relevant day” means —| (a) | the last day of the basis period of the prescribed person for the year of assessment referred to in subsection (2), (4) or (6), as the case may be; | | (b) | if on a day within that basis period the prescribed person becomes an approved person under section 13U(1)(a) the day immediately before the firstmentioned day; or | | (c) | if on a day within that basis period the prescribed person becomes an approved master fund or approved feeder fund of —| (i) | an approved master‑feeder fund structure under section 13U(1)(b); | | (ii) | an approved master‑feeder fund‑SPV structure under section 13U(1)(c); or | | (iii) | an approved master fund‑SPV structure under section 13U(1)(d), |
| the day immediately before the firstmentioned day; |
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“value” —| (a) | in relation to issued securities of a company other than those prescribed under paragraph (c) of the definition of “issued securities”, means —| (i) | where the relevant day is before 1 April 2014, the value of those securities at the time of their issue by the company; and | | (ii) | where the relevant day falls on or after 1 April 2014, the net asset value of those securities as at the relevant day; or |
| | (b) | in relation to issued securities of a company prescribed under paragraph (c) of the definition of “issued securities”, means —| (i) | where the relevant day is before 1 April 2014, the value of those securities at the prescribed time; and | | (ii) | where the relevant day falls on or after 1 April 2014, the net asset value of those securities as at the relevant day. [37/2014; 2/2016; 45/2018] |
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(10) This section does not apply to —| (a) | a company or trustee of a trust fund (as the case may be) that is incorporated or constituted on or after 1 January 2025; or | | (b) | a company or trustee of a trust fund (as the case may be) that —| (i) | is incorporated or constituted before 1 January 2025; and | | (ii) | is not a prescribed person at any time before that date. [13CA [37/2014; 32/2019] |
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| Exemption of international shipping profits |
13E.—(1) Subject to subsections (1A) and (2), there is exempt from tax the income of an approved international shipping enterprise derived —| (a) | on or after 1 April 1991 from —| (i) | the carriage of passengers, mail, livestock or goods from outside the limits of the port of Singapore by any foreign ship; | | (ii) | the charter of any foreign ship to any person where such ship is used by the person for the carriage of passengers, mail, livestock or goods outside the limits of the port of Singapore; and | | (iii) | the carriage of passengers, mail, livestock or goods by any foreign ship to Singapore solely for the purpose of transhipment; |
| | (b) | for the year of assessment 2005 and subsequent years of assessment from —| (i) | the operation outside the limits of the port of Singapore of any dredger, seismic ship or any ship used for offshore oil or gas activity; and | | (ii) | the charter of any foreign dredger, foreign seismic ship, or any foreign ship used for offshore oil or gas activity to any person where such dredger, seismic ship or ship is used by the person for the person’s operation outside the limits of the port of Singapore; |
| | (c) | for the year of assessment 2003 and subsequent years of assessment from —| (i) | towing or salvage operations carried out from outside the limits of the port of Singapore by any foreign ship; and | | (ii) | the charter of any foreign ship to any person where such ship is used by the person for towage and salvage operations carried out outside the limits of the port of Singapore; |
| | (d) | for the year of assessment 2009 and subsequent years of assessment, from foreign exchange and risk management activities which are carried out in connection with and incidental to the operations described in paragraphs (a), (b) and (c); | | (e) | at any time in the period between 22 February 2010 and 23 February 2015 (both dates inclusive) from the provision of ship management services to any qualifying special purpose vehicle in respect of ships owned or operated by the qualifying special purpose vehicle, unless the conditions of its approval otherwise provide; | | (f) | for the year of assessment 2012 and subsequent years of assessment, from the carriage by any foreign ship of passengers, mail, livestock or goods which are shipped in Singapore, except where such carriage is only within the limits of the port of Singapore; | | (g) | on or after 1 June 2011 from —| (i) | the sale of a foreign ship used for a prescribed purpose; | | (ii) | the assignment to another of all its rights as the buyer under a contract for the construction of a ship for a prescribed purpose that, at the time of assignment, is intended to be a foreign ship to be used for that or any other prescribed purpose; or | | (iii) | the sale of all of the issued ordinary shares in a special purpose company of the approved international shipping enterprise where, at the time of the sale of the shares, the special purpose company —| (A) | owns any foreign ship that is used for a prescribed purpose; | | (B) | is the buyer under a contract for the construction of a foreign ship for a prescribed purpose that is intended to be used for that or any other prescribed purpose; | | (C) | owns a Singapore ship or a provisionally registered ship within the meaning of section 13A(16); or [Act 33 of 2022 wef 04/11/2022] | | (D) | is the buyer under a contract for the construction of a ship that, at the time of the sale, is intended to be registered or is provisionally registered under the Merchant Shipping Act 1995; |
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| | (h) | at any time during the period from 24 February 2015 to 18 February 2020 (both dates inclusive) from providing prescribed ship management services to any qualifying special purpose vehicle in respect of ships owned or operated by the qualifying special purpose vehicle, unless the conditions of its approval otherwise provide; | | (i) | on or after 24 February 2015 from —| (i) | any mobilisation or holding of any ship used or to be used for offshore oil or gas activity outside the limits of the port of Singapore; or | | (ii) | the demobilisation of any ship after it has been so used, |
| where the mobilisation, holding or demobilisation is undertaken by the approved international shipping enterprise itself using a foreign ship; |
| | (j) | on or after 24 February 2015 from —| (i) | any mobilisation or holding of a foreign ship owned or operated by the approved international shipping enterprise and used or to be used for offshore oil or gas activity outside the limits of the port of Singapore; or | | (ii) | the demobilisation of a foreign ship owned or operated by the approved international shipping enterprise after it has been so used; |
| | (k) | on or after 24 February 2015 from the leasing of any container (other than finance leasing) carried out in connection with its operation of foreign ships and that is incidental to such operation; | | (l) | on or after 25 March 2016 from —| (i) | the operation outside the limits of the port of Singapore of any foreign ship for offshore renewable energy activity or offshore mineral activity; and | | (ii) | the charter of any foreign ship for offshore renewable energy activity or offshore mineral activity to any person, where such ship is used by the person for the person’s operation outside the limits of the port of Singapore; |
| | (m) | on or after 25 March 2016 from —| (i) | the sale of a foreign ship used for offshore renewable energy activity or offshore mineral activity; | | (ii) | the assignment to another of all its rights as the buyer under a contract for the construction of a ship for offshore renewable energy activity or offshore mineral activity that, at the time of assignment, is intended to be a foreign ship to be used for that activity or any prescribed purpose; or | | (iii) | the sale of all of the issued ordinary shares in a special purpose company of the approved international shipping enterprise where, at the time of the sale of the shares, the special purpose company —| (A) | owns any foreign ship that is used for offshore renewable energy activity or offshore mineral activity; or | | (B) | is the buyer under a contract for the construction of a foreign ship for that activity and that is intended to be used for that activity or any prescribed purpose; |
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| | (n) | on or after 25 March 2016 from —| (i) | any mobilisation or holding of any ship used or to be used for offshore renewable energy activity, or offshore mineral activity, outside the limits of the port of Singapore; or | | (ii) | the demobilisation of any ship after it has been so used, |
| where the mobilisation, holding or demobilisation is undertaken by the approved international shipping enterprise itself using a foreign ship; |
| | (o) | on or after 25 March 2016 from —| (i) | any mobilisation or holding of a foreign ship owned or operated by the approved international shipping enterprise and used or to be used for offshore renewable energy activity, or offshore mineral activity, outside the limits of the port of Singapore; or | | (ii) | the demobilisation of a foreign ship owned or operated by the approved international shipping enterprise after it has been so used; |
| | (p) | on or after 25 March 2016 from foreign exchange and risk management activities which are carried out in connection with and incidental to an activity described in paragraph (l), (n) or (o); | | (q) | on or after 29 December 2016 from foreign exchange and risk management activities that are carried out in connection with and incidental to an activity mentioned in subsection (1)(f), (h), (i) or (j); | | (r) | on or after 12 December 2018 from —| (i) | the finance leasing of any foreign ship to any person where the ship is used by the person for the carriage of passengers, mail, livestock or goods outside the limits of the port of Singapore; | | (ii) | the finance leasing of any foreign dredger, foreign seismic ship, or any foreign ship used for offshore oil or gas activity to any person where the dredger, seismic ship or ship is used by the person for the person’s operation outside the limits of the port of Singapore; | | (iii) | the finance leasing of any foreign ship to any person where the ship is used by the person for towage and salvage operations carried out outside the limits of the port of Singapore; and | | (iv) | the finance leasing of any foreign ship for offshore renewable energy activity or offshore mineral activity to any person, where the ship is used by the person for the person’s operation outside the limits of the port of Singapore; |
| | (s) | on or after 12 December 2018 from foreign exchange and risk management activities which are carried out in connection with and incidental to an activity mentioned in paragraph (r); and | | (t) | on or after 19 February 2020 from providing prescribed ship management services to —| (i) | any qualifying special purpose vehicle of the approved international shipping enterprise or another approved international shipping enterprise; or | | (ii) | any qualifying shareholder of the approved international shipping enterprise, |
| in respect of ships owned or operated by the qualifying special purpose vehicle or qualifying shareholder (as the case may be), unless the conditions of its approval otherwise provide. |
[2/2016; 34/2016; 32/2019; 41/2020] |
| (1A) Unless the Minister or such person as the Minister may appoint permits in a particular case, subsection (1)(e) does not apply to the provision by an approved international shipping enterprise of ship management services to a qualifying special purpose vehicle if at least 50% of the total number of the issued ordinary shares of the enterprise are beneficially owned, whether directly or indirectly, by another approved international shipping enterprise. |
(1AA) Subsection (1)(g) does not apply to —| (a) | any income of an approved international shipping enterprise derived before 12 December 2018 as a lessor of a foreign ship used for a prescribed purpose, under a finance lease that is treated as a sale under section 10C; or | | (b) | any income of an approved international shipping enterprise that is derived as part of a business of trading in foreign ships used for a prescribed purpose, or of constructing for sale foreign ships for a prescribed purpose. [2/2016; 41/2020] |
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| (1AB) Unless the Minister or such person as the Minister may appoint permits in a particular case, subsection (1)(h) does not apply to the provision by an approved international shipping enterprise of prescribed ship management services to a qualifying special purpose vehicle, if at least 50% of the total number of the issued ordinary shares of the enterprise are beneficially owned, whether directly or indirectly, by another approved international shipping enterprise. [2/2016] |
(1AC) Subsection (1)(m) does not apply to —| (a) | any income of an approved international shipping enterprise derived before 12 December 2018 as a lessor of a foreign ship used for offshore renewable energy activity or offshore mineral activity, under a finance lease that is treated as a sale under section 10C; or | | (b) | any income of an approved international shipping enterprise that is derived as part of a business of trading in foreign ships used for either of those activities, or of constructing for sale foreign ships for either of those activities. [34/2016; 41/2020] |
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| (1AD) Subsection (1)(r) does not apply to any income derived by an approved international shipping enterprise as part of a business of trading in foreign ships or constructing for sale foreign ships for any operation or activity mentioned in that provision. [41/2020] |
(1B) An application may be made to the Minister or authorised body for a company —| (a) | which is an international shipping enterprise; or | | (b) | which is not but intends to become an international shipping enterprise, |
| to be approved as an approved international shipping enterprise, and the company is deemed upon approval to be an approved international shipping enterprise. |
[Act 41 of 2020 wef 12/04/2024] |
(2) The exemption for each approved international shipping enterprise —| (a) | is for such period not exceeding 10 years after the date of its approval as the Minister or authorised body may specify, except that the Minister or authorised body may extend the period so specified for any further periods, not exceeding 10 years at a time, as the Minister or authorised body thinks fit; or [Act 41 of 2020 wef 12/04/2024] | | (b) | if, at the time of its approval, the company does not, in the opinion of the Minister or authorised body, satisfy such qualifying conditions as the Minister or authorised body may determine for the purposes of paragraph (a), is for such period not exceeding 5 years from the date of its approval as the Minister or authorised body may specify. [Act 41 of 2020 wef 12/04/2024] |
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| (2A) The approval of an approved international shipping enterprise for a period of exemption referred to in subsection (2)(b) may only be granted at any time between 1 June 2011 and 31 December 2026 (both dates inclusive). [2/2016; 41/2020] |
(3) In determining the amount of the income of an approved international shipping enterprise which is exempted under this section, the allowances provided for in sections 16, 17, 18, 18B, 18C, 19, 19A, 20, 21, 22 and 23 —| (a) | must be taken into account even if no claim for those allowances has been made; and | | (b) | may only be deducted against the income referred to in subsection (1), and the balance of those allowances is not available as a deduction against any other income, except that any balance remaining unabsorbed at the end of the tax exempt period is available as a deduction against any other income for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 23. |
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(4) Where an approved international shipping enterprise incurs a loss during the tax exempt period in respect of any operation, activity or service referred to in paragraphs (a) to (f), (h) to (l) and (n) to (s) of subsection (1), that loss —| (a) | must be deducted in accordance with section 37; and | | (b) | may only be deducted against the income referred to in any of those paragraphs, and the balance of such loss is not available as a deduction against any other income, except that any balance remaining unabsorbed at the end of the tax exempt period is available as a deduction against any other income for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 37. [2/2016; 34/2016; 32/2019] |
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| (4A) Where an approved international shipping enterprise incurs a loss on any sale or assignment referred to in subsection (1)(g) or (m) in any basis period falling, in whole or in part, within the tax exempt period, that loss may only be deducted against the gains derived from another sale or assignment referred to in either subsection (1)(g) or (m) in that same basis period, and the balance of the loss is not available as a deduction against any other income. [34/2016] |
| (5) Section 13A(2), (2A), (4), (5), (7), (8) and (9) applies to an approved international shipping enterprise, except that any reference to a shipping enterprise is a reference to an approved international shipping enterprise. |
(6) In this section —| “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 12/04/2024] |
| “container” has the meaning given by section 43P(7); |
| “demobilisation”, “finance leasing”, “holding”, “mobilisation” and “prescribed ship management services” have the meanings given by section 13A(16); |
| “foreign ship” means a seagoing ship other than a Singapore ship, or (on or after the date on which the Income Tax (Amendment) Act 2022 is published in the Gazette) a provisionally registered ship, within the meaning of section 13A(16); [Act 33 of 2022 wef 04/11/2022] |
“international shipping enterprise” means a company resident in Singapore —| (a) | owning or operating ships; or | | (b) | which has a qualifying special purpose vehicle which owns or operates ships; |
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“prescribed purpose”, in relation to a ship, means use for —| (a) | the carriage of passengers, mail, livestock or goods; | | (b) | dredging, seismic, or offshore oil or gas activity; | | (c) | a towing or salvage operation; or | | (d) | the mobilisation, holding or demobilisation of another ship; |
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| “ship” has the meaning given by section 2(1) of the Merchant Shipping Act 1995; |
| “ship management services” has the meaning given by section 13A(16); |
“special purpose company”, in relation to an approved international shipping enterprise, means a company that is wholly‑owned by the shipping enterprise and whose only business or intended business is —| (a) | any operation mentioned in subsection (1)(a), (b), (c), (f), (i) and (j); | | (b) | any operation of a Singapore ship, or (on or after the date on which the Income Tax (Amendment) Act 2022 is published in the Gazette) a provisionally registered ship, as defined in section 13A(16); [Act 33 of 2022 wef 04/11/2022] | | (c) | any operation or activity mentioned in subsection (1)(l), (n) or (o) that takes place on or after 25 March 2016; or | | (d) | any operation or activity mentioned in subsection (1)(r) that takes place on or after 12 December 2018. [2/2016; 34/2016; 41/2020] |
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(7) In this section, “qualifying special purpose vehicle”, in relation to a company referred to in paragraph (b) of the definition of “international shipping enterprise” in subsection (6) or an approved international shipping enterprise (called in this subsection the entity), means —| (a) | an approved company —| (i) | which is incorporated and resident in Singapore; and | | (ii) | at least 50% of the total number of the issued ordinary shares of which are beneficially owned, whether directly or indirectly, by —| (A) | the entity; or | | (B) | a company which beneficially owns (whether directly or indirectly) at least 50% of the total number of the issued ordinary shares of the entity; |
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| | (b) | an approved company —| (i) | which is incorporated outside Singapore; and | | (ii) | at least 25% of the total number of the issued ordinary shares of which are beneficially owned, whether directly or indirectly, by the entity; |
| | (c) | an approved partnership —| (i) | which is registered or formed outside Singapore; and | | (ii) | of which the entity is entitled, whether directly or indirectly, to at least 25% of its income; |
| | (d) | an approved company —| (i) | which is incorporated and resident in Singapore, and at least 50% of the total number of the issued ordinary shares of which are beneficially owned directly by another company which is a qualifying special purpose vehicle by virtue of paragraph (a)(ii)(B); or | | (ii) | which is incorporated outside Singapore, and at least 25% of the total number of the issued ordinary shares of which are beneficially owned directly by another company which is a qualifying special purpose vehicle by virtue of paragraph (a)(ii)(B); |
| | (e) | an approved partnership which is registered or formed outside Singapore and one of the partners of which is a company which is a qualifying special purpose vehicle by virtue of paragraph (a)(ii)(B), and is entitled to at least 25% of its income; or | | (f) | any other partnership or company that is approved under subsection (8) as a qualifying special purpose vehicle of the entity, so long as it satisfies the conditions imposed under that subsection. [2/2016] |
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(7A) In subsection (1)(t), “qualifying shareholder”, in relation to an approved international shipping enterprise, means an approved company —| (a) | that is incorporated and resident in Singapore; and | | (b) | that beneficially owns (whether directly or indirectly) at least 50% of the total number of issued ordinary shares of the approved international shipping enterprise. [41/2020] |
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| (8) The Minister or an authorised body may, in a particular case, and subject to such conditions as the Minister or authorised body considers fit to impose, approve any partnership or company not specified in paragraphs (a) to (e) of subsection (7), as a qualifying special purpose vehicle of the entity mentioned in that subsection. [13F [2/2016] [Act 41 of 2020 wef 12/04/2024] |
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| Exemption of income of foreign trust |
| 13F.—(1) There is exempt from tax such income as the Minister may by regulations prescribe of such foreign trust or eligible holding company established for the purposes of such foreign trust as specified in those regulations, or as approved by the Minister or authorised body, and administered by a trustee company in Singapore. [Act 33 of 2022 wef 04/11/2022] (2) Where any income of a foreign trust is exempt from tax under regulations made under subsection (1) in any year of assessment, the share of such income to which any beneficiary under the trust is entitled to receive for that year of assessment is also exempt from tax if the beneficiary —| (a) | being an individual, is neither a citizen of Singapore nor resident in Singapore; | | (b) | being a company, is neither incorporated nor resident in Singapore and where such a company —| (i) | has not more than 50 shareholders, all of its issued shares are beneficially owned, directly or indirectly, by persons who are neither citizens of Singapore nor resident in Singapore; or | | (ii) | has more than 50 shareholders, not less than 95% of the total number of its issued shares are beneficially owned, directly or indirectly, by persons who are neither citizens of Singapore nor resident in Singapore; |
| | (c) | being any other person, is neither resident in Singapore nor constituted or registered under any written law in Singapore; or | | (d) | is a trustee of another foreign trust specified under subsection (1). |
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| (3) Where any income of a foreign trust is exempt from tax under regulations made under subsection (1) in any year of assessment, the share of such income that a foreign account of a philanthropic purpose trust is entitled to receive for that year of assessment is also exempt from tax. |
| (4) Despite subsections (1) and (2), where it appears to the Comptroller that any income of a foreign trust or eligible holding company ought not to have been exempted under regulations made under subsection (1), the Comptroller may, subject to section 74, make such assessment or additional assessment upon the foreign trust or eligible holding company (as the case may be) as may appear to be necessary. |
(5) In this section —| “foreign account” and “philanthropic purpose trust” have the meanings given by section 13L; |
| “trustee company” has the meaning given by section 43G(2). |
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(6) This section does not apply to —| (a) | a trust that is constituted on or after 1 January 2025; | | (b) | a company that is incorporated on or after 1 January 2025; | | (c) | a trust that —| (i) | is constituted before 1 January 2025; and | | (ii) | in the basis period in which 31 December 2024 falls, is not a foreign trust specified in the regulations under subsection (1) (called in this subsection and subsection (8) a specified trust) that is administered by a trustee company in Singapore within the meaning of those regulations; or |
| | (d) | a company that —| (i) | is incorporated before 1 January 2025; and | | (ii) | in the basis period in which 31 December 2024 falls —| (A) | is not an eligible holding company established for the purposes of a specified trust, and specified in the regulations under subsection (1); or | | (B) | is not administered by a trustee company in Singapore within the meaning of those regulations. [37/2014; 32/2019] |
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(7) Where, in any basis period beginning on or after 1 January 2025 —| (a) | a trust or company does not satisfy the requirements referred to in subsection (8); or | | (b) | the trustee company which administers a foreign trust or an eligible holding company established for the purposes of a foreign trust fails to comply with any of the regulations under subsection (1), |
| then this section does not apply to the trust or company in paragraph (a), or the foreign trust or eligible holding company in paragraph (b), for the year of assessment to which that basis period relates, and for every subsequent year of assessment even if the requirements are satisfied and the regulations are complied with in the basis period for that subsequent year of assessment. |
[37/2014; 32/2019] |
(8) In subsection (7), the requirements are —| (a) | in the case of the trust, that it is a specified trust and is administered by a trustee company in Singapore within the meaning of those regulations; or | | (b) | in the case of the company —| (i) | that it is an eligible holding company established for the purposes of a specified trust, and specified in those regulations; and | | (ii) | that it is administered by a trustee company in Singapore within the meaning of those regulations. [13G [37/2014] |
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| Exemption of income of venture company |
| 13G.—(1) The Minister may make regulations to provide that such income as the Minister may specify of an approved venture company derived by it from making authorised investments is exempt from tax. [34/2016; 41/2020] | (2) Regulations made under subsection (1) may provide for the determination of the amount of the income of an approved venture company to be exempted and for the deduction of losses otherwise than in accordance with section 37. [34/2016] |
(2A) For a venture company that is approved before 1 April 2020, the exemption from tax of the income of the company under regulations made under subsection (1) —| (a) | is for such period, not exceeding 10 years, as the Minister, or such person as the Minister may appoint, may specify; and | | (b) | in any particular case after the period referred to in paragraph (a), is for such further period or periods, not exceeding 5 years at any one time for each period, as the Minister or an authorised body may specify. [34/2016; 41/2020] [Act 41 of 2020 wef 12/04/2024] |
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| (2B) The total period under subsection (2A)(a) and the further period or periods under subsection (2A)(b) must not in the aggregate exceed 15 years. |
(2BA) For a venture company that is approved on or after 1 April 2020, the exemption from tax of the income of the company under regulations made under subsection (1) is for —| (a) | a period not exceeding 15 years as specified to the venture company by the Minister or an authorised body; and [Act 41 of 2020 wef 12/04/2024] | | (b) | where the period mentioned in paragraph (a) is less than 15 years — any additional period or periods specified to the venture company by the Minister or an authorised body. [41/2020] [Act 41 of 2020 wef 12/04/2024] |
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| (2BB) The total period of exemption from tax of income of an approved venture company mentioned in subsection (2BA) must not exceed 15 years. [41/2020] |
| (2C) The Minister or authorised body may, subject to such conditions as the Minister or authorised body may impose, approve a venture company as an approved venture company for the purposes of this section. [32/2019] [Act 41 of 2020 wef 12/04/2024] |
| (2D) No approval may be granted to a venture company on or after 1 January 2026. [32/2019; 41/2020] |
| (3) The Comptroller must determine the manner and extent to which allowances under section 19, 19A, 20, 21 or 22 and any expenses, losses and donations allowable under this Act which are attributable to the income referred to in subsection (1) are to be deducted. |
(4) In determining the income of an approved venture company which is exempt from tax under regulations made under subsection (1) for any year of assessment, there are to be deducted therefrom —| (a) | expenses allowable under this Act for that year of assessment which are attributable to that income; | | (aa) | [Deleted by Act 34 of 2016] | | (b) | any loss for that year of assessment arising from the disposal of any authorised investments in Singapore or elsewhere; | | (c) | any allowances for that year of assessment under section 19, 19A, 20, 21 or 22 attributable to that income even if no claim for those allowances has been made; and | | (d) | any balance of the expenses, losses and allowances referred to in paragraphs (a), (b) and (c) which have not been deducted in determining that income for any previous year of assessment. [34/2016; 41/2020] |
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| (5) Any expenses, losses or allowances referred to in subsection (4) may only be deducted against the income of an approved venture company exempt from tax under regulations made under subsection (1) and are not available as a deduction against any other income of the company, except that any balance of the expenses, losses or allowances remaining unabsorbed at the end of the tax exempt period of the company is available as a deduction against any other income of the company for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 23 or 37, as the case may be. |
| (5A) [Deleted by Act 34 of 2016] |
| (6) The Comptroller must, for each year of assessment for which the income of an approved venture company is exempt from tax under regulations made under subsection (1), issue to the approved venture company a statement (to be included in a notice of any assessment served on the approved venture company under section 76) showing the amount of income exempt from tax under regulations made under subsection (1) and Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if such statement were a notice of assessment. |
| (7) Where any statement issued to an approved venture company under subsection (6) has become final and conclusive, the amount of income shown in the statement does not form part of the statutory income of the company for the year of assessment to which the statement relates and is exempt from tax. |
| (8) [Deleted by Act 19 of 2013] |
| (9) [Deleted by Act 19 of 2013] |
| (10) [Deleted by Act 19 of 2013] |
| (11) [Deleted by Act 19 of 2013] |
| (11A) [Deleted by Act 19 of 2013] |
| (12) [Deleted by Act 19 of 2013] |
| (13) [Deleted by Act 19 of 2013] |
| (14) [Deleted by Act 19 of 2013] |
| (15) An approved venture company must deliver to the Comptroller a copy of the account made up to any date specified by the Comptroller whenever called upon to do so by written notice. |
| (16) Despite anything in this section, where it appears to the Comptroller that any income of an approved venture company which has been exempted from tax under regulations made under subsection (1) ought not to have been so exempted for any year of assessment, the Comptroller may, at any time within 4 years after the expiry of that year of assessment, make such assessment or additional assessment upon the company as may appear to be necessary in order to make good any loss of tax. [34/2016] |
| (17) Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if an assessment under subsection (16) were a notice of assessment. |
(18) In this section —“authorised investments” —| (a) | in relation to income derived by an approved venture company before 1 April 2020, means —| (i) | debentures, stocks, shares, bonds, notes or warrants issued by a government or company; | | (ii) | any right or option in respect of any debentures, stocks, shares, bonds, notes or warrants; or | | (iii) | units in any unit trust within the meaning of section 10A; or |
| | (b) | in relation to income derived by an approved venture company on or after 1 April 2020, means investments prescribed by the Minister for the purpose of subsection (1); |
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| “tax exempt period” means the period during which any income of an approved venture company is exempt from tax under regulations made under subsection (1); |
| “venture company” means any company whose business consists wholly or mainly in the making of authorised investments and the principal part of whose income is derived therefrom. [13H [32/2019; 41/2020] |
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| Exemption of tax on gains or profits from equity remuneration incentive scheme (SMEs) |
13H.—(1) Where a qualifying employee derives any gains or profits in any year of assessment, after the expiry of the minimum holding period, from any stock option granted during the period from 1 June 2000 to 31 December 2013 (both dates inclusive), or any right or benefit under any share acquisition scheme (other than a stock option scheme) granted during the period from 1 January 2002 to 31 December 2013 (both dates inclusive), to acquire shares in any qualifying company or in its holding company, there is, subject to this section, exempt from tax 50% of an amount of such gains or profits as determined under subsection (2).(2) The amount of gains or profits referred to in subsection (1) is —| (a) | where the price to be paid for the shares under the right or benefit is equal to or exceeds the market value or, if it is not possible to determine such value, the net asset value of the shares at the time of the grant of the right or benefit, the amount as determined under section 10(6); or | | (b) | where the price to be paid for the shares under the right or benefit is at a discount to the market value or, if it is not possible to determine such value, the net asset value of the shares at the time of the grant of the right or benefit, the amount as determined under section 10(6) less the amount of the discount. |
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(3) The exemption under this section does not apply to any amount of gains or profits to which section 10(6) applies —| (a) | to the extent that the amount, when aggregated with the amount of such gains or profits previously derived by the qualifying employee and which qualifies for exemption under this section, exceeds $10 million; | | (b) | which is derived by the qualifying employee on or after 1 January of the 10th year following the year in which he or she first derived such gains or profits which qualified for exemption under this section; or | | (c) | which is derived by the qualifying employee for the release of his or her right or benefit to acquire shares in any qualifying company or in its holding company by reason of his or her resignation or termination of his or her employment with the qualifying company due to his or her misconduct. |
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(4) The exemption under this section applies to gains or profits derived by an employee from any right or benefit to acquire shares in a holding company of the company in which the employee is employed only if the following conditions are satisfied:| (a) | both the company and the holding company are incorporated in Singapore; | | (b) | the holding company grants the right or benefit to acquire its shares to its employees or the employees of companies within its group of companies; and | | (c) | at the time of the grant by the holding company of the right or benefit to acquire its shares —| (i) | both the company and the holding company are carrying on business in Singapore; | | (ii) | the market value of the gross assets of the company does not exceed $100 million; | | (iii) | the market value of the gross assets of the holding company and companies within its group of companies does not exceed in the aggregate $100 million; and | | (iv) | the company in which the employee is employed has not granted any right or benefit to any of its employees to acquire its shares. |
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| (5) The Minister may make regulations to provide generally for giving full effect to or for carrying out the purposes of this section. |
(6) For the purposes of this section and section 13I, where a company grants —| (a) | any stock option during the period from 1 April 2001 to 31 December 2013 (both dates inclusive); or | | (b) | any right or benefit under any share acquisition scheme (other than a stock option scheme) during the period from 1 January 2002 to 31 December 2013 (both dates inclusive), |
| to acquire shares under a tranche of the share acquisition scheme and any gains or profits derived by a qualifying employee from any right or benefit granted under that tranche qualifies for tax exemption under this section as well as section 13I, the company must opt for the tax exemption under this section or section 13I to apply in respect of the gains or profits relating to that tranche but not under both sections. |
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(7) Where a company has opted under subsection (6) for tax exemption under this section to apply to the gains or profits in respect of a tranche of a share acquisition scheme, tax exemption under section 13I —| (a) | is, subject to paragraph (b), not available in respect of any right or benefit to acquire shares granted by the company under any tranche subsequent to that tranche under the share acquisition scheme; and | | (b) | is available in respect of any right or benefit to acquire shares granted subsequent to the option by the company under any tranche under the share acquisition scheme only where the conditions for tax exemption under this section are not satisfied in respect of any such subsequent tranche granted. |
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| (8) Where a company has opted under subsection (6) for tax exemption under section 13I to apply to the gains or profits in respect of a tranche of a share acquisition scheme, tax exemption under this section is not available in respect of any right or benefit to acquire shares granted by the company under any tranche subsequent to that tranche under the share acquisition scheme. |
| (9) Any option by a company under subsection (6) is irrevocable. |
| (9A) Despite anything in this section, the exemption under this section does not apply to any gains or profits derived by a qualifying employee on or after 1 January 2024. |
(10) In this section, unless the context otherwise requires —| [Deleted by Act 33 of 2022 wef 04/11/2022] |
“minimum holding period” —| (a) | in relation to a right or benefit to acquire shares in a qualifying company or holding company under any stock option scheme, means the period prescribed by the Singapore Exchange during which no option may be exercised under a stock option scheme implemented by any company listed on that Exchange, which would have been applicable to the stock option granted by the qualifying company or holding company (as the case may be) if it were a company listed on that Exchange; and | | (b) | in relation to a right or benefit to acquire shares in a qualifying company or holding company under any share acquisition scheme (other than a stock option scheme), means —| (i) | a period of at least one year after the grant of the right or benefit, during which the shares so acquired may not be sold, if the price to be paid for the shares under the right or benefit is at a discount to the market value or, if it is not possible to determine such value, the net asset value of the shares at the time of the grant of the right or benefit; or | | (ii) | a period of at least 6 months after the grant of the right or benefit, during which the shares so acquired may not be sold, if the price to be paid for the shares under the right or benefit is equal to or exceeds the market value or, if it is not possible to determine such value, the net asset value of the shares at the time of the grant of the right or benefit; |
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“qualifying company” means a company incorporated in Singapore which at the time of the grant to its employees of any right or benefit to acquire its shares —| (a) | carries on business in Singapore; and | | (b) | has gross assets the market value of which does not exceed $100 million; |
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“qualifying employee” means an employee (other than any non‑executive director) of a company who, at the time of the grant to him or her of any right or benefit to acquire the shares of the company or the shares of its holding company, as the case may be —| (a) | is committed to work —| (i) | where the time of the grant is before 1 January 2010 —| (A) | at least 30 hours per week for the company; or | | (B) | where the employee is committed to work less than that number of hours, at least 75% of his or her total working time per week for the company; and |
| | (ii) | where the time of the grant is on or after 1 January 2010 —| (A) | at least the number of hours per week referred to in section 66A(1) of the Employment Act 1968 for the company; or | | (B) | where the employee is committed to work less than that number of hours, at least 75% of his or her total working time per week for the company; and |
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| | (b) | does not beneficially own, directly or indirectly, voting shares that confer the right to exercise or control the exercise of not less than 25% of the voting power in the company which grants the right or benefit to acquire its shares; |
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| “share acquisition scheme” means a scheme which imposes a minimum holding period requirement and allows an employee of a company to own or purchase shares in a qualifying company or that of its holding company, including stock options, share awards and other similar forms of employee share purchase plans but excluding phantom shares rights, share appreciation rights and any other similar rights; |
| “shares” includes stocks but does not include redeemable or convertible shares or shares of a preferential nature; |
| “total working time”, in relation to a qualifying employee, means the total period of time spent by him or her as an employee for all his or her employers plus, if applicable, the total period of time, which is deemed to be 10 hours per week, spent by him or her on remunerative work as a self‑employed person. [13J |
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| Exemption of tax on gains or profits from equity remuneration incentive scheme |
13I.—(1) Where a qualifying employee derives any gains or profits in any year of assessment, after the expiry of the minimum holding period, from any stock option granted during the period from 1 April 2001 to 31 December 2013 (both dates inclusive), or any right or benefit under any share acquisition scheme (other than a stock option scheme) granted during the period from 1 January 2002 to 31 December 2013 (both dates inclusive), to acquire shares in any qualifying company or in its holding company under a share acquisition scheme which satisfies the relevant percentage requirement, there is, subject to this section and section 13H(6) to (9), exempt from tax —| (a) | the first $2,000 of such gains or profits in that year of assessment as determined under subsection (2); and | | (b) | 25% of any amount of such gains or profits in that year of assessment exceeding $2,000 as determined under subsection (2). |
(2) The amount of gains or profits referred to in subsection (1) is —| (a) | where the price to be paid for the shares under the right or benefit is equal to or exceeds the market value or, if it is not possible to determine such value, the net asset value of the shares at the time of the grant of the right or benefit, the amount as determined under section 10(6); or | | (b) | where the price to be paid for the shares under the right or benefit is at a discount to the market value or, if it is not possible to determine such value, the net asset value of the shares at the time of the grant of the right or benefit, the amount as determined under section 10(6) less the amount of the discount. |
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(3) The exemption under this section does not apply to any amount of gains or profits to which section 10(6) applies —| (a) | to the extent that the amount, when aggregated with the amount of such gains or profits previously derived by the qualifying employee and which qualifies for exemption under this section, exceeds $1 million; | | (b) | which is derived by the qualifying employee on or after 1 January of the 10th year following the year in which he or she first derived such gains or profits which qualified for exemption under this section; or | | (c) | which is derived by the qualifying employee for the release of his or her right or benefit to acquire shares in any qualifying company or in its holding company by reason of his or her resignation or termination of his or her employment with the qualifying company due to his or her misconduct. |
|
| (3A) Despite anything in this section, the exemption under this section does not apply to any gains or profits derived by a qualifying employee on or after 1 January 2024. |
| (4) The Minister may make regulations to provide generally for giving full effect to or for carrying out the purposes of this section. |
(5) In this section, unless the context otherwise requires —| [Deleted by Act 33 of 2022 wef 04/11/2022] |
| “minimum holding period” has the meaning given by section 13H; |
“part‑time employee” means an employee of a company who is committed to work —| (a) | where the time of grant is before 1 January 2010, for not more than 30 hours per week (including any time the employee would be required to work but for injury, any official leave or such other similar events) for the company; or | | (b) | where the time of grant is on or after 1 January 2010, for not more than the number of hours per week referred to in section 66A(1) of the Employment Act 1968 (including any time the employee would be required to work but for injury, any official leave or such other similar events) for the company; |
|
| “qualifying company” means a company incorporated or registered under the Companies Act 1967 which, at the time of the grant to its employees of any right or benefit to acquire its shares or that of its holding company, carries on business in Singapore; |
| “qualifying employee” means an employee of a qualifying company who, at the time of the grant to him or her of any right or benefit to acquire the shares of the company or the shares of its holding company (as the case may be) does not beneficially own, directly or indirectly, voting shares that confer the right to exercise or control the exercise of not less than 25% of the voting power in the qualifying company which grants the right or benefit to acquire its shares; |
“relevant percentage requirement” —| (a) | in relation to any right or benefit under a share acquisition scheme to acquire the shares of a qualifying company or its holding company granted before 16 February 2008, means in the aggregate at least 50% of the employees of the qualifying company are offered during any calendar year any rights or benefits to acquire shares in the qualifying company or in its holding company under that scheme, as ascertained in accordance with the specified formula; or | | (b) | in relation to any right or benefit under a share acquisition scheme to acquire the shares of a qualifying company or its holding company granted on or after 16 February 2008, means in the aggregate at least 25% of the employees of the qualifying company are offered during any calendar year any rights or benefits to acquire shares in the qualifying company or in its holding company under that scheme, as ascertained in accordance with the specified formula; |
|
| “share acquisition scheme” has the meaning given by section 13H; |
| “shares” includes stocks but does not include redeemable or convertible shares or shares of a preferential nature; |
“specified formula” means the formula |
| | is the aggregate number of employees of the qualifying company who are offered during a calendar year any right or benefit to acquire shares in the qualifying company or in its holding company under any share acquisition scheme in respect of which the qualifying company has opted under section 13H(6) for tax exemption under this section instead of section 13H to apply, and who are employees of that qualifying company at the time of such offer; |
| | | is the number of employees of the qualifying company on the last day of that calendar year; |
| | | is the number of part‑time employees (other than non‑executive directors) on the last day of that calendar year where any right or benefit to acquire shares in that qualifying company or in its holding company is not offered to any such employee for the whole of that calendar year, or nil where any right or benefit to acquire shares in that qualifying company or in its holding company is offered to any such employee during that calendar year; |
| | | is the number of full‑time employees with less than one year’s service (other than non‑executive directors) on the last day of that calendar year where any right or benefit to acquire shares in that qualifying company or in its holding company is not offered to any such employee for the whole of that calendar year, or nil where any right or benefit to acquire shares in that qualifying company or in its holding company is offered to any such employee during that calendar year; and |
| | | is the number of employees engaged on contracts not exceeding 2 years (other than non‑executive directors) on the last day of that calendar year where any right or benefit to acquire shares in that qualifying company or in its holding company is not offered to any such employee for the whole of that calendar year, or nil where any right or benefit to acquire shares in that qualifying company or in its holding company is offered to any such employee during that calendar year. |
|
|
[13L |
|
|
| Exemption of tax on gains or profits from equity remuneration incentive scheme (start‑ups) |
13J.—(1) Where a qualifying employee derives any gains or profits in any year of assessment, after the expiry of the minimum holding period, from any right or benefit under any share acquisition scheme granted during the period from 16 February 2008 to 15 February 2013 (both dates inclusive) to acquire shares in any qualifying company, there is, subject to this section, exempt from tax 75% of an amount of such gains or profits in that year of assessment as determined under subsection (2).(2) The amount of gains or profits referred to in subsection (1) is —| (a) | where the price to be paid for the shares under the right or benefit is equal to or exceeds the market value or (if it is not possible to determine such value) the net asset value of the shares at the time of the grant of the right or benefit, the amount as determined under section 10(6); or | | (b) | where the price to be paid for the shares under the right or benefit is at a discount to the market value or (if it is not possible to determine such value) the net asset value of the shares at the time of the grant of the right or benefit, the amount as determined under section 10(6) less the amount of the discount. |
|
(3) The exemption under this section does not apply to any amount of gains or profits to which section 10(6) applies —| (a) | to the extent that the amount, when aggregated with the amount of such gains or profits previously derived by the qualifying employee and which qualifies for exemption under this section, exceeds $10 million; | | (b) | which is derived by the qualifying employee on or after 16 February of the 10th year following the year in which he or she first derived such gains or profits which qualified for exemption under this section; or | | (c) | which is derived by the qualifying employee for the release of his or her right or benefit to acquire shares in any qualifying company by reason of his or her resignation or the termination of his or her employment with the qualifying company due to his or her misconduct. |
|
(4) For the purposes of this section and section 13H, where ––| (a) | a company grants any right or benefit under any share acquisition scheme during the period from 16 February 2008 to 15 February 2013 (both dates inclusive) to acquire shares under a tranche of the share acquisition scheme; and | | (b) | any gains or profits derived by a qualifying employee from any right or benefit granted under that tranche qualifies for tax exemption under this section as well as section 13H, |
| the company must opt for the tax exemption under this section or section 13H to apply in respect of the gains or profits relating to that tranche but not under both sections. |
|
(5) Where a company has opted under subsection (4) for tax exemption under this section to apply to the gains or profits in respect of a tranche of a share acquisition scheme, tax exemption under section 13H or 13I —| (a) | is, subject to paragraph (b), not available in respect of any right or benefit to acquire shares granted by the company under any tranche subsequent to that tranche under the share acquisition scheme; and | | (b) | is available in respect of any right or benefit to acquire shares granted subsequent to the option by the company under any tranche under the share acquisition scheme only where the conditions for tax exemption under this section are not satisfied in respect of any such subsequent tranche granted. |
|
| (5A) Despite anything in this section, the exemption under this section does not apply to any gains or profits derived by a qualifying employee on or after 1 January 2024. |
| (6) The Minister may make regulations to provide generally for giving full effect to or for carrying out the purposes of this section. |
(7) In this section —“minimum holding period” —| (a) | in relation to a right or benefit to acquire shares in a qualifying company under any stock option scheme, means the period prescribed by the Singapore Exchange during which no option may be exercised under a stock option scheme implemented by any company listed on that Exchange, which would have been applicable to the stock option granted by the qualifying company if it were a company listed on that Exchange; and | | (b) | in relation to a right or benefit to acquire shares in a qualifying company under any share acquisition scheme (other than a stock option scheme), means —| (i) | a period of at least one year after the grant of the right or benefit, during which the shares so acquired may not be sold, if the price to be paid for the shares under the right or benefit is at a discount to the market value or, if it is not possible to determine such value, the net asset value of the shares at the time of the grant of the right or benefit; or | | (ii) | a period of at least 6 months after the grant of the right or benefit, during which the shares so acquired may not be sold, if the price to be paid for the shares under the right or benefit is equal to or exceeds the market value or, if it is not possible to determine such value, the net asset value of the shares at the time of the grant of the right or benefit; |
|
|
“qualifying company” means a company incorporated in Singapore which, at the time of the grant to its employees of any right or benefit to acquire its shares —| (a) | carries on business in Singapore; | | (b) | has been incorporated for 3 years or less; | | (c) | has its total share capital beneficially held directly by no more than 20 shareholders —| (i) | all of whom are individuals; or | | (ii) | at least one of whom is an individual holding at least 10% of the total number of issued ordinary shares of the qualifying company; and |
| | (d) | has gross assets the market value of which does not exceed $100 million; |
|
“qualifying employee” means an employee (other than any non‑executive director) of a company, who at the time of the grant to him or her of any right or benefit to acquire the shares of the company —| (a) | is committed to work —| (i) | where the time of the grant is before 1 January 2010 —| (A) | at least 30 hours per week for the company; or | | (B) | where the employee is committed to work less than that number of hours, at least 75% of his or her total working time per week for the company; and |
| | (ii) | where the time of the grant is on or after 1 January 2010 —| (A) | at least the number of hours per week referred to in section 66A(1) of the Employment Act 1968 for the company; or | | (B) | where the employee is committed to work less than that number of hours, at least 75% of his or her total working time per week for the company; and |
|
| | (b) | does not beneficially own, directly or indirectly, voting shares that confer the right to exercise or control the exercise of not less than 25% of the voting power in the company which grants the right or benefit to acquire its shares; |
|
| “share acquisition scheme” means a scheme which imposes a minimum holding period requirement and allows an employee of a company to own or purchase shares in a qualifying company, including stock options, share awards and other similar forms of employee share purchase plans but excluding phantom shares rights, share appreciation rights and any other similar rights; |
| “shares” includes stocks but does not include redeemable or convertible shares or shares of a preferential nature; |
| “total working time”, in relation to a qualifying employee, means the total period of time spent by him or her as an employee for all his or her employers plus, if applicable, the total period of time, which is deemed to be 10 hours per week, spent by him or her on remunerative work as a self‑employed person. [13M |
|
|
| Exemption of tax on income derived by non‑ordinarily resident individual |
13K.—(1) Where an NOR individual is resident in Singapore in any year of assessment within the period he or she is an NOR individual, he or she may, within such time in that year of assessment and in such manner as may be specified by the Comptroller, elect for all or any of the following income of the NOR individual to be exempt from tax for that year of assessment:| (a) | any relevant employment income for the year preceding that year of assessment, if the NOR individual —| (i) | is not physically present in Singapore for at least 90 days in the year preceding that year of assessment by reason of the exercise of any employment in Singapore; and | | (ii) | derives gains or profits of at least $160,000 from the exercise of any employment in Singapore for the year preceding that year of assessment; |
| | (b) | despite section 10B(11), any contribution up to the relevant amount made by the NOR individual’s employer to any non‑obligatory pension or provident fund constituted outside Singapore in the year preceding that year of assessment, if —| (i) | the NOR individual is neither a citizen nor a permanent resident of Singapore at the time such contribution is made; | | (ii) | the NOR individual derives gains or profits of at least $160,000 from the exercise of any employment in Singapore for the year preceding that year of assessment; and | | (iii) | a deduction with respect to such contribution has not been allowed to the NOR individual’s employer under section 14(1)(e). |
|
(2) Where the notional tax payable on the apportioned employment income by an NOR individual who has elected for tax exemption under subsection (1) is less than 10% of the gains or profits from the exercise of any employment in Singapore by him or her —| (a) | the apportioned employment income is readjusted such that the notional tax payable on the readjusted apportioned employment income is 10% of the gains or profits from the exercise of any employment in Singapore by the NOR individual; and | | (b) | the relevant employment income is reduced by the difference between the readjusted apportioned employment income and the apportioned employment income. |
|
(3) Any individual who satisfies any of the following criteria may apply to the Comptroller in such manner as the Comptroller may determine to be approved as an NOR individual for the specified period:| (a) | if the individual is not resident in Singapore for any year of assessment before 1 January 2003, but is resident in Singapore for every succeeding year of assessment up to and including year of assessment 2003, for a period of 5 consecutive years from the first year of assessment in which he or she is resident in Singapore; | | (b) | if the individual is resident in Singapore in year of assessment 2004, but is not resident in Singapore in year of assessment 2003, for a period of 5 consecutive years from year of assessment 2004; | | (c) | if the individual is resident in Singapore in year of assessment 2005, but is not resident in Singapore in years of assessment 2003 and 2004, for a period of 5 consecutive years from year of assessment 2005; | | (d) | if the individual is resident in Singapore in any year of assessment between the years of assessment 2006 and 2020 (both years inclusive), but is not resident in Singapore for all the 3 years of assessment immediately preceding that year of assessment, for a period of 5 consecutive years commencing from that year of assessment in which he or she is resident in Singapore. [32/2019] |
|
| (4) The Comptroller may, subject to subsection (4A) and such terms and conditions as the Comptroller may impose, approve the application of an individual to be an NOR individual. [32/2019] |
| (4A) No approval under subsection (4) may be granted for any application made on or after 1 January 2025. [32/2019] |
| (5) Where an individual has been approved as an NOR individual, approval must not be given under subsection (4) before the expiry of the period he or she is an NOR individual. |
(5A) Where —| (a) | an individual has been approved as an NOR individual before the year of assessment 2009; | | (b) | the period of the individual’s approval has not expired at the beginning of that year of assessment; and | | (c) | the individual has had income exempted from tax under this section in force immediately before 16 December 2008 for any year of assessment between the year of assessment 2005 and the year of assessment 2008 (both years inclusive), |
| then the individual may, at any time at or before filing with the Comptroller a return of his or her income for the year of assessment 2009, elect to continue to be subject to subsections (1) and (7) in force immediately before 16 December 2008; and in that event subsections (1) and (7) in force immediately before that date continue to apply to the individual for so long as he or she remains an NOR individual. |
|
| (6) Any election made under subsections (1) and (5A) and any approval granted under subsection (4) are irrevocable. |
(7) In this section —| “apportioned employment income”, in relation to an NOR individual, means total gains or profits from the exercise of any employment in Singapore by the NOR individual after deducting relevant employment income; |
| “NOR individual” means any individual who is for the time being approved as an NOR individual under subsection (4); |
| “notional tax payable”, in relation to gains or profits from the exercise of any employment in Singapore by an individual, apportioned employment income or readjusted apportioned employment income (as the case may be) means the amount of tax computed in accordance with the rates specified in Part A of the Second Schedule in respect of gains or profits from the exercise of any employment in Singapore by the individual, apportioned employment income or readjusted apportioned employment income (as the case may be) before any deduction under sections 37 and 39; |
| “obligatory” means required under any foreign written law; |
“relevant amount”, in relation to an NOR individual, means —| (a) | nil if A ≥ B; or | | (b) | B ‑ A if A < B, | | is the total amount of contributions made by the employer in respect of the NOR individual to any obligatory pension or provident fund constituted outside Singapore and for which the amount is not deemed as income accruing to the NOR individual under section 10B(11); and |
| | | is the amount of contribution which would have been required to be made by the employer under section 7 of the Central Provident Fund Act 1953 if the NOR individual were an employee and a citizen of Singapore; |
|
|
|
|
“relevant employment income”, in relation to an NOR individual, means — | | is the number of days in the year preceding that year of assessment for which the NOR individual is not physically present in Singapore by reason of the exercise of any employment in Singapore; |
| | | is the number of days in the year preceding that year of assessment for which the NOR individual exercises any employment in Singapore; and |
| | | is the gains or profits from the exercise of any employment in Singapore by the NOR individual referred to in section 10(2)(a), (6) and (7), but excluding — |
| | | | | (b) | where any amount of tax of the NOR individual payable in Singapore is borne, directly or indirectly, by his or her employer, the amount of tax that is so borne. |
|
|
|
[13N |
|
|
| Exemption of income of foreign account of philanthropic purpose trust |
13L.—(1) There is exempt from tax such income derived from —| (a) | any funds or assets in any foreign account of a philanthropic purpose trust constituted on or after 18 February 2005 and administered by a trustee company in Singapore; and | | (b) | any funds or assets of an eligible holding company established for the purposes of that philanthropic purpose trust which are held for the foreign account of that trust, |
| as the Minister may by regulations prescribe. |
| (2) Regulations made under subsection (1) may provide for the deduction of expenses, allowances and losses relating to a foreign account of a philanthropic purpose trust or an eligible holding company established for the purposes of a philanthropic purpose trust, otherwise than in accordance with this Act. |
(3) In this section —“eligible holding company” means a company —| (a) | which is incorporated outside Singapore; | | (b) | which is set up to hold assets of a philanthropic purpose trust administered by a trustee company; | | (c) | whose operations consist solely of trading or making investments for the purpose of the philanthropic purpose trust; | | (d) | which does not claim any relief under any arrangement made under section 49 or any tax credit under section 50A; and | | (e) | all the shares of which are held by the trustees of the philanthropic purpose trust or by their nominee; |
|
“foreign account”, in relation to a philanthropic purpose trust, means an account into which funds or assets are injected solely by settlors who or which are —| (a) | individuals that are neither citizens of Singapore nor resident in Singapore, unless the Minister otherwise by regulations prescribes; | | (b) | companies each of which —| (i) | is neither incorporated nor resident in Singapore; | | (ii) | does not have a permanent establishment in Singapore other than a trustee company referred to in subsection (1)(a); | | (iii) | does not in the basis period —| (A) | in the case of any year of assessment before 2021, carry on a business in Singapore; or | | (B) | in the case of the year of assessment 2021 or a subsequent year of assessment, carry on a business in Singapore or outside Singapore; |
| | (iv) | does not beneficially own more than 20% of the total number of the issued shares of any company incorporated in Singapore; | | (v) | does not have 20% or more of the total number of its issued shares beneficially owned, directly or indirectly, by a company which —| (A) | has a permanent establishment in Singapore other than a trustee company referred to in subsection (1)(a); | | (B) | carries on in the basis period —| (BA) | in the case of any year of assessment before 2021, a business in Singapore; or | | (BB) | in the case of the year of assessment 2021 or a subsequent year of assessment, a business in Singapore or outside Singapore; or |
| | (C) | beneficially owns more than 20% of the total number of the issued shares of any company incorporated in Singapore; and |
| | (vi) | has —| (A) | if it has no more than 50 shareholders, all of its issued shares beneficially owned, directly or indirectly, by persons who are neither citizens of Singapore nor resident in Singapore; or | | (B) | if it has more than 50 shareholders, not less than 95% of the total number of its issued shares beneficially owned, directly or indirectly, by persons who are neither citizens of Singapore nor resident in Singapore; |
|
| | (c) | foreign trusts; | | (d) | other philanthropic purpose trusts that inject funds or assets from their foreign accounts; or | | (e) | any other persons that are neither —| (i) | resident in Singapore; nor | | (ii) | constituted or registered under any written law in Singapore; |
|
|
| “foreign trust” has the meaning given by section 13F; |
“philanthropic purpose trust” means a trust established in writing under any law for a purpose which is for the public benefit and which falls within any of the following descriptions of purposes:| (a) | the prevention or relief of poverty; | | (b) | the advancement of education; | | (c) | the advancement of religion; | | (d) | the advancement of health; | | (e) | the advancement of citizenship or community development; | | (f) | the advancement of the arts, heritage or science; | | (g) | the advancement of environmental protection or improvement; | | (h) | the relief of those in need by reason of youth, age, ill health, disability, financial hardship or other disadvantage; | | (i) | the advancement of animal welfare; | | (j) | the advancement of any sport which involves physical skill and exertion; | | (k) | any other purpose beneficial to the community; |
|
| “trustee company” has the meaning given by section 43G(2). [32/2019] |
|
| (4) The Minister or an authorised body may in any particular case waive any requirement referred to in paragraph (b)(ii) to (v) of the definition of “foreign account” in subsection (3). [Act 41 of 2020 wef 06/12/2022] |
(5) This section does not apply to —| (a) | a trust that is constituted on or after 1 January 2025; | | (b) | a company that is incorporated on or after 1 January 2025; | | (c) | a trust that —| (i) | is constituted before 1 January 2025; and | | (ii) | in the basis period in which 31 December 2024 falls, is not a philanthropic purpose trust that —| (A) | has a foreign account; and | | (B) | is administered by a trustee company in Singapore; or |
|
| | (d) | a company —| (i) | is incorporated before 1 January 2025; and | | (ii) | in the basis period in which 31 December 2024 falls, is not an eligible holding company established for the purposes of a philanthropic purpose trust which satisfies the requirements in paragraph (c)(ii)(A) and (B). [37/2014; 32/2019] |
|
|
| (6) Where, in any basis period beginning on or after 1 January 2025, a trust or company does not satisfy the applicable requirement referred to in subsection (7), then this section does not apply to the trust or company for the year of assessment to which that basis period relates, and for every subsequent year of assessment even if that requirement is satisfied in the basis period for the subsequent year of assessment. [37/2014; 32/2019] |
(7) In subsection (6), the requirement is —| (a) | in the case of the trust, that it is a philanthropic purpose trust that has a foreign account and is administered by a trustee company in Singapore; or | | (b) | in the case of the company, that it is an eligible holding company established for the purposes of a philanthropic purpose trust which satisfies all of the requirements in paragraph (a). [37/2014] |
|
| (8) Where, in any basis period beginning on or after 1 January 2025, the trustee company which administers a philanthropic purpose trust fails to comply with any of the regulations under subsection (1), then this section does not apply to the trust or the eligible holding company established for the purposes of the trust for the year of assessment to which that basis period relates, and for every subsequent year of assessment even if those regulations are satisfied in the basis period for the subsequent year of assessment. [13O [37/2014; 32/2019] |
|
| Exemption of income derived from asset securitisation transaction |
| 13M.—(1) There is exempt from tax, subject to such conditions as may be prescribed by regulations, income derived by an approved securitisation company resident in Singapore from asset securitisation transaction entered into during the period from 27 February 2004 to 31 December 2028 (both dates inclusive). [45/2018] [Act 30 of 2023 wef 30/10/2023] | (2) Regulations made under subsection (1) may provide for the deduction of expenses, allowances and losses of an approved securitisation company otherwise than in accordance with this Act. |
| (3) Despite anything in this section, where it appears to the Comptroller that any income of an approved securitisation company which has been exempted from tax under subsection (1) ought not to have been so exempted for any year of assessment, the Comptroller may, at any time within 4 years after the expiry of that year of assessment, make such assessment or additional assessment upon the company as may appear to be necessary in order to make good any loss of tax. |
| (3A) Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if an assessment under subsection (3) were a notice of assessment. |
(4) In this section —| “approved securitisation company” means a company incorporated in Singapore principally to conduct asset securitisation transaction and is approved by the Minister or an authorised body; [Act 41 of 2020 wef 06/12/2022] |
| “asset securitisation transaction” means the acquisition of assets (other than immovable property in Singapore) or risks by an approved securitisation company where the acquisition of such assets or risks is funded through the issuance of asset‑backed securities by the company. [13P |
|
|
| Exemption of relevant income of prescribed locally‑administered trust |
13N.—(1) There is exempt from tax all relevant income of —| (a) | such locally‑administered trust as the Minister may by regulations prescribe; and | | (b) | a holding company established for the purposes of such trust, as the Minister may by regulations prescribe. |
| (2) Where any relevant income of a prescribed locally‑administered trust is exempt from tax under subsection (1) in any year of assessment, the share of such income to which any beneficiary of the locally‑administered trust is entitled to receive for that year of assessment is also exempt from tax. |
(3) In this section —“locally‑administered trust” means a trust administered by a trustee company in Singapore —| (a) | every settlor of which is an individual; | | (b) | every beneficiary of which is an individual or a charitable institution, trust or body of persons established for charitable purposes only; and | | (c) | at least one of the beneficiaries of which is not a settlor of the trust; |
|
“relevant income” means —| (a) | any income of the kinds referred to in section 13(1)(zd), (ze), (zf), (zh), (zi), (zj), (zk) or (zl) accrued in or derived from Singapore on or after 17 February 2006; or | | (b) | any income of the kinds referred to in section 13(7A) received in Singapore on or after 17 February 2006 excluding, in respect of a prescribed locally‑administered trust, any dividend received by the trust from a prescribed holding company not resident in Singapore, if the dividend is paid out of income that is not the relevant income of the holding company; |
|
| “trustee company” has the meaning given by section 43G(2). |
|
(4) This section does not apply to —| (a) | a trust that is constituted on or after 1 January 2025; | | (b) | a company that is incorporated on or after 1 January 2025; | | (c) | a trust that —| (i) | is constituted before 1 January 2025; and | | (ii) | in the basis period in which 31 December 2024 falls, is not a locally‑administered trust prescribed under subsection (1) (called in this subsection and subsection (6) a prescribed trust); or |
| | (d) | a company that —| (i) | is incorporated before 1 January 2025; and | | (ii) | in the basis period in which 31 December 2024 falls, is not a holding company established for the purposes of a prescribed trust, and prescribed under subsection (1). [37/2014; 32/2019] |
|
|
| (5) Where, in any basis period beginning on or after 1 January 2025, a trust or company does not satisfy the requirement referred to in subsection (6), then this section does not apply to the trust or company for the year of assessment to which that basis period relates, and for every subsequent year of assessment even if the requirement is satisfied in the basis period for the subsequent year of assessment. [37/2014; 32/2019] |
(6) In subsection (5), the requirement is —| (a) | in the case of the trust, that it is a prescribed trust; or | | (b) | in the case of the company, that it is a holding company established for the purposes of a prescribed trust, and prescribed under subsection (1). [37/2014] |
|
| (7) Where, in any basis period beginning on or after 1 January 2025, the trustee company which administers a locally‑administered trust fails to comply with any of the regulations made under subsection (1), then this section does not apply to the trust or the holding company established for the purposes of the trust for the year of assessment to which that basis period relates, and for every subsequent year of assessment even if those regulations are satisfied in the basis period for the subsequent year of assessment. [13Q [37/2014; 32/2019] |
|
| Exemption of income of company incorporated and resident in Singapore arising from funds managed by fund manager in Singapore |
13O.—(1) Subject to such conditions as may be prescribed by regulations or specified in the letter of approval of the company, there is exempt from tax such income as the Minister may by regulations prescribe of a company incorporated and resident in Singapore and approved by the Minister or an authorised body (called in this section an approved company) arising from funds managed —| (a) | in Singapore by a fund manager; or | | (b) | by a person approved by the Minister or authorised body. [Act 41 of 2020 wef 06/12/2022] |
| (1A) The approval of a person under subsection (1) is subject to such conditions as the Minister may impose. |
| (2) No approval may be granted under subsection (1) after 31 December 2024. [37/2014; 32/2019] |
(3) Where —| (a) | income of any approved company has been exempt from tax under subsection (1) in any year of assessment; and | | (b) | a person (called in this section the relevant owner), either alone or together with the relevant owner’s associates, beneficially owns on the relevant day issued securities of the approved company the value of which is more than the prescribed percentage of the total value of all issued securities of the approved company on the relevant day, |
| then the relevant owner is liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the formula |
| | is the percentage which the value of the issued securities of the approved company beneficially owned on the relevant day by the relevant owner bears to the total value of all issued securities of the approved company on the relevant day; |
| | | is the amount of income of the approved company as reflected in the audited account of the approved company for the basis period relating to that year of assessment; and |
| | | is the tax rate specified in section 43(1)(a) applicable to that year of assessment. |
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(4) Subsection (3) does not apply to a relevant owner if —| (a) | the Comptroller permits the relevant owner to take steps to reduce the ownership of the issued securities by the relevant owner or the relevant owner’s associates within such period as the Comptroller may specify, being a period of no more than 3 months from the relevant day; and | | (b) | by the end of the specified period, the value of the issued securities beneficially owned by the relevant owner together with the relevant owner’s associates is no more than the prescribed percentage of the total value of all issued securities of the approved company on the relevant day. |
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(5) Despite subsection (3), where —| (a) | income of any approved company has been exempt from tax under subsection (1) in any year of assessment; | | (b) | a person, either alone or together with the person’s associates, beneficially owns on the relevant day any issued securities of the approved company; and | | (c) | the person mentioned in paragraph (b) is a non‑bona fide entity, |
| then the person mentioned in paragraph (b) is not liable to pay the penalty referred to in subsection (3); but a person (called in this section the liable person) who — |
| (d) | beneficially owns on the relevant day equity interests of the person mentioned in paragraph (b); and | | (e) | is not himself, herself or itself a non‑bona fide entity, |
| is liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the formula specified in subsection (5A), if, and only if, the total of — |
| (f) | the value of the equity interests of the approved company beneficially owned by the liable person on the relevant day; and | | (g) | the value of the equity interests of the approved company beneficially owned by the associates of the liable person on the relevant day, |
| exceeds the prescribed percentage of the total value of all the equity interests of the approved company on that day. |
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(5A) The formula for the penalty referred to in subsection (5) is as follows: | | is the percentage which the value of the equity interests of the approved company beneficially owned on the relevant day by the liable person bears to the total value of all equity interests of the approved company on the relevant day; |
| | | is the amount of income of the approved company as reflected in the audited account of the approved company for the basis period relating to that year of assessment; and |
| | | is the tax rate applicable to that year of assessment as specified in section 43(1)(a). |
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| (5B) Subsection (4) applies, with the necessary modifications, to the liable person as it applies to a relevant owner as if the reference to subsection (3) is a reference to subsection (5). |
(6) For the purposes of subsections (5)(d), (f) and (g) and (5A), if —| (a) | a person beneficially owns (including by virtue of one or more applications of this subsection) equity interests of a person (called in this subsection a first level entity); and | | (b) | the first level entity beneficially owns equity interests of another person (called in this subsection a second level entity), |
| then the firstmentioned person is taken to beneficially own equity interests of the second level entity; and the percentage which the value of those equity interests bears to the total value of all equity interests of the second level entity is computed in accordance with the formula |
| | is the percentage which the value of equity interests of the first level entity beneficially owned by the firstmentioned person bears to the total value of all equity interests of the first level entity; and |
| | | is the percentage which the value of equity interests of the second level entity beneficially owned by the first level entity bears to the total value of all equity interests of the second level entity. |
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| (6A) The Minister an authorised body may at any time, in the discretion of the Minister or authorised body and subject to such conditions as the Minister or authorised body may impose, remit or refund, wholly or in part, the penalty that is payable or paid by a person under subsection (3) or (5); and section 92(2B) to (2E) applies, with the necessary modifications, to any non‑compliance with any such condition as it applies to the non‑compliance with a condition imposed under section 92(2). [37/2014] [Act 41 of 2020 wef 06/12/2022] |
(7) Regulations made under this section may —| (a) | provide for the determination of the amount of income of any approved company to be exempt from tax; | | (b) | provide for the circumstances under which a person would be considered to be an associate for the purposes of this section; | | (c) | exempt any person or class of persons from subsection (3) or (5); and | | (d) | make provision generally for giving full effect to or for carrying out the purposes of this section. |
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(8) In this section —“equity interest” means —| (a) | in relation to a company, any issued security of that company; or | | (b) | in relation to a person other than a company, such right or interest as may be prescribed; |
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“issued securities”, in relation to a company, means —| (a) | issued debentures of, or issued stocks or shares in, the company; | | (b) | any right, option or derivative in respect of any such debentures, stocks or shares; or | | (c) | such other securities of the company as may be prescribed; |
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“non‑bona fide entity” means a person not resident in Singapore (excluding a permanent establishment in Singapore) who —| (a) | is set up solely for the purpose of avoiding or reducing payment of tax or penalty under this Act; or | | (b) | does not carry out any substantial business activity for a genuine commercial reason; |
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“relevant day” means —| (a) | the last day of the basis period of the approved company for the year of assessment referred to in subsection (3) or (5), as the case may be; or | | (b) | if within that basis period the approved company ceases to be so approved, the last day it was so approved; |
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“value” —| (a) | in relation to issued securities of a company other than those prescribed under paragraph (c) of the definition of “issued securities”, means —| (i) | where the relevant day is before 1 April 2014, the value of those securities at the time of their issue by the company; and | | (ii) | where the relevant day falls on or after 1 April 2014, the net asset value of those securities as at the relevant day; or |
| | (b) | in relation to issued securities of a company prescribed under paragraph (c) of the definition of “issued securities”, means —| (i) | where the relevant day is before 1 April 2014, the value of those securities at the prescribed time; and | | (ii) | where the relevant day falls on or after 1 April 2014, the net asset value of those securities as at the relevant day. [37/2014; 2/2016] |
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| (9) The Minister may by regulations make such transitional and saving provisions as the Minister may consider necessary or expedient in relation to the repeal of section 13R of this Act as in force immediately before 1 September 2007. [13R |
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| Exemption of income of shipping investment enterprise |
13P.—(1) Subject to subsections (1G) and (4), there is exempt from tax the income derived by an approved shipping investment enterprise —| (a) | before 25 March 2016 from the chartering or finance leasing of any seagoing ship, acquired by the approved shipping investment enterprise before or during the period of its approval referred to in subsection (3), to —| (i) | a person who is neither resident in Singapore nor a permanent establishment in Singapore; or | | (ii) | an approved international shipping enterprise, |
| for use outside the limits of the port of Singapore; |
| | (b) | before 25 March 2016 from the chartering or finance leasing of any seagoing Singapore ship, acquired by the approved shipping investment enterprise before or during the period of its approval referred to in subsection (3), to a shipping enterprise within the meaning of section 13A for use outside the limits of the port of Singapore; | | (c) | before 25 March 2016, for the year of assessment 2009 and subsequent years of assessment, from foreign exchange and risk management activities which are carried out in connection with and incidental to the activities referred to in paragraphs (a) and (b); | | (ca) | on or after 25 March 2016 from the chartering or finance leasing of any seagoing ship acquired by the approved shipping investment enterprise before or during the period of its approval mentioned in subsection (3), for use outside the limits of the port of Singapore; | | (cb) | on or after 25 March 2016 from foreign exchange and risk management activities which are carried out in connection with and incidental to any activity mentioned in paragraph (ca); | | (cc) | on or after 12 December 2018 from the chartering or finance leasing by the approved shipping investment enterprise of any seagoing ship, for use by the lessee outside the limits of the port of Singapore, if the ship was —| (i) | acquired by an approved related party before or during the period of its approval under subsection (3); and | | (ii) | chartered, or leased under a finance lease, by the approved related party to the approved shipping investment enterprise; |
| | (cd) | on or after 12 December 2018 from foreign exchange and risk management activities that are carried out in connection with and incidental to an activity mentioned in paragraph (cc); and | | (d) | on or after 1 June 2011 from —| (i) | the sale of a seagoing ship; | | (ii) | the assignment to another of all its rights as the buyer under a contract for the construction of a seagoing ship; or | | (iii) | the sale of all of the issued ordinary shares in a special purpose company of the approved shipping investment enterprise where, at the time of the sale of the shares, the special purpose company owns any seagoing ship or is the buyer under a contract for the construction of any seagoing ship. [34/2016; 32/2019] |
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| (1A) Subsection (1), in relation to income referred to in paragraph (a), (b), (c), (ca) or (cb) of that subsection, continues to apply to a shipping investment enterprise the approval of which has expired or been withdrawn, but which continues to derive such income in relation to a seagoing ship acquired before or during the period of the approval, provided that the enterprise has by the date of the expiry or before the withdrawal, fulfilled all the conditions referred to in subsection (3); and any reference in this section to an approved shipping investment enterprise is to be construed accordingly. [34/2016] |
| (1B) In relation to income mentioned in subsection (1)(cc) or (cd), subsection (1) continues to apply to a shipping investment enterprise the approval of which has expired or been withdrawn, but that continues to derive such income, if both the shipping investment enterprise and the related party mentioned in subsection (1)(cc) have, by the date of the expiry or before the withdrawal, fulfilled all the conditions of their respective approvals under subsection (3). [32/2019] |
| (1C) For the purpose of subsection (1B), the shipping investment enterprise is treated under this section as an approved shipping investment enterprise. [32/2019] |
| (1D) Subsection (1)(ca) and (cc) does not apply to income derived on or after 12 December 2018 from the chartering or finance leasing of a seagoing ship that is acquired by the approved shipping investment enterprise or the approved related party by way of a finance lease entered into with an entity that was not an approved related party. [32/2019] |
| (1DA) Subsection (1)(ca) and (cc) also does not apply to any income derived by an approved shipping investment enterprise as part of a business of trading in seagoing ships or constructing seagoing ships for sale. [41/2020] |
| (1E) Subsections (1)(cc) and (cd) and (1B) apply to income derived by an approved shipping investment enterprise in relation to a ship acquired by the related party before the period of the approval of the related party, if and only if the approved shipping investment enterprise is approved on or after 1 April 2008. [32/2019] |
(1F) Subsection (1)(d) does not apply to —| (a) | any income of an approved shipping investment enterprise derived before 12 December 2018 as a lessor of a seagoing ship under a finance lease that is treated as a sale under section 10C; or | | (b) | any income of an approved shipping investment enterprise that is derived as part of a business of trading in seagoing ships or of constructing seagoing ships for sale. [32/2019; 41/2020] |
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| (1G) Subsections (1) and (1A) apply to income derived by an approved shipping investment enterprise in relation to a seagoing ship acquired before the period of its approval, if and only if the enterprise is approved on or after 1 April 2008. [32/2019] |
| (2) The Minister or an authorised body may, at any time between 1 March 2006 and 31 December 2026 (both dates inclusive), approve a shipping investment enterprise or a related party of an approved shipping investment enterprise for the purposes of subsection (1). [37/2014; 2/2016; 32/2019; 41/2020] [Act 41 of 2020 wef 12/04/2024] |
(3) The approval under subsection (2) is subject to such conditions as the Minister may specify, and is —| (a) | where the approval is granted during the period between 1 March 2006 and 28 February 2011 (both dates inclusive), for such period not exceeding 10 years, as the Minister may specify; and | | (b) | where the approval is granted during the period between 1 March 2011 and 31 December 2026 (both dates inclusive), for such period not exceeding 5 years, as the Minister may specify, |
| except that the Minister may extend the period so specified for such further periods as the Minister thinks fit. |
[37/2014; 2/2016; 41/2020] |
| (3A) A reference to the Minister in subsection (3), in the case of an approval granted on or after the date of commencement of section 5(1)(a) of the Income Tax (Amendment) Act 2021, includes the authorised body. [Act 27 of 2021 wef 12/04/2024] |
(4) The Minister or an authorised body may, in respect of any seagoing ship or class of seagoing ships, specify the period during which the income of the seagoing ship or class of seagoing ships may be exempted from tax under subsection (1) not exceeding —| (a) | in the case of any ship used for the carriage of goods or passengers, towage or salvage, a period of 30 years; or | | (b) | in the case of any dredger, seismic ship or any ship used for offshore oil or gas activity, offshore renewable energy activity or offshore mineral activity, a period of 40 years. [34/2016] [Act 41 of 2020 wef 12/04/2024] |
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(5) In determining the amount of the income of an approved shipping investment enterprise which is exempted under subsection (1), the allowances provided for in sections 16, 17, 18, 18B, 18C, 19, 19A, 20, 21, 22 and 23, other than allowances made to a lessee of a seagoing ship under regulations made under section 10C —| (a) | must be taken into account even if no claim for those allowances has been made; and | | (b) | may only be deducted against the income referred to in subsection (1), and the balance of those allowances is not available as a deduction against any other income, except that any balance remaining unabsorbed at the end of the tax exempt period of the enterprise is available as a deduction against any other income for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 23. |
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(6) Where an approved shipping investment enterprise incurs a loss during the tax exempt period in respect of any activity referred to in paragraphs (a), (b), (c), (ca), (cb), (cc) and (cd) of subsection (1), that loss —| (a) | must be deducted in accordance with section 37; and | | (b) | may only be deducted against the income referred to in any of those paragraphs, and the balance of such loss is not available as a deduction against any other income, except that any balance remaining unabsorbed at the end of the tax exempt period is available as a deduction against any other income for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 37. [34/2016; 32/2019] |
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| (6A) Where an approved shipping investment enterprise incurs a loss on any sale or assignment mentioned in subsection (1)(d) in any basis period falling, in whole or in part, within the tax exempt period, that loss may only be deducted against the gains derived from another sale or assignment mentioned in subsection (1)(d) in that same basis period, and the balance of the loss is not available as a deduction against any other income. |
| (7) The Comptroller must for each year of assessment for which the income of an approved shipping investment enterprise is exempt from tax under subsection (1) issue to the enterprise a statement (to be included in a notice of any assessment served on the enterprise under section 76) showing the amount of income exempt from tax under subsection (1); and Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if such statement were a notice of assessment. |
| (8) Where any statement issued to an approved shipping investment enterprise under subsection (7) has become final and conclusive, the amount of income shown in the statement does not form part of the statutory income of the enterprise for the year of assessment to which the statement relates and is exempt from tax. |
| (9) [Deleted by Act 19 of 2013] |
| (10) [Deleted by Act 19 of 2013] |
| (11) [Deleted by Act 19 of 2013] |
| (12) [Deleted by Act 19 of 2013] |
| (13) [Deleted by Act 19 of 2013] |
| (14) [Deleted by Act 19 of 2013] |
| (15) [Deleted by Act 19 of 2013] |
| (16) [Deleted by Act 19 of 2013] |
| (17) An approved shipping investment enterprise must deliver to the Comptroller a statement of the account made up to any date specified by the Comptroller whenever called upon to do so by written notice. |
| (18) Despite anything in this section, where it appears to the Comptroller that any income of an approved shipping investment enterprise which has been exempted from tax under subsection (1) ought not to have been so exempted for any year of assessment, the Comptroller may, at any time within 4 years after the expiry of that year of assessment, make such assessment or additional assessment upon the enterprise as may appear to be necessary in order to make good any loss of tax. |
| (19) Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if an assessment under subsection (18) were a notice of assessment. |
| (19A) [Deleted by Act 2 of 2016] |
(20) In this section —| “approved international shipping enterprise” means an international shipping enterprise 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 12/04/2024] |
| “finance leasing” means the leasing of any seagoing ship (including any arrangement or agreement in connection with such leasing) which has the effect of transferring substantially the obsolescence, risks or rewards incidental to ownership of the seagoing ship to the lessee; |
| “international shipping enterprise” has the meaning given by section 13E(6); |
| “registered business trust” has the meaning given by the Business Trusts Act 2004; |
“related party”, in relation to an approved shipping investment enterprise, means —| (a) | any entity that is related to the approved shipping investment enterprise in such manner as may be prescribed by rules made under section 7; or | | (b) | any other entity that is approved by the Minister or authorised body in any particular case to be a related party of the approved shipping investment enterprise; [Act 27 of 2021 wef 12/04/2024] |
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| “ship” has the meaning given by section 2(1) of the Merchant Shipping Act 1995; |
“shipping investment enterprise” means —| (a) | a company incorporated and resident in Singapore; or | | (b) | a registered business trust; |
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| “Singapore ship” has the meaning given by section 13A(16); |
| “special purpose company”, in relation to an approved shipping investment enterprise, means a company that is wholly‑owned by the enterprise and whose only business or intended business is the chartering or finance leasing of seagoing ships; |
“tax exempt period”, in relation to an approved shipping investment enterprise, means —| (a) | in a case where the enterprise is approved on or after 1 April 2008 and —| (i) | acquired; or | | (ii) | chartered, or leased under a finance lease, from a related party, |
| a seagoing ship for use outside the limits of the port of Singapore before the date of approval of the enterprise — the period from the date of that approval to the date where no income of any seagoing ship of that enterprise is eligible for exemption from tax under subsection (1) (both dates inclusive); or |
| | (b) | in any other case — the period from the date the enterprise —| (i) | first acquired; or | | (ii) | first chartered, or leased under a finance lease, from a related party, |
| during the period of approval of the enterprise, a seagoing ship for use outside the limits of the port of Singapore, to the date where no income of any seagoing ship of that enterprise is eligible for exemption from tax under subsection (1) (both dates inclusive). |
[2/2016; 32/2019; 27/2021] |
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| (21) Rules made for the purpose of the definition of “related party” in subsection (20) may be made to take effect from (and including) 12 December 2018. [13S [32/2019] |
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| Exemption of trust income to which beneficiary is entitled |
13Q.—(1) Where any beneficiary of a trust who is resident in Singapore is entitled to any share of the statutory income of the trust, that share is exempt from tax in the beneficiary’s hands if it would have been exempt from tax under any provision of this Part had it been derived or received directly by the beneficiary rather than the trustee.(2) This section does not apply to —| (a) | any income of a real estate investment trust within the meaning of section 43(10); | | (b) | any income of a designated unit trust within the meaning of section 35(14); | | (c) | [Deleted by Act 37 of 2014] | | (d) | any income of a trust fund prescribed under section 13C; | | (e) | any income of a foreign trust specified under section 13F; | | (f) | any income of a locally‑administered trust prescribed under section 13N; | | (g) | any income of a trust the trustee of which is a prescribed person under section 13D; or | | (h) | any income of an approved trust fund referred to in the definition of “approved person” under section 13U(5), or of a trust fund that is a feeder fund or master fund approved under section 13U. [13T [37/2014] |
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| Exemption of estate income received by beneficiary, etc. |
| 13QA. Where a person resident in Singapore is a beneficiary of an estate administered in Singapore, and any share of the statutory income of the estate is received by, distributed to or applied to the benefit of that person, that share is exempt from tax in the person’s hands if it would have been exempt from tax under any provision of this Part had it been derived or received directly by that person instead of the executor of the estate. [Act 30 of 2023 wef 30/10/2023] |
| Exemption of income of not‑for‑profit organisation |
13R.—(1) There is exempt from tax any income of an approved not‑for‑profit organisation.| (2) The Minister or an authorised body may, during the period from 15 February 2007 to 31 December 2027 (both dates inclusive), approve any not‑for‑profit organisation for the purposes of subsection (1). [37/2014; 34/2016; 27/2021] [Act 41 of 2020 wef 12/04/2024] |
| (3) The approval under subsection (2) is subject to such conditions as the Minister or an authorised body may impose and is for such period not exceeding 10 years as the Minister or authorised body may specify. [Act 41 of 2020 wef 12/04/2024] |
| (4) Despite subsection (2), the period specified under subsection (3) may be extended on expiry by the Minister or an authorised body for such further period or periods, not exceeding 10 years at any one time, as the Minister or authorised body thinks fit. [Act 41 of 2020 wef 12/04/2024] |
| (5) The Minister may make regulations to provide for the deduction of expenses, allowances and losses of an approved not‑for‑profit organisation otherwise than in accordance with this Act. |
| (6) Despite subsection (1), where it appears to the Comptroller that any income of an approved not‑for‑profit organisation which has been exempted from tax under subsection (1) ought not to have been so exempted for any year of assessment, the Comptroller may at any time, subject to section 74, make such assessment or additional assessment on the approved not‑for‑profit organisation as may appear to be necessary in order to make good any loss of tax. |
| (6A) Any expenses, losses or allowances incurred or claimed by an approved not‑for‑profit organisation during the period of its approval under subsection (3) or (4) that remain unabsorbed at the end of that period, are not available as a deduction against any of its income for the year of assessment which relates to the basis period in which the approval of the approved not‑for‑profit organisation expires or is withdrawn, or any subsequent year of assessment. [27/2021] |
(7) In this section, “not‑for‑profit organisation” means any person, not being a person registered or exempt from registration under the Charities Act 1994 —| (a) | who is not established or operated for the object of deriving a profit; | | (b) | whose income and property —| (i) | may only be applied for the furtherance of its objects; and | | (ii) | are not distributable to any shareholder, member, trustee or officer of the person except as reasonable compensation for services rendered; and |
| | (c) | whose property may only be distributed to persons established for a similar object as that person’s upon that person’s dissolution. [13U |
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| Exemption of income derived by law practice from international arbitration held in Singapore |
13S.—(1) Any law practice intending to provide legal services in connection with any international arbitration may, from 1 July 2007 to 30 June 2017 (both dates inclusive), apply to the Minister, or such person as the Minister may appoint, for approval as an approved law practice.| (2) Where the Minister, or such person as the Minister may appoint, considers it expedient in the public interest to do so, the Minister or appointed person may approve the application and issue a letter to the law practice subject to such conditions as the Minister or appointed person thinks fit. |
| (2A) No approval under this section may be granted to any law practice which is approved on or after 1 April 2010 as a development and expansion company under Part 4 of the Economic Expansion Incentives (Relief from Income Tax) Act 1967 in respect of international services that qualify for zero‑rating under section 21(3) of the Goods and Services Tax Act 1993, and such approval remains in force. |
| (3) Every letter issued under subsection (2) must specify a date as the commencement day from which the approved law practice is entitled to tax relief under this section. |
| (4) The tax relief period of an approved law practice commences on its commencement day and continues for such period, not exceeding 5 years, as is specified in the letter issued to it under subsection (2). |
| (5) The amount of the income of an approved law practice which will qualify for the relief for any year of assessment is the excess of the total amount of the qualifying income of the approved law practice for the basis period for that year of assessment over its base income. |
| (6) Where an approved law practice has satisfied the conditions specified in the letter issued to it under subsection (2), one‑half of the amount of the income of the approved law practice for any year of assessment for a basis period that falls within the tax relief period which qualifies for the relief as ascertained under subsection (5) does not form part of the statutory income of the approved law practice for that year of assessment and is exempt from tax. |
| (6A) For the purpose of satisfying the Comptroller that its income qualifies for relief under this section, the approved law practice must provide, not later than 5 years after the end of its tax relief period, evidence of the place of hearing or intended place of hearing (as the case may be) of the international arbitration. |
| (7) Where an approved law practice is a law corporation, the exemption under section 43(6) or (6C) (as the case may be) does not apply to the balance of the qualifying income exceeding the base income of the approved law practice that is not exempt under subsection (6). [45/2018] |
(8) The base income mentioned in subsection (5) is —| (a) | where an approved law practice had in the period of 3 years immediately preceding the commencement day provided legal services in connection with any qualifying international arbitration —| (i) | the amount ascertained by dividing the total income derived from providing those legal services in the period by the actual number of years in the period in which those legal services were provided; or | | (ii) | if the amount ascertained under sub‑paragraph (i) is less than zero, deemed to be zero; or |
| | (b) | such amount as the Minister may specify. |
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| (9) The Comptroller must determine the manner and extent to which allowances under section 19, 19A, 20, 21, 22 or 23 and any expenses and losses allowable under this Act which are attributable to the qualifying income of an approved law practice are to be deducted. |
(10) In determining the qualifying income of an approved law practice for the basis period for any year of assessment, there are to be deducted from the income —| (a) | expenses allowable under this Act for that year of assessment which are attributable to that income; and | | (b) | any allowances for that year of assessment under section 19, 19A, 20, 21 or 22 attributable to that income even if no claim for those allowances has been made. |
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| (11) The Comptroller may require an auditor to certify the income derived by an approved law practice from legal services in connection with any qualifying international arbitration and any direct costs and expenses incurred therefor. |
| (12) Where an approved law practice has in any year of assessment during the tax relief period incurred any loss from providing legal services in connection with any qualifying international arbitration or any allowances attributable to the qualifying income remaining unabsorbed, 50% of the loss or allowances, in each case, is to be deducted as provided for in section 23 or 37 (as the case may be) and the balance is disregarded. |
| (13) [Deleted by Act 19 of 2013] |
| (14) [Deleted by Act 19 of 2013] |
(15) In this section —| “arbitral tribunal”, “award”, “international arbitration” and “party” have the meanings given by the International Arbitration Act 1994; |
| “client”, “foreign law practice”, “Formal Law Alliance”, “Joint Law Venture”, “law corporation” and “Singapore law practice” have the meanings given by the Legal Profession Act 1966; |
| “hearing” means a hearing by the arbitral tribunal on the substance of the dispute; |
| “law practice” means a Singapore law practice, foreign law practice, Formal Law Alliance or Joint Law Venture; |
“legal services in connection with any qualifying international arbitration” —| (a) | in relation to an approved law practice whose application for approval is made at any time between 1 July 2007 and 30 June 2012 (both dates inclusive), means any professional work of a legal nature provided for the purposes of an international arbitration during the eligible period by any lawyer of the law practice for its client who is a party to the arbitration the hearing of which is held in Singapore during its tax relief period or the period referred to in subsection (8)(a), as the case may be; or | | (b) | in relation to an approved law practice whose application for approval is made at any time between 1 July 2012 and 30 June 2017 (both dates inclusive), means any professional work of a legal nature provided for the purposes of an international arbitration during the eligible period by any lawyer of the law practice for its client who is a party to the arbitration the hearing of which is held or would (if there had been a hearing) have been held in Singapore; |
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| “qualifying income” means the income derived by an approved law practice from the provision of legal services in connection with any qualifying international arbitration. [37/2014] |
|
(16) For the purposes of the definition of “legal services in connection with any qualifying international arbitration” in subsection (15), “eligible period” means —| (a) | in relation to an approved law practice whose application for approval is made at any time between 1 July 2007 and 30 June 2012 (both dates inclusive), the period beginning on the initial date specified in sub‑paragraph (i) or (ii), whichever is applicable, and ending on the terminal date specified in sub‑paragraph (iii) or (iv), whichever is applicable:| (i) | where the client in question is the claimant serving the request for arbitration, the initial date is the date of issue of the request; | | (ii) | where the client in question is the respondent being served the request for arbitration, the initial date is the date of receipt of the request for arbitration by the client or law practice; | | (iii) | a terminal date which is the date on which the final award is made by the arbitral tribunal; | | (iv) | a terminal date which is the date on which the arbitration proceeding has otherwise finally terminated; or |
| | (b) | in relation to an approved law practice whose application for approval is made at any time between 1 July 2012 and 30 June 2017 (both dates inclusive), the period beginning on the initial date specified in sub‑paragraph (i) or (ii), whichever is applicable, and ending on the terminal date specified in sub‑paragraph (iii) or (iv), whichever is applicable:| (i) | where the client in question is the claimant serving the request for arbitration, the initial date is the date of issue of the request; | | (ii) | where the client in question is the respondent being served the request for arbitration, the initial date is the date of receipt of the request for arbitration by the client or law practice; | | (iii) | a terminal date which is the date on which the final award is made by the arbitral tribunal; | | (iv) | a terminal date which is the date on which the arbitration proceeding has otherwise finally terminated, whether or not there was a hearing. [13V |
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| Exemption of relevant income of eligible family‑owned investment holding company |
13T.—(1) There is exempt from tax all relevant income of an eligible family‑owned investment holding company.| (2) For the purposes of subsection (1), the Minister may make regulations to provide for the deduction of expenses, allowances and losses of an eligible family‑owned investment holding company otherwise than in accordance with this Act. |
(3) In this section —“eligible family‑owned investment holding company” means any company incorporated before 1 April 2013 —| (a) | whose shareholders are related to each other in the manner prescribed by regulations; | | (b) | whose operation consists wholly or mainly of the holding or making of investments; and | | (c) | which satisfies such other conditions as may be prescribed by regulations; |
|
“relevant income” means —| (a) | any income of the kinds referred to in section 13(1)(zd), (ze), (zf), (zh), (zi), (zj), (zk) or (zl) accrued in or derived from Singapore on or after 1 April 2008; or | | (b) | any income of the kinds referred to in section 13(7A) received in Singapore on or after 1 April 2008. |
|
|
| (4) Where a company fails to satisfy the definition of “eligible family‑owned investment holding company” in any basis period beginning on or after 1 April 2013, then this section does not apply to the company in any subsequent basis period, even if it satisfies the definition in that subsequent basis period. |
| (5) Subsection (1) ceases to apply with effect from the year of assessment 2024. [13W [39/2017] |
|
| Exemption of income arising from funds managed by fund manager in Singapore |
13U.—(1) Subject to such conditions as may be prescribed by regulations or specified in the letter of approval of the person, master fund, feeder fund, SPV, master‑feeder fund structure, master‑feeder fund‑SPV structure or master fund‑SPV structure, there is exempt from tax such income as the Minister may by regulations prescribe of —| (a) | an approved person arising from funds managed in Singapore by a fund manager; | | (b) | in relation to an approved master‑feeder fund structure —| (i) | a person (not being an individual, a body of persons or a Hindu joint family) that is an approved master fund or an approved feeder fund of the structure; | | (ii) | a partner of a partnership (including a limited partnership and a limited liability partnership), where the partnership is the approved master fund or an approved feeder fund of the structure; | | (iii) | a trustee of a trust fund where the trust fund is the approved master fund or an approved feeder fund of the structure; and | | (iv) | a taxable entity in relation to the approved master fund or an approved feeder fund of the structure, where the master fund or feeder fund is not a legal entity, |
| arising from funds of the master fund or any feeder fund of that structure, that are managed in Singapore by a fund manager; |
| | (c) | in relation to an approved master‑feeder fund‑SPV structure —| (i) | a company, a trustee of a trust fund or a partner of a limited partnership, where the company, trust fund or limited partnership is the approved master fund or an approved feeder fund of the structure; | | (ia) | a person (not being a company, an individual or a Hindu joint family) that is an approved feeder fund of the structure; | | (ib) | a partner of a partnership (excluding a limited partnership but including a limited liability partnership), where the partnership is an approved feeder fund of the structure; | | (ic) | a taxable entity in relation to an approved feeder fund of the structure, where the feeder fund is not a legal entity; | | (ii) | an approved 1st tier SPV of the structure; | | (iii) | an approved 2nd tier SPV of the structure; | | (iv) | an approved eligible SPV of the structure, where the eligible SPV is not one mentioned in sub‑paragraphs (v), (vi) and (vii); | | (v) | a partner of an approved eligible SPV of the structure, where the eligible SPV is a partnership (including a limited partnership and a limited liability partnership); | | (vi) | the trustee of an approved eligible SPV of the structure, where the eligible SPV is a trust fund; and | | (vii) | the taxable entity of an approved eligible SPV of the structure, where the eligible SPV is not a legal entity, |
| (viii) | the master fund; | | (ix) | any feeder fund; or | | (x) | any approved eligible SPV, |
| of that structure, that are managed in Singapore by a fund manager; or |
[Act 33 of 2022 wef 19/02/2019] | | (d) | in relation to an approved master fund‑SPV structure —| (i) | a company, a trustee of a trust fund or a partner of a limited partnership, where the company, trust fund or limited partnership is the approved master fund of the structure; | | (ii) | an approved 1st tier SPV of the structure; | | (iii) | an approved 2nd tier SPV of the structure; | | (iv) | an approved eligible SPV of the structure, where the eligible SPV is not one mentioned in sub‑paragraphs (v), (vi) and (vii); | | (v) | a partner of an approved eligible SPV of the structure, where the eligible SPV is a partnership (including a limited partnership and a limited liability partnership); | | (vi) | the trustee of an approved eligible SPV of the structure, where the eligible SPV is a trust fund; and | | (vii) | the taxable entity of an approved eligible SPV of the structure, where the eligible SPV is not a legal entity, |
| arising from funds of the master fund or of any approved eligible SPV of that structure, that are managed in Singapore by a fund manager. |
[2/2016; 45/2018; 32/2019] [Act 33 of 2022 wef 19/02/2019] |
| (2) Approval under subsection (1)(a) may be granted during the period from 1 April 2009 to 31 December 2024 (both dates inclusive). [37/2014; 32/2019] |
| (2A) Approval under subsection (1)(b) may be granted during the period from 7 July 2010 to 31 December 2024 (both dates inclusive). [37/2014; 32/2019] |
| (2B) Approval under subsection (1)(c)(i) and (d)(i) may be granted during the period from 1 April 2015 to 31 December 2024 (both dates inclusive). [32/2019] |
| (2C) Approval under subsection (1)(c)(ia), (ib) and (ic) may be granted during the period from 20 February 2018 to 31 December 2024 (both dates inclusive). [32/2019] |
| (2D) Approval under subsection (1)(c)(ii) and (iii) and (d)(ii) and (iii) may be granted during the period from 1 April 2015 to 18 February 2019 (both dates inclusive). [32/2019] |
| (2E) Approval under subsection (1)(c)(iv), (v), (vi) and (vii) and (d)(iv), (v), (vi) and (vii) may be granted during the period from 19 February 2019 to 31 December 2024 (both dates inclusive). [32/2019] |
| (3) Where the income of any approved person or person (including a company), trustee, partner, taxable entity, 1st tier SPV, 2nd tier SPV or eligible SPV referred to in subsection (1)(b), (c) or (d) is not exempt from tax under this section, sections 13C, 13D and 13O do not apply to that income despite anything in those provisions. [2/2016; 45/2018; 32/2019] |
(4) Regulations made under subsection (1) may —| (a) | provide for the determination of the amount of income of any approved person or person (including a company), trustee, partner, taxable entity, 1st tier SPV, 2nd tier SPV or eligible SPV referred to in subsection (1)(b), (c) or (d) to be exempt from tax; | | (b) | provide for the deduction of expenses, allowances and losses of any approved person or person (including a company), trustee, partner, taxable entity, 1st tier SPV, 2nd tier SPV or eligible SPV referred to in subsection (1)(b), (c) or (d) otherwise than in accordance with this Act; | | (c) | where the approved person is a partner of an approved partnership (including a limited partnership and a limited liability partnership), provide for the recovery of tax from the partner in a case where the exemption ought not to have been allowed to the partner due to non‑compliance with any condition imposed on the partnership, including the deeming of a specified amount as income of the partner for the year of assessment in which the Comptroller discovers the non‑compliance of the condition; | | (ca) | provide for the recovery of tax from a person (including a company), trustee, taxable entity, 1st tier SPV, 2nd tier SPV or eligible SPV referred to in subsection (1)(b), (c) or (d) in a case where the exemption ought not to have been allowed to the person due to non‑compliance with any condition imposed on the approved master‑feeder fund structure, approved master‑feeder fund‑SPV structure or approved master fund‑SPV structure, as the case may be; | | (cb) | provide for the recovery of tax from a partner of a partnership (including a limited partnership and a limited liability partnership) referred to in subsection (1)(b), (c) or (d) in a case where the exemption ought not to have been allowed to that partner due to non‑compliance with any condition imposed on the approved master‑feeder fund structure, approved master‑feeder fund‑SPV structure or approved master fund‑SPV structure (as the case may be), including the deeming of a specified amount as income of the partner for the year of assessment in which the Comptroller discovers the non‑compliance with the condition; and | | (d) | make provision generally for giving full effect to or for carrying out the purposes of this section. [2/2016; 45/2018; 32/2019] |
|
(5) In this section —| “1st tier SPV”, in relation to a master‑feeder fund‑SPV structure or a master fund‑SPV structure, means a special purpose vehicle wholly‑owned by the master fund of the structure; |
| “2nd tier SPV”, in relation to a master‑feeder fund‑SPV structure or a master fund‑SPV structure, means a special purpose vehicle wholly‑owned by a 1st tier SPV of the structure; |
| “approved” means approved by the Minister or an authorised body; [Act 41 of 2020 wef 06/12/2022] |
“approved person” means —| (a) | any approved person (not being an individual, a body of persons or a Hindu joint family); | | (b) | any partner of an approved partnership (including a limited partnership and a limited liability partnership); | | (c) | any trustee of an approved trust fund; or | | (d) | the taxable entity of an approved investment vehicle that is not a legal entity; |
|
| “designated unit trust” means any designated unit trust within the meaning of section 35(14) and whose income does not form part of the statutory income of its trustee by reason of section 35(12); |
“eligible SPV”, in relation to a master‑feeder fund‑SPV structure or a master fund‑SPV structure, means a special purpose vehicle where the net gains, profits or other benefits of all investments held by the vehicle are to go (whether directly or indirectly) to the master fund of the structure, or the master fund and one or more of the following:| (a) | a prescribed person under section 13D; | | (b) | an approved company under section 13O; | | (c) | an approved person, or an approved master fund, an approved feeder fund, an approved 1st tier SPV, an approved 2nd tier SPV or an approved eligible SPV of any structure mentioned in subsection (1); | | (d) | a prescribed sovereign fund entity or an approved foreign government‑owned entity under section 13V; | | (e) | a person (excluding an individual and a Hindu joint family) —| (i) | that is not resident in Singapore; | | (ii) | that does not have a permanent establishment in Singapore (other than a fund manager); | | (iii) | that does not carry on a business in Singapore; | | (iv) | that is not set up solely for the purpose of avoiding or reducing the payment of any tax or penalty under this Act; and | | (v) | that carries on outside Singapore substantial business activity for a genuine commercial reason; |
| | (f) | a trust fund —| (i) | the trustee of which is not resident in Singapore or a citizen of Singapore; | | (ii) | the trustee of which does not (in its capacity as such trustee) have a permanent establishment in Singapore other than a fund manager for that trust fund; | | (iii) | the trustee of which does not carry on any business in Singapore other than acting as such trustee; | | (iv) | the trustee of which (in its capacity as such trustee) carries on outside Singapore substantial business activity for a genuine commercial reason; and | | (v) | that is not set up solely for the purpose of avoiding or reducing the payment of any tax or penalty under this Act; |
| | (g) | a partnership (including a limited partnership and a limited liability partnership) —| (i) | none of the partners of which is resident in Singapore; | | (ii) | that does not have a permanent establishment in Singapore (other than a fund manager); | | (iii) | that does not carry on a business in Singapore; | | (iv) | that is not set up solely for the purpose of avoiding or reducing the payment of any tax or penalty under this Act; and | | (v) | that carries on outside Singapore substantial business activity for a genuine commercial reason; |
| | (h) | an investment vehicle that is not a legal person —| (i) | the taxable entity of which is the custodian of investments held by it; | | (ii) | the taxable entity of which is not a resident in Singapore or a citizen of Singapore; | | (iii) | the taxable entity of which (in its capacity as custodian of investments held by the investment vehicle) does not have a permanent establishment in Singapore other than a fund manager for that investment vehicle; | | (iv) | the taxable entity of which does not carry on any business in Singapore other than acting as such custodian; | | (v) | the taxable entity of which carries on outside Singapore substantial business activity for a genuine commercial reason; and | | (vi) | that is not set up solely for the purpose of avoiding or reducing the payment of any tax or penalty under this Act; |
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|
| “feeder fund” means an investment vehicle (whether or not a legal entity) that invests its funds, or whose funds are invested, substantially and directly through a single master fund; |
| “master‑feeder fund structure” means an arrangement comprising one or more feeder funds and the master fund through which the funds of the feeder fund or funds are substantially and directly invested; |
“master‑feeder fund‑SPV structure” means an arrangement comprising —| (a) | one or more feeder funds; | | (b) | the master fund through which the funds of the feeder fund or funds are substantially and directly invested; and | | (c) | one or more SPVs; |
|
“master fund‑SPV structure” means an arrangement comprising —| (a) | a master fund; and | | (b) | one or more SPVs; |
|
“master fund” —| (a) | in relation to a master fund‑SPV structure or master‑feeder fund‑SPV structure, means a company, a trust fund or a limited partnership; or | | (b) | in relation to a master‑feeder fund structure, means an investment vehicle (whether or not a legal entity), |
| that enables investors to invest funds in one or more underlying investments that are managed by a fund manager; |
|
| “real estate investment trust” has the meaning given by section 43(10); |
“special purpose vehicle” or “SPV” —| (a) | in relation to a master‑feeder fund‑SPV structure, means an investment vehicle whose only activity is the holding of investments for other investment vehicles or persons which must include the master and feeder funds of the structure; or | | (b) | in relation to a master fund‑SPV structure, means an investment vehicle whose only activity is the holding of investments for other investment vehicles or persons which must include the master fund of the structure; |
|
| “taxable entity”, in relation to an investment vehicle (including a master fund, a feeder fund and an SPV) that is not a legal entity, means the person to whom income from the investment vehicle accrues; |
| “trust fund” does not include any trust that is a pension or provident fund approved by the Comptroller under section 5, designated unit trust and real estate investment trust. [37/2014; 2/2016; 45/2018; 32/2019] |
|
(6) The following approvals may only be granted on or after 20 February 2018:| (a) | the approval, for the purposes of the definition of “approved person” in subsection (5), of —| (i) | a person other than a company; | | (ii) | a partnership, including a limited liability partnership but excluding a limited partnership; or | | (iii) | an investment vehicle that is not a legal entity (other than a trust fund); |
| | (b) | the approval, for the purpose of subsection (1)(b), of any of the following as a master fund or feeder fund:| (i) | a person that is not a company; | | (ii) | a partnership, including a limited liability partnership but excluding a limited partnership; | | (iii) | an investment vehicle that is not a legal entity (other than a trust fund). [13X [45/2018; 32/2019] |
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| Exemption of certain income of prescribed sovereign fund entity and approved foreign government‑owned entity |
13V.—(1) There is exempt from tax such income as the Minister may by regulations prescribe of —| (a) | a prescribed sovereign fund entity arising from its funds that are managed in Singapore by an approved foreign government‑owned entity; and | | (b) | an approved foreign government‑owned entity arising from its funds that are managed in Singapore, and from managing in Singapore the funds of, or providing in Singapore any investment advisory service to, a prescribed sovereign fund entity. |
| (2) The Minister or an authorised body may, at any time between 1 April 2010 and 31 December 2024 (both dates inclusive), approve a foreign government‑owned entity for the purpose of subsection (1). [37/2014; 32/2019] [Act 41 of 2020 wef 06/12/2022] |
(3) Regulations made under subsection (1) may —| (a) | provide for the period of each approval, and that the conditions to which any approval is subject may be stated in the letter of approval issued to the foreign government‑owned entity; | | (aa) | provide for renewal of an approval; | | (b) | provide for the determination of the amount of income of a prescribed sovereign fund entity or an approved foreign government‑owned entity that is exempt from tax; | | (c) | provide for the deduction of expenses, allowances and losses of a prescribed sovereign fund entity or an approved foreign government‑owned entity otherwise than in accordance with this Act; and | | (d) | make provision generally for giving full effect to or for carrying out the purposes of this section. [37/2014] |
|
(4) In this section —“foreign government‑owned entity” means —| (a) | an entity wholly and beneficially owned (whether directly or indirectly) by the government or other public authority of a foreign country; | | (b) | an entity that is incorporated, formed or established by the government or other public authority of a foreign country either directly or indirectly through one or more intermediate entities; | | (c) | an entity that is incorporated, formed or established by the law of a foreign country and that is not a public authority of that foreign country; or | | (d) | an entity that is incorporated, formed or established by an entity mentioned in paragraph (c) either directly or indirectly through one or more intermediate entities, |
| and whose principal activity is to manage the entity’s own funds or the funds of a prescribed sovereign fund entity; |
|
| “prescribed sovereign fund entity” means a sovereign fund entity that satisfies such conditions as may be prescribed; |
“sovereign fund entity” means —| (a) | the government or other public authority of a foreign country; | | (b) | an entity wholly and beneficially owned by the government or other public authority of a foreign country; | | (c) | an entity that is incorporated, formed or established by the government or other public authority of a foreign country either directly or indirectly through one or more intermediate entities; | | (d) | an entity that is incorporated, formed or established by the law of a foreign country and that is not a public authority of that foreign country; or | | (e) | an entity that is incorporated, formed or established by an entity mentioned in paragraph (d) either directly or indirectly through one or more intermediate entities, |
| and whose funds (which may include the reserves of the government and any pension or provident fund of that country) are managed by an approved foreign government‑owned entity. |
[13Y [41/2020] |
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| Exemption of gains or profits from disposal of ordinary shares |
13W.—(1) There is exempt from tax any gains or profits derived by a company (called in this section the divesting company) from the disposal of ordinary shares in another company (called in this section the investee company) which are legally and beneficially owned by the divesting company immediately before the disposal, being a disposal —| (a) | during the period between 1 June 2012 to 31 December 2027 (both dates inclusive); and | | (b) | after the divesting company has, at all times during a continuous period of at least 24 months ending on the date immediately prior to the date of disposal of such shares, legally and beneficially owned at least 20% of the ordinary shares in that investee company. [34/2016; 41/2020] |
| (2) Subsection (1) only applies if the divesting company provides, at the time of lodgment of its return of income for the year of assessment relating to the basis period in which the disposal occurs, or within such further time as the Comptroller may allow, such information and supporting documents as may be specified by the Comptroller. |
(3) In determining the amount of gains or profits which are exempt from tax under subsection (1) for any year of assessment, there are to be deducted all outgoings and expenses wholly and exclusively incurred by the divesting company in the production of such gains or profits, including —| (a) | the price paid in acquiring those shares; | | (b) | any sum payable by way of interest upon any money borrowed by the divesting company, where the Comptroller is satisfied that the interest was payable on capital employed to acquire the shares; | | (c) | any sum payable in the basis period for the year of assessment 2008 or a subsequent year of assessment in lieu of interest or for the reduction thereof, upon any money borrowed by the divesting company, being a sum of a type prescribed under section 14(1)(a)(ii), where the Comptroller is satisfied that it was payable on capital employed to acquire the shares; | | (d) | any legal costs incurred for the acquisition or disposal of the shares; | | (e) | any amount paid in respect of stamp duty for the acquisition or disposal of the shares; and | | (f) | any other expenses allowable under this Act which are directly attributable to those gains or profits. |
|
| (4) In determining for the purposes of subsection (1) whether the divesting company legally and beneficially owns at any time at least 20% of the ordinary shares in the investee company, the divesting company is treated as the legal and beneficial owner of any ordinary shares in that investee company during the borrowing period when the legal interest in such shares had been transferred by the divesting company to another under a securities lending or repurchase arrangement. |
(5) Where —| (a) | gains or profits derived from the disposal of ordinary shares by the divesting company is exempt from tax under subsection (1); and | | (b) | one or more of the amounts referred to in subsection (6) which are attributable to any of the shares disposed of, have been allowed as a deduction to the divesting company for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of, |
| then the amounts in paragraph (b) are regarded as income of the divesting company that is chargeable to tax for the second‑mentioned year of assessment. |
|
(6) Subsection (5) applies to the following amounts:| (a) | any amount provided for a diminution in the value of the shares; | | (b) | any amount written off against the value of the shares; | | (c) | any impairment loss for the shares; | | (d) | any loss recognised in accordance with FRS 39, SFRS for Small Entities, FRS 109 or SFRS(I) 9 (as the case may be), in determining the profit or loss or expense in respect of the shares. [39/2017; 32/2019] |
|
(7) Where —| (a) | gains or profits derived from the disposal of ordinary shares by the divesting company is exempt from tax under subsection (1); and | | (b) | any write‑back for a diminution in the value of the shares, or profit recognised in accordance with FRS 39, SFRS for Small Entities, FRS 109 or SFRS(I) 9 (as the case may be), which is attributable to any of the shares, has been charged to tax as income of the divesting company for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of, |
| then the write‑back or profit referred to in paragraph (b) is regarded as an expense allowable under this Act to the divesting company for the second‑mentioned year of assessment. |
[39/2017; 32/2019] |
(8) This section does not apply to —| (a) | the disposal of shares the gains or profits of which are included as part of the income of a company referred to in section 26; | | (b) | the disposal of shares before 1 June 2022 in a company that —| (i) | is in the business of trading Singapore immovable properties; or | | (ii) | principally carries on the activity of holding Singapore immovable properties, |
| other than property development, where the shares are not listed on a stock exchange in Singapore or elsewhere; |
| | (ba) | the disposal of shares on or after 1 June 2022 not listed on a stock exchange in Singapore or elsewhere, being shares in a company that the Comptroller is satisfied —| (i) | is in the business of trading immovable properties situated whether in Singapore or elsewhere; | | (ii) | principally carries on the activity of holding immovable properties situated whether in Singapore or elsewhere; or | | (iii) | has undertaken property development in Singapore or elsewhere, except where —| (A) | the immovable property developed is used by the company to carry on its trade or business (including the business of letting immovable properties), not being a business mentioned in sub‑paragraph (i); and | | (B) | the company did not undertake any property development in Singapore or elsewhere for a period of at least 60 consecutive months before the disposal of shares; or |
|
| | (c) | the disposal of shares by a partnership, limited partnership or limited liability partnership one or more of the partners of which is a company or are companies. [41/2020] |
|
(9) In this section —| “activity of holding immovable properties” excludes the holding of immovable properties where such properties are used to carry on a trade or business, including the business of letting immovable properties; |
| “borrowing period” and “securities lending or repurchase arrangement” have the meanings given by section 10H(12); |
| “disposal”, in relation to shares, means the transfer of both the legal and beneficial interests in the shares to another; |
| “FRS 39” and “SFRS for Small Entities” have the meanings given by section 34A(10); |
| “FRS 109” and “SFRS(I) 9” have the meanings given by section 34AA(15); |
“property development” means construction or causing the construction of any building or part of a building, and acquisition of land or building for such construction, and for this purpose “construction” means —| (a) | any building operations, or demolition and rebuilding operations, in, on, over or under any land for the purpose of erecting a building or part of a building; and | | (b) | any alteration or addition to, or partial demolition and rebuilding of, any building or part of a building, |
| that requires the approval of the Commissioner of Building Control under the Building Control Act 1989 or (if carried out in a country outside of Singapore) would have required such approval if it had been carried out in Singapore. |
[13Z [39/2017; 32/2019; 41/2020] |
|
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| Exemption of certain payments received in connection with COVID‑19 events |
13X.—(1) The following are exempt from tax:| (a) | a cash payment made on behalf of the Government to a person under the public scheme known as the Self‑Employed Person Income Relief Scheme (SIRS), that is part of the Budget Statements of the Government dated 26 March 2020 and 6 April 2020; | | (b) | a cash payment made on behalf of the Government to a person under the public scheme known as the Jobs Support Scheme (JSS); | | (c) | a cash payment made by the Government to a person under any of the following public schemes:| (i) | Quarantine Order Allowance (QOA) Scheme; | | (ii) | Leave‑of‑Absence (LOA) Programme; | | (iii) | the Stay‑Home Notice (SHN) Support Programme; |
| | (d) | a cash payment made on behalf of the Government to an individual under the public scheme known as the COVID‑19 Support Grant (CSG), that is part of the Budget Statement of the Government dated 26 March 2020, and the ministerial statement of the Minister dated 17 August 2020; | | (e) | a cash payment made by the Singapore Tourism Board between (and including) the months of April and July 2020 to the holder of a tourist guide licence as defined in section 20(1) of the Singapore Tourism Board Act 1963, to mitigate any loss of income from a COVID‑19 event; | | (f) | a cash payment made by the Maritime and Port Authority of Singapore under the public scheme known as the Seafarers Relief Package in the year 2020 to a seafarer as defined in section 2(1) of the Merchant Shipping (Maritime Labour Convention) Act 2014, that is funded by the Maritime and Port Authority of Singapore; | | (g) | a benefit received by a self‑employed individual who drives a chauffeured private hire car or taxi, from —| (i) | the Land Transport Authority of Singapore (called in this paragraph and paragraph (ga) LTA); or | | (ii) | an entity in the Tenth Schedule, |
| that is given in connection with an amount received by LTA or the entity out of a payment made by the Government to the Special Relief Fund under the public scheme known as the Point‑to‑Point Support Package; |
| | (ga) | a benefit received by an individual who drives a chauffeured private hire car or taxi, from —| (i) | the LTA; or | | (ii) | an entity in the Tenth Schedule, |
| that is given on or after 1 January 2021 in connection with an amount received by the LTA or the entity out of a payment made by the Government from a fund established by the Government known as the COVID‑19 Driver Relief Fund; |
| | (h) | any other prescribed benefit given in connection with a prescribed public scheme, up to such amount or value as may be prescribed. [41/2020; 27/2021] |
(2) Where a public authority makes a payment under a public scheme on behalf of the Government to a person that is then paid to another person, the firstmentioned person does not, for the purposes of subsection (1), make the second‑mentioned payment on behalf of the Government. | | The Inland Revenue Authority of Singapore makes a cash payment under the Jobs Support Scheme on behalf of the Government to a central hirer of a central hiring arrangement of a group of related parties, which the central hirer disburses to the related parties. The central hirer does not make the disbursement on behalf of the Government under subsection (1)(b). |
|
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[41/2020] [Act 33 of 2022 wef 04/11/2022] |
(3) The following are also exempt from tax, but only if the Comptroller is satisfied that conditions prescribed for the exemption are satisfied:| (a) | the rent or value of any place of residence in Singapore (including any furniture or fittings in that place), or an allowance for accommodation in Singapore, for the use by an individual in the year 2020, that is provided to the individual in the year 2020 by the individual’s employer, up to the prescribed amount per day; | | (b) | the value of any food, transport and other necessities (called in this paragraph basic necessities), or an allowance for basic necessities, for consumption or use by an individual in Singapore in the year 2020, that is provided to the individual in the year 2020 by the individual’s employer, up to the prescribed amount per day for all basic necessities. [41/2020] |
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| (4) An amount described in subsection (5) received or receivable in the year 2020 by a person who is a lessee or licensee of any immovable property in relation to which a remission of property tax is given by the Property Tax (Non‑Residential Properties) (Remission) Order 2020, is exempt from tax. [41/2020] |
(5) The amount mentioned in subsection (4) is any of the following, as applicable:| (a) | the amount in the form of monetary payments of any benefit (as defined in the COVID‑19 (Temporary Measures) (Transfer of Benefit of Property Tax Remission) Regulations 2020) of the reduction in property tax as a result of the remission that the owner of the immovable property is required under section 29(2) of the COVID‑19 (Temporary Measures) Act 2020 to pass on to the person in the year 2020; | | (b) | the amount in the form of monetary payments that the owner of the immovable property has passed on or has agreed to pass on to the person in the year 2020, and by reason of which the owner is exempt from section 29(2) of the COVID‑19 (Temporary Measures) Act 2020 under regulation 13(2) of the COVID‑19 (Temporary Measures) (Transfer of Benefit of Property Tax Remission) Regulations 2020; | | (c) | the amount of any other monetary payments received or receivable by the person from the person’s lessor or licensor in the year 2020, but only if the Comptroller is satisfied that the payments are intended by the lessor or licensor to provide relief to the person from any economic hardship arising from a COVID‑19 event; | | (d) | the total of the amounts in paragraphs (a), (b) and (c). [41/2020] |
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(5A) The amount of any monetary payment received or receivable by a person who is a lessee or licensee of any prescribed property from the person’s lessor or licensor in the year 2021 is exempt from tax, if —| (a) | the payment is made pursuant to an undertaking given by the lessor or licensor to his, her or its lessor or licensor, to provide relief to the person from any economic hardship arising from a COVID‑19 event; or | | (b) | the Comptroller is satisfied that the monetary payment is intended by the lessor or licensor to provide relief to the person from any economic hardship arising from a COVID‑19 event. [27/2021] |
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| (5B) Rules made for the purposes of subsection (5A) may be made to take effect from (and including) 16 November 2021. [27/2021] |
(6) In this section —| “chauffeured private hire car” has the meaning given to that term by section 14ZA(8); |
| “COVID‑19” means the infectious disease known as Coronavirus Disease 2019; |
“COVID‑19 event” means —| (a) | the COVID‑19 epidemic or pandemic; or | | (b) | the operation of or compliance with any law of Singapore, or an order or direction of the Government or any statutory body, being any law, order or direction that is made by reason of or in connection with COVID‑19; |
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| “monetary payment” includes payment by e‑money as defined in section 2(1) of the Payment Services Act 2019; |
| “owner”, in relation to immovable property, has the meaning given by section 2(1) of the Property Tax Act 1960 and includes a person that is deemed to be an owner of the property under any provision of that Act; |
| “prescribed” means prescribed by rules made under section 7; |
| “prescribed property” means any non‑residential property, or any property belonging to a class of non‑residential properties, that is prescribed as a prescribed property for the purposes of subsection (5A), and includes any part of such property. [13ZA [41/2020; 27/2021] |
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