Income Tax Act 1947 - Singapore Statutes Online

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.

(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.

(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.

(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.

(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.

(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;

“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;

“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

(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 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

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

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.

Example

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).

[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]

(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]

(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]

(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;

“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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