5. The principal Act is amended by inserting, immediately after section 13H, the following sections:“Exemption of certain dividends of Singapore Exchange Derivatives Trading Limited |
13I.—(1) Where any income of the Singapore Exchange Derivatives Trading Limited (including income derived by it while it was known as the Singapore International Monetary Exchange Limited) has been exempted under section 13(1)(z), such income shall be credited to a special account (referred to in this section as the account) to be kept by the company for the purposes of this section.(2) Section 13E shall apply, with the necessary modifications, in respect of any dividends paid out of the account of the company. |
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Exemption of tax on gains or profits from entrepreneurial employee stock option |
13J.—(1) Where a qualifying employee derives any gains or profits by the exercise, assignment or release, after the expiry of the minimum vesting period, of any right or benefit granted on or after 1st June 2000 to acquire shares in any qualifying company or in its holding company, there shall, subject to this section, be 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 on the exercise, assignment or release of the right or benefit (referred to in this section as the exercise price) is equal 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 in accordance with section 10(5); or | (b) | where the exercise price of the shares 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 in accordance with section 10(5) less the amount of the discount. |
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(3) The exemption under this section shall not apply to any amount of gains or profits deemed to be income of a person under section 10(5) —(a) | to the extent that the amount, when aggregated with the amount of such deemed income previously derived by him and which qualifies for exemption under this section, exceeds $10 million; or | (b) | which is derived by him on or after 1st January of the 10th year following the year in which he first derived such deemed income which qualified for exemption under this section. |
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(4) The exemption under this section shall apply to gains or profits derived by an employee by the exercise, assignment or release of any right or benefit to acquire shares in a holding company of the company in which he 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) In this section, unless the context otherwise requires —“holding company” has the same meaning as in section 5 of the Companies Act (Cap. 50); |
“minimum vesting period”, in relation to a qualifying company or holding company, 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; |
“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 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 at least 30 hours per week for the company in which he is employed or, if he is committed to work less than such number of hours, is committed to work at least 75% of his 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; |
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“shares” includes stocks but excludes 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 as an employee for all his employers plus, if applicable, the total period of time, which shall be deemed to be 10 hours per week, spent by him on remunerative work as a self-employed person.”. |
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