Income Tax (Concessionary Rate of Tax for Approved Securities Companies) (Amendment) Regulations 1999

No. S 491

Income Tax Act

(Chapter 134)

Income Tax (Concessionary Rate of Tax for Approved Securities Companies) (Amendment) Regulations 1999

In exercise of the powers conferred by section 43A of the Income Tax Act, the Minister for Finance hereby makes the following Regulations:

Citation and commencement

1.—(1) These Regulations may be cited as the Income Tax (Concessionary Rate of Tax for Approved Securities Companies) (Amendment) Regulations 1999.

(2) Regulations 2 (a), (b), (d) and (e), 3, 5 and 6 of these Regulations shall have effect for the year of assessment 1998 and subsequent years of assessment.

(3) Regulation 2(c) of these Regulations shall have effect for the year of assessment 2000 and subsequent years of assessment.

Amendment of regulation 2

2. Regulation 2 of the Income Tax (Concessionary Rate of Tax for Approved Securities Companies) Regulations (Rg 9) (referred to in these Regulations as the principal Regulations) is amended —

(a)

by deleting the word “or” at the end of paragraph (1)(a)(iii);

(b)

by deleting the colon at the end of sub-paragraph (iv) of paragraph (1)(a) and substituting the word “; or”, and by inserting immediately thereafter the following sub-paragraph:

“(v)	stocks, shares, bonds and other securities listed on the Stock Exchange of Singapore in any foreign currency issued by a company which is incorporated in Singapore and whose operations are substantially outside Singapore and approved by the Minister or such person as he may appoint:”;

(c)

by deleting the words “Fund Manager approved under section 43A(1)(b)” in paragraph (1)(b)(iv), (d)(v) and (e)(iv) and substituting in each case the words “fund manager approved under section 13C(a) or 43A (1)(b)”;

(d)

by deleting the words “sub-paragraph (a)(i) and (iv)” in paragraph (1)(d) and substituting the words “sub-paragraph (a)(i), (iv) and (v)”; and

(e)

by deleting the full-stop at the end of sub-paragraph (f) of paragraph (1) and substituting a semi-colon, and by inserting immediately thereafter the following sub-paragraph:

“(g)

services on behalf of a company which is incorporated in Singapore and whose operations are substantially outside Singapore and approved by the Minister or such person as he may appoint, in respect of the arrangement, underwriting, management and placement of —

(i)	securities by the company which are listed on the Stock Exchange of Singapore in any foreign currency; or
(ii)	an initial public offering by the company of securities for the purpose of a listing on the Stock Exchange of Singapore in any foreign currency.”.

Amendment of regulation 3

3. Regulation 3 of the principal Regulations is amended —

(a)	by inserting, immediately after the words “regulation 2 (1)(c)” in paragraph (1)(b), the words “and (g)”; and
(b)	by inserting, immediately after the words “regulation 2 (1)(c)” wherever they appear in paragraph (2), the words “and (g)”.

New regulation 3A

4. The principal Regulations are amended by inserting, immediately after regulation 3, the following regulation:

“Tax exemption on income derived by approved securities company

3A.—(1) Notwithstanding regulations 2 and 3, there shall be exempt from tax the income derived by an approved securities company from the following activities:

(a)	the activities described in regulation 2(1)(a) (other than those excluded under the proviso thereto) and regulation 2(1)(b) where the stocks, shares, bonds and other securities specified therein are listed on the Stock Exchange of Singapore; and
(b)	the activities described in regulation 2(1)(c) and (g) where such activities are in respect of an initial public offering by a company of the securities specified therein for the purpose of a listing on the Stock Exchange of Singapore.

(2) This regulation shall have effect from the year of assessment 1998 to the year of assessment 2002.”.

New regulation 4A

5. The principal Regulations are amended by inserting, immediately after regulation 4, the following regulation:

“Determination of income exempted from tax

4A.—(1) In determining the income to be exempted from tax under regulation 3A —

(a)	the Comptroller shall have regard to such expenses, capital allowances and donations allowable under the Act as are, in his opinion, to be deducted in ascertaining such income;
(b)	there shall be deducted from that income any allowances under section 19, 19A, 20, 21 or 22 attributable to that income notwithstanding that no claim for those allowances has been made;
(c)	any balance of the allowances mentioned in sub-paragraph (b) and any losses incurred in respect of any activity the income from which would be exempted from tax under regulation 3A shall only be deducted against income from the same activity exempted under that regulation, and any balance of such allowances and losses shall not be deducted against any other income; and
(d)	any balance of the allowances and losses mentioned in sub-paragraph (c) remaining unabsorbed as at the end of the year of assessment 2002 shall, subject to paragraph (2), be available as a deduction against any other income for any subsequent year of assessment in accordance with section 23 or 37 of the Act, as the case may be.

(2) Section 37B of the Act shall apply to any amount of allowances and losses available as a deduction against any other income as provided under paragraph (1)(d) as if they were unabsorbed allowances or losses in respect of the concessionary income under that section.”.

Amendment of regulation 6

6. Regulation 6 of the principal Regulations is amended by deleting the full-stop at the end of the definition of “foreign investor” and substituting a semi-colon, and by inserting immediately thereafter the following definition:

“ “initial public offering” means a public offering of securities of a company, whose stocks or shares have not previously been listed on the Stock Exchange of Singapore, in conjunction with the listing of those securities on the Stock Exchange of Singapore, and includes a listing of securities of such a company on the Stock Exchange of Singapore by way of an introduction.”.

Made this 29th day of October 1999.

LIM SIONG GUAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[R32.19.05 Vol. 7; AG/LEG/SL/134/97/9 Vol. 1]

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