Income Tax (Concessionary Rate of Tax for Approved Headquarters Company) (Amendment) Regulations 1999

No. S 516

Income Tax Act

(Chapter 134)

Income Tax (Concessionary Rate of Tax for Approved Headquarters Company) (Amendment) Regulations 1999

In exercise of the powers conferred by section 43E 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 Headquarters Company) (Amendment) Regulations 1999.

(2) Regulation 2(b) and (c) of these Regulations shall have effect for the year of assessment 1999 and subsequent years of assessment.

(3) Regulations 2 (a) and (d), 3, 4 and 5 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 Headquarters Company) Regulations (Rg 6) (referred to in these Regulations as the principal Regulations) is amended —

(a)	by inserting, immediately after the words “section 43E(2)” in the 5th line of the definition of “qualifying services”, the words “or (2A)”;
(b)	by deleting sub-paragraph (i) of paragraph (n) of the definition of “qualifying services”;
(c)	by deleting the words “if the company has more than 50 shareholders,” in the 1st line of paragraph (n)(ii) of the definition of “qualifying services”; and
(d)	by inserting, immediately after the words “section 43E(2)” in sub-paragraph (iii) of the definition of “qualifying treasury investment or financial activities”, the words “or (2A)”.

Amendment of regulation 4

3. Regulation 4 of the principal Regulations is amended —

(a)

by inserting, immediately after paragraph (1), the following paragraph:

“(1A) Notwithstanding paragraph (1), there shall be exempt from tax the income of a headquarters company approved under section 43E(2A) of the Act in respect of the provision of qualifying services which have been approved under section 43E(2A)(a) of the Act.”; and

(b)

by deleting the words “Paragraph (1)” in paragraph (2) and substituting the words “Paragraphs (1) and (1A)”.

Amendment of regulation 5

4. Regulation 5 of the principal Regulations is amended by deleting the words “regulation 4” in the 1st line and substituting the words “regulation 4 (1)”.

New regulation 6

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

“Determination of income exempted from tax

6.—(1) In determining the income of an approved headquarters company to be exempted from tax under regulation 4 (1A) —

(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 of the Act 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 the provision of qualifying services approved under section 43E(2A)(a) of the Act shall only be deducted against income to be exempted under regulation 4 (1A), 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 period for which the exemption from tax under regulation 4 (1A) is approved shall, subject to paragraph (2), be 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 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 the 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.”.

Made this 19th day of November 1999.

LIM SIONG GUAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF(R)R32.16.057 Vol. 16; AG/LEG/SL/134/97/9 Vol. 1]

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