Income Tax (Concessionary Rate of Tax for Approved Oil Trading Companies) Regulations

Income Tax Act

(Chapter 134, Section 43F)

Income Tax (Concessionary Rate of Tax for Approved Oil Trading Companies)
Regulations

Rg 15

G.N. No. S 198/1992

REVISED EDITION 1993

(1st April 1993)

[1st January 1989]

Citation

1. These Regulations may be cited as the Income Tax (Concessionary Rate of Tax for Approved Oil Trading Companies) Regulations.

Definitions

2. In these Regulations —

“over the counter hedging transaction” means any transaction, other than a transaction carried out on any exchange specified in the First Schedule, in petroleum swaps or options including caps, collars, floors and swap options, where —

(a)

the consideration or other payment in the transaction is calculated on the basis of the price of petroleum or any petroleum product;

(b)

the transaction is in connection with and incidental to any physical trading; and

(c)

the transaction is carried out by an approved oil trading company with —

(i)	another approved oil trading company;
(ii)	a person who carries on the business of refining petroleum in Singapore;
(iii)	a person who is neither a resident of nor a permanent establishment in Singapore;
(iv)	a branch office outside Singapore of a company resident in Singapore; or
(v)	an Asian Currency Unit of a financial institution;

“petroleum futures trading” means trading in futures contracts or options in petroleum or any petroleum product on any exchange specified in the First Schedule carried out by an approved oil trading company in accordance with the rules and regulations or customs and practices of that exchange with —

(a)	an Asian Currency Unit of a financial institution;
(b)	a member of SIMEX;
(c)	a person who is neither a resident of nor a permanent establishment in Singapore;
(d)	a branch office outside Singapore of a company resident in Singapore; or
(e)	another approved oil trading company;

“petroleum product” means any of the products specified in the Second Schedule;

“physical trading” means trading in petroleum or any petroleum product on a spot or forward basis where the intention of the parties at the time of the transaction is that actual delivery of the petroleum or petroleum product is required, whether or not it is actually made, and where the petroleum or petroleum product is purchased by an approved oil trading company from and sold to —

(a)	another approved oil trading company;
(b)	a person who carries on the business of refining petroleum in Singapore;
(c)	a person who is neither a resident of nor a permanent establishment in Singapore; or
(d)	a branch office outside Singapore of a company resident in Singapore,

but excludes any transaction in which the petroleum or petroleum product is purchased for the purposes of consumption in Singapore or for the supply of fuel to aircraft or vessels within Singapore;

“qualifying transaction” means any of the following transactions carried out by an approved oil trading company in currencies other than Singapore dollars:

(a)	physical trading;
(b)	petroleum futures trading; or
(c)	over the counter hedging transaction.

Approved oil trading company

3.—(1) The Minister may approve any oil trading company for the purposes of section 43F of the Act for such period not exceeding 5 years as he may specify.

(2) The Minister may in any particular case extend the period so specified for such further periods, not exceeding 5 years at any one time, as he thinks fit.

Concessionary rate of tax

4.—(1) Subject to paragraph (2), tax shall be payable at the rate of 10% on the income of an approved oil trading company from —

(a)

profits from qualifying transactions;

(b)

commission and fees from acting as a broker in physical trading between any of the following persons:

(i)	an approved oil trading company;
(ii)	a person who carries on the business of refining petroleum in Singapore;
(iii)	a person who is neither a resident of nor a permanent establishment in Singapore; or
(iv)	a branch office outside Singapore of a company resident in Singapore,

but excludes any income attributable to activities carried out in Singapore which add value to the petroleum or petroleum product by any physical alteration, addition or improvement including refining and blending.

(2) Paragraph (1) shall apply in relation to an approved oil trading company from such date as the Minister may specify.

(3) Paragraph (1) shall not apply to any income derived from any transaction —

(a)	in petroleum carried out before 1st January 1989; or
(b)	in any petroleum product specified in the first column of the Second Schedule carried out before the date corresponding to the product specified in the second column thereof.

Determination of income chargeable to tax

5. For the purposes of regulation 4, the Comptroller shall determine —

(a)	the income chargeable to tax of an approved oil trading company having regard to such expenses, donations and allowances under section 19, 19A, 20, 21, 22 or 23 of the Act as are, in his opinion, to be deducted in ascertaining such income;
(b)	the manner and extent to which any losses arising from the qualifying transactions and physical trading specified in that regulation may be deducted under section 37 of the Act in ascertaining the chargeable income of an approved oil trading company;
(c)	the manner and extent to which income, attributable to activities carried out in Singapore which add value to the petroleum or petroleum products by any physical alteration, addition or improvement (including refining and blending) should be excluded from the income referred to in regulation 4(1).

[G.N. No. S 398/1992]

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