Income Tax (Exemption of Royalties and Other Payments for Economic and Technological Development) (Amendment) Notification 2001

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Published in Subsidiary Legislation Supplement
on 09 May 2001

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No. S 267

Income Tax Act

(Chapter 134)

Income Tax (Exemption of Royalties and Other Payments for Economic and Technological Development) (Amendment) Notification 2001

In exercise of the powers conferred by section 13(4) of the Income Tax Act, the Minister for Finance hereby makes the following Notification:

Citation

1. This Notification may be cited as the Income Tax (Exemption of Royalties and Other Payments for Economic and Technological Development) (Amendment) Notification 2001.

New paragraph 1A

2. The Income Tax (Exemption of Royalties and Other Payments for Economic and Technological Development) Notification 2001 (G.N. No. S 97/2001) (referred to in this Notification as the principal Notification) is amended by inserting, immediately after paragraph 1, the following paragraph:

“Definitions

1A. For the purposes of this Notification —

“downloadable software” means software downloaded by an end-user from the Internet or a network for a fee and where the end-user only receives the right to use the software but is not permitted to reverse engineer, decompile, or disassemble the software;

“end-user” means an user who acquires the right to run the software on a single computer or computer network but does not have the right to exploit the copyright to the software;

“maintenance and support services” includes software technical support via telephone or on-line services, delivery of updates or upgrades, remote correction of defects, or installation services provided in connection with a site licence;

“site licence” means a software licence where —

(a)	the licensee only receives the right to use the software but is not permitted to reverse engineer, decompile, or disassemble the software, or exploit the copyright to the software; and
(b)	the licensee is permitted to install the software on any number of computers or servers for operation within its own business, location or facility,

and includes any maintenance and support services that are not priced separately and are incidental to the grant of the software licence;

“software bundled with computer hardware” means software that has been pre-installed in the computer hardware and is distributed under the following conditions:

(a)	the software and computer hardware are sold together as a single product without being priced separately;
(b)	the buyer only receives the right to use the software on the computer hardware; and
(c)	the buyer is not permitted to reverse engineer, decompile, or disassemble the software, or resell the software on its own.”.

Amendment of paragraph 2

3. Paragraph 2 of the principal Notification is amended by deleting the paragraph heading and substituting the following paragraph heading:

“Exemption for shrink-wrap software”.

Amendment of paragraph 3

4. Paragraph 3 of the principal Notification is amended —

(a)

by deleting the words “where the income” in sub-paragraph (b) and substituting the words “and the payment”; and

(b)

by deleting the paragraph heading and substituting the following paragraph heading:

“Terms and conditions of exemption under paragraph 2”.

New paragraphs 4 and 5

5. The principal Notification is amended by inserting, immediately after paragraph 3, the following paragraphs:

“Exemption for site licence, etc.

4. Subject to paragraph 5, there shall be exempt from tax any payment made for —

(a)	a site licence;
(b)	downloadable software; or
(c)	software bundled with computer hardware,

in the nature of income referred to in section 12(7) of the Act accruing in or derived from Singapore on or after 23rd February 2001 by any non-resident person.

Terms and conditions of exemption under paragraph 4

5. The exemption under paragraph 4 shall apply only if the payment referred to in that paragraph is made to a non-resident person and the payment —

(a)	is not derived by that person from any trade or business carried on or exercised by him in Singapore; and
(b)	is not effectively connected with any permanent establishment in Singapore.”.

Made this 8th day of May 2001.

LIM SIONG GUAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF(R) R32.12.06 Vol. 16; MF(R) R32.18.54; AG/LEG/SL/134/97/9 Vol. 2]