Goods and Services Tax (International Services) (Amendment) Order 2003

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Published in Subsidiary Legislation Supplement
on 01 Jul 2003

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No. S 317

Goods and Services Tax Act

(Chapter 117A)

Goods and Services Tax (International Services) (Amendment) Order 2003

In exercise of the powers conferred by sections 21 (3)(r) and 86(1) of the Goods and Services Tax Act, the Minister for Finance hereby makes the following Order:

Citation and commencement

1. This Order may be cited as the Goods and Services Tax (International Services) (Amendment) Order 2003 and shall come into operation on 1st July 2003.

New paragraph 5

2. The Goods and Services Tax (International Services) Order (O 1) is amended by inserting, immediately after paragraph 4, the following paragraph:

“Prescribed conditions

5. The conditions specified in the Fourth Schedule are prescribed for the purposes of section 21(3)(r) of the Act.”.

New Fourth Schedule

3. The Goods and Services Tax (International Services) Order is amended by inserting, immediately after the Third Schedule, the following Schedule:

“FOURTH SCHEDULE

Paragraph 5

Prescribed Conditions

1. In this Schedule, unless the context otherwise requires —

“foreign company” means a company which is neither incorporated nor resident in Singapore and —

(a)	where the company has not more than 50 shareholders, the whole of its issued capital is beneficially owned, directly or indirectly, by persons who are neither citizens of Singapore nor resident in Singapore; and
(b)	where the company has more than 50 shareholders, not less than 95% of its issued capital is beneficially owned, directly or indirectly, by persons who are neither citizens of Singapore nor resident in Singapore;

“resident in Singapore” has the same meaning as in section 2 of the Income Tax Act (Cap. 134);

“trust company” means —

(a)	a company registered as a trust company under the Trust Companies Act (Cap. 336); or
(b)	a non-resident company incorporated outside Singapore having a branch in Singapore which provides services as a trustee or custodian.

2.—(1) Subject to sub-paragraphs (2) and (3), a trust shall be regarded as a foreign trust for the purposes of this Schedule if —

(a)

it is a trust created in writing and every settlor and every beneficiary thereof are —

(i)	individuals who are neither citizens of Singapore nor resident in Singapore; or
(ii)	foreign companies; or

(b)

it is a unit trust where the whole value of the unit trust fund is beneficially held, directly or indirectly, by —

(i)	individuals who are neither citizens of Singapore nor resident in Singapore; or
(ii)	foreign companies.

(2) Notwithstanding sub-paragraph (1), a trust shall not be regarded as a foreign trust for the purposes of this Schedule if any settlor or beneficiary or unit holder (as the case may be) of the trust is a company which —

(a)	has a permanent establishment in Singapore other than a trust company;
(b)	carries on a business in Singapore;
(c)	beneficially owns more than 20% of the issued capital of any company incorporated in Singapore; or
(d)	has 20% or more of its issued capital beneficially owned, directly or indirectly, by a company which falls within sub-paragraph (a), (b) or (c),

unless approval is granted by the Minister or such other person as he may appoint for that trust to be regarded as a foreign trust for the purposes of this Schedule.

(3) A trust referred to in sub-paragraph (1) (a) shall continue to be regarded as a foreign trust notwithstanding that any settlor or beneficiary of the trust who is an individual subsequently becomes a citizen of Singapore or resident in Singapore, if the following conditions are satisfied:

(a)

in the case of a settlor who subsequently becomes a citizen of Singapore or resident in Singapore —

(i)	no new assets are injected into the trust by the settlor from the day he becomes a citizen of Singapore or resident in Singapore;
(ii)	the settlor neither receives nor enjoys any benefit under the trust and shall not exercise any power of appointment in favour of any person who is a citizen of Singapore or resident in Singapore; and
(iii)	the settlor neither revokes the trust nor varies the terms of the trust so as to cause any benefit to be paid or otherwise made available to a citizen of Singapore or resident in Singapore;

(b)

in the case of a settlor who was previously a citizen of Singapore or resident in Singapore and the trust was constituted subsequent to the settlor ceasing to be a citizen of Singapore or resident in Singapore, the settlor does not within 5 years of last ceasing to be a citizen of Singapore or resident in Singapore resume being a citizen of Singapore or resident in Singapore; and

(c)

in the case of a beneficiary who subsequently becomes a citizen of Singapore or resident in Singapore —

(i)	the total value of all distributions made by the trustee to the beneficiaries who are citizens of Singapore or resident in Singapore is less than 20% of the cumulative value of all trust distributions made by the trustee for the trust; and
(ii)	all beneficiaries who are citizens of Singapore or resident in Singapore are beneficially entitled to less than 20% of the assets of the trust.

(4) For the purposes of sub-paragraph (3) (c), where a trustee is unable by any reasonable means to ascertain the value of any distribution or asset of the trust, the value to be ascribed to such distribution or asset shall be such amount as the Comptroller may determine.

3. Subject to paragraph 4, the services supplied in relation to a trust shall be zero-rated if the services are supplied in relation to a foreign trust by —

(a)	a trustee of the foreign trust (including a trust company providing services in its capacity as trustee of the foreign trust); or
(b)	a trust company to a trustee of the foreign trust.

4. Notwithstanding paragraph 3, the services referred to therein shall not include —

(a)	services provided directly in connection with land or goods situated in Singapore;
(b)	services provided to the trustee by any agent other than the services provided by a trust company as specified in paragraph 3(b); and
(c)	such other services as the Comptroller may determine.

5. Every trustee shall keep and maintain in respect of the trust such records of the particulars of every settlor and every beneficiary of the trust as the Comptroller may determine.

6. Every trustee shall comply with such other conditions as the Comptroller may impose for the protection of the revenue.”.

Made this 1st day of July 2003.

LIM SIONG GUAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MOF (R) R60.1.0013 Vol. 19; AG/LEG/SL/117A/2002/2 Vol. 1]

(To be presented to Parliament under section 86(2) of the Goods and Services Tax Act).