No. S 513
Income Tax Act
(Chapter 134)
Income Tax (Concessionary Rate of Tax for Approved Offshore General Insurance Companies) (Amendment) Regulations 1999
In exercise of the powers conferred by section 43C of the Income Tax Act, the Minister for Finance hereby makes the following Regulations:
Citation and commencement
1.  These Regulations may be cited as the Income Tax (Concessionary Rate of Tax for Approved Offshore General Insurance Companies) (Amendment) Regulations 1999 and shall have effect for the year of assessment 1999 and subsequent years of assessment.
Amendment of regulation 2
2.  Regulation 2 of the Income Tax (Concessionary Rate of Tax for Approved Offshore General Insurance Companies) Regulations (Rg 26) (referred to in these Regulations as the principal Regulations) is amended —
(a)by inserting, immediately after the definition of “approved insurance company”, the following definition:
“ “approved marine hull and liability insurer” means any insurance company approved under regulation 3A;”; and
(b)by deleting the full-stop at the end of paragraph (g) of the definition of “offshore investments” and substituting a semi-colon, and by inserting immediately thereafter the following definition:
“ “offshore marine hull and liability business” means the business of insuring and reinsuring offshore risks involving marine hull and liability but excludes cargo, energy and aviation risks.”.
New regulation 3A
3.  The principal Regulations are amended by inserting, immediately after regulation 3, the following regulation:
Approval of marine hull and liability insurer
3A.  The Minister or such person as he may appoint may, upon application by any approved insurance company and if he considers it expedient in the public interest to do so, approve the insurance company as an approved marine hull and liability insurer for such period not exceeding 10 years as he may specify.”.
Amendment of regulation 4
4.  Regulation 4(1) of the principal Regulations is amended by deleting the word “Tax” and substituting the words “Subject to regulation 5A, tax”.
New regulation 5A
5.  The principal Regulations are amended by inserting, immediately after regulation 5, the following regulation:
Exemption from income tax
5A.  Notwithstanding regulation 4, there shall be exempt from tax the following income derived by an approved marine hull and liability insurer for the basis period for any year of assessment:
(a)the underwriting income derived from accepting offshore marine hull and liability business; and
(b)such part of the income referred to in regulation 4(1)(b) as is ascertained by the formula —
where Pm
is the amount of the gross premiums received or receivable during the basis period in respect of policies underwritten by the approved marine hull and liability insurer in the course of carrying on its business in Singapore from the offshore marine hull and liability business;
Po
Has the same meaning as in regulation 5(1); and
A
is the total amount of the income referred to in regulation 4(1)(b) for the basis period.”.
Amendment of regulation 6
6.  Regulation 6 of the principal Regulations is amended by renumbering the regulation as paragraph (1) of that regulation, and by inserting immediately thereafter the following paragraph:
(2)  There shall be apportioned between the offshore marine hull and liability business and the other offshore general insurance business of an approved marine hull and liability insurer —
(a)any amount of expenditure, capital allowances and donations apportioned to the offshore general insurance business in accordance with paragraph (1); and
(b)any item of expenditure incurred in respect of both the offshore marine hull and liability business and the other offshore general insurance business, allowable to the insurer under the Act,
and the portion attributable to its offshore marine hull and liability business shall be ascertained by using the fraction —
where Pm and Po have the same meanings as in regulation 5A.”.
New regulation 7
7.  The principal Regulations are amended by inserting, immediately after regulation 6, the following regulation:
Determination of income exempted from tax
7.—(1)  In determining the income of an approved marine hull and liability insurer to be exempted from tax under regulation 5A —
(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 capital allowances 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 offshore marine hull and liability business (which, if they had been profits, would have been exempted from tax under regulation 5A) shall only be deducted against income to be exempted under regulation 5A, 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 referred to in sub-paragraph (c) remaining unabsorbed as at the end of the period for which the exemption from tax under regulation 5A is approved shall, subject to paragraph (2), be available as a deduction against any other income of the insurer 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 22nd day of November 1999.
LIM SIONG GUAN
Permanent Secretary,
Ministry of Finance,
Singapore.
[MF(R)R32.7.06 V.8 ; AG/LEG/SL/134/97/9 Vol. 1]