Search within Legislation

Search Results

No. S 521

Income Tax Act

(Chapter 134)

Income Tax (Supplementary Retirement Scheme) (Amendment) Regulations 2010

In exercise of the powers conferred by section 10L(11) of the Income Tax Act, read with section 199A of the Criminal Procedure Code (Cap. 68), the Minister for Finance hereby makes the following Regulations:

Citation and commencement

1.—(1) These Regulations may be cited as the Income Tax (Supplementary Retirement Scheme) (Amendment) Regulations 2010 and shall, with the exception of regulations 2(b), 4, 6(b) and (c), 7(c), 10(f), 11(b), 14 and 15, come into operation on 15th September 2010.

(2) Regulation 6(c) shall be deemed to have come into operation on 1st January 2009.

(3) Regulations 4(a) and (c) to (h) and 15 shall come into operation on 1st February 2011.

(4) Regulations 4(b) and 11(b) shall be deemed to have come into operation on 1st March 2010.

(5) Regulations 6(b), 7(c) and 14 shall be deemed to have come into operation on 1st October 2008.

(6) Regulations 2(b) and 10(f) shall have effect for the year of assessment 2009 and subsequent years of assessment.

Amendment of regulation 2

2. Regulation 2 of the Income Tax (Supplementary Retirement Scheme) Regulations 2003 (G.N. No. S 30/2003) (referred to in these Regulations as the principal Regulations) is amended —

(a)

by deleting the definition of “financial product provider” and substituting the following definitions:

“ “deposit” has the meaning given to that word in section 4B of the Banking Act (Cap. 19);

“financial institution” means any institution licensed or approved by, or registered with or otherwise regulated by, the Monetary Authority of Singapore under any written law;

“financial product provider” means any financial institution which accepts or has accepted deposits, or offers or has offered gold certificates or investment products, under the SRS;

“investment product” has the meaning given to that expression in the Financial Advisers Act (Cap. 110);”; and

(b)

by renumbering the regulation as paragraph (1) of that regulation, and by inserting immediately thereafter the following paragraph:

“(2) In these Regulations other than regulation 7(2)(a), unless the context otherwise requires —

(a)	a reference to an SRS member making a contribution to his SRS account includes his employer making a contribution to that account on his behalf;
(b)	a reference to a contribution of, by or from an SRS member to his SRS account includes a contribution by his employer to that account on his behalf.”.

Amendment of regulation 4

3. Regulation 4 of the principal Regulations is amended —

(a)

by deleting sub-paragraph (c) of paragraph (1) and substituting the following sub-paragraph:

“(c)

at any time, maintain comprehensive records and documents pertaining to its operation of the SRS —

(i)	for 5 years of assessment, in the case of records and documents pertaining to year of assessment 2008 or any subsequent year of assessment; or
(ii)	for 7 years of assessment, in the case of records and documents pertaining to any year of assessment before the year of assessment 2008;”; and

(b)

by inserting, immediately after the word “investments” in paragraph (3)(a)(ii), the words “and deposits”.

Amendment of regulation 6

4. Regulation 6 of the principal Regulations is amended —

(a)

by deleting the words “21 years” in paragraph (1)(a) and substituting the words “18 years”;

(b)

by deleting sub-paragraph (c) of paragraph (1) and substituting the following sub-paragraph:

“(c)	is not mentally disordered and is capable of managing himself and his affairs.”;

(c)

by deleting the word “Any” in paragraph (2) and substituting the words “Subject to paragraph (3), any”;

(d)

by deleting paragraph (3) and substituting the following paragraph:

“(3) Subject to paragraph (6), an SRS member shall not apply to an SRS operator to open an SRS account if —

(a)

he already has an SRS account (including one that has been suspended) with the same or another SRS operator;

(b)

he has a pending application with another SRS operator to open an SRS account; or

(c)

he previously had an SRS account with the same or another SRS operator and all the moneys in the account had been withdrawn —

(i)	on the ground that he is physically or mentally incapacitated from ever continuing in any employment, is either (if withdrawal is made before 1st March 2010) found to be of unsound mind or (if withdrawal is made on or after that date) mentally disordered and incapable of managing himself or his affairs, or is suffering from a terminal illness or disease; or
(ii)	on or after reaching the prescribed retirement age prevailing at the time of his first contribution.”;

(e)

by deleting paragraph (5) and substituting the following paragraphs:

“(5) Subject to paragraphs (5A) and (5B), where an applicant qualifies under paragraph (1) to be an SRS member, the SRS operator shall open an SRS account for that applicant, but only after —

(a)

obtaining a declaration from the applicant that —

(i)	he has no other SRS account (including one that has been suspended) at the time of application or, if he has an SRS account with another SRS operator, he has already taken all the necessary steps to close that account;
(ii)	he does not have a pending application with another SRS operator to open an SRS account at that time; and
(iii)	he did not previously have an SRS account all the moneys in which were withdrawn on the ground referred to in paragraph (3)(c)(i), or on or after reaching the age referred to in paragraph (3)(c)(ii); and

(b)

informing the applicant of the conditions of the SRS, including the following:

(i)	that an SRS member cannot have an SRS account with more than one SRS operator, a suspended SRS account being treated as an SRS account;
(ii)	the obligations of an SRS member under regulation 11(1);
(iii)	that the maximum amount of deduction under section 39(2)(o) of the Act is subject to the SRS contribution cap applicable to that SRS member;
(iv)	that SRS withdrawals are chargeable to tax in accordance with section 10L of the Act, and the circumstances in which a 5% penalty will be imposed under the Act on withdrawals;
(v)	that an SRS member cannot contribute to his SRS account if he had previously made a withdrawal from this or a previous SRS account of his on the ground referred to in paragraph (3)(c)(i), or on or after reaching the age referred to in paragraph (3)(c)(ii); and
(vi)	that an SRS member is subject to Part XX of the Act if he contravenes any provision of the Act relating to the SRS and regulation 20 if he contravenes these Regulations.

(5A) A declaration in respect of the matter referred to in paragraph (5)(a)(iii) need not be obtained if the applicant informs the SRS operator that the SRS account is to take the place of an existing SRS account with another SRS operator.

(5B) An SRS operator shall not open an SRS account for an applicant if —

(a)	the applicant already has an SRS account with the SRS operator, including one that has been suspended;
(b)	the applicant previously had an SRS account with the SRS operator and made a withdrawal from that account on the ground referred to in paragraph (3)(c)(i), or on or after reaching the age referred to in paragraph (3)(c)(ii), unless the SRS account to be opened is to replace an existing SRS account opened with another SRS operator; or
(c)	he knows or has reason to believe that any part of the declaration referred to in paragraph (5)(a) is false in a material particular.

(5C) An SRS operator shall not be taken to have contravened regulation (5B)(b) if, without being in contravention of regulation 4(1)(c), it has no record or document evidencing such withdrawal.”;

(f)

by deleting the words “wishes to transfer his SRS funds to another SRS operator” in paragraph (6) and substituting the words “who has an existing SRS account informs the SRS operator that he wishes to open an SRS account with another SRS operator in place of the existing SRS account”;

(g)

by inserting, immediately after the word “records” in paragraph (6)(b), the words “and documents”; and

(h)

by inserting, immediately after the words “paragraph (5)(a)” in paragraph (7)(b), “, (5B)”.

Amendment of regulation 7

5. Regulation 7 of the principal Regulations is amended —

(a)

by inserting, immediately after sub-paragraph (a) of paragraph (2), the following sub-paragraph:

“(aa)

shall, if he had instructed or authorised his employer to make any contribution on his behalf to his SRS account, immediately revoke such instruction or authorisation in writing;”;

(b)

by inserting, immediately after the word “investment” in paragraph (2)(b), the words “or make a deposit”;

(c)

by deleting the word “and” at the end of sub-paragraph (c) of paragraph (2), and by inserting immediately thereafter the following sub-paragraph:

“(ca)

shall return to his SRS account all deposits made using SRS funds during the period of suspension, together with all gains and interest derived from such deposits; and”; and

(d)

by inserting, immediately after paragraph (3), the following paragraphs:

“(3A) Where an SRS account of an SRS member is suspended under paragraph (1), the SRS operator shall not accept any contribution to his SRS account or allow the SRS funds to be used in contravention of paragraph (2)(b).

(3B) An SRS operator who contravenes paragraph (3A) shall be guilty of an offence.”.

Amendment of regulation 8

6. Regulation 8 of the principal Regulations is amended —

(a)

by deleting paragraphs (1), (2) and (3) and substituting the following paragraph:

“(1) All contributions to an SRS account shall be made in the form of cash.”;

(b)

by deleting paragraphs (4), (4A) and (5) and substituting the following paragraphs:

“(4) An SRS member may make contributions in a year to his SRS account if and only if he derives income in the preceding year.

(4A) Subject to paragraph (4), an SRS member who has been adjudged a bankrupt and who has made a withdrawal from his SRS account during his bankruptcy may make further contributions to his SRS account upon his discharge from bankruptcy.

(5) Notwithstanding paragraphs (4) and (4A), an SRS member shall not make any contribution to his SRS account if he had at any time made a withdrawal from his SRS account or a previous SRS account of his —

(a)

on the ground that he —

(i)	was physically or mentally incapacitated from ever continuing in any employment;
(ii)	was either (in the case of a withdrawal before 1st March 2010) found to be of unsound mind or (in the case of a withdrawal on or after that date) mentally disordered and incapable of managing himself or his affairs; or
(iii)	was suffering from a terminal illness or disease; or

(b)

on or after reaching the prescribed retirement age prevailing at the time of his first contribution.”;

(c)

by deleting paragraph (4) and substituting the following paragraph:

“(4) An SRS member may make contributions in a year to his SRS account if and only if he derives income in that year.”; and

(d)

by deleting paragraphs (6) to (11) and substituting the following paragraphs:

“(6) The employer of an SRS member shall not make any contribution to the SRS account of the SRS member on behalf of the SRS member unless —

(a)	the SRS member has instructed or authorised the employer in writing to make that contribution on his behalf, and such instruction or authorisation has not been revoked; and
(b)	the contribution consists solely of the SRS member’s gains or profits from any employment with that employer.

(7) Any person who contravenes paragraph (6) shall be guilty of an offence.

(8) An SRS member shall not make any contribution to his SRS account —

(a)	if the SRS contribution cap applicable to him is nil under regulation 9(1)(a); or
(b)	in any other case, to the extent that it exceeds the SRS contribution cap applicable to the SRS member for that year.

(9) An SRS operator —

(a)	shall accept contributions of an SRS member in any year only after the SRS contribution cap applicable to the SRS member for that year has been computed, and shall credit such contributions into the SRS account of the SRS member;
(b)	shall not accept any contribution from an SRS member in any year to the extent that it exceeds the contribution cap applicable to the SRS member for that year as computed by the SRS operator under regulation 9(3) to (10) (whichever is applicable); and
(c)	shall not accept any contribution from an SRS member if it knows or ought to know that the SRS contribution cap applicable to him is nil under regulation 9(1)(a).

(10) For the purposes of paragraphs (8)(b) and (9)(b), a contribution to an SRS account in any year exceeds the contribution cap applicable to an SRS member for that year if that contribution, when added to the contributions already made that year, if any, after deducting the withdrawals from his SRS account already made that year, if any, exceeds the contribution cap.

(11) In this regulation, “gains or profits from any employment” has the meaning given to that expression in section 10(2) of the Act.”.

Amendment of regulation 9

7. Regulation 9 of the principal Regulations is amended —

(a)

by deleting paragraph (1) and substituting the following paragraph:

“(1) Subject to regulation 10, the contribution cap of an SRS member for any year —

(a)

shall be nil if he had at any time made a withdrawal from his SRS account, including any previous SRS account of his —

(i)	on the ground that he was physically or mentally incapacitated from ever continuing in any employment, was either (in the case of a withdrawal before 1st March 2010) found to be of unsound mind or (in the case of a withdrawal on or after that date) mentally disordered and incapable of managing himself or his affairs, or was suffering from a terminal illness or disease; or
(ii)	on or after reaching the prescribed retirement age prevailing at the time of his first contribution;

(b)

in any other case, shall be computed in accordance with paragraphs (3) to (10), and shall be calculated by the SRS operator of the SRS member.”;

(b)

by deleting the word “The” in paragraph (3) and substituting the words “For the purpose of paragraph (1)(b), the”; and

(c)

by inserting, immediately after paragraph (7), the following paragraphs:

“(8) The Minister or such person as he may appoint may, upon application by the settlor or trustee of a pension or provident fund —

(a)	approved under section 5 of the Act (other than the Central Provident Fund or any pension or provident fund designated by the Minister under section 39(8) of the Act);
(b)	established at any time before 1st October 2008; and
(c)	which is to be dissolved,

designate the fund as a qualifying fund for the purposes of paragraph (9), subject to such terms and conditions as he may impose.

(9) The contribution cap of an SRS member who —

(a)	is a member of a qualifying fund that is dissolved on or after 1st October 2008;
(b)	is entitled in any year to receive a sum of money from that qualifying fund by reason of its dissolution; and
(c)	in that year (or such other year as the Minister or such person as he may appoint may in exceptional circumstances approve) makes a contribution to his SRS account using that sum of money or any part of it,

shall be increased by the amount referred to in paragraph (10) in the year such contribution is made.

(10) The amount referred to in paragraph (9) is the lower of the amounts derived from the following:

(a)	(A x B x C) – D; or
(b)	E,

where A is the relevant income base referred to in paragraph (5);

B is —

(i)

15% where the SRS member is a citizen of Singapore or a Singapore permanent resident on the date he makes the contribution referred to in paragraph (9)(c); or

(ii)

35% in any other case;

is the number of years (a part of a year being treated as a full year) between 2001 and the year immediately preceding the year referred to in paragraph (9)(b) (both years inclusive);

is the aggregate amount of SRS contributions made by the SRS member in all the years (including a part of a year) immediately preceding the year referred to in paragraph (9)(b); and

is the sum of money which the SRS member is entitled to receive from the qualifying fund by reason of the dissolution of the fund,

except that the amount computed in accordance with sub-paragraph (a) shall be treated as nil if D exceeds the product of A, B and C.”.

Amendment of regulation 10

8. Regulation 10(3) of the principal Regulations is amended by inserting, immediately after the words “intends to make” in sub-paragraph (b)(ii), the words “, or to instruct or authorise his employer to make on his behalf,”.

Amendment of regulation 11

9. Regulation 11 of the principal Regulations is amended —

(a)

by deleting the word “or” at the end of paragraph (1)(a);

(b)

by deleting the full-stop at the end of sub-paragraph (b) of paragraph (1) and substituting a semi-colon, and by inserting immediately thereafter the following sub-paragraphs:

“(c)

if he has made a deposit using SRS funds, use as collateral, security or guarantee for any financial transaction, or assign to another person —

(i)	the full amount in the account in which the funds are deposited; or
(ii)	any amount in the account if the amount in the account after deducting the first-mentioned amount is less than the sum of the SRS funds and all gains and interest derived therefrom, less any amount that has been transferred to the member’s SRS account; or

(d)

make a nomination under section 49L(2) of the Insurance Act (Cap. 142) in respect of any life insurance product acquired using his SRS funds.”;

(c)

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

“(1A) An SRS member shall not enter into any arrangement with any person with respect to the use of his SRS funds the purpose or one of the purposes of which is to reduce or avoid any liability imposed or which would otherwise have been imposed by or under section 10L of the Act or any provision of these Regulations.”;

(d)

by inserting, immediately after the words “paragraph (1)” in paragraph (2), the words “or (1A)”;

(e)

by deleting paragraph (3) and substituting the following paragraph:

“(3) Subject to paragraph (4), an SRS member may use his SRS funds to make a deposit with a financial institution, or use his SRS funds to acquire only the following investments:

(a)	gold certificates offered by a financial institution;
(b)	any investment product within the meaning of the Financial Advisers Act (Cap. 110) that is offered by or through a financial institution.”;

(f)

by deleting the words “a financial product” in paragraph (4) and substituting the words “an investment product”;

(g)

by deleting paragraph (5) and substituting the following paragraph:

“(5) An SRS operator shall —

(a)	ensure that the SRS funds of its SRS members are used only in the manner permitted by paragraph (3);
(b)	ensure that the amount standing to an account in which a deposit has been made using SRS funds of an SRS member does not at any time fall below the sum of the SRS funds deposited and all gains and interest derived therefrom, less any amount that has been transferred to the member’s SRS account;
(c)	ensure that on the closure of an account in which a deposit has been made using SRS funds of an SRS member, a sum comprising the amount of the SRS funds deposited and all gains and interest derived therefrom, less any amount that has been transferred to the member’s SRS account, is transferred to the member’s SRS account;
(d)	ensure that, on the instruction of an SRS member who has made a deposit of SRS funds to transfer from the account in which the SRS funds are deposited to his SRS account a sum comprising not more than the amount of the SRS funds deposited and all gains and interest derived therefrom (less any amount that has been transferred to his SRS account), the sum is so transferred;
(e)	subject to regulation 12(4), ensure that all gains or profits derived from investments acquired using SRS funds of any of its SRS members, and all proceeds of sale of such investments, are returned to his SRS account;
(f)	not discriminate against any deposit with any financial institution or any investment referred to in paragraph (3) created or distributed by any financial institution;
(g)	endeavour to offer settlement facilities to SRS members for as wide a range of investments referred to in paragraph (3) as possible;
(h)	settle each investment transaction individually and not allow contra trades or contra settlement; and
(i)	upon the death or bankruptcy of any of its SRS members, complete the settlement of any transaction initiated by that SRS member before such death or bankruptcy in accordance with the relevant law.”; and

(h)

by deleting paragraph (7) and substituting the following paragraph:

“(7) Nothing in this regulation shall be taken to require an SRS member to sell any investment product which he acquired using his SRS funds under paragraph (3) in the event that the product ceases to be an investment product within the meaning of the Financial Advisers Act (Cap. 110).”.

Amendment of regulation 12

10. Regulation 12 of the principal Regulations is amended —

(a)

by deleting the word “and” at the end of paragraph (1)(a);

(b)

by deleting sub-paragraph (b) of paragraph (1) and substituting the following sub-paragraphs:

“(b)	ensure that the amount standing to an account with the provider in which a deposit has been made using SRS funds of an SRS member does not at any time fall below the sum of the SRS funds deposited and all gains and interest derived therefrom, less any amount that has been transferred to the member’s SRS account;
(c)	ensure that on the closure of an account with the provider in which a deposit has been made using SRS funds of an SRS member, a sum comprising the amount of the SRS funds deposited and all gains and interest derived therefrom, less any amount that has been transferred to the member’s SRS account, is transferred to the member’s SRS account;
(d)	ensure that on the instruction of an SRS member who has made a deposit of SRS funds to transfer from the account in which the SRS funds are deposited to his SRS account a sum comprising not more than the amount of the SRS funds deposited and all gains and interest derived therefrom (less any amount that has been transferred to his SRS account), the sum is so transferred; and
(e)	subject to paragraph (4), ensure that all gains or profits derived from any investment acquired from the provider using the SRS funds of an SRS member, and all proceeds of sale of such investment are returned to the SRS account of the member.”;

(c)

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

“(1A) A financial product provider shall not enter into any arrangement with an SRS member with respect to the use of that SRS member’s SRS funds the purpose or one of the purposes of which is to reduce or avoid any liability imposed or which would otherwise have been imposed by or under section 10L of the Act or any provision of these Regulations.”;

(d)

by deleting the words “regulations 4(1)(a) to (d), (2) and (3) and 11(5)(a)” in paragraph (3)(a) and substituting the words “regulation 4(1)(a) to (d), (2) and (3)”;

(e)

by deleting the words “acquired any investment from it” in paragraph (4) and substituting the words “made any deposit with it using his SRS funds or who acquired any investment from it using his SRS funds”;

(f)

by deleting the words “any of the 2 periods” in paragraph (4)(d) and substituting the words “the period”; and

(g)

by inserting, immediately after the words “paragraph (1),” in paragraph (6), “(1A),”.

Amendment of regulation 13

11. Regulation 13 of the principal Regulations is amended —

(a)

by inserting, immediately after the words “SRS account” in paragraph (2), the words “whether by himself or another person”; and

(b)

by deleting sub-paragraph (b) of paragraph (5) and substituting the following sub-paragraph:

“(b)	is mentally disordered and incapable of managing himself or his affairs; or”.

Amendment of regulation 14

12. Regulation 14(2) of the principal Regulations is amended —

(a)	by inserting, immediately after the words “comprises solely of investments”, the words “or deposits or both”; and
(b)	by inserting, immediately after the words “such investments”, the words “or deposits”.

Amendment of regulation 15

13. Regulation 15 of the principal Regulations is amended —

(a)	by deleting the words “includes investments, the investments” in paragraph (1) and substituting the words “includes investments or deposits or both, the investments and deposits (as the case may be)”;
(b)	by deleting the words “listed shares which have become unlisted” in paragraph (1)(c) and substituting the words “unlisted shares”;
(c)	by deleting the words “investments acquired using SRS funds, the investments” in paragraph (2) and substituting the words “investments acquired or deposits made using SRS funds or both, the investments and deposits (as the case may be)”;
(d)	by deleting the words “listed shares which have become unlisted” in paragraph (2)(c) and substituting the words “unlisted shares”;
(e)	by inserting, immediately after the word “investment” wherever it appears in paragraphs (3) and (6), the words “or deposit”;
(f)	by inserting, immediately after the word “investments” in paragraph (4), the words “or deposits”; and
(g)	by inserting, immediately after the words “investments purchased with” in the regulation heading, the words “or deposits made using”.

New regulation 19

14. The principal Regulations are amended by inserting, immediately after regulation 18, the following regulation:

“Withdrawal under section 10L(3)(b) of Act disregarded in certain cases

19.—(1) Notwithstanding regulation 8 and (with effect from 15th September 2010) regulation 9(1)(a), where an SRS member —

(a)	made his first withdrawal under section 10L(3)(b) of the Act from his SRS account; and
(b)	subsequently made one or more contributions to his SRS account during the period between 1st October 2008 and 31st December 2008 (both dates inclusive),

then any withdrawal made under 10L(3)(b) of the Act prior to the date of the first of his contributions referred to in paragraph (b) shall be disregarded for the purposes of those provisions.

(2) Notwithstanding regulation 8 and (with effect from 15th September 2010) regulation 9(1)(a), where an SRS member —

(a)	made one or more withdrawals under section 10L(3)(b) of the Act of all the funds standing to his SRS account and closed his SRS account; and
(b)	subsequently opened another SRS account during the period between 1st October 2008 and 31st December 2008 (both dates inclusive),

then the withdrawal or withdrawals shall be disregarded for the purposes of those provisions.”.

New regulations 20 and 21

15. The principal Regulations are amended by inserting, immediately after regulation 19, the following regulations:

“Penalty

20.—(1) Any person who is guilty of an offence under these Regulations (other than regulation 11(1A) or 12(1A)) shall be liable on conviction to a fine not exceeding $1,000 and in default of payment to imprisonment for a term not exceeding 6 months.

(2) Any person who is guilty of an offence under regulation 11(1A) or 12(1A) shall be liable on conviction to a fine not exceeding $2,000 or to imprisonment for a term not exceeding 12 months or to both.

Composition of offences

21.—(1) Any offence under these Regulations, other than an offence under regulation 11(1A) or 12(1A), may be compounded by the Comptroller in accordance with section 199A of the Criminal Procedure Code (Cap. 68).

(2) The Comptroller may compound an offence by collecting from the person reasonably suspected of having committed the offence a sum of money not exceeding $500.”.

[G.N. Nos. S 207/2004; S 231/2005; S 874/2005]

Made this 8th day of September 2010.

PETER ONG

Permanent Secretary,
Ministry of Finance,
Singapore.

[MOF R032.013.2884.V1; AG/LLRD/SL/134/2005/16 Vol. 1]