Income Tax (Concessionary Rate of Tax for Approved Offshore Composite Insurance Companies) (Amendment) Regulations 2004

Status:

Published in Subsidiary Legislation Supplement
on 27 Oct 2004

No. S 659

Income Tax Act

(Chapter 134)

Income Tax (Concessionary Rate of Tax for Approved Offshore Composite Insurance Companies) (Amendment) Regulations 2004

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 Composite Insurance Companies) (Amendment) Regulations 2004 and shall have effect for the year of assessment 2004 and subsequent years of assessment.

Amendment of regulation 2

2. Regulation 2 of the Income Tax (Concessionary Rate of Tax for Approved Offshore Composite Insurance Companies) Regulations (Rg 27) (referred to in these Regulations as the principal Regulations) is amended by inserting, immediately after the definition of “interest from ACU deposits”, the following definition:

“ “marine hull and liability business” means the business of insuring and reinsuring risks involving marine hull and liability but excludes cargo, energy and aviation risks;”.

Deletion and substitution of regulation 7

3. Regulation 7 of the principal Regulations is deleted and the following regulation substituted therefor:

“Exemption from tax

7.—(1) Notwithstanding regulation 5, 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 marine hull and liability business; and

(b)

the amount of income as is ascertained by the formula —

where

P_m

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;

P_n

P_o, P_i, P_oL and P_iL

have the same meanings as in regulation 6(1);

is the total amount of dividends and interest derived from outside Singapore, gains or profits realised from the sale of offshore investments, and interest from ACU deposits derived from the investment of its insurance fund established and maintained under the Insurance Act (Cap. 142) for the offshore general insurance business for the basis period ascertained in accordance with regulation 5(1)(c)(i);

is the total amount of dividends and interest derived from outside Singapore, gains or profits realised from the sale of offshore investments, and interest from ACU deposits derived from the investment of its insurance fund established and maintained under the Insurance Act for the offshore life business for the basis period ascertained in accordance with regulation 5(1)(c)(i);

is the total amount of the income referred to in regulation 5(1)(c)(ii) for the basis period; and

(i) the investment of its insurance funds established and maintained under the Insurance Act (Cap.142) for the general insurance business and life business; and

(ii) the investment of its shareholders’ funds established in Singapore which are used to support the general insurance and life business,

where the gains or profits realised from the sale of offshore investments is the net amount (after deducting losses from the gains or profits) realised during the basis period from the sale of offshore investments acquired by the approved insurance company less any expenses directly attributable to the production of such gains or profits allowable under the Act.

(2) Where the Comptroller is satisfied that any part of the insurance funds and shareholders’ funds is not required to support the marine hull and liability business of an approved marine hull and liability insurer, he may adopt a reduced amount of the dividends, interest and gains or profits under paragraph (1)(b) as appears to him to be reasonable in the circumstances..”.

Amendment of regulation 8

4. Regulation 8 of the principal Regulations is amended by deleting paragraphs (2) and (3) and substituting the following paragraph:

“(2) Notwithstanding paragraph (1), where an approved insurance company under the Act is also an approved marine hull and liability insurer under regulation 4, any item of expenditure not directly attributable to the marine hull and liability business, the offshore general insurance business or the offshore life business of such company, and capital allowances and donations, allowable to such company under the Act, shall be apportioned between such business and other insurance business of such company in the following manner:

(a)

the portion attributable to marine hull and liability business shall be ascertained by using the fraction ––

P_m + P _n ________________
P_o + P_i + P _oL + P_iL

(b)

the portion attributable to offshore life business and offshore general insurance business, other than marine hull and liability business, shall be ascertained by using the fraction ––

P_o + P_oL— P _m ________________
P_o + P_i + P _oL + P_iL

where

P_m and P_n

have the same meanings as in regulation 7 (1); and

P_o, P_i, P_oL and P_iL

have the same meanings as in regulation 6 (1).

Amendment of regulation 9

5. Regulation 9(1) of the principal Regulations is amended by deleting the word “offshore” in sub-paragraph (c).

Amendment of regulation 10

6. Regulation 10 of the principal Regulations is amended by deleting the words “section 26(3B)(b) and (c)” in the 4th line and substituting the words “section 26(8)(b) and (c)”.”.

Made this 3rd day of September 2004.

LIM SIONG GUAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF(R) R32.12.01 Vol. 25; AG/LEG/SL/134/2002/9 Vol. 1]

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