Income Tax (Exemption and Concessionary Tax Rate for Income from Life Insurance Business) Regulations

Income Tax Act

(Chapter 134, Section 43C)

Rg 28

G.N. No. S 212/1995

REVISED EDITION 1996

(15th May 1996)

[5th May 1995]

Citation

1. These Regulations may be cited as the Income Tax (Exemption and Concessionary Tax Rate for Income from Life Insurance Business) Regulations and shall have effect for the year of assessment 1996 and subsequent years of assessment.

[S 81/2009 wef Y/A 2005 & Sub Ys/A]

[S 320/2016 wef 05/07/2016]

Definitions

2. In these Regulations —

“approved captive insurer” means any captive insurer approved under regulation 3A;

[S 81/2009 wef 17/02/2006]

“approved insurer” means any insurer approved under regulation 3;

[S 81/2009 wef Y/A 2005 & Sub Ys/A]

[Deleted by S 320/2016 wef 01/04/2013]

“capital allowances” means the allowances under section 19, 19A, 20, 21, 22 or 23 of the Act;

“captive insurer” has the same meaning as in section 1A of the Insurance Act (Cap. 142);

[S 81/2009 wef 17/02/2006]

“interest from ACU deposits” means interest derived from deposits held with an Asian Currency Unit in Singapore;

[S 320/2016 wef 05/07/2016]

“offshore captive insurance business” means the offshore life business in relation to the risks of related companies, including third party offshore risks underwritten in the course of and incidental to the captive insurance business;

[S 81/2009 wef 17/02/2006]

“offshore investments” means —

(a)	stocks and shares denominated in any foreign currency of companies not incorporated and not resident in Singapore;
(b)	securities, other than stocks and shares, denominated in any foreign currency (including bonds, notes, certificates of deposit and treasury bills) issued by foreign governments, foreign banks outside Singapore and companies not incorporated and not resident in Singapore;
(c)	futures contracts denominated in any foreign currency made in any futures exchange;
(d)	any immovable property situated outside Singapore;
(e)	certificates of deposit, notes and bonds issued by Asian Currency Units in Singapore;
(f)	Asian Dollar Bonds approved under section 13(1)(v) of the Act; and
(g)	foreign currency deposits held outside Singapore with financial institutions outside Singapore; [S 320/2016 wef 05/07/2016]

“offshore life business” and “participating fund” have the same meanings as in section 26(12) of the Act;

[S 603/2017 wef 28/11/2013]

“offshore life policy” means a life policy that is not a Singapore policy within the meaning of paragraph 2(1)(a) of the First Schedule to the Insurance Act;

[S 603/2017 wef 28/11/2013]

“participating policy” has the same meaning as in paragraph 6A of the First Schedule to the Insurance Act ;

[S 81/2009 wef Y/A 2006 & Sub Ys/A]

[S 748/2010 wef 01/04/2008]

“qualifying return in lieu of interest” means any return in lieu of interest from investing in products endorsed by any Shari’ah council or body, or by any committee formed for the purpose of providing guidance on compliance with Shari’ah law.

[S 748/2010 wef 01/04/2008]

Application

2A. These Regulations apply to —

(a)	an approved insurer that is approved as such before 1 June 2017; and
(b)	an approved captive insurer that is approved as such before 1 June 2017. [S 611/2017 wef 01/06/2017]

Approval of insurer

3.—(1) The Minister or such person as he may appoint may, upon application by any insurer registered under the Insurance Act (Cap. 142) to carry on life insurance business only and if he considers it expedient in the public interest to do so, during the period from 1 April 2010 to 31 May 2017 (both dates inclusive) approve the insurer as an approved insurer for the purposes of these Regulations.

[S 603/2017 wef 01/04/2015]

[S 611/2017 wef 01/06/2017]

(2) Any approval under paragraph (1) shall be for such period not exceeding 10 years as the Minister or such person as is appointed under paragraph (1) may specify.

[S 103/2011 wef 01/04/2010]

Previously approved insurers

3AA.—(1) Where an insurer registered under the Insurance Act (Cap. 142) was, on 31st March 2010, an approved insurer under regulation 3 as in force before 1st April 2010, it shall remain approved as an approved insurer under regulation 3 until 1st August 2010 unless —

(a)	the insurer makes an application to the Minister, or such other person as he may appoint, on or before 31st July 2010 to continue to be an approved insurer, supported by a declaration made by the insurer in a form determined by the MAS; and
(b)	the Minister or that other person, if he considers it expedient in the public interest to do so, approves the insurer as an approved insurer under regulation 3.

(2) Any approval under paragraph (1) shall be for such period not exceeding 10 years starting from 1st April 2010 as the Minister or the other person referred to in that paragraph may specify, and shall be subject to such terms and conditions as the Minister or that person may think fit to impose.

(3) In this regulation, “MAS” means the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act (Cap. 186).

[S 103/2011 wef 01/04/2010]

Approval of captive insurer

3A.—(1) The Minister or such person as he may appoint may, upon application by any captive insurer and if he considers it expedient in the public interest to do so, during the period from 17 February 2006 to 31 May 2017 (both dates inclusive) approve the insurer as an approved captive insurer.

[S 320/2016 wef 16/02/2011]

[S 603/2017 wef 01/04/2016]

[S 611/2017 wef 01/06/2017]

(2) Any approval granted under paragraph (1) is for such period not exceeding 10 years as the Minister or such person as the Minister may appoint may specify.

[S 611/2017 wef 01/06/2017]

(3) No approval may be given under paragraph (1) unless, at the time of such approval, all the functions in the following sub‑paragraphs are undertaken by the captive insurer, by a company incorporated in Singapore, or by personnel located in Singapore who are employed by a company incorporated outside Singapore:

(a)

either or both of the following:

(i)	ensuring compliance with any requirement or any direction, notice or other document issued under the Insurance Act (Cap. 142);
(ii)	ensuring compliance with any requirement or any direction, notice or other document issued under the Monetary Authority of Singapore Act (Cap. 186);

(b)

ensuring compliance with any requirement relating to financial accounting, auditing and reporting under the Companies Act (Cap. 50);

(c)

the day-to-day management of the captive insurer’s business.

[S 603/2017 wef 26/10/2017]

3B. [Deleted by S 320/2016 wef 01/04/2013]

Concessionary rate of tax for approved insurer

4.—(1) Tax shall be payable at the rate of 10% on the following income derived by an approved insurer:

(a)

the amount referred to in section 26(7)(a)(i) of the Act (but excluding the investment income and gains or profits derived from the sale of investments and other income, whether derived from Singapore or elsewhere, of any life insurance fund established under the Insurance Act relating to offshore life policies);

[S 81/2009 wef Y/A 2006 & Sub Ys/A]

(b)

the dividends and interest derived from outside Singapore, the gains or profits realised from the sale of offshore investments, and interest from ACU deposits derived from —

(i)	subject to paragraph (2), the investment of its insurance fund established and maintained under the Insurance Act for the offshore life business; and
(ii)	the investment of its shareholders’ funds established in Singapore which are used to support the offshore life business as ascertained under regulation 5. [S 81/2009 wef Y/A 2005 & Sub Ys/A] [S 748/2010 wef 01/04/2008] [S 320/2016 wef 01/04/2013]

(2) Where the Comptroller is satisfied that any part of the insurance fund referred to in sub-paragraph (b)(i) of paragraph (1) is not required to support the offshore life business of an approved insurer, he may adopt such reduced amount of the dividends, interest and gains or profits under that sub-paragraph as appears to him to be reasonable in the circumstances.

[S 81/2009 wef Y/A 2005 & Sub Ys/A]

(3) For the year of assessment 2012 and subsequent years of assessment, a reference to interest in this regulation includes a reference to qualifying return in lieu of interest.

[S 320/2016 wef 05/07/2016]

[G.N. No. S 212/95]

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