Concessionary rate of tax for income derived on or after 1 July 2021 of approved insurer
4A.—(1) Subject to this regulation, tax is payable at the rate of 10% on the income mentioned in paragraph (2) derived on or after 1 July 2021 by an approved insurer in a basis period for any year of assessment.
(2) For the purposes of paragraph (1), the income is —
(a)
the onshore life insurance surplus, and offshore life insurance surplus (as the case may be), derived by the insurer from accepting life reinsurance policies, excluding —
(i)
gains or profits from the sale of investments that are acquired using any life insurance fund relating to life reinsurance policies; and
(ii)
investment income or any other income derived from such life insurance fund, whether or not the income is derived in Singapore or elsewhere;
(b)
the part of A that is ascertained by the formula
(c)
the part of B that is ascertained by the formula and
(d)
the part of C that is ascertained by the formula
(3) In paragraph (2) —
“A” is the total amount of the following income of the approved insurer (excluding excluded income) derived in the basis period:
(a)
dividends and qualifying interest derived from the investment of its non-participating fund established and maintained under the Insurance Act 1966 for its offshore life business;
[S 215/2023 wef 31/12/2021]
(b)
gains or profits from the sale of qualifying investments acquired using such non-participating fund,
less any expenses incurred in the production of such income for which a deduction is allowed under the Act;
“B” is the total amount of the following income of the approved insurer (excluding excluded income) derived in the basis period:
(a)
dividends and qualifying interest derived from the investment of its non-participating fund established and maintained under the Insurance Act 1966 for its onshore life business;
[S 215/2023 wef 31/12/2021]
(b)
gains or profits from the sale of qualifying investments acquired using such non-participating fund,
less any expenses incurred in the production of such income for which a deduction is allowed under the Act;
“C” is the total amount of the following income of the approved insurer (excluding excluded income) derived in the basis period:
(a)
dividends and qualifying interest derived from the investment of its shareholders’ fund established in Singapore and used to support its offshore life business and onshore life business;
(b)
gains or profits from the sale of qualifying investments acquired using such shareholders’ fund,
less any expenses incurred in the production of such income for which a deduction is allowed under the Act;
“Pil” is the total amount of the gross premiums received or receivable in the basis period in respect of all policies underwritten by the approved insurer in the course of carrying on its onshore life business in Singapore;
“Pilr” is the total amount of gross premiums received or receivable in the basis period in respect of all non-participating policies underwritten by the approved insurer in the course of carrying on its onshore life reinsurance business in Singapore;
“Pinp” is the total amount of gross premiums received or receivable in the basis period in respect of all non-participating policies underwritten by the approved insurer in the course of carrying on its onshore life business in Singapore;
“Pol” is the total amount of gross premiums received or receivable in the basis period in respect of all policies underwritten by the approved insurer in the course of carrying on its offshore life business in Singapore;
“Polr” is the total amount of gross premiums received or receivable in the basis period in respect of all non-participating policies underwritten by the approved insurer in the course of carrying on its offshore life reinsurance business in Singapore;
“Ponp” is the total amount of gross premiums received or receivable in the basis period in respect of all non-participating policies underwritten by the approved insurer in the course of carrying on its offshore life business in Singapore;
“excluded income” means any income derived in the basis period from any investment in, or the sale of, any stock, share or other securities of a company that —
(a)
is in the business of trading or holding —
(i)
prescribed assets or projects, and other immovable property; or
(ii)
immovable properties other than prescribed assets or projects;
(b)
is not in the business of property development; and
(c)
is not listed on a stock exchange in Singapore or elsewhere.
(4) Where the approved insurer is also an approved captive insurer, the reference to gross premiums in the definitions of “Pilr” and “Polr” in paragraph (3) excludes the gross premiums received or receivable in the basis period in respect of all policies underwritten by the approved insurer in the course of carrying on its captive life business in Singapore.
(5) For the purposes of paragraph (2), where the Comptroller is satisfied that any part of the non-participating fund mentioned in the definition of “A” or “B” in paragraph (3) is not required to support the offshore life reinsurance business or the onshore life reinsurance business of the approved insurer (as the case may be), the Comptroller may adopt such reduced amount of “A” in paragraph (2)(b) or “B” in paragraph (2)(c) as appears to the Comptroller to be reasonable in the circumstances.
(6) For the purposes of paragraph (2), where the Comptroller is satisfied that any part of the shareholders’ fund mentioned in the definition of “C” in paragraph (3) is not required to support the approved insurer’s offshore life reinsurance business and onshore life reinsurance business, the Comptroller may adopt such reduced amount of “C” in paragraph (2)(d) as appears to the Comptroller to be reasonable in the circumstances.
(7) A reference in this regulation to interest includes a reference to qualifying return in lieu of interest.