No. S 492
Income Tax Act
(Chapter 134)
Income Tax (Remission of Tax for Companies) Rules 1999
In exercise of the powers conferred by sections 7 and 92(4) of the Income Tax Act, the Minister for Finance hereby makes the following Rules:
Citation
1.  These Rules may be cited as the Income Tax (Remission of Tax for Companies) Rules 1999.
Definitions
2.  In these Rules —
“chargeable concessionary income” means chargeable income subject to tax at the concessionary rate of 10% or such other concessionary rate as may be prescribed under section 13H, 43A, 43C (excluding such part of the income ascertained under section 26(3A) of the Act as is apportioned to the policyholders of an insurance company subject to the concessionary rate of tax prescribed by regulations made under section 43C), 43D, 43E, 43F, 43G, 43H, 43I, 43J, 43K, 43L, 43M, 43N or 43O of the Act or section 19B or 19J of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86);
“chargeable normal income” means chargeable income subject to tax at the rate of 26%;
“Singapore dividend” means any dividend derived from Singapore from which tax has been deducted under section 44 of the Act.
Computation of tax payable on Singapore dividend
3.  In determining the amount of tax payable by a company on any Singapore dividend for the year of assessment 1999, the following provisions shall apply:
(a)the Comptroller shall determine the manner and extent to which any allowances (including investment allowances given under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86)), expenses, losses and donations allowable under the Act are to be deducted;
(b)where the Singapore dividend is assessed to tax under section 10(1)(d) of the Act, the tax payable on the Singapore dividend shall be computed in accordance with the formula —
image1.gif
where A
is the statutory income of the company from Singapore dividend for that year of assessment;
B
is the aggregate of the statutory income of the company from each source of income subject to tax at the rate of 26% for that year of assessment:
 
Provided that in computing the statutory income of the company from any trade, business, profession or vocation, there shall be deducted from such income —
 
(i)any loss deducted under section 37 of the Act in ascertaining the chargeable normal income of the company for that year of assessment; and
 
(ii)any normal investment allowance under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) used for that year of assessment;
C
is the chargeable normal income for that year of assessment; and
(c)where the Singapore dividend is assessed to tax under section 10(1)(a) of the Act as income from a trade, business, profession or vocation, the tax payable on the Singapore dividend shall be computed in accordance with the formula —
image2.gif
Where X
is the statutory income of the company from the trade, business, profession or vocation for that year of assessment which is attributable to Singapore dividend:
 
Provided that in computing the statutory income of the company from the trade, business, profession or vocation, there shall be deducted from such income —
 
(i)any loss deducted under section 37 of the Act in ascertaining the chargeable normal income of the company for that year of assessment; and
 
(ii)any normal investment allowance under Part X of the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) used for that year of assessment;
Y
is the aggregate of the statutory income of the company from each source of income subject to tax at the rate of 26% for that year of assessment;
Z
is the chargeable normal income for that year of assessment.
Exemption of certain dividends
4.  Where a company resident in Singapore is given a remission of tax for the year of assessment 1999 under section 92(3) of the Act, the following provisions shall apply:
(a)as soon as any amount of tax of the company is so remitted, the following amount of income shall be credited to a special account (referred to in these Rules as the tax rebate account) to be kept by the company —
(i)in the case of any amount of tax remitted in respect of tax payable on chargeable normal income, the amount of tax so remitted divided by 26%;
(ii)in the case of any amount of tax remitted in respect of tax payable on chargeable concessionary income, the amount of tax so remitted; and
(b)subsections (3) to (10) and (12) of section 13E of the Act shall apply, with the necessary modifications, to the company in respect of a distribution of dividends from the income credited to the tax rebate account as if the company were a company referred to in subsection (3) of that section.
Made this 2nd day of November 1999.
LIM SIONG GUAN
Permanent Secretary,
Ministry of Finance,
Singapore.
[F41.3.001 Vol. 19; AG/LEG/SL/134/97/9 Vol. 1]