6.—(1) Section 13S applies to the share of divisible income of a partner of an approved partnership derived —(a) | during the period between 1 April 2008 and 24 March 2016 (both dates inclusive) from the qualifying activities mentioned in paragraphs (a), (b) and (c) of the definition of “qualifying activities” in paragraph (6); | (b) | on or after 1 June 2011 from the qualifying activities mentioned in paragraphs (d), (e) and (f) of the definition of “qualifying activities” in paragraph (6); and | (c) | on or after 25 March 2016 from the qualifying activities mentioned in paragraphs (g) and (h) of the definition of “qualifying activities” in paragraph (6), |
as it applies to the income of an approved shipping investment enterprise from the activities mentioned in section 13S(1)(a), (b), (c), (ca), (cb) and (d), with the modifications and exceptions set out in this regulation. |
[S 457/2017 wef 25/03/2016] (2) For the purposes of paragraph (1) —(a) | a reference in section 13S(2) to a shipping investment enterprise is a reference to a partnership registered under any written law in Singapore; | (b) | a reference in section 13S to the approval of a shipping investment enterprise is a reference to the approval of the partnership under section 13S(2); | (c) | a reference in section 13S(7), (8) and (18) to an approved shipping investment enterprise is a reference to a partner of the approved partnership; [S 457/2017 wef 01/01/2014] | (d) | a reference in section 13S(17) to an approved shipping investment enterprise is a reference to the approved partnership; | (e) | a reference in section 13S to a sea-going ship acquired, chartered or leased by an approved shipping investment enterprise is a reference to a sea-going ship acquired, chartered or leased by the approved partnership; and | (f) | paragraphs (3), (3A), (4), (5) and (5B) apply in lieu of section 13S(1A), (1AA), (5), (6) and (6A), and section 13S(1B) is to be construed accordingly. [S 457/2017 wef 01/06/2011] |
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(3) Section 13S(1) shall continue to apply to —(a) | a partner of a partnership the approval of which has expired or been withdrawn, but which continues to derive income from qualifying activities in relation to a sea-going ship acquired before or during the period of the approval, provided that the partnership has by the date of the expiry or before the withdrawal, fulfilled all the conditions referred to in section 13S(3); and | (b) | any reference in section 13S and these Regulations to an approved partnership shall be construed accordingly. |
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(3A) Section 13S(1)(d) does not apply to —(a) | any income of an approved partnership as a lessor of a sea‑going ship under a finance lease that is treated as a sale under section 10D; or | (b) | any income of an approved partnership from carrying on a business of trading in sea‑going ships or of constructing sea‑going ships for sale. [S 457/2017 wef 01/06/2011] |
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(4) In determining the share of divisible income of a partner of an approved partnership from qualifying activities which is exempt from tax under section 13S(1), the allowance provided for in sections 16, 17, 18, 18B, 18C, 19, 19A, 20, 21, 22 and 23 as apportioned to that share, other than allowances made to a lessee of a sea-going ship under regulations made under section 10D —(a) | shall be taken into account notwithstanding that no claim for the allowance has been made; and | (b) | shall only be deducted from the share of income of the partner derived from the qualifying activities, and the balance of those allowances shall not be available as a deduction against any other income of the partner; except that any balance remaining unabsorbed at the end of the tax exempt period of the approved partnership shall be available as a deduction against any other income of the partner for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 23. |
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(5) Where an approved partnership incurs a loss during the tax exempt period of the partnership in respect of qualifying activities, that loss as apportioned to each partner of the partnership —(a) | shall be deducted against the income of the partner from the qualifying activities in accordance with section 37; and | (b) | shall only be deducted against the income of the partner from the qualifying activities, and the balance of the loss shall not be available as a deduction against any other income of the partner, except that any balance remaining unabsorbed at the end of the tax exempt period of the partnership shall be available as a deduction against any other income of the partner for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 37. |
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(5A) Paragraphs (3) and (5) apply only in respect of income from the qualifying activities in paragraphs (a), (b), (c), (g) and (h) of the definition of “qualifying activities” in paragraph (6). [S 457/2017 wef 25/03/2016] |
(5B) Where an approved partnership incurs a loss on any sale or assignment mentioned in paragraph (d), (e) or (f) of the definition of “qualifying activities” in paragraph (6) in any basis period falling, in whole or in part, within the tax exempt period, that loss may only be deducted against the gains derived from another sale or assignment mentioned in paragraph (d), (e) or (f), as the case may be, in that basis period, and the balance of the loss is not available as a deduction against any other income. [S 457/2017 wef 01/06/2011] |
(6) In this regulation —“approved international shipping enterprise”, “finance leasing”, “international shipping enterprise”, “shipping investment enterprise”, “Singapore ship” and “tax exempt period” have the same meanings as in section 13S, as modified (where applicable) by paragraph (2); [S 457/2017 wef 11/04/2016] |
“qualifying activities” means —(a) | the chartering or finance leasing of any sea-going ship, acquired by the approved partnership before or during the period of its approval referred to in section 13S(3) to —(i) | a person who is neither resident in Singapore nor a permanent establishment in Singapore; or | (ii) | an approved international shipping enterprise, |
for use outside the limits of the port of Singapore; |
| (b) | the chartering or finance leasing of any sea-going Singapore ship, acquired by the approved partnership before or during the period of its approval referred to in section 13S(3), to a shipping enterprise within the meaning of section 13A for use outside the limits of the port of Singapore; [S 457/2017 wef 01/06/2011] | (c) | in respect of income for the year of assessment 2009 and subsequent years of assessment, the foreign exchange and risk management activities which are carried out in connection with and incidental to the activities referred to in paragraphs (a) and (b); [S 457/2017 wef 01/06/2011] | (d) | the sale of a sea-going ship; [S 457/2017 wef 01/06/2011] | (e) | the assignment to another of all the rights of the approved partnership as the buyer under a contract for the construction of a sea‑going ship; [S 457/2017 wef 25/03/2016] [S 457/2017 wef 01/06/2011] | (f) | the sale of all of the issued ordinary shares in a special purpose company of the approved partnership where, at the time of the sale of the shares, the special purpose company owns any sea‑going ship or is the buyer under a contract for the construction of any sea‑going ship; [S 457/2017 wef 01/06/2011] | (g) | the chartering or finance leasing of any sea-going ship acquired by the approved partnership before or during the period of its approval mentioned in section 13S(3), for use outside the limits of the port of Singapore; and [S 457/2017 wef 25/03/2016] | (h) | foreign exchange and risk management activities that are carried out in connection with and incidental to any activity mentioned in paragraph (g); [S 457/2017 wef 25/03/2016] |
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“ship” has the same meaning as in section 13S; [S 457/2017 wef 11/04/2016] |
“special purpose company”, in relation to an approved partnership, means a company that is wholly owned by the partnership and whose only business or intended business is the chartering or finance leasing of sea‑going ships. [S 457/2017 wef 01/06/2011] |
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