Income Tax (Exemption of Royalties and Other Payments for Economic and Technological Development) Notification 2001

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No. S 97

Income Tax Act

(Chapter 134)

Income Tax (Exemption of Royalties and Other
Payments for Economic and Technological
Development) Notification 2001

In exercise of the powers conferred by section 13(4) of the Income Tax Act, the Minister for Finance hereby makes the following Notification:

Citation

1. This Notification may be cited as the Income Tax (Exemption of Royalties and Other Payments for Economic and Technological Development) Notification 2001.

Exemption

2. Subject to paragraph 3, there shall be exempt from tax any payment made for shrink-wrap software in the nature of income referred to in section 12(7) of the Act accruing in or derived from Singapore on or after 1st January 2001 by any non-resident person.

Terms and conditions of exemption

3. The exemption under paragraph 2 shall apply only if the payment for shrink-wrap software —

(a)

is for software distributed only in the form of compact discs or floppy diskettes in wrapped boxes accompanied by shrink-wrapped licences granting the purchaser the right to use the software under the following conditions:

(i)	the purchaser only receives the right to use the software but is not permitted to modify it in any way;
(ii)	the purchaser is not licensed to reverse engineer, de-compile, or disassemble the computer program; and
(iii)	the purchaser may resell his copy of the software as long as any other copies he has made are destroyed and the same terms and conditions of the licence are imposed on the subsequent purchaser; and

(b)

is made to a non-resident person where the income —

(i)	is not derived by that person from any trade or business carried on or exercised by him in Singapore; and
(ii)	is not effectively connected with any permanent establishment in Singapore.

Made this 21st day of February 2001.

LIM SIONG GUAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF(R) R32.12.06 Vol. 16; MF(R) R32.18.54; AG/LEG/SL/134/97/9 Vol. 2]

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