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LexisNexis Annotated Statutes of Singapore

LexisNexis Annotated Statutes of Singapore Income Tax Act Economic Expansion Incentives (Relief from Income Tax) Act

Author: Tang Siau Yan
Publisher: LexisNexis Singapore
ISBN: 9789812369192
Published In: January 2012
Format: Paperback
Jurisdiction: Singapore ? Disclaimer:
Countri(es) stated herein are used as reference only

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This work is a section by section commentary of the Income Tax Act and the Economic Expansion Incentives (Relief from Income Tax) Act. It pulls together updated and convenient reference information from various sources inclusive of subsidiary legislation, court judgments, board of review decisions Inland Revenue Authority of Singapore circulars, Monetary Authority of Singapore circulars, Institute of Certified Public Accountants of Singapore guidelines? all of which are relevant to the interpretation and application of provisions of the Income Tax Act and the Economic Expansion Incentive (Relief from Income Tax) as of 29 February 2012, inclusive of changes proposed in the Budget 2012.

Key Features:

Extensive cross-references to various sources of information which are relevant to the interpretation of the two Acts in practice.
Includes key cases from jurisdictions ie: Australia, United Kingdom, Hong Kong and Malaysia.
Up-to-date, complete and succinct.
In-depth annotations, referenced by paragraph numbers.
Bold headings to identify key phrases or subsections arising in each provision.

PART I
PRELIMINARY

1. Short title
2. Interpretation

PART II
ADMINISTRATION

3. Appointment of Comptroller and other officers
4. Powers of Comptroller
5. Approved pension or provident fund
6. Official secrecy
7. Rules
8. Service and signature of notices
8A. Electronic service
9. Free postage

PART III
IMPOSITION OF INCOME TAX

10. Charge of income tax
10A. Profits of investment company
10B. Profits of unit trusts
10C. Excess provident fund contributions, etc., deemed to be income
10D. Income from finance or operating lease
10E. Ascertainment of income of investment holding company
10F. Ascertainment of income from certain public-private partnership arrangement
10G. ?
10H. Ascertainment of income from business of hiring out motor cars or providing driving instructions
10I. Reduction of share capital
10J. Shares buyback
10K. Shares redemption
10L. Withdrawals from Supplementary Retirement Scheme
10M. Buyback of preference shares
10N. Securties lending or repurchase arrangement
11. Ascertainment of income of clubs, trade associations, etc
12. Source of income

PART IV
EXEMPTION FROM I NCOME TAX

13. Exempt income
13A. Exemption of shipping profits
13B. Exemption of certain dividends
13C. Exemption of income of trustee of trust fund arising from funds managed by fund manager in Singapore
13CA. Exemption of income of non-resident arising from funds managed by fund manager in Singapore
13D. Exemption of certain dividends of approved investment company
13E. Exemption of dividends from foreign income
13F. Exemption of international shipping profits
13G. Exemption of income of foreign trust
13H. Exemption of income of venture company
13I. Exemption of certain dividends of Singapore Exchange Derivatives Trading Limited
13J. Exemption of tax on gains or profits from equity remuneration incentive scheme (SMEs)
13K. Exemption of certain dividends of Singapore Exchange Derivatives Clearing Limited
13L. Exemption of tax on gains or profits from equity remuneration incentive scheme
13M. Exemption of tax on gains or profits from equity remuneration incentive scheme (start-ups)
13N. Exemption of tax on income derived by non-ordinarily resident individual
13O. Exemption of income of foreign account of philanthropic purpose trust
13P. Exemption of income derived from asset securitisation transaction
13Q. Exemption of relevant income of prescribed locally administered trust
13R. Exemption of income of company incorporated and resident in Singapore arising from funds managed by fund manager in Singapore
13S. Exemption of income of shipping investment enterprise
13T. Exemption of trust income to which beneficiary is entitle
13U. Exemption of income of not-for-profit organisation
13V. Exemption of income derived by law practice from international arbitration held in Singapore
13W. Exemption of relevant income of eligible family-owned investment holding company
13X. Exemption of income arising from funds managed by fund manager in Singapore
13Y. Exemption of certain income of prescribed sovereign fund entity and approved foreign government-owned entity

PART V
DEDUCTIONS AGAINST INCOME

14. Deductions allowed
14A. Deduction for costs for protecting intellectual property
14B. Further deduction for expenses relating to approved trade fairs, exhibitions or trade missions or to maintenance of overseas trade office
14C. Further deduction for logistics expenses
14D. Expenditure on research and development
14DA. Enhanced deduction for qualifying expenditure on research and development
14E. Further deduction for expenditure on research and development project
14F. Management expenses of investment companies
14G. ?
14H. Expenditure on building modifications for benefit of disabled employees
14I. Provisions by banks and qualifying finance companies for doubtful debts and diminution in value of investments
14J. Further deduction for expenditure on research and development of new financial activities
14K. Further or double deduction for overseas investment development expenditure
14L. Further deduction for expenses incurred in relocation or recruitment of overseas talent
14M. Deduction for hotel refurbishment expenditure
14N. Deduction for upfront land premium
14O. Deduction for special reserve of approved general insurer
14P. Deduction for treasury shares transferred under employee equity- based remuneration scheme
14PA. Deduction for shares transferred by special purpose vehicle under employee equity-based remuneration scheme
14Q. Deduction for renovation or refurbishment expenditure
14R. Deduction for qualifying training expenditure
14S. Deduction for qualifying design expenditure
14T. Deduction for expenditure on leasing of PIC automation equipment under qualifying lease
14U. Deduction for expenses incurred before first dollar of income from trade, business, profession or vocation
15. Deductions not allowed

PART VI
CAPITAL ALLOWANCES

16. Initial and annual allowances, industrial buildings and structures
17. Balancing allowances and charges, industrial buildings and structures
18. Definitions for sections 16, 17 and 18B
18B. Transitional provisions for capital expenditure incurred on industrial buildings or structures on or after 23rd February 2010
18C. Initial and annual allowances for certain buildings and structures
19. Initial and annual allowances, machinery or plant
19A. Allowances of 3 years or 2 years write off for machinery and plant, and 100% write off for computer, prescribed office automation equipment and robot
19B. Writing-down allowances for intellectual property rights
19C. Writing-down allowances for approved cost-sharing agreement for research and development activities
19D. Writing-down allowance for IRU
20. Balancing allowances and charges for machinery or plant
21. Replacement of machinery or plant
22. Expenditure on machinery or plant
22A. Order of set-off of allowances
23. Carry forward of allowances
24. Special provisions as to certain sales
25. ...

PART VII
ASCERTAINMENT OF CERTAIN INCOME

26. Profits of insurers
26A. Ascertainment of income of member of Lloyd?s syndicate
27. Profits of non-resident shipowner or charterer
28. Profits of non-resident air transport and cable undertakings
29. Income from certain dividends to include tax thereon
30. Certain undistributed profits may be treated as distributed
31. Income arising from settlements
32. Valuation of trading stock on discontinuance or transfer of trade or business
33. Comptroller may disregard certain transactions and dispositions
34. Decision of Comptroller no bar to appeal
34A. Adjustment on change of basis of computing profits of financial instruments
34B. Islamic financing arrangements
34C. Amalgamation of companies
34D. Transactions not at arm?s length

PART VIII
ASCERTAINMENT OF STATUTORY INCOME

35. Basis for computing statutory income
35A. Cessation of source of income commenced before 1st January 1969
36. Partnership
36A. Limited liability partnership
36B. Registered business trusts
36C. Limited partnership

PART IX
ASCERTAINMENT OF ASSESSABLE INCOME

37. Assessable income
37A. Restriction on deduction of trading losses against dividends
37B. Adjustment of capital allowances and losses between income subject to tax at concessionary and normal rates of tax
37C. Group relief for Singapore companies
37D. Transfer of qualifying deduction between spouses
37E. Carry-back of capital allowances and losses
37F. Carry-back of capital allowances and losses between spouses
37G. Deduction for incremental expenditure on research and development
37H. Cash grant for research and development expenditure for start-up company
37I. Cash payout under Productivity and Innovation Credit Scheme
37J. Penalties for false information, etc., under section 37I
37K. Deduction for qualifying investments in qualifying start-up companies
37L. Deduction for acquisition of shares of companies

PART X
ASCERTAINMENT OF CHARGEABLE INCOME AND PERSONAL RELIEFS

38. Chargeable income
39. Relief and deduction for resident individual and Hindu joint family
40. Relief for non-resident citizens and certain other non-residents
40A. Relief for non-resident public entertainers
40B. Relief for non-resident employees
40C. Relief for non-resident SRS members
40D. Relief for non-resident deriving income from activity as public entertainer and employee, etc.
41. Proof of claims for deduction or relief

PART XI
RATES OF TAX

42. Rates of tax upon individuals
42A. Rebate for children of family
43. Rate of tax upon companies and others
43A. Concessionary rate of tax for Asian Currency Unit, Fund Manager and securities company
43B. Special rate of tax for non-resident shipowner or charterer or air transport undertaking
43C. Exemption and concessionary rate of tax for insurance and re-insurance business
43D. Concessionary rate of tax for offshore transactions on any market maintained by Singapore Exchange or its subsidiaries
43E. Concessionary rate of tax for headquarters company
43F. Concessionary rate of tax for oil trading company
43G. Concessionary rate of tax for Finance and Treasury Centre
43H. Concessionary rate of tax for international commodity trading company
43I. Concessionary rate of tax for offshore leasing of machinery and plant
43J. Concessionary rate of tax for trustee company
43K. Concessionary rate of tax for members of Singapore Commodity Exchange Ltd, etc
43L. ?
43M. ?
43N. Concessionary rate of tax for income derived from debt securities
43O. Concessionary rate of tax for cyber trading
43P. Concessionary rate of tax for global trading company and qualifying company
43Q. Concessionary rate of tax for financial sector incentive company
43R. Concessionary rate of tax for provision of processing services to financial institutions
43S. Concessionary rate of tax for commodity derivatives trading company
43T. Concessionary rate of tax for income derived from securities lending or repurchase arrangement
43U. Concessionary rate of tax for income derived from organising or staging tourism event
43V. Concessionary rate of tax for clearing member of Singapore clearing house
43W. Concessionary rate of tax for shipping investment manager
43X. Concessionary rate of tax for trust income to which beneficiary is entitled
43Y. Concessionary rate of tax for leasing of aircraft and aircraft engines
43Z. Concessionary rate of tax for aircraft investment manager
43ZA. Concessionary rate of tax for container investment enterprise
43ZB. Concessionary rate of tax for container investment manager
43ZC. Concessionary rate of tax for approved insurance brokers
43ZD. Concessionary rate of tax for income derived from managing qualifying registered business trust or company
43ZE. Concessionary rate of tax for ship broking and forward freight agreement trading
43ZF. Concessionary rate of tax for shipping-related support services

PART XII
RIGHTS OF DEDUCTION OF TAX

44. Deduction of tax from dividends of companies
44A. Transitional provisions for company subjected to former imputation system
45. Withholding of tax in respect of interest paid to non-resident persons
45A. Application of section 45 to royalties, management fees, etc
45AA. Tax deemed withheld and recoverable from person in breach of condition imposed under section 13(4)
45B. Application of section 45 to non-resident director?s remuneration
45C. Application of section 45 to distribution by unit trust
45D. Application of section 45 to gains from real property transactions
45E. Application of section 45 to withdrawals by non-citizen SRS members, etc
45F. Application of section 45 to income from profession or vocation carried on by non-resident individual, etc
45G. Application of section 45 to distribution from any real estate investment trust
45GA. Application of section 45 to income derived as public entertainer
45H. Application of section 45 to commission or other payment of junket promoter

PART XIII
ALLOWANCES FOR TAX CHARGED

46. Tax deducted from dividends, interests, etc
47. Special allowance for interest received as trading receipts

PART XIV
RELIEF AGAINST DOUBLE TAXATION

48. ...
49. Avoidance of double taxation arrangements
50. Tax credits
50A. Unilateral tax credits
50B. Tax credits for trust income to which beneficiary is entitled
50C. Pooling of credits

PART XV
PERSONS CHARGEABLE

Husband and wife
51. Income of wife
Trustees, agents and curators
52. Chargeability of trustees, etc
53. Chargeability of agent of person residing out of Singapore
54. Liability of person chargeable in respect of incapacitated person
55. Liability of managers of companies or bodies of persons
56. Indemnification of representative
57. Power to appoint agent, etc., for recovery of tax
58. Deceased persons
59. Duty of liquidator on winding up of company or limited liability partnership
60. Chargeability of joint trustees
61. Hindu joint families

PART XVI
RETURNS

62. Notice of chargeability and returns
62A. The basic rule: Singapore dollar to be used
62B. Currency other than Singapore dollar to be used in certain circumstances
63. Furnishing of estimate of chargeable income if no return is made under section 62
64. Comptroller may call for further returns
65. Power to call for returns, books, etc
65A. Statement of bank accounts, assets, etc
65B. Power of Comptroller to obtain information
65C. Failure to comply with notices issued by Comptroller
66. Returns to be deemed to be furnished by due authority
67. Keeping of books of account and giving of receipts
68. Official information and secrecy, and returns by employer
69. Lists to be prepared by representative or agent
70. Occupiers to furnish return of rent payable
71. Return to be made by partnership
71A. ?

PART XVII
ASSESSMENT AND OBJECTIONS

72. Comptroller to make assessments
73. Advance assessments
74. Additional assessments
75. Waiver of small assessments
76. Service of notices of assessment and revision of assessment
77. Errors and defects in assessment and notice

PART XVIII
APPEALS

78. Board of Review
79. Right of appeal
80. Hearing and disposal of appeals
81. Appeals to High Court
82. Cases stated for High Court
83. Proceedings before Board of Review and High Court
84. Assessments to be final and conclusive

PART XIX
COLLECTION, RECOVERY AND REPAYMENT OF TAX

85. Time within which payment is to be made
86. Recovery of tax from persons leaving Singapore
87. Penalty for non-payment of tax and enforcement of payment
88. Change of address
89. Suit for tax by Comptroller
90. Statement of Comptroller sufficient
91. Deduction of tax from emoluments and pensions
92. Remission of tax
92A. Remission of tax of companies for year of assessment 2011
92B. Cash grant for companies for year of assessment 2011
93. Repayment of tax
93A. Relief in respect of error or mistake

PART XX
OFFENCES AND PENALTIES

94. Penalties
94A. Penalty for failure to make return
95. Penalty for incorrect return
96. Penal provisions relating to fraud, etc
96A. Serious fraudulent tax evasion
97. Penalties for offences by authorised and unauthorised persons
98. Penalty for obstructing officers
99. Tax to be payable notwithstanding any proceedings for penalties
100. Provisions relating to penalty
101. Sanction for prosecution
102. Service of summons
103. Saving for criminal proceedings
104. Admissibility of certain statements and documents as evidence
105. Jurisdiction of Courts

PART XXA
EXCHANGE OF INFORMATION UNDER AVOIDANCE OF DOUBLE TAXATION ARRANGEMENTS AND EXCHANGE OF INFORMATION ARRANGEMENTS

105A. Interpretation of this Part
105B. Purpose of this Part
105BA. Exchange of information arrangement
105C. Prescribed arrangement
105D. Request for information
105E. Comptroller to serve notice of request on certain persons
105F. Power of Comptroller to obtain information
105G. Power of Comptroller to obtain information from other authorities
105H. Rules for purposes of this Part

PART XXB
COURT ORDERS RELATING TO RESTRICTED INFORMATION

105I. Interpretation of this Part
105J. Orders relating to certain information
105K. Supplementary provisions regarding section 105J orders
105L. Immunities
105M. Failure to comply with section 105J orders

PART XXI
MISCELLANEOUS

106. Powers to amend Schedules
107. Consequential provision arising from abolition of imputation system
108. Advance rulings

FIRST SCHEDULE
INSTITUTION, AUTHORITY, PERSON OR FUND EXEMPTED

SECOND SCHEDULE
RATES OF TAX

THIRD SCHEDULE

FOURTH SCHEDULE
NAME OF BOND, SECURITIES, STOCK OR FUND

FIFTH SCHEDULE
CHILD RELIEF

SIXTH SCHEDULE
NUMBER OF YEARS OF WORKING LIFE OF ASSET

SEVENTH SCHEDULE
ADVANCE RULINGS

EIGHTH SCHEDULE
ECONOMIC EXPANSION INCENTIVES (RELIEF FROM INCOME TAX) Act
ARRANGEMENT OF SECTIONS

PART I
PRELIMINARY
Section Page

1. Short title
2. Act to be construed as one with Income Tax Act
3. Interpretation

PART II
PIONEER INDUSTRIES

4. Power to approve an industry and a product as a pioneer industry and a pioneer product
5. Application for and issue and amendment of pioneer certificate
6. Tax relief period of pioneer enterprise
7. Provisions governing old and new trade or business
8. Restrictions on trading before end of tax relief period
9. Power to give directions
10. Ascertainment of income in respect of old trade or business
11. Application of Part XVI of Income Tax Act
12. Comptroller to issue statement of income
13. Exemption from income tax
14. Certain dividends exempted from income tax
15. Carry forward of loss and allowance

PART III
PIONEER SERVICE COMPANIES

16. Interpretation of this Part
17. Application for and issue and amendment of certificate for pioneer service company
18. Tax relief period of pioneer service company
19. Application of sections 7 to 15 to pioneer service company

PART IIIA
POST-PIONEER COMPANIES

19A. to 19H.

PART IIIB
DEVELOPMENT AND EXPANSION INCENTIVE

19I. Interpretation of this Part
19J. Application for and issue of certificate to development and expansion company
19K. Tax relief period of development and expansion company
19L. Certain dividends exempted from income tax
19M. Ascertainment of income from qualifying activities
19N. Ascertainment of income from other trade of business
19O. Deduction of losses
19P. Power to give directions

PART IV
EXPANSION OF ESTABLISHED ENTERPRISES

20. to 25.

PART V
EXPANDING SERVICE COMPANIES

26. to 28.

PART VI
PRODUCTION FOR EXPORT

29. to 44.
PART VIA

PART VII
INTERNATIONAL TRADE INCENTIVES

45. to 56.

PART VIII
FOREIGN LOANS FOR PRODUCTIVE EQUIPMENT

57. Application for and issue of approved foreign loan certificate
58. Restriction on disposal of specified productive equipment
59. Exemption of approved foreign loan interest from tax
60. Exemption of additional interest on approved foreign loan from tax

PART IX
ROYALTIES, FEES AND DEVELOPMENT CONTRIBUTIONS

61. Application for and issue of approved royalties, fees or contributions certificate
62. Notice of variation of terms of agreement or arrangement
63. Relief conditional on no increase in foreign tax
64. Reduction of tax for approved royalties, fees or contributions
65. Exemption from tax where investment made in approved enterprise

PART X
INVESTMENT ALLOWANCES

66. Interpretation of this Part
67. Capital expenditure investment allowance
68. Investment allowance
69. Crediting of investment allowance
70. Prohibition to sell, lease out or dispose of assets
71. Exemption from income tax
72. Certain dividends exempted from income tax
73. Recovery of tax exempted
74. Application of Parts XVII and XVIII of Income Tax Act
74A. No investment allowance for certain expenditure

PART XI
WAREHOUSING AND SERVICING INCENTIVES

75. to 84.

PART XII
INTERNATIONAL CONSULTANCY SERVICES

85. to 92.

PART XIII
INVESTMENTS IN NEW TECHNOLOGY COMPANIES

93. to 97.

PART XIIIA
OVERSEAS INVESTMENT AND VENTURE CAPITAL INCENTIVES

97A. to 97G.

PART XIIIB
OVERSEAS ENTERPRISE INCENTIVE

97H. Interpretation of this Part
97I. Application for and issue of certificate to overseas enterprise
97J. Tax relief period of overseas enterprise
97K. Separate accounts for qualifying activity
97L. Power to give directions
97M. Qualifying income
97N. Application of Part XVI of Income Tax Act
97O. Statement of qualifying income
97P. Exemption from income tax
97Q. Certain dividends exempted from income tax
97R. Certification of income by auditor

PART XIIIC
ENTERPRISE INVESTMENT INCENTIVE

97S Interpretation of this Part
97T Application for and issue of certificate to start-up company
97U Allotment of qualifying shares by company
97V Deduction of losses allowable to eligible investor
97W Power of Comptroller to give directions
97X Prohibition of other activity
97Y Recovery of tax
97Z Savings provision

PART XIIID
INTEGRATED INDUSTRIAL CAPITAL ALLOWANCES

97ZA Interpretation of this Part
97ZB Integrated industrial capital allowance
97ZC Deduction of integrated industrial capital allowance
97ZD Prohibition to sell, lease out or dispose of productive equipment
97ZE Recovery of tax

PART XIIIE PART XIIIFPART XIV
MISCELLANEOUS PROVISIONS

98. Prohibition of publication of application and certificate or letter
99. Revocation of certificate or letter
100. Provisions of Income Tax Act not affected
101. Action of officers no offence
102. Regulations
103. Savings provision
104. Consequential provision arising from abolition of imputation system

Tang Siau Yan is a Partner at Allen & Gledhill LLP's Tax Practice Group. He specializes in tax dispute resolution. Covering all aspects of Singapore taxation, his expertise lies in cross-border tax structures, tax litigation, tax compliance and regulatory matters. Amongst others, Siau Yan regularly assists clients in negotiating and resolving tax disputes with the Inland Revenue Authority of Singapore. Siau Yan graduated from The London School of Economics and Political Science with an LLB (Hons) degree (First Class) in 1999 and obtained an LLM from Cambridge University in 2000. After graduation, he joined the Inland Revenue Authority of Singapore and was the Deputy Director of the Legislation branch when he left in 2007. He is also a non-practising member of the Institute of Certified Public Accountants of Singapore.