8 September 2011

Singapore tax residents receiving foreign-sourced income in Singapore will now have a consolidated e-Tax Guide on tax exemptions under the foreign-sourced income exemption (FSIE) scheme for reference.

Issued by IRAS on 6 September 2011, the guide explains the FSIE scheme of sections 13(7A) to 13(11) of the Income Tax Act which allows foreign income received in Singapore on or after 1 June 2003 by specified resident taxpayers to be exempt from  tax where qualifying conditions are met. The tax exemption applies to specified foreign income that does not arise from a trade or business carried on in Singapore. The specified foreign income are foreign-sourced dividends, foreign branch profits and foreign-sourced service income.

Where the foreign income arises from a trade or business carried on in Singapore, it remains taxable in Singapore upon accrual regardless of whether it is received in Singapore. Qualifying conditions for the exemptions and the administrative procedures are explained in the e-Tax Guide, “Tax exemption for foreign-sourced income”.

Content of the earlier e-Tax Guides and supplementary circular issued previously by IRAS on tax exemption for foreign-sourced dividends, foreign branch profits and foreign-sourced service income on 21 May 2003, 30 July 2004 and 31 May 2006 respectively have been subsumed under this newly re-written guide.

Source: This article was extracted from the Inland Revenue Authority of Singapore (IRAS) website. Visit http://www.iras.gov.sg/ for more information.