Tag: Exemptions

Income Tax (Exemption of Interest and Other Payments for Economic and Technological Development) Notification 2012 deemed to have come into operation on 1 April 2011

On By taxsgIn e-Gazette, Legislative Updates

28 February 2012

The Income Tax (Exemption of Interest and Other Payments for Economic and Technological Development)Notification 2012, published on 24 February 2012, is deemed to have come into operation on 1 April 2011.

The Notification defines ‘qualifying payments’ to be any interest, commission, fee or other payment or any income derived from loans considered derived from Singapore under section 12(6) of the Income Tax Act (ITA), and outlines the tax exemption conditions of those qualifying payments in respect of financial institutions.

The Notification provides for tax exemption on any payments which a bank or finance company in Singapore is liable to make to a person who is neither a resident in Singapore nor a PE in Singapore where:

(i) the payment is liable to be made during the period from 1 April 2011 to 31 March 2021 (both  dates  inclusive) under:

  • a contract which took  effect before 1 April  2011
  • a  contract which is extended or renewed, where the extension or renewal took effect before 1 April 2011, or
  • a debt security which was issued before 1 April 2011

(ii)  the payment is liable to be made under a contract which takes effect on a date which falls within the period from 1 April 2011 to 31 March 2021 (both dates inclusive)

(iii)  the payment is liable to be made:

  • under a contract which is extended or renewed, where the extension or renewal takes effect on a date which falls within the period from 1 April  2011 to 31 March 2021 (both dates inclusive), and
  • on or after the date on which such extension or renewal takes effect, or

(iv) the payment is liable to be made under a debt security which is issued on a date which falls within the period from 1 April 2011 to 31 March 2021 (both dates inclusive).

A qualifying payment must be made by a specified approved payer. The exemption however does not apply to qualifying payments made by a person or an approved payer in connection with an arrangement referred to in section 33(1) of the Income Tax Act whereby the Comptroller may disregard certain transactions and dispositions.

Source: e-Gazette

IRAS issues e-Tax Guide “Tax Exemption under Section 13(12) for Specified Scenarios, Real Estate Investment Trusts and Qualifying Offshore Infrastructure Project/Asset”

On By taxsgIn Corporate Tax, Individual Tax, Latest Tax News

25 February 2012

On 22 February 2012, IRAS issued the first edition of an e-Tax Guide on “Tax Exemption under section 13(12) for Specified Scenarios, Real Estate Investment Trusts and Qualifying Offshore Infrastructure Project/Asset”.  This e-Tax Guide replaces the earlier guide entitled “Income Tax: Tax Exemption under section 13(12) for Specified Scenarios and Real Estate Investment Trusts”, first published on 31 May 2006.

Section 13(12) provides that the Minister may, by order, exempt from tax wholly or in part foreign-sourced income received by a person resident in Singapore.  This e-tax guide provides details on various scenarios and conditions under which the tax exemption under section 13(12) of the Income Tax Act (“ITA”) will be granted to resident taxpayers. Basically, tax exemption, subject to conditions, can be granted under section 13(12) of the ITA on:

  • certain foreign-sourced income received in Singapore by resident companies under specified scenarios
  • certain foreign-sourced income received in Singapore by Real Estate Investment Trusts listed on SGX (“S-REITs”) or their wholly-owned Singapore resident subsidiary companies that meet qualifying conditions
  • foreign-sourced interest income received in Singapore by approved listed resident entities or their approved wholly-owned Singapore resident subsidiary companies from qualifying offshore infrastructure project/asset
  • foreign-sourced income received in Singapore by resident taxpayers on a case-by-case basis.

The full e-Tax Guide can be found here.

Source: This article was extracted from the Inland Revenue Authority of Singapore (IRAS) website.

IRAS releases e-Tax Guide on tax exemption for foreign-sourced income

On By taxsgIn Corporate Tax, Latest Tax News

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.

Income Tax (Exemption of Foreign Income)(No. 2) Order 2011

On By taxsgIn e-Gazette, Legislative Updates

25 July 2011

Supernova Holdings (Singapore) Pte Ltd has been granted exemption from  tax on the dividends received in Singapore on 23 December 2009 from Seksun Tech (HK) Co Ltd.

Seksun Tech (HK) Co Ltd is located in Hong Kong, being  a  company  in which  Supernova Holdings (Singapore) Pte Ltd owns 100% of the total number of issued ordinary  shares.

The exemption is subject to the terms and conditions specified in the letter of approval dated 23 June 2011 addressed to the tax agent of Supernova Holdings (Singapore) Pte Ltd.

The above Order was made on 20 July 2011 and was first published in the Government Gazette, Electronic Edition, on 22 July 2011.

Source: eGazette

IRAS update on the administrative concession on gains from the sale of vessels

On By taxsgIn Corporate Tax, Latest Tax News

20 July 2011

In Budget 2008, it was announced that the administrative concession that all gains from the sale of vessels will not be subject to income tax as long as the vessels are registered with the Singapore Registry of Ships or owned by Approved International Shipping Enterprise companies, will be extended for a period of 5 years from YA 2010 to YA 2014.

The IRAS has now announced that with effect from 1 June 2011, to facilitate administration of the above mentioned tax concession, eligible companies that wish to enjoy the concession must make an irrevocable election for the concession. The prescribed forms for the election are:

For more details, please refer to the FAQs on MPA’s website at www.mpa.gov.sg and the election forms under the Related Items portion of this webpage.

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