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Contents  

Long Title

Part I PRELIMINARY

Part II ADMINISTRATION

Part III IMPOSITION OF INCOME TAX

Part IV EXEMPTION FROM INCOME TAX

Part V DEDUCTIONS AGAINST INCOME

Part VI CAPITAL ALLOWANCES

Part VII ASCERTAINMENT OF CERTAIN INCOME

Part VIII ASCERTAINMENT OF STATUTORY INCOME

Part IX ASCERTAINMENT OF ASSESSABLE INCOME

Part X ASCERTAINMENT OF CHARGEABLE INCOME AND PERSONAL RELIEFS

Part XI RATES OF TAX

Part XII DEDUCTION OF TAX AT SOURCE

Part XIII ALLOWANCES FOR TAX CHARGED

Part XIV RELIEF AGAINST DOUBLE TAXATION

Part XV PERSONS CHARGEABLE

Husband and wife

Trustees, agents and curators

Part XVI RETURNS

Part XVII ASSESSMENTS AND OBJECTIONS

Part XVIII APPEALS

Part XIX COLLECTION, RECOVERY AND REPAYMENT OF TAX

Part XX OFFENCES AND PENALTIES

Part XXI MISCELLANEOUS

FIRST SCHEDULE Institution, Authority, Person or Fund Exempted

SECOND SCHEDULE Rates of Tax

THIRD SCHEDULE Repealed

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

Legislative History

Comparative Table

Comparative Table

 
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On 21/10/2017, you requested the version in force on 01/01/2008 incorporating all amendments published on or before 01/01/2008.
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PART III
IMPOSITION OF INCOME TAX
Charge of income tax
10.
—(1)  Income tax shall, subject to the provisions of this Act, be payable at the rate or rates specified hereinafter for each year of assessment upon the income of any person accruing in or derived from Singapore or received in Singapore from outside Singapore in respect of —
(a)
gains or profits from any trade, business, profession or vocation, for whatever period of time such trade, business, profession or vocation may have been carried on or exercised;
(b)
gains or profits from any employment;
(c)
[Deleted by Act 29/65);]
(d)
dividends, interest or discounts;
(e)
any pension, charge or annuity;
(f)
rents, royalties, premiums and any other profits arising from property; and
(g)
any gains or profits of an income nature not falling within any of the preceding paragraphs.
(2)  In subsection (1)(b), “gains or profits from any employment” means —
(a)
any wages, salary, leave pay, fee, commission, bonus, gratuity, perquisite or allowance (other than a subsistence, travelling, conveyance or entertainment allowance which is proved to the satisfaction of the Comptroller to have been expended for purposes other than those in respect of which no deduction is allowed under section 15) paid or granted in respect of the employment whether in money or otherwise;
(b)
the value of any food, clothing or lodging provided or paid for by the employer;
(c)
the annual value of any place of residence provided by the employer and for the purposes of this paragraph —
(i)
if the remuneration received by a director of a company is less than the annual value of the premises, the full annual value shall be deemed to be gains or profits of the employment;
(ii)
except as provided in sub-paragraph (i), if the annual value of the premises exceeds 10% of the gains or profits from the employment mentioned in paragraphs (a) and (b) less the rent, if any, paid by the employee for the use of the premises, the excess shall be disregarded;
(iii)
where the premises are shared, “place of residence” means the part of the premises occupied by the person chargeable;
(d)
any sum standing to the account of any individual in any pension or provident fund or society which the individual is entitled to withdraw upon retirement or which is withdrawn therefrom.
[26/73; 26/93; 28/96; 49/2004]
(3)  Any sum realised under any insurance against loss of profits shall be taken into account in the ascertainment of any profits or income.
(4)  Where, under section 17, 20 or 21, a balancing charge falls to be made, the amount thereof shall be deemed to be income chargeable with tax under this Act, except in the case of a balancing charge in respect of —
(a)
a Singapore ship which is owned by a shipping enterprise within the meaning of section 13A or by an approved shipping investment enterprise within the meaning of section 13S at the time the balancing charge falls to be made in respect of the Singapore ship, but only up to the amount ascertained in accordance with the formula
where A
is the amount of allowances under section 19 or 19A made to the enterprise in respect of the Singapore ship against any income exempt from tax under section 13A or 13S;
B
is the total amount of allowances under section 19 or 19A which have been made in respect of the ship during the period it is owned by the enterprise; and
C
is the amount of balancing charge;
(b)
a foreign ship the income derived from the operation of which is exempt from tax under section 13A or 13F, or the income derived from the chartering or finance leasing of which is exempt from tax under section 13S, as the case may be, but only up to the amount ascertained in accordance with the formula
where X
is the amount of allowances under section 19 or 19A made to the enterprise in respect of the foreign ship against any income exempt from tax under section 13A, 13F or 13S, as the case may be;
Y
is the total amount of allowances under section 19 or 19A which have been made in respect of the ship during the period it is owned by the enterprise; and
Z
is the amount of balancing charge.
[2/92; 32/95; 31/98; 7/2007]
(5)  Subsection (4)(b) shall apply, with the necessary modifications, to any dredger, seismic ship, or any vessel used for offshore oil or gas activity the income derived from the operation of which is exempt from tax under section 13F or the income derived from the chartering or finance leasing of which is exempt from tax under section 13S.
[49/2004; 7/2007]
(5A)  In subsections (4) and (5), “finance leasing” has the same meaning as in section 13S(20).
[7/2007]
(6)  Any gains or profits, directly or indirectly, derived by any person from a right or benefit granted on or after 1st January 2003, whether granted in his name or in the name of his nominee or agent, to acquire shares in any company shall, where the right or benefit is obtained by that person by reason of any office or employment held by him, be deemed to be income chargeable to tax under subsection (1)(b), accruing at such time and of such amount as determined under the following provisions:
(a)
where the right or benefit is exercised, assigned, released or acquired, at the time of the exercise, assignment, release or acquisition of the right or benefit and the gains or profits shall be the price of the shares in the open market at that time, less any amount paid for the shares;
(b)
notwithstanding paragraph (a), where the right or benefit granted is subject to any restriction on the sale of the shares so acquired, at the time the restriction ceases to apply and the gains or profits shall be the price of the shares in the open market at that time, less any amount paid for the shares;
(c)
if it is not possible to determine the gains or profits under paragraph (a) or (b), the Comptroller may use the net asset value of the shares, less any amount paid for the shares, as the basis for determining the gains or profits;
(d)
notwithstanding paragraphs (a) and (c), any gains or profits derived by him by any exercise of a right or benefit to acquire shares in any company listed on the Singapore Exchange shall be the last done price on the listing date of the shares so acquired less the amount paid for the shares;
(e)
“the last done price on the listing date”, in relation to any shares referred to in paragraph (d), means the price of the shares in the open market at the last transaction on the date on which the shares are first listed on the Singapore Exchange after the acquisition of the shares by him; and
(f)
“shares” includes stocks.
[37/2002]
(6A)  For the avoidance of doubt, section 10(5) in force immediately before 10th December 2002 shall continue to apply to any gains or profits directly or indirectly derived by the exercise, assignment or release of any right or benefit to acquire shares (including stocks) in a company granted to a person before 1st January 2003, whether in his name or in the name of his nominee or agent, where the right or benefit was obtained by that person by reason of any office or employment held by him.
[7/2007]
(7)  Notwithstanding subsection (6), where —
(a)
the right or benefit to acquire shares in a company is granted on or after 1st January 2003 to an individual while he is exercising an employment in Singapore; and
(b)
immediately before he ceases that employment —
(i)
the individual is neither a citizen of Singapore nor a Singapore permanent resident, or being a Singapore permanent resident is leaving Singapore permanently; and
(ii)
the right or benefit is not exercised, assigned, released or acquired by him, or the restriction on the sale of the shares has not ceased to apply,
any gains or profits from the right or benefit shall be —
(A)
deemed to be income derived by the individual one month before the date of cessation of employment or the date the right or benefit is granted, whichever is the later; and
(B)
computed based on the price of the shares in the open market on that date, less the amount paid for the shares.
[37/2002]
(7A)  The Comptroller may, if he thinks fit and subject to such condition as he may impose, accept from the employer of an individual to whom subsection (7) applies an undertaking —
(a)
to make a return, in such form and by such time as the Comptroller may determine, of any gains or profits derived by the individual from the right or benefit to acquire shares in a company as computed under subsection (6);
(b)
to pay to the Comptroller any tax assessed on such gains or profits; and
(c)
to pay the penalties specified in the undertaking for any failure to comply with paragraph (a) or (b).
[49/2004]
(7B)  Where the Comptroller accepts an undertaking from the employer of an individual under subsection (7A), subsection (7) shall not apply to the individual and he shall be assessed in accordance with subsection (6).
[49/2004]
(7C)  If any condition imposed by the Comptroller under subsection (7A) has not been complied with by the employer of an individual, then notwithstanding the undertaking given by the employer, the gains or profits derived by the individual from the right or benefit to acquire shares in a company shall be assessed in accordance with subsection (7) and shall be deemed to be income accruing to the individual in the year in which the condition is not complied with.
[49/2004]
(8)  Subsection (6)(c) shall apply, with the necessary modifications, to gains or profits derived by an individual referred to in subsection (7).
[37/2002]
(8A)  For the purpose of subsection (1)(d) —
(a)
any discount on any debt security shall be deemed to accrue when the debt security is redeemed;
(b)
subject to any exemption from tax provided under this Act, the discount shall be deemed to be income chargeable to tax of the holder of the debt security immediately before such redemption; and
(c)
the discount on any debt security shall be deemed to be an amount equal to the difference between —
(i)
the amount payable to the holder of the debt security upon the maturity or any earlier redemption of the debt security; and
(ii)
the amount paid by the first holder of the debt security for the issue of the debt security.
[53/2007]
(8B)  In subsection (8A), “debt security” has the same meaning as in section 43N(4).
[53/2007]
(9)  For the purposes of subsection (1)(e), the income derived from an annuity for any year shall be deemed to be an amount equal to 3% of the total consideration payable or paid for the purchase of the annuity except that the whole amount of the annuity shall be deemed to be income if —
(a)
the person deriving income from the annuity has previously received sums equal to the total consideration for the annuity exclusive of the amounts deemed to be income under this subsection; or
(b)
the annuity is purchased by the employer of the person deriving on or after 1st January 1993 such income in lieu of any pension or other benefit payable during his employment or upon his retirement.
[4/75; 26/93]
(10)  Subsection (9) shall not apply to any annuity purchased under the SRS.
[24/2001]
(11)  For the purposes of subsection (1)(f) —
(a)
“any other profits arising from property” shall be deemed to include the net annual value of property used by or on behalf of the owner for residential purposes and not for the purposes of gain or profit;
(b)
“net annual value”, in relation to any property, means the annual value of such property less the expenses of repair, insurance, interest, maintenance or upkeep and all public rates and taxes paid thereon;
(c)
in respect of any one property which is occupied for residential purposes by the owner thereof —
(i)
the net annual value of such property; or
(ii)
an amount equal to such sum as the Minister may, by order published in the Gazette, specify,1
1  For the Year of Assessment 1997 and subsequent Years of Assessment the sum specified is $150,000 — see Cap. 134, O 4A.
whichever is the less, shall not be deemed to be profits arising from property; and for the purposes of this paragraph any property owned by a married woman living with her husband shall be deemed to be owned by the husband.
[7/70; 9/80]
(12)  Where a person derives interest from a negotiable certificate of deposit or derives gains or profits from the sale thereof, his income shall be treated as follows:
(a)
in the case of a financial institution the interest and the gains or profits shall be deemed to be income from a trade or business under subsection (1)(a);
(b)
in any other case the interest and the gains or profits shall be deemed to be income from interest under subsection (1)(d) subject to the following provisions:
(i)
if the interest is received by a subsequent holder of a certificate of deposit the income derived from such interest shall exclude the amount by which the purchase price exceeds the issued price of the certificate, except where that amount has been excluded in the computation of any previous interest derived by him in respect of that certificate; and
(ii)
where a subsequent holder sells a certificate after receiving interest therefrom the gains or profits shall be deemed to be the amount by which the sale price exceeds the issued price or the purchase price, whichever is the lower; and
(c)
for the purposes of paragraph (b), where a subsequent holder purchases a certificate at a price which is less than the issued price and holds the certificate until its maturity, the amount by which the issued price exceeds the purchase price shall be deemed to be interest derived by him.
[4/75]
(13)  Any maintenance payment received by —
(a)
a child under a maintenance order or a deed of separation; or
(b)
a parent under a maintenance order made under the Maintenance of Parents Act (Cap. 167B),
shall not be deemed to be income for the purposes of subsection (1).
[28/96]
(14)  For the purposes of subsection (1)(a) and (f), the income derived by any author, composer or choreographer, or any company in which he beneficially owns all the issued shares, from any royalties or other payments received as consideration for the assignment of or for the right to use the copyright in any literary, dramatic, musical or artistic work, shall be deemed to be —
(a)
the amount of the royalties or other payments remaining after the deductions allowable under Parts V and VI have been made; or
(b)
an amount equal to 10% of the gross amount of the royalties or other payments,
whichever is the less.
[24/2000; 34/2005; 7/2007]
(15)  Subsection (14) shall not apply to royalties or payments received in respect of any work published in any newspaper or periodical.
[1/88]
(16)  For the purposes of subsection (1)(a) and (f), the income derived by an individual who is the inventor, author, proprietor, designer or creator (as the case may be) of an approved intellectual property or approved innovation, or by any company in which he beneficially owns all the issued shares, from any royalties or other payments received as consideration for the assignment of or the rights in the approved intellectual property or approved innovation shall be deemed to be —
(a)
the amount of the royalties or other payments remaining after the deductions allowable under Parts V and VI have been made; or
(b)
an amount equal to 10% of the gross amount of royalties or other payments,
whichever is the less.
[7/2007]
(17)  Notwithstanding subsection (16), where it appears to the Comptroller that any amount of income which has been determined under that subsection for the purposes of subsection (1)(a) or (f) ought not to have been so determined for any year of assessment, the Comptroller may, within 6 years (if that year of assessment is 2007 or a preceding year of assessment) or 4 years (if that year of assessment is 2008 or a subsequent year of assessment) after the end of that year of assessment, make such assessment or additional assessment upon the individual as may be necessary in order to make good any loss of tax.
[11/94; 53/2007]
(18)  In subsection (16) —
“approved” means approved for such period not exceeding 5 years by the Minister or such person as he may appoint;
“innovation” means —
(a)
any new product or new service, or any new method used in the manufacture or processing of goods or materials or in the provision of services; or
(b)
any substantial improvement in any product or in the provision of any service, or in any method used in the manufacture or processing of goods or materials or in the provision of services,
which involves novelty or originality;
“rights in the approved intellectual property or approved innovation” means the rights relating to any patent, copyright, trade mark, industrial design, layout-design of integrated circuit, or know-how of an approved intellectual property or approved innovation, where a substantial part of the work in producing the approved intellectual property or innovation is undertaken in Singapore.
[24/2000; 7/2007]
(19)  Any distribution made by a unit trust approved under section 10B out of gains or profits derived on or after 1st July 1989 from the disposal of securities and which have not been subject to tax shall be deemed to be income if received by a unit holder except where the unit holder is —
(a)
an individual resident in Singapore; or
(b)
a person who is not resident in Singapore and has no permanent establishment in Singapore.
[23/90]
(20)  Any distribution made by a designated unit trust to any unit holder or by an approved CPF unit trust to any unit holder out of —
(a)
gains or profits derived from Singapore or elsewhere from the disposal of securities;
(b)
interest (other than interest for which tax has been deducted under section 45); and
(c)
dividends derived from outside Singapore and received in Singapore,
which do not form part of the statutory income of the designated unit trust or approved CPF unit trust by virtue of section 35(12) shall, subject to subsection (21), be deemed to be income of the unit holder if he is not a foreign investor.
[32/95; 31/98; 24/2000]
(20A)  Any distribution made by a designated unit trust or approved CPF unit trust to any unit holder out of —
(a)
gains or profits derived on or after 27th February 2004 from —
(i)
foreign exchange transactions;
(ii)
transactions in futures contracts;
(iii)
transactions in interest rate or currency forwards, swaps or option contracts; and
(iv)
transactions in forwards, swaps or option contracts relating to any securities or financial index;
(b)
distributions from foreign unit trusts derived from outside Singapore and received in Singapore on or after 27th February 2004;
(c)
fees and compensatory payments (other than fees and compensatory payments for which tax has been deducted under section 45A) derived on or after 27th February 2004 from securities lending or repurchase arrangements with —
(i)
a person who is neither a resident of nor a permanent establishment in Singapore;
(ii)
the Monetary Authority of Singapore;
(iii)
a bank licensed under the Banking Act (Cap. 19);
(iv)
a merchant bank approved as a financial institution under section 28 of the Monetary Authority of Singapore Act (Cap. 186);
(v)
a finance company licensed under the Finance Companies Act (Cap. 108);
(vi)
a holder of a capital markets services licence licensed to carry on business in the following regulated activities under the Securities and Futures Act (Cap. 289) or a company exempted under that Act from holding such a licence:
(A)
dealing in securities (other than any person licensed under the Financial Advisers Act (Cap. 110));
(B)
fund management;
(C)
securities financing; or
(D)
providing custodial services for securities;
(vii)
a collective investment scheme or closed-end fund as defined in the Securities and Futures Act (Cap. 289) that is constituted as a corporation;
(viii)
the Central Depository (Pte) Limited;
(ix)
an insurer registered or regulated under the Insurance Act (Cap. 142) or exempted under that Act from being registered or regulated; or
(x)
a trust company licensed under the Trust Companies Act (Cap. 336);
(d)
rents and any other income derived from any immovable property situated outside Singapore and received in Singapore on or after 27th February 2004;
(e)
discount derived from outside Singapore and received in Singapore on or after 27th February 2004;
(f)
discount from —
(i)
qualifying debt securities issued during the period from 27th February 2004 to 16th February 2006 which mature within one year from the date of issue of those securities; or
(ii)
qualifying debt securities issued during the period from 17th February 2006 to 31st December 2008;
(g)
gains or profits derived on or after 27th February 2004 from the disposal of debentures, stocks, shares, bonds or notes issued by supranational bodies;
(h)
prepayment fee, redemption premium and break cost from qualifying debt securities issued during the period from 15th February 2007 to 31st December 2008; and
(i)
such other income directly attributable to qualifying debt securities issued on or after a prescribed date, as may be prescribed by regulations,
which do not form part of the statutory income of the designated unit trust or approved CPF unit trust by virtue of section 35(12A) shall be deemed to be income of the unit holder if he is not a foreign investor.
[49/2004; 11/2005; 7/2007; 53/2007]
(21)  Where any distribution made out of gains or profits referred to in subsection (20)(a) is made to a unit holder who is an individual resident in Singapore, the distribution, if made on or after 28th February 1998, shall not be deemed to be income of that unit holder.
[32/95; 31/98]
(22)  Where a designated unit trust had also been approved under section 10B, any distribution made by the designated unit trust out of any income (including gains or profits from the disposal of securities) derived by it during the period the designated unit trust was approved under section 10B shall be treated as income of a unit holder in accordance with subsection (19) and section 35(11) and (15).
[32/95]
(23)  In subsections (20), (20A), (21) and (22) —
“approved CPF unit trust” has the same meaning as in section 35(14);
“break cost”, “prepayment fee” and “redemption premium” have the same meanings as in section 13(16);
“compensatory payment” has the same meaning as in section 10N(12);
“designated unit trust” means any unit trust designated under section 35(14);
“financial index” includes any currency, interest rate, share, stock or bond index;
“foreign investor”  —
(a)
in relation to an individual, means an individual who is not resident in Singapore;
(b)
in relation to a company, means a company which is not resident in Singapore and —
(i)
in the case of a company with not more than 50 shareholders, all of its issued shares are beneficially owned, directly or indirectly, by persons who are not citizens of Singapore and not resident in Singapore; and
(ii)
in the case of a company with more than 50 shareholders, not less than 80% of the total number of its issued shares are beneficially owned, directly or indirectly, by persons who are not citizens of Singapore and not resident in Singapore; and
(c)
in relation to a trust fund, means a trust fund where at least 80% of the value of the fund is beneficially held, directly or indirectly, by foreign investors referred to in paragraph (a) or (b) and, unless waived by the Minister or such person as he may appoint, where —
(i)
the fund is created outside Singapore; and
(ii)
the trustees of the fund are neither citizens of Singapore nor resident in Singapore;
“qualifying debt securities” has the same meaning as in section 13(16);
“securities” has the same meaning as in section 10A;
“securities lending or repurchase arrangement” has the same meaning as in section 10N(12).
[32/95; 31/98; 49/2004; 34/2005; 53/2007]
(24)  For the purposes of subsection (2)(d), the sum standing to the account of any individual in any pension or provident fund or society, other than a pension or provident fund to which section 10C applies, shall be deemed to accrue to the individual on the date he is entitled to the sum upon retirement or on the date he withdraws any sum before his retirement, as the case may be, except that where upon his retirement an individual is entitled to elect under the rules or constitution of the pension or provident fund or society as to the manner and amount of the sum to be withdrawn, only the amount so withdrawn shall be deemed to be income of the individual accruing on the date of withdrawal.
[26/93]
(25)  It is hereby declared for the avoidance of doubt that the amounts described in the following paragraphs shall be income received in Singapore from outside Singapore whether or not the source from which the income is derived has ceased:
(a)
any amount from any income derived from outside Singapore which is remitted to, transmitted or brought into, Singapore;
(b)
any amount from any income derived from outside Singapore which is applied in or towards satisfaction of any debt incurred in respect of a trade or business carried on in Singapore; and
(c)
any amount from any income derived from outside Singapore which is applied to purchase any movable property which is brought into Singapore.
[32/95]
(26)  Any payment accrued to a self-employed woman under section 9 of the Children Development Co-Savings Act (Cap. 38A) shall be deemed to be income from her trade, business, profession or vocation chargeable to tax under subsection (1)(a).
[24/2001]
(27)  Where any income is derived by a special purpose vehicle under any approved Islamic debt securities arrangement entered into on or after 17th February 2006, the income shall be deemed to have been derived at the end of the arrangement by the originator of the arrangement.
[53/2007]
(28)  In subsection (27) —
“approved” means approved by the Minister or such person as he may appoint, subject to such conditions as the Minister or person may impose;
“Islamic debt securities” has the same meaning as in section 43N(4);
“Islamic debt securities arrangement” means an arrangement under which —
(a)
immovable properties in Singapore are acquired by a special purpose vehicle from a person (referred to in this subsection and subsection (27) as the originator) where the acquisition is funded through the issuance of Islamic debt securities by the special purpose vehicle;
(b)
the immovable properties are leased by the special purpose vehicle to the originator; and
(c)
the immovable properties are reacquired by the originator upon the maturity of the Islamic debt securities;
“special purpose vehicle” means a company whose only business is to acquire the originator’s immovable properties in Singapore, lease them back to the originator and transfer such properties to the originator upon the maturity of the Islamic debt securities.
[53/2007]
Profits of investment company
10A.
—(1)  Notwithstanding any other provisions of this Act, the Minister may by regulations —
(a)
provide that tax on gains or profits derived from the disposal of securities (other than transferred securities to which section 10N applies) by an approved investment company shall be levied and paid for each year of assessment upon such amount as may be determined by reference to the period during which those securities have been held;
(b)
provide for the deduction of such amount of allowances under section 19, 19A, 20, 21 or 23 to be granted in such manner as may be prescribed;
(c)
provide for the deduction of such amount of losses arising from the disposal of securities (other than transferred securities to which section 10N applies) as may be determined by reference to the period during which those securities have been held;
(d)
provide for the deduction of such amounts of expenses and donations allowable under this Act in such manner as may be prescribed.
[3/89; 37/2002]
(2)  In this section —
“approved” means approved by the Minister or such person as he may appoint;
“investment company” means any company whose business consists wholly or mainly in the making of investments and the principal part of whose income is derived therefrom;
“securities” means —
(a)
debentures, stocks, shares, bonds or notes issued by a government or company;
(b)
any right or option in respect of any such debentures, stocks, shares, bonds or notes; or
(c)
units in any unit trust within the meaning of section 10B.
[23/90; 32/95]
Profits of unit trusts
10B.
—(1)  Notwithstanding any other provisions of this Act, the Minister may by regulations —
(a)
provide that tax on gains or profits derived on or after 1st July 1989 from the disposal of securities by an approved unit trust shall be levied and paid for each year of assessment by the trustees upon such percentage of the gains or profits and in such manner as may be prescribed;
(b)
provide for the deduction of such percentage of the losses arising from the disposal of securities in such manner as may be prescribed;
(c)
provide for the deduction of expenses allowable under this Act to be granted in such manner as may be prescribed;
(d)
provide for the deduction of tax by the trustees of the unit trust on any distribution received by a unit holder which is deemed to be income under section 10(19).
[23/90]
(2)  In this section —
“approved” means approved by the Minister or such person as he may appoint;
“securities” has the same meaning as in section 10A;
“unit” means a right or interest (whether described as a unit, a sub-unit or otherwise) which may be acquired under a unit trust;
“unit trust” means any trust established for the purpose, or having the effect, of providing facilities for the participation by persons as beneficiaries under a trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property.
[23/90]
Excess provident fund contributions, etc., deemed to be income
10C.
—(1)  Notwithstanding section 13(1)(j), where in any year, contributions have been made by an employer in respect of an employee under section 7 of the Central Provident Fund Act (Cap. 36) —
(a)
any part of the employer’s contributions, in respect of ordinary or additional wages paid to the employee in that year, which is not obligatory under that Act; or
(b)
the employer’s contributions in respect of that part of the additional wages which exceeds the specified amount paid to the employee in that year,
shall be deemed to be income accruing to the employee for the year in which the wages are paid.
[23/90; 49/2004; 34/2005; 7/2007]
(2)  Notwithstanding subsection (1)(a), where in any year, contributions obligatory by reason of a contract of employment are made by any relevant employer to the Central Provident Fund in respect of overseas ordinary wages or overseas additional wages paid to an employee in that year, that part of such contributions up to the relevant amount shall not be deemed to be income accruing to the employee.
[11/94]
(3)  Subsection (2) shall not apply to contributions made by an employer in any year from 1st January 1999 to the Central Provident Fund in respect of an employee who holds a professional visit pass or a work pass in that year.
[1/98; 30/2007]
(4)  Notwithstanding subsection (1)(a), where on or after 1st January 2003, contributions are made by any employer for any year to the medisave account of an employee maintained under the Central Provident Fund Act (Cap. 36) in lieu of hospitalisation or outpatient medical benefits which the employer is obliged to provide by reason of a contract of employment, such contributions up to $1,500 for that year shall, subject to subsections (5) and (6), not be deemed to be income accruing to the employee.
[21/2003]
(5)  Where contributions referred to in subsection (4) are made in respect of an employee by 2 or more employers for any year, the amount of such contributions not deemed to be income accruing to the employee shall not exceed $1,500 for that year.
[21/2003]
(6)  Subsection (4) shall not apply to contributions made by an employer in any year from 1st January 1999 to the Central Provident Fund in respect of an employee who holds a professional visit pass or a work pass in that year.
[1/98; 30/2007]
(7)  [Deleted by Act 7 of 2007]
(8)  Where in any year contributions under section 7 of the Central Provident Fund Act have been made in respect of an employee employed by 2 or more employers and the employers are related to each other, subsection (1)(b) shall apply as if all the ordinary and additional wages from those related employers and the contributions on those wages were paid by one employer.
[7/2007]
(9)  For the purposes of subsection (8), one employer shall be deemed to be related to another where one of them, directly or indirectly, has the ability to control the other or where both of them, directly or indirectly, are under the control of a common person.
(10)  Subsections (1) to (9) shall apply, with the necessary modifications, to contributions made by an employer to a designated pension or provident fund as if those contributions were employer’s contributions to the Central Provident Fund.
(11)  Where in any year contributions have been made by an employer in respect of an employee to any pension or provident fund constituted outside Singapore, the whole of the contributions made to that pension or provident fund shall be deemed to be income accruing to the employee for the year in which the contributions are paid.
[26/93]
(12)  In this section —
“additional wages” has the same meaning as in the Central Provident Fund Act (Cap. 36);
“designated pension or provident fund” means an approved pension or provident fund designated by the Minister under section 39(8);
“employer’s contributions” means the contributions made by any employer under section 7(1) of the Central Provident Fund Act less the amount of contributions recoverable by the employer from the wages of an employee under section 7(2) of that Act;
“ordinary wages” has the same meaning as “ordinary wages for the month” in the Central Provident Fund Act;
“overseas additional wages” means additional wages paid in respect of the performance of any duty for any period outside Singapore;
“overseas ordinary wages” means ordinary wages paid in respect of the performance of any duty for any period outside Singapore;
“overseas total wages”, in relation to any year, means the total of the overseas ordinary wages and overseas additional wages in that year received by an employee;
“relevant amount” means the amount of contributions which would have been required to be made by the relevant employer had such contributions been obligatory under the Central Provident Fund Act (Cap. 36) in respect of —
(a)
the overseas total wages paid to an employee in any year less the aggregate in that year of such part of the overseas ordinary wages paid to the employee in every month in that year as exceeds $4,500; or
(b)
$76,500,
whichever is the less;
“relevant employer” means any company incorporated or registered under the Companies Act (Cap. 50) or any person registered under the Business Registration Act (Cap. 32);
“specified amount” means —
(a)
in relation to the year 2005, the difference between $85,000 and the total ordinary wages paid to the employee in that year; and for this purpose, any amount of ordinary wages paid to the employee for any month in the year in excess of $5,000 shall be disregarded;
(b)
in relation to the year 2006 and every subsequent year, the difference between $76,500 and the total ordinary wages paid to the employee in that year; and for this purpose, any amount of ordinary wages paid to the employee for any month in the year in excess of $4,500 shall be disregarded;
“total wages”, in relation to any year, means the total of the ordinary and additional wages in that year received by an employee;
“year” means any year from 1st January to 31st December.
[11/94; 49/2004; 34/2005; 7/2007]
Income from finance or operating lease
10D.
—(1)  Notwithstanding any other provisions of this Act, the Minister may by regulations provide for the circumstances in which the Comptroller may direct that allowances under section 19, 19A, 20, 21, 22 or 23 in respect of any machinery or plant which is leased under a finance lease entered into on or after 1st April 1990 shall not be made to the lessor but to the lessee as though the machinery or plant had been sold by the lessor to the lessee.
[20/91]
(2)  In determining the income of a lessor from the leasing of any machinery or plant, other than those which have been treated as though they had been sold pursuant to regulations made under subsection (1), the following provisions shall apply:
(a)
the Comptroller shall determine the manner and extent to which —
(i)
allowances under section 19, 19A, 20, 21, 22 or 23 and any expenses and donations allowable under this Act are to be deducted;
(ii)
any loss may be deducted under section 37;
(b)
where the lessor derives income from onshore leasing or offshore leasing or both and such income is subject to tax under section 42(1) or 43(1), the allowances under section 19, 19A, 20, 21, 22 or 23 in respect of finance leasing shall only be available as a deduction against the income from finance leasing, and any balance of the allowances shall not, subject to paragraph (d), be available as a deduction against any other income or be available for transfer under section 37C, 37D or 37F;
(c)
where the lessor is a leasing company which derives income from onshore leasing as well as from offshore leasing subject to the concessionary rate of tax under section 43I, any balance of the allowances under section 19, 19A, 20, 21, 22 or 23 in respect of onshore finance leasing in any year of assessment after deduction against the income from such leasing shall be available as a deduction against any income from offshore finance leasing for that year of assessment, and any balance of the allowances shall not, subject to paragraph (d), be available as a deduction against any other income or be available for transfer under section 37C;
(d)
where the lessor referred to in paragraph (b) or (c) ceases to derive income from finance leasing in the basis period for any year of assessment, any balance of the allowances after the deduction in paragraph (b) or (c) shall be available as a deduction against any other income for that year of assessment and for any subsequent year of assessment in accordance with section 23;
(e)
where the lessor is a leasing company which derives income from onshore leasing as well as from offshore leasing subject to the concessionary rate of tax under section 43I —
(i)
the allowances under section 19, 19A, 20, 21, 22 or 23 in respect of operating leasing shall firstly be available as a deduction against the income from such leasing, and any balance of the allowances shall be available as a deduction against any other income; and
(ii)
any losses incurred in respect of finance leasing or operating leasing shall be available as a deduction against any other income.
[1/98; 37/2002; 49/2004; 34/2005; 53/2007]
(3)  In this section —
“finance lease” means a lease of any machinery or plant (including any arrangement or agreement in connection with the lease) which has the effect of transferring substantially the obsolescence, risks or rewards incidental to ownership of such machinery or plant to the lessee;
“finance leasing” means the leasing of any machinery or plant under any finance lease;
“leasing company”, “offshore finance leasing” and “offshore leasing” have the same meanings as in section 43I(9);
“onshore finance leasing” means the onshore leasing of any machinery or plant under any finance lease;
“onshore leasing” means the leasing, other than offshore leasing, of any machinery or plant;
“operating leasing” means the leasing of any machinery or plant, other than finance leasing.
[1/98; 53/2007]
Ascertainment of income from business of making investment
10E.
—(1)  Notwithstanding any other provisions of this Act, in determining the income of a company or trustee of a property trust derived from any business of the making of investments the following provisions shall apply:
(a)
any outgoings and expenses incurred by the company or trustee of a property trust in respect of investments of that business which do not produce any income shall not be allowed as a deduction under section 14 for that business or other income of the company or trustee of a property trust;
(b)
any outgoings and expenses incurred by the company or trustee of a property trust in respect of investments of that business which produce any income shall only be available as a deduction under section 14 against the income derived from such investments and any excess of such outgoings and expenses over such income in any year shall be disregarded; and
(c)
the allowances under sections 19, 19A, 20 and 21 relating to that business shall only be available as a deduction against the income derived from investments of that business which produce any income and the balance of the allowances in any year shall be disregarded.
[32/95; 37/2002]
(1A)  Where subsection (1) would apply to the originator of any approved Islamic debt securities arrangement if that arrangement had not been entered into, that subsection shall continue to apply to the originator as if the arrangement had not been entered into.
[53/2007]
(2)  In this section —
“approved Islamic debt securities arrangement” and “originator” have the same meanings as in section 10(28);
“business of the making of investments” includes the business of letting immovable properties;
“immovable property-related assets” means debt securities and shares issued by property companies, mortgaged-backed securities, other property trust funds, and assets incidental to the ownership of immovable properties;
“investments” means securities, immovable properties and immovable property-related assets;
“property trust” means a trust which invests in immovable properties or immovable property-related assets.
[32/95; 37/2002; 53/2007]
10F.  [Repealed by Act 37/2002]
10G.  [Repealed by Act 37/2002]
Ascertainment of income from business of hiring out motor cars or providing driving instruction
10H.
—(1)  Notwithstanding any other provisions of this Act, in determining the income derived by any person for any year of assessment from any business of hiring out motor cars or of providing driving instruction using motor cars, the following provisions shall apply:
(a)
any outgoings and expenses incurred in respect of that business for that year of assessment and allowable under this Act shall only be deducted against the income derived from that business and any excess of such outgoings and expenses over such income shall not be available as a deduction against any other income of the person or be available for transfer under section 37C, 37D or 37F for that year of assessment and any subsequent year of assessment; and
(b)
the allowances under sections 19, 19A, 20, 21 and 22 relating to that business for that year of assessment shall only be available as a deduction against the income derived from that business and any excess of such allowances over such income shall not be available as a deduction against any other income of the person or be available for transfer under section 37C, 37D or 37F for that year of assessment and any subsequent year of assessment.
[32/99; 37/2002; 49/2004; 34/2005]
(2)  In this section, “motor car” means a car which is constructed or adapted for the carriage of not more than 7 passengers exclusive of the driver and the weight of which unladen does not exceed 3,000 kilograms.
[32/99]
Reduction of share capital
10I.
—(1)  This section shall, subject to sections 10J, 10K and 10M, apply where a company resident in Singapore reduces its share capital and the reduction of share capital involves a payment to any shareholder of the company.
[32/99; 24/2001]
(2)  Where the reduction of share capital is made out of the contributed capital of the company, and a payment is made to any shareholder of the company pursuant to such reduction, the payment to the shareholder shall not be regarded as a payment of dividend by the company to the shareholder, and an amount equal to the payment shall be debited to the contributed capital account referred to in subsection (5)(c)(i).
[32/99]
(3)  Where the reduction of share capital is not made out of the contributed capital of the company, and a payment is made to any shareholder of the company pursuant to such reduction, the payment to the shareholder shall be deemed to be a dividend paid by the company to the shareholder on the date of the payment, and the provisions relating to the payment of dividends under this Act and the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) shall apply, with the necessary modifications, to the dividend deemed to be paid.
[32/99]
(4)  Where the dividend deemed to be paid under subsection (3) is a dividend to which section 44 applies, the amount of dividend deemed to be paid by the company to the shareholder shall be deemed to be of such a gross amount as after deduction of tax at the rate deductible at the date of payment would be equal to the amount of payment made by the company to the shareholder.
[32/99]
(5)  For the purposes of this section —
(a)
the share capital of a company shall include any reserve which is treated as paid-up share capital of the company for the purpose of any reduction of share capital made by the company;
(b)
the contributed capital of a company as at any date shall be the aggregate of the amounts received by the company, whether in cash or in the form of other valuable consideration, for the shares it had issued up to that date reduced by —
(i)
the aggregate of the amounts of any payment made to any shareholder of the company pursuant to any reduction of share capital by the company up to that date which had not been treated as a payment of dividends for the purpose of this Act;
(ii)
the aggregate of the amounts of any payment made to any shareholder of the company pursuant to any redemption of shares by the company up to that date which had not been treated as a payment of dividends for the purpose of this Act; and
(iii)
the aggregate of the amounts of any other payment made to any shareholder of the company pursuant to any return of share capital up to that date which had not been treated as a payment of dividends for the purpose of this Act;
(c)
in relation to the first reduction of its share capital made on or after 18th November 1998 by any company, the contributed capital of the company immediately before the first reduction —
(i)
shall be credited to an account (referred to in this section as the contributed capital account) to be kept by the company for the purposes of this section; and
(ii)
where the aggregate of the amounts of any payment referred to in paragraph (b)(i), (ii) and (iii) exceeds the aggregate of the amounts received by the company, whether in cash or in the form of other valuable consideration, for the shares it had issued before the first reduction, the amount to be credited to the contributed capital account shall be deemed to be zero;
(d)
where any share is issued by a company subsequent to the first reduction of its share capital referred to in paragraph (c), any amount received by the company, whether in cash or in the form of other valuable consideration, for the shares it had issued shall be credited to the contributed capital account;
(e)
where a company redeems any redeemable shares subsequent to the first reduction of its share capital referred to in paragraph (c) and section 10K does not apply to that redemption, any payment made to any shareholder for the purpose of that redemption shall be debited to the contributed capital account where the payment is not treated as a payment of dividends for the purpose of this Act;
(f)
where any reduction of share capital of a company was made before 18th November 1998 for the purposes of or in connection with a scheme for the reconstruction of any company or companies or the amalgamation of 2 or more companies and such scheme resulted in the transfer of assets of the first-mentioned company, whether directly by that company or indirectly through its shareholders, to another company in exchange for shares in the transferee company, the consideration equal to the value of the assets received by the transferee company for the shares issued shall, notwithstanding paragraph (b), not form part of the contributed capital of the transferee company where the payment made by the first-mentioned company pursuant to the reduction of its share capital was —
(i)
not treated as a payment of dividend to the shareholder of the first-mentioned company for the purpose of this Act; and
(ii)
more than the contributed capital of the first- mentioned company immediately before the reduction of its share capital;
(g)
where paragraph (f) is applicable to the contributed capital of a transferee company, the contributed capital of the first-mentioned company under that paragraph after the reduction of its share capital shall, notwithstanding paragraph (b), not be reduced by the payment made by the first-mentioned company for the reduction of its share capital; and
(h)
any amount applied by a company in issuing shares of the company to its shareholders as bonus shares shall not be regarded as receipts by the company from the issue of shares.
[32/99; 34/2005]
(6)  A company shall deliver to the Comptroller a copy of the contributed capital account made up to any date specified by the Comptroller whenever called upon to do so by notice in writing.
[32/99]
Shares buyback
10J.
—(1)  Where a company resident in Singapore purchases or otherwise acquires shares issued by it from any shareholder of the company (referred to in this section as a buyback), and such shares are deemed cancelled under section 76B of the Companies Act (Cap. 50), for the purposes of this section —
(a)
the buyback constitutes a market purchase if the purchase of the shares is made on a stock exchange; and
(b)
the buyback constitutes an off-market purchase if the purchase of the shares is made otherwise than on a stock exchange.
[32/99; 34/2005; 7/2007]
(2)  Where a company undertakes a buyback described in subsection (1), any payment made by the company to any shareholder for the buyback shall, to the extent that the payment is made out of contributed capital of the company, not be regarded as a payment of dividend by the company to the shareholder, and an amount equal to the payment shall be debited to the contributed capital account kept by the company under section 10I(5)(c)(i).
[32/99]
(3)  Where a company undertakes a buyback described in subsection (1), any payment made by the company to any shareholder for the buyback shall, to the extent that the payment is not made out of the contributed capital of the company, be deemed to be —
(a)
a dividend paid by the company on the date of the payment, and the provisions relating to payment of dividends under this Act and the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) shall apply, with the necessary modifications, to the dividend deemed to be paid;
(b)
a dividend received by the shareholder (not being a transferee to whom section 10N applies) where the buyback is an off-market purchase made in accordance with an equal access scheme authorised in advance by the company at a general meeting of the company.
[32/99; 37/2002]
(4)  Notwithstanding subsection (3), where a company undertakes a buyback described in subsection (1)(a) through a special trading counter established on the Singapore Exchange, any payment made by the company to any shareholder for the buyback shall, to the extent that the payment is not made out of the contributed capital of the company, be deemed to be —
(a)
a dividend paid by the company on the date of the payment, and section 44 shall apply, with the necessary modifications, to such dividend; and
(b)
a dividend received by the shareholder if the conditions in subsection (5) are satisfied.
[24/2000]
(5)  The conditions referred to in subsection (4)(b) are —
(a)
the shares sold through the special trading counter are not acquired by the shareholder through any securities lending or repurchase arrangement;
(b)
the shareholder has beneficially owned the shares for a continuous period of at least 183 days ending immediately before the day of the sale of the share through the special trading counter;
(c)
the shareholder has furnished to the Comptroller, or such other person as the Comptroller may direct, a declaration relating to the ownership and other particulars of the shares sold in such form and manner as may be approved by the Comptroller; and
(d)
the company has complied with such requirements as may be imposed by the Comptroller.
[24/2000]
(6)  Where the dividend deemed to be paid by a company under subsection (3)(a) is a dividend to which section 44 applies, the amount of dividend so paid by the company and the amount of dividend deemed to be received by the shareholder under subsection (3)(b) shall be deemed to be of such a gross amount as after deduction of tax at the rate deductible at the date of payment would be equal to the amount of payment made by the company to the shareholder.
[32/99]
(7)  The amount of any dividend deemed to be paid by a company under subsection (4)(a) shall be deemed to be of such a gross amount as after deduction of tax under section 44 at the rate deductible at the date of payment would be equal to the amount of payment made by the company.
[24/2000]
(8)  The amount of any dividend deemed to be received by a shareholder under subsection (4)(b) shall be deemed to be of such a gross amount as after deduction of tax under section 44 at the rate deductible at the date of payment by the company would be equal to the amount of payment received by the shareholder.
[24/2000]
(9)  Where any payment made by a company to any shareholder for a buyback is not deemed to be a dividend received by the shareholder under subsection (3)(b) or (4)(b), no set-off under section 46 shall be allowed to the shareholder in respect of the payment.
[32/99; 24/2000]
(10)  Where a shareholder sells his shares to the company in an off-market purchase referred to in subsection (3)(b) —
(a)
no deduction shall be allowed to him in respect of the costs he incurred to acquire the shares he sold to the company; and
(b)
the cost of any remaining share in the company held by the shareholder immediately after the sale shall be ascertained by the formula
where A
is the aggregate cost of all shares in the company held by the shareholder immediately preceding the buyback of his shares; and
N
is the number of remaining shares in the company held by the shareholder after the buyback of his shares.
[32/99]
(11)  Notwithstanding any other provisions of this Act, where a shareholder sells his shares through a special trading counter referred to in subsection (4) and any payment received by the shareholder for the buyback of such shares is deemed to be a dividend received by him under that subsection —
(a)
no deduction shall be allowed to him in respect of the costs incurred to acquire the shares sold; and
(b)
where any provision for the diminution in the value of such shares has been allowed as a deduction previously, the total amount of all such deductions not written back shall be deemed to be a trading receipt of the shareholder for the basis period in which the shares are sold.
[24/2000]
(12)  For the purposes of this section —
(a)
the contributed capital of a company has the same meaning as in section 10I(5)(b);
(b)
where a company undertakes a buyback to which subsection (2) applies and the buyback is effected before any reduction of its share capital to which section 10I applies or any redemption of shares to which section 10K applies or any purchase or acquisition of shares or stocks of a preferential nature to which section 10M applies, section 10I(5)(c), (d) and (e) shall apply, with the necessary modifications, for the purpose of the buyback and any reference in that section to the first reduction shall be read as a reference to the buyback;
(c)
“equal access scheme” means a scheme which satisfies all the following conditions:
(i)
the offers under the scheme are to be made to every person who holds shares to purchase or acquire the same percentage of their shares;
(ii)
all the persons mentioned in sub-paragraph (i) have a reasonable opportunity to accept the offers made to them; and
(iii)
the terms of all the offers are the same except that there shall be disregarded —
(A)
differences in consideration attributable to the fact that the offers relate to shares with different accrued dividend entitlements;
(B)
differences in consideration attributable to the fact that the offers relate to shares with different amounts remaining unpaid; and
(C)
differences in the offers introduced solely to ensure that each shareholder is left with a whole number of shares;
(d)
in determining the duration of beneficial ownership of shares for the purposes of subsection (5)(b) —
(i)
the day of acquisition of the shares shall be counted as one day, but the day of sale of the shares shall be excluded;
(ii)
any bonus shares or shares arising from a consolidation or sub-division of shares shall be deemed to have been acquired on the date of acquisition of the original shares in respect of which the bonus shares were issued, or from which the consolidated or sub-divided shares were derived;
(iii)
the duration shall not be regarded as discontinued by the lending or sale of the shares under any securities lending or repurchase arrangement; and
(iv)
regard shall be had to such other matters as may be prescribed;
(e)
“shares” includes stocks but does not include shares or stocks of a preferential nature.
[32/99; 24/2000; 24/2001]
Shares redemption
10K.
—(1)  This section shall apply where a company resident in Singapore redeems from its shareholders any redeemable shares issued after 6th July 1999.
[32/99]
(2)  Where a company redeems any redeemable shares to which this section applies, any payment made by the company to any shareholder from whom the shares are redeemed shall —
(a)
where the payment is provided for out of contributed capital of the company, not be regarded as a payment of dividend by the company to the shareholder, and an amount equal to the payment shall be debited to the contributed capital account kept by the company under section 10I(5)(c)(i);
(b)
where the payment is not provided for out of contributed capital of the company —
(i)
be deemed to be a dividend paid by the company on the date of the payment, and the provisions relating to the payment of dividends under this Act and the Economic Expansion Incentives (Relief from Income Tax) Act (Cap. 86) shall apply, with the necessary modifications, to the dividend deemed to be paid;
(ii)
notwithstanding sub-paragraph (i), not be deemed to be a dividend received by the shareholder.
[32/99]
(3)  Where the dividend deemed to be paid under subsection (2)(b)(i) is a dividend to which section 44 applies, the amount of dividend deemed to be so paid by the company shall be deemed to be of such a gross amount as after deduction of tax at the rate deductible at the date of payment would be equal to the amount of payment made by the company to the shareholder.
[32/99]
(4)  No set-off under section 46 shall be allowed to any shareholder in respect of any payment made by a company to the shareholder for the redemption of his redeemable shares.
[32/99]
(5)  For the purposes of this section —
(a)
the contributed capital of a company has the same meaning as in section 10I(5)(b); and
(b)
where a company redeems any redeemable shares to which this section applies and the redemption is effected before any reduction of its share capital to which section 10I applies or any buyback to which section 10J(2) or 10M applies, section 10I(5)(c), (d) and (e) shall apply, with the necessary modifications, for the purpose of the redemption and any reference in that section to the first reduction shall be read as a reference to the redemption.
[32/99; 24/2001]
Withdrawals from Supplementary Retirement Scheme
10L.
—(1)  Where the amount of withdrawals made by an SRS member from his SRS account in any year exceeds the amount he contributed to his SRS account in that year, the excess amount withdrawn from his SRS account shall, subject to subsections (3), (6), (7), (8) and (9), be deemed to be income of the SRS member chargeable to tax under section 10(1)(g).
[24/2001]
(2)  Except where a withdrawal is made by the Official Assignee or the trustee in bankruptcy of an SRS member who is a bankrupt or where a withdrawal is made under subsection (3), (4) or (8) or deemed to be withdrawn under subsection (6), (7) or (9), a penalty of 5% of the amount withdrawn which is deemed to be income of an SRS member under subsection (1) shall be payable by the SRS member and shall be deducted by the SRS operator from the amount so withdrawn.
[24/2001]
(2A)  The Minister may, for any good cause, remit, wholly or in part, any penalty payable by any SRS member under subsection (2).
[37/2002]
(3)  Only 50% of the following withdrawals made by an SRS member from his SRS account shall be deemed to be income of the SRS member chargeable to tax under section 10(1)(g):
(a)
withdrawal of all the funds standing in his SRS account at the same time if the SRS member is neither a citizen of Singapore nor a Singapore permanent resident on the date of the withdrawal and for a continuous period of at least 10 years before that date, and has maintained his SRS account for a period of not less than 10 years from the date of his first contribution to his SRS account;
(b)
any withdrawal on or after the SRS member has attained the prescribed retirement age prevailing at the time when the SRS member made his first contribution to his SRS account; or
(c)
any withdrawal made on the ground that the SRS member is physically or mentally incapacitated from ever continuing in any employment, is found to be of unsound mind or is suffering from a terminal illness or disease.
[24/2001; 37/2002]
(4)  Where any contribution made by an SRS member in any year to his SRS account exceeds his SRS contribution cap for that year (referred to in this section as excess contribution) —
(a)
the aggregate of the excess contribution and, unless the Comptroller otherwise directs, an amount equal to 5% of the excess contribution, to be compounded yearly in accordance with regulations made under this section; or
(b)
the total amount standing in his SRS account,
whichever amount is the lower, shall be withdrawn by the SRS member from his SRS account by 31st December of the year in which he has been notified by the Comptroller of the excess contribution; and that amount shall be deemed to be his income chargeable to tax under section 10(1)(g) for that year.
[24/2001]
(5)  Where an SRS member is eligible to make a withdrawal under subsection (3)(b), all the funds (excluding any life annuity) standing in his SRS account shall be withdrawn not later than —
(a)
10 years from the prescribed retirement age prevailing at the time he made his first withdrawal under subsection (3)(b); or
(b)
10 years from the prescribed retirement age prevailing at any time,
whichever is the earlier.
[24/2001]
(6)  Upon the expiry of the earlier of the 2 periods referred to in subsection (5), any balance (excluding any life annuity and any amount not withdrawn under subsection (4)) remaining in the SRS account shall be deemed to be withdrawn by the SRS member and 50% of such balance shall be deemed to be his income chargeable to tax under section 10(1)(g) for the year in which the earlier of such periods expires.
[Act 34/2008, wef Y/A 2009 & Sub Ys/A:2008-ACT-34]
[24/2001]
(7)  Where an SRS member is eligible to make a withdrawal under subsection (3)(c), he shall withdraw all the funds (excluding any life annuity) standing in his SRS account not later than 10 years from the date he makes the first withdrawal; and upon the expiry of that period, any balance (excluding any life annuity and any amount not withdrawn under subsection (4)) remaining in his SRS account shall be deemed to be withdrawn by the SRS member and 50% of such balance shall be deemed to be his income chargeable to tax under section 10(1)(g).
[24/2001]
(8)  Only 50% of any annuity payment made under a life annuity purchased by an SRS member under the SRS shall be deemed to be income of the SRS member chargeable to tax under section 10(1)(g) upon —
(a)
the expiry of the earlier of the 2 periods referred to in subsection (5);
[Act 34/2008, wef Y/A 2009 & Sub Ys/A:2008-ACT-34]
(b)
the expiry of the period referred to in subsection (7); or
(c)
the closure of his SRS account on or after he has attained the prescribed retirement age prevailing at the time when he made his first contribution to his SRS account.
[24/2001]
(9)  Where an SRS member dies, any sum standing in his SRS account shall be deemed to be withdrawn on the date of his death and 50% of the sum shall be deemed to be his income chargeable to tax under section 10(1)(g).
[24/2001]
(10)  For the purposes of this section, the use of funds in his SRS account by an SRS member for investment in savings or investment products offered under the SRS and for disbursement of any charges in relation to the operation of his SRS account shall be deemed not to be a withdrawal from his SRS account.
[24/2001]
(11)  The Minister may by regulations establish a Supplementary Retirement Scheme to provide for voluntary cash contributions by individuals to accounts operated by SRS operators so as to encourage individuals to save for their old age.
[Act 34/2008, wef Y/A 2009 & Sub Ys/A:2008-ACT-34]
[24/2001]
(12)  Without prejudice to the generality of subsection (11), regulations made under that subsection may provide for —
(a)
the opening and the type of account for any SRS member into which contributions may be made;
(b)
the SRS contribution cap, the mode and manner of the contributions and withdrawals that can be made by any SRS member;
(c)
the method of valuation of investment products acquired under the SRS;
(d)
the method of computing income deemed to accrue from excess contributions made by any SRS member;
(e)
the suspension or closure of SRS accounts and the circumstances in which the SRS accounts may be suspended or closed;
(f)
the terms and conditions governing the relationship between the Government, SRS operators, SRS members and the Comptroller under the SRS;
(g)
the purposes for which the contributions made under the SRS can be utilised and invested, the persons with whom investments may be made and the terms and conditions of the investment and withdrawal under the SRS;
(h)
the consequences for any contravention of the regulations, including making any act or omission in contravention of such regulations an offence and prescribing penalties for such offence;
(i)
the requirements and obligations to be observed by SRS members, SRS operators and financial product providers under the SRS; and
(j)
generally for giving full effect to or for carrying out the purposes of this section.
[24/2001]
(13)  This section shall not apply to any SRS member whose SRS account is opened and closed within the same year.
[24/2001]
Buyback of preferential shares
10M.  Section 10K shall apply in relation to any purchase or acquisition by a company resident in Singapore from its shareholders of shares or stocks of a preferential nature issued by it (referred to in this section as a buyback), and for the purpose of such application —
(a)
any reference to redemption of shares in that section shall be construed as a reference to a buyback of shares or stocks of a preferential nature; and
(b)
any reference to redeemable shares in that section shall be construed as a reference to shares or stocks of a preferential nature.
[24/2001]
Securities lending or repurchase arrangement
10N.
—(1)  For the purpose of determining whether an amount, other than any fee payable under a securities lending or repurchase arrangement, should be taken into account in ascertaining the gains or profits from any transfer of securities under the arrangement in respect of which a transferor is chargeable to tax, the transferor is to be treated as if —
(a)
the transfer of the transferred securities had not been made;
(b)
the transferor had held the transferred securities at all times during the borrowing period; and
(c)
the return of the transferred securities or equivalent securities had not been made at the end of the borrowing period.
[37/2002]
(2)  Notwithstanding subsection (1), where a transferor is a person who carries on a trade or business of sale and purchase of securities, any gains or profits derived by him from any transfer of securities under a securities lending or repurchase arrangement shall be chargeable to tax under section 10(1)(a) if subsequent to the transfer of the transferred securities —
(a)
the transferred securities are redeemed;
(b)
the transferee accepts a takeover offer for the transferred securities upon the direction of the transferor;
(c)
the arrangement is terminated because the transferor or transferee is unable to perform any of the obligations specified in the arrangement, unless the transferor applies the collateral held by him to re-acquire equivalent securities under the terms of the arrangement;
(d)
the transferee sells the transferred securities to the issuer of such securities upon the direction of the transferor; or
(e)
any other event occurs which, in the opinion of the Comptroller, results in the condition specified in paragraph (a)(iii) or (iv) of the definition of “securities lending or repurchase arrangement” not fulfilled,
and the gains or profits shall be deemed to arise at the time any of the events referred to in paragraph (a), (b), (c), (d) or (e) occurs.
[37/2002]
(3)  Where a transferee is a person who carries on a trade or business of sale and purchase of securities, any gains or profits derived by him from any transfer of securities under a securities lending or repurchase arrangement shall be chargeable to tax under section 10(1)(a), and the gains or profits shall be deemed to arise at the time any of the following events occurs:
(a)
the transferee disposes of the transferred securities to a person other than the transferor; and
(b)
subsequent to such disposal, the transferee returns equivalent securities to the transferor or any of the events specified in subsection (2) occurs, whichever is the earlier.
[37/2002]
(4)  For the purposes of computing the gains or profits of a transferee under subsection (3), the transferee is to be treated as if he had acquired the transferred securities from or returned equivalent securities to the transferor, as the case may be, for a consideration equal to the market value of the transferred securities at the beginning of the borrowing period under the securities lending or repurchase arrangement.
[37/2002]
(5)  Where any distribution of dividend or interest in respect of transferred securities is made to a Singapore-based transferee and received by a transferor under a securities lending or repurchase arrangement, the distribution shall be included in the statutory income of the transferor of the year in which the distribution is made to the transferee, and be assessed as if the distribution had been made to the transferor.
[37/2002]
(6)  A Singapore-based transferee deriving in respect of transferred securities under a securities lending or repurchase arrangement any dividend from Singapore from which tax has been deducted under section 44 shall —
(a)
not be entitled to any set-off under section 46(1) in respect of the dividend;
(b)
notify such person within such period as the Comptroller may require that he is a transferee; and
(c)
comply with such requirement as the Comptroller may impose.
[37/2002]
(7)  A Singapore-based transferee (other than a transferee under a buy and sell back arrangement in respect of qualifying debt securities or foreign debt securities) shall not be entitled toany relief under section 48 or any tax credit under section 50 or 50A for any distribution received by him from outside Singapore in respect of transferred securities under a securities lending or repurchase arrangement.
[37/2002]
(8)  Where any compensatory payment derived under a securities lending or repurchase arrangement by a transferor from a Singapore- based transferee is in place of —
(a)
any dividend which is exempt from tax or interest which is derived from qualifying debt securities, the transferor shall be assessed at the tax rate that would have been applicable to the dividend or interest, as the case may be, had it been made directly to the transferor;
(b)
a distribution of a dividend derived from Singapore from which tax has been deducted under section 44, no set-off under section 46(1) shall be allowed to the transferor; or
(c)
a distribution of income derived from outside Singapore and where the transferor is resident in Singapore, no relief under section 48 and no tax credit under section 50 or 50A shall be allowed to the transferor.
[37/2002]
(9)  Section 45 shall apply in relation to —
(a)
any distribution of interest (other than interest derived from qualifying debt securities) in respect of transferred securities; and
(b)
any compensatory payment in place of —
(i)
any distribution of income derived from outside Singapore;
(ii)
any dividend derived from Singapore from which tax has been deducted under section 44; or
(iii)
any interest (other than interest derived from qualifying debt securities),
made under a securities lending or repurchase arrangement by a Singapore-based transferee to a transferor who is not resident in Singapore, as that section applies to any interest paid by a person to another person not known to him to be resident in Singapore, and for the purpose of such application, any reference in that section to interest shall be construed as a reference to such distribution of interest or compensatory payment.
[37/2002]
(10)  For the purposes of this section, the Comptroller may specify such requirement and obligation to be observed, and such information in respect of any transferor, transferee or transferred securities to be furnished, by the depository agent of the transferor or transferee.
[37/2002]
(11)  The Minister may make regulations to provide generally for giving full effect to or for carrying out the purposes of this section.
[37/2002]
(12)  In this section —
“borrowing period”, in relation to any transferred securities, means the period commencing from the date the securities are transferred by the transferor to the transferee and ending on the date the securities or equivalent securities are returned to the transferor or are regarded as being disposed of by the transferor under subsection (2), whichever is the earlier;
“commercial purpose”, in relation to any securities lending or repurchase arrangement, means —
(a)
the settling of a sale of securities, whether by the transferee or another person;
(b)
the replacement, in whole or in part, of the transferred securities obtained by the transferee under any earlier securities lending or repurchase arrangement;
(c)
the on-lending of the transferred securities to another person;
(d)
the fulfillment by the transferee of its existing obligations arising from an uncovered written option position using transferred securities;
(e)
the hedging and arbitrage transactions entered into or to be entered into by the transferee;
(f)
the liquidity management by the transferee;
(g)
the holding of the transferred securities, without being disposed of, as collateral against the obligations of the counterparty to the securities lending or repurchase arrangement; or
(h)
any other purpose as the Minister (or such person as the Minister may appoint) may in writing allow;
“compensatory payment”, in relation to any transferred securities, means a payment made during the borrowing period to a transferor in place of any distribution of interest, dividend or right to purchase warrants, options or additional securities in respect of the transferred securities under circumstances in which the transferee does not receive such distribution to be passed on to the transferor, and includes any amount which is in place of interest and is deducted from the price paid by the transferor to acquire equivalent securities or re-acquire the transferred securities under a buy and sell back arrangement in respect of qualifying debt securities, Singapore Government securities or foreign debt securities;
“equivalent securities”, in relation to any transferred securities, means securities which are identical in type, nominal value (where applicable), description and amount to the transferred securities and includes —
(a)
the securities into which the transferred securities have been converted, sub-divided or consolidated;
(b)
the proceeds of the redemption of the transferred securities;
(c)
the cash or securities representing the proceeds of the acceptance of the takeover of the transferred securities;
(d)
if there is a call on partly-paid securities and if the transferor has paid to the transferee the sum due on the call, the paid-up securities;
(e)
if there is a bonus issue, the transferred securities together with the securities allotted by way of bonus;
(f)
if there is a rights issue and if the transferor has directed the transferee to take up the issue and has paid to the transferee any sum due on the issue, the transferred securities together with the securities allotted under the rights issue or, if the transferor has directed the transferee to sell the rights, the transferred securities together with the proceeds from the disposal of the rights;
(g)
if any distribution is made in the form of securities or a certificate which may be exchanged for securities or an entitlement to acquire securities, the transferred securities together with the securities or certificate or entitlement equivalent to those allotted; and
(h)
if the transferee is unable to return the transferred securities, such amount of money or securities equivalent to the transferred securities;
“foreign debt securities” means securities, other than stocks and shares, denominated in any foreign currency (including bonds and notes) issued by foreign governments, foreign banks outside Singapore and companies not incorporated and not resident in Singapore;
“qualifying debt securities” has the same meaning as in section 13(16);
“securities” includes any collateral that is provided in the form of securities but does not include stocks and shares of any company resident in Singapore which are not listed on any stock exchange in Singapore or elsewhere;
“securities lending or repurchase arrangement” means any written arrangement made on or after 23rd November 2001 —
(a)
under which —
(i)
a person (referred to in this section as transferor) transfers the legal interest in any securities (referred to in this section as transferred securities) to another person (referred to in this section as transferee) for any commercial purpose;
(ii)
the transferor re-acquires the transferred securities or acquires equivalent securities from the transferee at a later time;
(iii)
the transferor retains the risk of loss or opportunity for gain in respect of the transferred securities;
(iv)
the transferor does not dispose of (by transfer, declaration of trust or otherwise) the right to receive any part of the total consideration payable or to be given by the transferee under the arrangement; and
(v)
if any distribution is made in respect of the transferred securities during the borrowing period, the transferor receives from the transferee the distribution or compensatory payment equal to the value of the distribution; and
(b)
where —
(i)
the transferor and transferee are dealing with each other at arm’s length; and
(ii)
the transferor or transferee or both of them do not enter into the arrangement with the purpose, or main purpose, of avoiding, reducing or deferring any tax chargeable under this Act;
“Singapore-based transferee” means a transferee who is resident in Singapore (except in respect of any business carried on outside Singapore through a permanent establishment outside Singapore) or which is a permanent establishment in Singapore;
“Singapore Government securities” and “debt securities” have the same meanings as in section 43N.
[37/2002; 34/2005]
(13)  This section has effect notwithstanding anything to the contrary in this Act, except that nothing in this section shall affect the chargeability to tax of any income of a transferor or transferee under section 10 unless otherwise provided in this section.
[37/2002]
Ascertainment of income of clubs, trade associations, etc.
11.
—(1)  Where a body of persons, whether corporate or unincorporate, carries on a club or similar institution and receives from its members not less than half of its gross receipts on revenue account (including entrance fees and subscriptions), it shall not be deemed to carry on a business; but where less than half of such gross receipts are received from members, the whole of the income from transactions both with members and others (including entrance fees and subscriptions) shall be deemed to be receipts from a business, and the body of persons shall be chargeable in respect of the profits therefrom.
(2)  Where a body of persons, whether corporate or unincorporate, carries on a trade or professional association in such circumstances that more than half of its receipts by way of entrance fees and subscriptions from Singapore members are claimed or claimable as allowable deductions for the purposes of section 14 —
(a)
the body of persons shall be deemed to carry on a business;
(b)
the whole of its income from transactions with Singapore members and persons who are not members (including entrance fees and subscriptions) shall be deemed to be receipts from a business; and
(c)
the body of persons shall be chargeable in respect of the profits from the business.
[7/2007]
(3)  For the purposes of subsection (2), “body of persons” includes a company limited by guarantee approved by the Minister or such person as he may appoint, subject to such conditions as he may impose.
[7/2007]
(4)  In this section —
“members”, in relation to a body of persons, means those persons who are entitled to vote at a general meeting of the body at which effective control is exercised over its affairs;
“Singapore members” means members that are —
(a)
persons, other than companies, resident in Singapore;
(b)
companies incorporated in Singapore (excluding branches or offices located outside Singapore); or
(c)
in the case of companies incorporated outside Singapore, the branches or offices of the companies located within Singapore.
[7/2007]
Sources of income
Trading operations carried on partly in Singapore
12.
—(1)  Where a non-resident person carries on a trade or business of which only part of the operations is carried on in Singapore, the gains or profits of the trade or business shall be deemed to be derived from Singapore to the extent to which such gains or profits are not directly attributable to that part of the operations carried on outside Singapore.
Non-resident shipping and air transport
(2)  Where a non-resident person carries on —
(a)
the business of shipowner or charterer; or
(b)
the business of air transport,
and any ship or aircraft owned or chartered by him calls at a port, aerodrome or airport in Singapore, his full profits arising from the carriage of passengers, mails, livestock or goods shipped, or loaded into an aircraft, in Singapore shall be deemed to accrue in Singapore.
(2A)  Subsection (2) shall not apply to passengers, mails, livestock or goods which are brought to Singapore solely for transhipment, or for transfer from one aircraft to another or from an aircraft to a ship or from a ship to an aircraft.
Cable or wireless undertakings
(3)  Where a non-resident person carries on in Singapore the business of transmitting messages by cable or by any form of wireless apparatus, his full profits arising from the transmission in Singapore of any such messages, whether originating in Singapore or elsewhere, to places outside Singapore shall be deemed to accrue in Singapore.
Employment exercised in Singapore
(4)  The gains or profits from any employment exercised in Singapore shall be deemed to be derived from Singapore whether the gains or profits from such employment are received in Singapore or not.
Employment exercised outside Singapore on behalf of Government
(5)  The gains or profits from any employment exercised outside Singapore on behalf of the Government by any individual in the discharge of governmental functions shall be deemed to be derived from Singapore except where such individual is not a citizen or a resident of Singapore.
Interest, etc.
(6)  There shall be deemed to be derived from Singapore —
(a)
any interest, commission, fee or any other payment in connection with any loan or indebtedness or with any arrangement, management, guarantee, or service relating to any loan or indebtedness which is —
(i)
borne, directly or indirectly, by a person resident in Singapore or a permanent establishment in Singapore except in respect of any business carried on outside Singapore through a permanent establishment outside Singapore or any immovable property situated outside Singapore; or
(ii)
deductible against any income accruing in or derived from Singapore; or
(b)
any income derived from loans where the funds provided by such loans are brought into or used in Singapore.
[5/77]
Royalties, etc.
(7)  There shall be deemed to be derived from Singapore —
(a)
royalty or other payments in one lump sum or otherwise for the use of or the right to use any movable property;
(b)
any payment for the use of or the right to use scientific, technical, industrial or commercial knowledge or information or for the rendering of assistance or service in connection with the application or use of such knowledge or information;
(c)
any payment for the management or assistance in the management of any trade, business or profession; or
(d)
rent or other payments under any agreement or arrangement for the use of any movable property,
which are borne, directly or indirectly, by a person resident in Singapore or a permanent establishment in Singapore (except in respect of any business carried on outside Singapore through a permanent establishment outside Singapore) or which are deductible against any income accruing in or derived from Singapore.
[5/77]
Commission or other payment of junket promoter
2(8)   Commission or other payment of junket promoterThere shall be deemed to be derived from Singapore any commission or other payment paid to a junket promoter for arranging a junket with a casino operator in Singapore which is —
(a)
borne, directly or indirectly, by a person resident in Singapore or a permanent establishment in Singapore except in respect of any business carried on outside Singapore through a permanent establishment outside Singapore; or
(b)
deductible against any income accruing in or derived from Singapore.
[10/2006]
[Note: Subsections (8) and (9) shall come into operation on 2nd April 2008 vide S 176/2008.]
2  Subsections (8) and (9), inserted by the Casino Control Act, to come into operation when section 202 of the Casino Control Act is brought into operation.
3(9)   In this section, “casino operator”, “junket” and “junket promoter” have the same meanings as in the Casino Control Act (Cap. 33A)
[10/2006]
3  Subsections (8) and (9), inserted by the Casino Control Act, to come into operation when section 202 of the Casino Control Act is brought into operation.
[Note: Subsections (8) and (9) shall come into operation on 2nd April 2008 vide S 176/2008.]