On 22/05/2013,
you requested for the version in force on 22/05/2013
incorporating all amendments published on or before 22/05/2013.
The closest version currently available is that of 31/03/2005.
PART II
PIONEER INDUSTRIES
4.
—(1) The Minister may, if he considers it expedient in the public interest to do so, approve an industry, which is not being carried on in Singapore on a scale adequate to the economic needs of Singapore and for which in his opinion there are favourable prospects for development, to be a pioneer industry and any specific product of that industry to be a pioneer product.
[48/2004]
(2) The Minister may revoke any approval given under this section but any such revocation shall not affect the operation of any pioneer certificate issued to any pioneer enterprise before the revocation.
[48/2004]
(3) Any industry which has been approved as a pioneer industry or any product which has been approved as a pioneer product before the date of commencement of the Economic Expansion Incentives (Relief from Income Tax) (Amendment No. 2) Act 2004 shall be deemed to have been approved under this section.
[48/2004]
5.
—(1) Any company which is desirous of producing a pioneer product may make an application in writing to the Minister to be approved as a pioneer enterprise in such form and with such particulars as may be prescribed.
(2) Where the Minister is satisfied that it is expedient in the public interest to do so and, in particular, having regard to the production or anticipated production of the pioneer product from all sources of production in Singapore, he may approve that company as a pioneer enterprise and issue a pioneer certificate to the company, subject to such conditions as he thinks fit.
(3) Every pioneer certificate issued under this section shall specify —
(a)
the date on or before which it is expected that the pioneer enterprise will commence to produce in marketable quantities the product specified in the certificate; and
(b)
the rate of production of that product which it is expected will be attained on or before that date.
(4) The date specified under subsection (3)(a) shall be deemed to be the production day of the pioneer enterprise for the purposes of this Act.
(5) The Minister may, in his discretion, upon the application of any pioneer enterprise, amend its pioneer certificate by substituting for the production day specified therein such earlier or later date as he thinks fit and thereupon the provisions of this Act shall have effect as if the date so substituted were the production day in relation to that pioneer enterprise.
6. The tax relief period of a pioneer enterprise shall commence on its production day and shall continue for such period, not exceeding 15 years, as the Minister may determine.
[11/2004; 48/2004]
7. For the purposes of the Income Tax Act (Cap. 134) and this Act —
(a)
the old trade or business of a pioneer enterprise shall be deemed to have permanently ceased at the end of its tax relief period;
(b)
the pioneer enterprise shall be deemed to have set up and commenced a new trade or business on the day immediately following the end of its tax relief period;
(c)
the pioneer enterprise shall make up accounts of its old trade or business for a period not exceeding one year, commencing on its production day, for successive periods of one year thereafter and for the period not exceeding one year ending at the date when its tax relief period ends; and
(d)
in making up the first accounts of its new trade or business the pioneer enterprise shall take as the opening figures for those accounts the closing figures in respect of its assets and liabilities as shown in its last accounts in respect of its tax relief period, and its next accounts of its new trade or business shall be made up by reference to the closing figures in such first accounts and any subsequent accounts shall be similarly made up by reference to the closing figures of the preceding accounts of its new trade or business.
8.
—(1) Where, during its tax relief period, a pioneer enterprise carries on any trade or business other than the trade or business relating to the relevant pioneer product (referred to in this section as separate trade), separate accounts shall be maintained in respect of that separate trade or business and in respect of the same accounting period.
[11/2004]
(2) Where the carrying on of such separate trade results in a loss in any accounting period, the loss shall be brought into the computation of the income of the pioneer enterprise for that period unless the Comptroller, having regard to all the circumstances of the case, is satisfied that the loss was not incurred for the purpose of obtaining a tax advantage.
[22/87]
(3) Where the carrying on of such separate trade results in a profit in any accounting period, and the profit, computed in accordance with the provisions of the Income Tax Act (Cap. 134) as modified by this section, amounts to less than 5% of the full sum receivable from the sale of goods or the provision of services, the statutory income from that source shall be deemed to be 5% (or such lower rate as the Comptroller may specify in any particular case) of the full sum so receivable and the income of the pioneer enterprise shall be abated accordingly.
[22/87; 11/2004]
(4) Where in the opinion of the Comptroller the carrying on of such separate trade is subordinate and incidental to the carrying on of the trade or business relating to the relevant pioneer product, the income or loss arising from such activities shall be deemed to form part of the income or loss of the pioneer enterprise.
(5) In this section, "relevant pioneer product" means the pioneer product specified in its pioneer certificate.
9. For the purposes of the Income Tax Act and this Act, the Comptroller may direct that —
(a)
any sums payable to a pioneer enterprise in any accounting period which, but for the provisions of this Act, might reasonably and properly have been expected to be payable, in the normal course of business, after the end of that period shall be treated as not having been payable in that period but as having been payable on such date, after that period, as the Comptroller thinks fit and, where that date is after the end of the tax relief period of the pioneer enterprise, as having been so payable, on that date, as a sum payable in respect of its new trade or business; and
(b)
any expense incurred by a pioneer enterprise within one year after the end of its tax relief period which, but for the provisions of this Act, might reasonably and properly have been expected to be incurred, in the normal course of business, during its tax relief period shall be treated as not having been incurred within that year but as having been incurred for the purposes of its old trade or business and on such date, during its tax relief period, as the Comptroller thinks fit.
10.
—(1) The income of a pioneer enterprise in respect of its old trade or business shall be ascertained in accordance with the provisions of the Income Tax Act (Cap. 134) after making such adjustments as may be necessary in consequence of any direction given under section 9.
(2) In determining the income of a pioneer enterprise referred to in subsection (1), the allowances provided for in sections 16, 17, 18, 19, 19A, 19B, 20, 21 and 22 of the Income Tax Act shall be taken into account notwithstanding that no claim for such allowances has been made.
[48/2004]
(3) Where the tax relief period of a pioneer enterprise referred to in subsection (1) expires during the basis period for any year of assessment, for the purpose of determining the income in respect of its old trade or business and its new trade or business for that year of assessment, there shall be deducted allowances provided for in sections 16, 17, 18, 19, 19A, 19B, 20, 21 and 22 of the Income Tax Act notwithstanding that no claim for such allowances has been made; and for the purpose of computing such allowances —
(a)
the allowances for that year of assessment shall be computed as if the old trade or business of the pioneer enterprise had not been deemed to have permanently ceased at the end of the tax relief period; and
(b)
the allowances computed in accordance with paragraph (a) shall be apportioned between the old trade or business and the new trade or business of the pioneer enterprise in such manner as appears to the Comptroller to be reasonable in the circumstances.
[36/93; 48/2004]
(4) Where in any year of assessment full effect cannot, by reason of an insufficiency of profits for that year of assessment, be given to the allowances mentioned in subsection (2), then the balance of the allowances shall be added to, and be deemed to form part of, the corresponding allowances, if any, for the next succeeding year of assessment and, if no such corresponding allowances fall to be made for that year, shall be deemed to constitute the corresponding allowances for that year, and so on for subsequent years of assessment.
(5) Notwithstanding subsections (1) and (2), where a pioneer enterprise has incurred or has given a written undertaking to the Minister to incur a capital expenditure of not less than $150 million and —
(a)
more than 50%, or such other percentage as the Minister may determine, of the paid-up capital of the pioneer enterprise is held by persons permanently resident in Singapore; and
(b)
such capital expenditure has been approved by the Minister as promoting or enhancing the economic or technological development of Singapore,
the capital expenditure so incurred by the pioneer enterprise within its tax relief period in respect of any asset used for the purposes of its new trade or business shall, subject to such conditions as the Minister may impose, be deemed, for the purposes of sections 16, 17, 18, 19, 19A, 19B, 20, 21 and 22 of the Income Tax Act (Cap. 134), to have been incurred on the day immediately following the last day of its tax relief period.
[29/91; 48/2004]
(6) Where a pioneer enterprise referred to in subsection (5) carries on a separate trade or business, and an industrial building, plant or machinery is used both for the purposes of that trade or business and the trade or business relating to the relevant pioneer product, subsection (5) shall apply to that building, plant or machinery.
[29/91; 11/2004]
(7) Where a pioneer enterprise has, before 16th August 1991, incurred a capital expenditure of not less than $1,000 million, subsection (5) shall apply to that enterprise in respect of that expenditure notwithstanding that the enterprise has not complied with paragraphs (a) and (b) of that subsection.
[29/91; 48/2004]
(8) Where a pioneer enterprise referred to in subsection (5) or (7) is the holder of 2 pioneer certificates in respect of different periods of time, and capital expenditure has been incurred in respect of any industrial building, plant or machinery which is jointly used in carrying on the trade or business of the 2 pioneer industries, no deduction shall be made in respect of such expenditure under any of the provisions contained in sections 16, 17, 18, 19, 19A, 19B, 20, 21 and 22 of the Income Tax Act (Cap. 134) until after the expiration of the tax relief period that is later in time.
[S 143/89]
(9) In subsections (5) and (7), “capital expenditure” means capital expenditure in connection with a pioneer product, on factory building (excluding land) in Singapore, on any new plant or new machinery used in Singapore and on intellectual property rights for use in Singapore and, subject to the approval of the Minister, on any secondhand plant or secondhand machinery used in Singapore.
[48/2004]
11. Part XVI of the Income Tax Act (relating to returns of income) shall apply in all respects as if the income of a pioneer enterprise in respect of its old trade or business were chargeable to tax.
12. For each year of assessment, the Comptroller shall issue to the pioneer enterprise a statement showing the amount of income for that year of assessment, and Parts XVII and XVIII of the Income Tax Act (relating to assessments, objections and appeals) shall apply, with the necessary modifications, as if that statement were a notice of assessment given under those provisions.
13.
—(1) Subject to section 14(7), where any statement issued under section 12 has become final and conclusive, the amount of the income shown by the statement shall not form part of the statutory income of the pioneer enterprise for any year of assessment and shall be exempt from tax.
(2) The Comptroller may, in his discretion and before such a statement has become final and conclusive, declare that a specified part of the amount of such income is not in dispute and such an undisputed amount of income is exempt from tax, pending such a statement becoming final and conclusive.
14.
—(1) As soon as any amount of income of a pioneer enterprise has become exempt under section 13, that amount shall be credited to an account to be kept by the pioneer enterprise for the purposes of this section.
(2) Where that account is in credit at the date on which any dividends are paid by the pioneer enterprise out of income which has been exempted, an amount equal to those dividends or to that credit, whichever is the less, shall be debited to the account.
(3) So much of the amount of any dividends so debited to that account as is received by a shareholder of the pioneer enterprise shall, if the Comptroller is satisfied with the entries in the account, be exempt from tax in the hands of the shareholder.
(4) Notwithstanding subsections (3) and (10), no dividend paid on any share of a preferential nature shall be exempt from tax under this section in the hands of the shareholder.
[11/2004]
(5) Any dividends debited to that account shall be treated as having been distributed to the shareholders of the pioneer enterprise or any particular class of those shareholders in accordance with the proportion of their shareholdings in the pioneer enterprise.
[44/2002]
(6) The pioneer enterprise shall deliver to the Comptroller a copy of that account, made up to a date specified by him, whenever called upon to do so by notice in writing sent by him to its registered office, until such time as he is satisfied that there is no further need for maintaining the account.
(7) Notwithstanding section 13 and subsections (1) to (6), where it appears to the Comptroller that —
(a)
any amount of exempted income of a pioneer enterprise; or
(b)
any dividend exempted in the hands of any shareholder,
ought not to have been exempted by reason of any direction made under section 9 or the revocation under section 99 of a pioneer certificate issued to the pioneer enterprise, the Comptroller may subject to section 74 of the Income Tax Act (Cap. 134) —
(i)
make such assessment or additional assessment upon the pioneer enterprise or any such shareholder as may appear to be necessary in order to counteract any profit obtained from any such amount; or
(ii)
direct the pioneer enterprise to debit its account, kept in accordance with subsection (1), with such amount as the circumstances require.
[1/95; 44/2002]
(8) Parts XVII and XVIII of the Income Tax Act (relating to assessments, objections and appeals) shall apply, with the necessary modifications, to any direction given under subsection (7) as if it were a notice of assessment given under those provisions.
(9) Section 44 of the Income Tax Act shall not apply in respect of any dividend or part thereof which is debited to the account required to be kept for the purposes of this section.
(10) Where an amount has been received by way of dividends from a company by a shareholder and the amount is exempt from tax under this section, if that shareholder is a company, any dividends paid by that company to its shareholders, to the extent that the Comptroller is satisfied that those dividends are paid out of that amount, shall be exempt from tax in the hands of those shareholders; and section 44 of the Income Tax Act shall not apply to any such dividends or part thereof.
[44/2002]
15.
—(1) Where a pioneer enterprise has, during its tax relief period, incurred a loss for any year, that loss shall be deducted as provided for in section 37 of the Income Tax Act, with the necessary modifications, but only against the income of the pioneer enterprise as ascertained under section 10, except that the balance of any such loss which remains unabsorbed at the end of its tax relief period is available to the new trade or business in accordance with that Act.
[22/87; 11/2004]
(2) Notwithstanding section 7(a), the balance of any allowance as provided for in section 10 which remains unabsorbed at the end of the tax relief period of the pioneer enterprise is available to the new trade or business in accordance with the Income Tax Act (Cap. 134).
[22/87]