On 19/05/2013,
you requested for the version in force on 19/05/2013
incorporating all amendments published on or before 19/05/2013.
The closest version currently available is that of 18/04/2013.
Exemption of income of company incorporated and resident in Singapore arising from funds managed by fund manager in Singapore
13R.
—(1) Subject to such conditions as may be prescribed by regulations or specified in the letter of approval of the company, there shall be exempt from tax such income as the Minister may by regulations prescribe of a company incorporated and resident in Singapore and approved by the Minister or such person as he may appoint (referred to in this section as an approved company) arising from funds managed —
(a)
in Singapore by a fund manager; or
(b)
by a person approved by the Minister or the person appointed by the Minister.
[22/2011 wef 01/09/2007]
(1A) The approval of a person under subsection (1) shall be subject to such conditions as the Minister may impose.
[22/2011 wef 01/09/2007]
(2) No approval shall be granted under subsection (1) after 31st March 2014.
[27/2009 wef 29/12/2009]
[53/2007]
(3) Where —
(a)
income of any approved company has been exempt from tax under subsection (1) in any year of assessment; and
(b)
a person (referred to in this section as the relevant owner), either alone or together with his associates, beneficially owns on the relevant day issued securities of the approved company the value of which is more than the prescribed percentage of the total value of all issued securities of the approved company on the relevant day,
then the relevant owner shall be liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the following formula:
where A is the percentage which the value of the issued securities of the approved company beneficially owned on the relevant day by the relevant owner bears to the total value of all issued securities of the approved company on the relevant day; |
B is the amount of income of the approved company as reflected in the audited account of the approved company for the basis period relating to that year of assessment; and |
C is the tax rate specified in section 43(1)(a) applicable to that year of assessment. |
[53/2007]
(4) Subsection (3) shall not apply to a relevant owner if —
(a)
the Comptroller permits the relevant owner to take steps to reduce the ownership of the issued securities by him or his associates within such period as the Comptroller may specify, being a period of no more than 3 months from the relevant day; and
[34/2008 wef 01/09/2007]
(b)
by the end of the specified period, the value of the issued securities beneficially owned by the relevant owner together with his associates is no more than the prescribed percentage of the total value of all issued securities of the approved company on the relevant day.
[53/2007]
(5) Notwithstanding subsection (3), where —
(a)
income of any approved company has been exempt from tax under subsection (1) in any year of assessment;
(b)
a person, either alone or together with his associates, beneficially owns on the relevant day any issued securities of the approved company; and
(c)
the person mentioned in paragraph (b) is a non-bona fide entity,
then the person mentioned in paragraph (b) shall not be liable to pay the penalty referred to in subsection (3); but a person (referred to in this section as the liable person) who —
(i)
beneficially owns on the relevant day equity interests of the person mentioned in paragraph (b); and
(ii)
is not himself a non-bona fide entity,
shall be liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the formula specified in subsection (5A), if, and only if, the total of —
(A)
the value of the equity interests of the approved company beneficially owned by the liable person on the relevant day; and
(B)
the value of the equity interests of the approved company beneficially owned by the associates of the liable person on the relevant day,
exceeds the prescribed percentage of the total value of all the equity interests of the approved company on that day.
[27/2009 wef 29/12/2009]
(5A) The formula for the penalty referred to in subsection (5) shall be as follows:
where A is the percentage which the value of the equity interests of the approved company beneficially owned on the relevant day by the liable person bears to the total value of all equity interests of the approved company on the relevant day; |
B is the amount of income of the approved company as reflected in the audited account of the approved company for the basis period relating to that year of assessment; and |
C is the tax rate applicable to that year of assessment as specified in section 43(1)(a). |
[27/2009 wef 29/12/2009]
(5B) Subsection (4) shall apply, with the necessary modifications, to the liable person as it applies to a relevant owner as if the reference to subsection (3) is a reference to subsection (5).
[27/2009 wef 29/12/2009]
(6) For the purposes of subsections (5)(i), (A) and (B) and (5A), if —
(a)
a person beneficially owns (including by virtue of one or more applications of this subsection) equity interests of a person (referred to in this subsection as a first level entity); and
(b)
the first level entity beneficially owns equity interests of another person (referred to in this subsection as a second level entity),
then the first-mentioned person is taken to beneficially own equity interests of the second level entity; and the percentage which the value of those equity interests bears to the total value of all equity interests of the second level entity shall be computed in accordance with the following formula:
where A is the percentage which the value of equity interests of the first level entity beneficially owned by the first-mentioned person bears to the total value of all equity interests of the first level entity; and |
B is the percentage which the value of equity interests of the second level entity beneficially owned by the first level entity bears to the total value of all equity interests of the second level entity. |
[53/2007]
[27/2009 wef 29/12/2009]
(7) Regulations made under this section may —
(a)
provide for the determination of the amount of income of any approved company to be exempt from tax;
(b)
provide for the circumstances under which a person would be considered to be an associate for the purposes of this section;
(c)
exempt any person or class of persons from subsection (3) or (5); and
(d)
make provision generally for giving full effect to or for carrying out the purposes of this section.
[53/2007]
(8) In this section —
“equity interest” means —
(a)
in relation to a company, any issued security of that company; or
(b)
in relation to a person other than a company, such right or interest as may be prescribed;
“issued securities”, in relation to a company, means —
(a)
issued debentures of, or issued stocks or shares in, the company;
(b)
any right, option or derivative in respect of any such debentures, stocks or shares; or
(c)
such other securities of the company as may be prescribed;
[34/2008 wef 01/09/2007]
“non-bona fide entity” means a person not resident in Singapore (excluding a permanent establishment in Singapore) who —
(a)
is set up solely for the purpose of avoiding or reducing payment of tax or penalty under this Act; or
(b)
does not carry out any substantial business activity for a genuine commercial reason;
“relevant day” means the last day of the basis period of the approved company relating to the year of assessment referred to in subsection (3) or (5);
[27/2009 wef 29/12/2009]
“value” —
(a)
in relation to issued securities of a company other than those prescribed under paragraph (c) of the definition of “issued securities”, means the value of those securities at the time of their issue by the company; or
(b)
in relation to issued securities of a company prescribed under paragraph (c) of the definition of “issued securities”, means the value of those securities at the prescribed time.
[34/2008 wef 01/09/2007]
(9) The Minister may by regulations make such transitional and savings provisions as he may consider necessary or expedient in relation to the repeal of section 13R in force immediately before 1st September 2007.
[53/2007]