Singapore legislation
Section 81
of Economic Expansion Incentives (Relief from Income Tax) Act
Section 81
Computation of export earnings and exemption from tax
(1)
The total income of a warehousing company or a servicing company in respect of its trade or business which includes its export of eligible goods or provision of eligible services shall be ascertained (after making such adjustments as may be necessary in consequence of any direction given under section 48 as made applicable by section 79), for any accounting period during its tax relief period in accordance with the provisions of the Income Tax Act, and, in particular, the following provisions shall apply:
income from other non-trading sources shall be excluded and separately assessed;
the allowances provided for in sections 16, 17, 18, 19, 19A, 20, 21 and 22 (where applicable) of the Income Tax Act shall be taken into account notwithstanding that no claim for those allowances has been made, and where in any year of assessment full effect cannot, by reason of an insufficiency of profits for that year of assessment, be given to those allowances, section 23 of the Income Tax Act shall apply;
the amount of any unabsorbed allowances in respect of any year of assessment immediately preceding the tax relief period which would otherwise be available under section 23(2) and (4) of the Income Tax Act (Cap. 134) shall be taken into account;
section 37 of the Income Tax Act shall apply in respect of any loss incurred prior to or during its tax relief period;
any unabsorbed allowances granted under sections 16, 17, 19, 19A, 20 and 21 of the Income Tax Act and losses incurred in respect of any distinct trade or business shall be brought into the computation;
any unabsorbed allowances granted under sections 16, 17, 19, 19A, 20 and 21 of the Income Tax Act and losses incurred in respect of the trade or business referred to in this subsection shall, during the tax relief period, only be deducted against the income derived from that trade or business; and
subject to sections 23 and 37 of the Income Tax Act, any allowances and losses which remain unabsorbed at the end of the tax relief period shall be available for deduction in its post tax relief period.
(2)
The amount of the export income of a warehousing company or a servicing company which will qualify for the relief for any year of assessment shall be deemed to be such amount which bears to the total income ascertained under subsection (1) the same proportion as the excess of the total amount of the export earnings of that company over its base export earnings bears to the total amount of its earnings.
(2A)
One-half of the amount of the export income of a warehousing company or a servicing company which qualifies for the relief as ascertained in subsection (2) shall not form part of the chargeable income of the company for that year of assessment and shall be exempt from tax.
(3)
The base export earnings referred to in subsection (2) shall be where a warehousing company or a servicing company has been carrying on its trade or business —
for 3 or more years immediately preceding the date of its application under this Part, an amount equal to one-third of the export earnings for the 3 years immediately preceding the date of its application under this Part; and
for less than 3 years immediately preceding the date of its application under this Part, such amount as the Minister may specify having regard to the export earnings of other warehousing companies or servicing companies, as the case may be.