Singapore legislation
Clause 14
of Economic Expansion Incentives (Relief from Income Tax) Bill
Clause 14
Certain dividends exempted from income tax
(1)
As soon as any amount of income of a pioneer enterprise has become exempted under section 13 of this Act, such amount shall be credited to an account to be kept by the pioneer enterprise for the purposes of this section.
(2)
Where such 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 such dividends or to such credit, whichever is the less, shall be debited to such account.
(3)
So much of the amount of any dividends so debited to such account as are received by a shareholder in the pioneer enterprise shall, if the Comptroller is satisfied with the entries in such account, be exempt from tax, in the hands of such shareholder.
(4)
Any dividends debited to such account shall be treated as having been distributed to the shareholders of the pioneer enterprise or any particular class of such shareholders in the same proportions as such shareholders were entitled to payment of the dividends giving rise to the debit.
(5)
The pioneer enterprise shall deliver to the Comptroller a copy of such 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 such account.
(6)
Notwithstanding section 13 of this Act and the foregoing provisions of this section, where it appears to the Comptroller that —
any amount of exempted income of a pioneer enterprise; or
any dividend exempted in the hands of any shareholder, including any dividend paid by a holding company to which subsection (9) of this section applies,ought not to have been exempted by reason of any direction made under section 9 of this Act or the revocation under section 46 of this Act of a pioneer certificate issued to such pioneer enterprise, the Comptroller may at any time within twelve years from the date of any such direction or revocation —
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
direct such pioneer enterprise to debit its account, kept in accordance with subsection (1) of this section, with such amount as the circumstances require.
(7)
Parts XI and XII of the Income Tax Ordinance (Cap. 166) (relating to objections and appeals) and of any rules made thereunder, shall apply, mutatis mutandis, to any direction given under subsection (6) of this section as if it were a notice of assessment given under those provisions.
(8)
Section 44 of the Income Tax Ordinance 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.
(9)
Where an amount has been received by way of dividend from a pioneer enterprise by a shareholder and such amount is exempt from tax under this section, if that shareholder is a company (in this section called the “holding company”) which holds, throughout its tax relief period, the beneficial interest in all the issued shares of the pioneer enterprise (or in not less than such proportion of those shares as the Minister may require at the time when the pioneer certificate is issued to that pioneer enterprise) any dividends paid on or after the 1st day of January 1968, by such holding company to its shareholders, to the extent that the Comptroller is satisfied that those dividends are paid out of such amount, shall be exempt from tax in the hands of those shareholders; and section 44 of the Income Tax Ordinance shall not apply in respect of any dividend or part thereof so exempt.