Singapore legislation
Clause 31
of Economic Expansion Incentives (Relief from Income Tax) Bill
Clause 31
Dividends exempted
(1)
As soon as any amount of export income has become exempted under the provisions of section 30 of this Act that amount shall be credited to an account to be kept by the export 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 export 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 export 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 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 export enterprise shall deliver to the Comptroller a copy of such account, made up to a date specified by him, whenever called upon so to do 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 the provisions of section 30 of this Act and the foregoing provisions of this section, where it appears to the Comptroller that —
any amount of exempted income of an export enterprise; or
any dividend exempted in the hands of any shareholder, including any dividend paid by a holding company to which the provisions of subsection (9) of this section apply,ought not to have been exempted by reason of a direction under section 9 of this Act, as applied to this Part by section 24 of this Act, having been made with respect to the export enterprise, after any income of such enterprise has been exempted under the provisions of this Act or the revocation under section 46 of this Act of a certificate issued to such export enterprise, the Comptroller may, at any time within twelve years of the date of any such direction or revocation —
make such assessment or additional assessment upon the export enterprise or any such shareholder as may appear to be necessary in order to counteract any profit obtained from any such amount which ought not to have been exempted; or
direct such export 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 an export enterprise by a shareholder and such amount is exempt from tax under the foregoing provisions of this section, if that shareholder is a company (in this section referred to as “the holding company”) which holds, at the time any dividend is declared, the beneficial interest in all the issued shares of the export enterprise (or in not less than such proportion of those shares as the Minister may require at the time when the export certificate is issued to that export enterprise), any dividends paid on or after the 1st day of January 1967, by the 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 the provisions of section 44 of the Income Tax Ordinance shall not apply in respect of any dividend or part thereof so exempt.