Singapore legislation

Clause 24

Amendment of section 14M

Section 14M(8) of the principal Act is amended —

(a)

by inserting, immediately after paragraph (d), the following paragraph:“(e)any dividends debited to the tax exempt account shall be treated as having been distributed to the shareholders of the company or any particular class of the shareholders in accordance with the proportion of their shareholdings in the company;”;

(b)

by deleting paragraph (f) and substituting the following paragraph:“(g)notwithstanding paragraphs (d) and (f) —

(i)

no dividend paid on any share of a preferential nature shall be exempt from tax in the hands of the shareholder;

(ii)

any dividend paid on any share of a preferential nature shall be deemed as interest income of the shareholder if the dividend is paid by a company —

(A)

which has not been subjected to the provisions of section 44 in force immediately before 1st January 2003; or (B)which before 1st January 2003 had been subjected to the provisions of section 44 in force immediately before that date and the dividend is paid on or after —

(BA)the 44A balance of the company becomes nil;

(BB)the company exercises the option referred to in section 44(6A); or

(BC)31st December 2007,whichever is the earliest; and (iii)any dividend paid on any share of a preferential nature shall be deemed as interest expense of the company if the company so elects;”; and (c)by re-lettering the existing paragraphs (e), (g) and (h) as paragraphs (f), (h) and (i), respectively.

Read in full context — Income Tax (Amendment) Bill →