Clause 45

by deleting subsection (1) and substituting the following subsection:“(1) Every company resident in Singapore which —

has paid dividend to any shareholder before 1st January 2003;

has paid dividend to any shareholder at any time during the period from 1st January 2003 to 31st March 2003, and on or before the day of paying the dividend, has not exercised an option under subsection (6A); or

at any time during the period from 1st April 2003 to 31st December 2007 —

has paid dividend to any shareholder; (ii)has a 44A balance of the company remaining on the day before the date of payment of the dividend after taking into account the tax assessed to be added to the 44A balance under section 44A(5); and (iii)on or before the day of paying the dividend, has not exercised an option under subsection (6A),shall be entitled to deduct from the amount of dividend paid, tax at the relevant rate on every dollar of such dividend.”;

by inserting, immediately after the word “assessment” in the 2nd line of subsection (4), the words “before the year of assessment 2003 under subsection (1)(a)”;

by deleting the words “subsection (1)” in the 3rd line of subsection (4)(a) and (b) and substituting in each case the words “subsection (1)(a)”;

by inserting, immediately after the word “dividend” in the 1st line of subsection (5), the words “under subsection (1)(a)”;

by deleting the words “subsection (1)” in the 5th line of subsection (5) and substituting the words “subsection (1)(a)”;

by inserting, immediately after the word “dividend” in the last line of subsection (5), the words “paid on or before 31st December 2002”;

by inserting, immediately after subsection (5), the following subsections:“(5A) Upon payment of a dividend by a company during the period 1st January 2003 to 31st December 2007 from which tax has been deducted, whether the company is entitled to make the deduction or otherwise, the amount of tax deducted shall be deducted from the 44A balance of the company remaining on the day before the date of payment of the dividend, and in the event where the amount to be so deducted exceeds the said balance, a charge equal to the amount of such excess shall be paid to the Comptroller within 14 days from the date of payment of the dividend, and any amount of tax which remains unpaid on that date shall, notwithstanding section 85, be paid immediately to the Comptroller.(5B) Upon the payment of any dividend referred to in subsection (1)(b) or (c), the 44A balance of the company, after deducting the tax deducted from the dividend, if any, remaining on the date of payment of the dividend, shall be carried forward as a balance to be set-off against the tax deducted from any ensuing dividend paid on or before 31st December 2007.(5C) For the purpose of subsection (5A), where a dividend is paid by a company which has not been subjected to the provisions of section 44 in force immediately before 1st January 2003, the 44A balance of the company remaining on the day before the date of payment of the dividend shall be deemed to be nil.”;

by deleting subsection (6) and substituting the following subsections:“(6) Subject to subsection (6B), every company resident in Singapore which —

whether has or has not, during the period from 1st January 2003 to 31st March 2003; or

has, during the period from 1st April 2003 to 31st December 2007,a 44A balance and has paid dividend at any time during those periods shall deduct tax from the dividend as provided under subsection (1) unless otherwise provided in this Act or unless the company has exercised an irrevocable option under subsection (6A). (6A) Any company to which subsection (6) applies may exercise an irrevocable option in writing not to deduct tax under subsection (1) and where such an option is made, the company shall not be entitled to deduct tax under subsection (1) from the date of the exercise of the option.(6B) Notwithstanding the exercise of an irrevocable option under subsection (6A) by a company, section 44A shall continue to apply to the company.(6C) Where at any date during the period from 1st April 2003 to 31st December 2007 a company which is resident in Singapore has not exercised an option under subsection (6A), and the 44A balance of the company is reduced to nil, the company shall not be entitled to deduct tax from dividends under subsection (1) so long as the balance remains as nil on or after that date.”;

by deleting subsection (7) and substituting the following subsection:“(7) Where no charge is payable by a company under subsection (4) or (5A) but the amount of tax deducted by the company under subsection (1) exceeds —

the aggregate amount as computed under subsection (4)(a) or (b) less any amount of tax assessed on the company but not paid; or

the amount as computed under subsection (5A) less any amount of tax assessed on the company which formed part of the 44A balance of the company but not paid,as the case may be, a sum equal to such excess shall be paid by the company to the Comptroller immediately on the date of payment of the dividend.”;

by inserting, immediately after the word “dividend” in the 1st line of subsection (8), the words “under subsection (1)”;

by inserting, immediately after the word “balance” in the penultimate line of subsection (8), the words “, the 44A balance”;

by inserting, immediately after the word “assessment” in the 2nd line of subsection (9), the words “before the year of assessment 2008”;

by inserting, immediately after the word “balance” in the penultimate line of subsection (9), the words “or the 44A balance”;

by inserting, immediately after the word “Comptroller” in the 2nd line of subsection (11), the words “under subsection (4)”;

by inserting, immediately after the words “additional charge” in the 3rd line of subsection (11), the words “but before 1st January 2008”;

by deleting subsections (12) and (13) and substituting the following subsections:“(12) Any charge or additional charge paid by a company to the Comptroller under subsection (5A) shall only be used to set-off any tax assessed on the estimated chargeable income for the year of assessment 2003 referred to in section 44A(5).(13) If any charge or additional charge referred to in subsection (4) or (5A) or section 44A(8) is not paid to the Comptroller within the period prescribed for the payment of the charge, section 87 shall have effect in relation to the charge or additional charge, and the provisions of this Act relating to the collection and recovery of tax shall apply to the collection and recovery of the charge or additional charge and penalties imposed thereon.”;

by inserting, immediately after the words “has been paid” in the 2nd line of subsection (14)(a), the words “under subsection (1)”;

by deleting the words “rate deductible” in the 6th line of subsection (14)(a) and substituting the words “relevant rate applicable”;

by inserting, immediately after the words “subsection (4)” in the 2nd line of subsection (14)(b), the words “or (5A)”;

by deleting the words “subsection (4) or (7)” in the 3rd line of subsection (14)(b) and substituting the words “subsection (4), (5A) or (7)”;

by inserting, immediately after the word “assessment” in the 2nd line of subsection (14)(c), the words “before the year of assessment 2003”;

by deleting the words “subsection (4)” in subsection (14)(d) and substituting the words “subsection (4), (5A)”;

by deleting the words “or 43O” in the 4th line of subsection (14)(e)(ii) and substituting the words “, 43O or 43P”;

by deleting the word “and” at the end of subsection (14)(e);

by deleting the words “or (5)” in the 3rd line of subsection (14)(f) and substituting the words “, (5), (5A) or (5B)”; and

by deleting the full-stop at the end of paragraph (f) of subsection (14) and substituting the word “; and”, and by inserting immediately thereafter the following paragraph:“(g)relevant rate of tax —

in relation to a dividend paid from 1st January 2001 to 31st December 2001, is 24.5%; and

in relation to a dividend paid from 1st January 2002, is 22%.”.