Clause 32

by deleting “22%” in subsection (1)(a) and (b) and substituting in each case “20%”;

by inserting, immediately after the words “Notwithstanding anything in this Act” in subsection (3), the words “but subject to subsection (3A)”;

by inserting, immediately after subsection (3), the following subsection:“(3A) Notwithstanding anything in this Act, tax at the rate of 10% shall be levied and paid on the gross amount of any income referred to in section 12(7)(a) and (b) but excluding the incomes specified in subsection (7), accruing in or derived from Singapore on or after 1st January 2005 by a person not resident in Singapore which is not derived by the person from any trade, business, profession or vocation carried on or exercised by him in Singapore and which is not effectively connected with any permanent establishment in Singapore of the person.”;

by inserting, immediately after the words “subsection (1)” in subsection (6), the words “but subject to subsection (6A)”;

by inserting, immediately after subsection (6), the following subsection:“(6A) Notwithstanding subsections (1) and (6), for each of the first 3 years of assessment, falling within the years of assessment 2005 to 2009, of a qualifying company, there shall be levied and paid upon the chargeable income of the company tax at the rate prescribed in subsection (1)(a) on every dollar of the chargeable income thereof except that every dollar of the first $100,000 of the chargeable income (excluding Singapore dividends) shall be exempt from tax.”;

by deleting the words “subsection (3)(b)” in subsection (7) and substituting the words “subsections (3)(b) and (3A)”;

by deleting subsection (8) and substituting the following subsection:“(8) The reference to 20% in subsection (1) shall, for the years of assessment 2003 and 2004, be read as a reference to 22%.”;

by inserting, immediately before the definition of “foreign firm” in subsection (10), the following definition:“ “first 3 years of assessment”, in relation to a qualifying company, means the year of assessment relating to the basis period during which the company is incorporated in Singapore and the 2 consecutive years of assessment immediately following that year of assessment;”;

by inserting, immediately after the words “subsections (3)” in the definition of “gross amount” in subsection (10), the word “, (3A)”; and

by inserting, immediately after the definition of “gross amount” in subsection (10), the following definition:“ “qualifying company” means a company incorporated in Singapore (other than a company limited by guarantee) which for each of the first 3 years of assessment —

is resident in Singapore for that year of assessment; and

has no more than 20 shareholders all of whom are individuals throughout the basis period for that year of assessment;”.