Clause 5

by deleting the words “and any gains or profits under subsection (6)” in subsection (2)(c)(ii);

by deleting subsection (5) and substituting the following subsection:“(5) Subsection (4)(b) shall apply, with the necessary modifications, to any dredger, seismic ship, or any vessel used for offshore oil or gas activity the income derived from the operation of which is exempt from tax under section 13F.”;

by inserting, immediately after subsection (7), the following subsections:“(7A) The Comptroller may, if he thinks fit and subject to such condition as he may impose, accept from the employer of an individual to whom subsection (7) applies an undertaking —

to make a return, in such form and by such time as the Comptroller may determine, of any gains or profits derived by the individual from the right or benefit to acquire shares in a company as computed under subsection (6);

to pay to the Comptroller any tax assessed on such gains or profits; and

to pay the penalties specified in the undertaking for any failure to comply with paragraph (a) or (b).(7B) Where the Comptroller accepts an undertaking from the employer of an individual under subsection (7A), subsection (7) shall not apply to the individual and he shall be assessed in accordance with subsection (6).(7C) If any condition imposed by the Comptroller under subsection (7A) has not been complied with by the employer of an individual, then notwithstanding the undertaking given by the employer, the gains or profits derived by the individual from the right or benefit to acquire shares in a company shall be assessed in accordance with subsection (7) and shall be deemed to be income accruing to the individual in the year in which the condition is not complied with.”;

by inserting, immediately after subsection (20), the following subsection:“(20A) Any distribution made by a designated unit trust or approved CPF unit trust to any unit holder out of —

gains or profits derived on or after 27th February 2004 from —

foreign exchange transactions;

transactions in futures contracts;

transactions in interest rate or currency forwards, swaps or option contracts; and

transactions in forwards, swaps or option contracts relating to any securities or financial index;

distributions from foreign unit trusts derived from outside Singapore and received in Singapore on or after 27th February 2004;

fees and compensatory payments (other than fees and compensatory payments for which tax has been deducted under section 45A) derived on or after 27th February 2004 from securities lending or repurchase arrangements with —

a person who is neither a resident of nor a permanent establishment in Singapore;

the Monetary Authority of Singapore;

a bank licensed under the Banking Act (Cap.19);

a merchant bank approved as a financial institution under section 28 of the Monetary Authority of Singapore Act (Cap. 186);

a finance company licensed under the Finance Companies Act (Cap. 108);

a holder of a capital markets services licence licensed to carry on business in the following regulated activities under the Securities and Futures Act (Cap. 289) or a company exempted under that Act from holding such a licence:

dealing in securities (other than any person licensed under the Financial Advisers Act (Cap. 110));

fund management;

securities financing; or

providing custodial services for securities;

a collective investment scheme or closed-end fund as defined in the Securities and Futures Act that is constituted as a corporation;

the Central Depository (Pte) Limited;

an insurer registered or regulated under the Insurance Act (Cap. 142) or exempted under that Act from being registered or regulated; or

a trust company registered under the Trust Companies Act (Cap. 336);

rents and any other income derived from any immovable property situated outside Singapore and received in Singapore on or after 27th February 2004;

discount derived from outside Singapore and received in Singapore on or after 27th February 2004;

discount from qualifying debt securities which mature within one year from the date of issue of those securities and issued during the period from 27th February 2004 to 31st December 2008; and

gains or profits derived on or after 27th February 2004 from the disposal of debentures, stocks, shares, bonds or notes issued by supranational bodies,which do not form part of the statutory income of the designated unit trust or approved CPF unit trust by virtue of section 35(12A) shall be deemed to be income of the unit holder if he is not a foreign investor.”;

by deleting the words “subsections (20),” in subsection (23) and substituting the words “subsections (20), (20A),”;

by inserting, immediately after the definition of “approved CPF unit trust” in subsection (23), the following definition:“ “compensatory payment” has the same meaning as in section 10N(12);”;

by inserting, immediately after the definition of “designated unit trust” in subsection (23), the following definition:“ “financial index” includes any currency, interest rate, share, stock or bond index;”; and

by deleting the full-stop at the end of the definition of “foreign investor” in subsection (23) and substituting a semi-colon, and by inserting immediately thereafter the following definitions:“ “qualifying debt securities” has the same meaning as in section 13(16);“securities” has the same meaning as in section 10A;“securities lending or repurchase arrangement” has the same meaning as in section 10N(12).”.