Clause 5

by deleting the full-stop at the end of paragraph (f) of subsection (1) and substituting a semi-colon, and by inserting immediately thereafter the following paragraph:“(g)on or after 1st June 2011 from —

the sale of a foreign ship, a foreign dredger, a foreign seismic ship or any foreign vessel used for offshore oil or gas activity;

the assignment to another of all its rights as the buyer under a contract for the construction of a ship, dredger, seismic ship or vessel that, at the time of the assignment, is intended to be a foreign ship, a foreign dredger, a foreign seismic ship or any foreign vessel used for offshore oil or gas activity; or

the sale of all of the issued ordinary shares in a special purpose company of the approved international shipping enterprise where, at the time of the sale of the shares, the special purpose company owns any ship, dredger, seismic ship or vessel used for offshore oil or gas activity, or is the buyer under a contract for the construction of any ship, dredger, seismic ship or vessel used for offshore oil or gas activity.”;

by deleting the words “Subsection (1)(e)” in subsection (1A) and substituting the words “Unless the Minister or such person as he may appoint permits in a particular case, subsection (1)(e)”;

by inserting, immediately after subsection (1A), the following subsection:“(1AA) Subsection (1)(g) shall not apply to —

any income of an approved international shipping enterprise as a lessor of a ship, dredger, seismic ship or any vessel used for offshore oil or gas activity, under a finance lease that is treated as a sale under section 10D; or

any income of an approved international shipping enterprise from carrying on a business of trading in ships, dredgers, seismic ships, or vessels used for offshore oil or gas activity, or of constructing ships, dredgers, seismic ships, or vessels used for offshore oil or gas activity for sale.”;

by deleting subsection (4) and substituting the following subsections:“(4) Where an approved international shipping enterprise incurs a loss during the tax exempt period in respect of any operation, activity or service referred to in paragraphs (a) to (f) of subsection (1), that loss —

shall be deducted in accordance with section 37; and

shall only be deducted against the income referred to in any of those paragraphs, and the balance of such loss shall not be available as a deduction against any other income, except that any balance remaining unabsorbed at the end of the tax exempt period shall be available as a deduction against any other income for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 37.(4A) Where an approved international shipping enterprise incurs a loss on any sale or assignment referred to in subsection (1)(g) in any basis period falling, in whole or in part, within the tax exempt period, that loss shall only be deducted against the gains derived from another sale or assignment referred to in subsection (1)(g) in that same basis period, and the balance of the loss shall not be available as a deduction against any other income.”; and

by deleting the full-stop at the end of the definition of “ship management services” in subsection (6) and substituting a semi-colon, and by inserting immediately thereafter the following definition:“ “special purpose company”, in relation to an approved international shipping enterprise, means a company that is wholly owned by the enterprise and whose only business or intended business is undertaking any operation referred to in subsection (1)(a), (b), (c) and (f), or any operation of a Singapore ship as defined in section 13A(16).”.