Economic Expansion Incentives (Relief from Income Tax) Act 1967 · 2020 Revised Edition · Part 7 · Royalties, Fees and Development Contributions
39. Reduction of tax for approved royalties, fees or contributions
Feedback & supportLast amended by an amending law of 2023. 3 amendments in all.
Despite section 43(1) of the Income Tax Act 1947, the Minister may, subject to subsection (2), if he or she is satisfied that it is expedient in the public interest to do so, by an endorsement to that effect on the approved royalties, fees or contributions certificate, exempt from tax or authorise that tax at such concessionary rate as specified in the certificate be levied and paid upon any approved royalties, fees or contributions received by a non-resident person.
Without affecting section 61, where —
on or after 19 April 2016, a company contravenes section 38(2), or any condition under section 37(3), in respect of any approved royalties, fees or contributions; and
the Minister is of the view that it is in the public interest to do so,the Minister may revoke the approval for the royalties, fees or contributions under section 37(3)(a) with effect from a date determined by the Minister, which may be a date that is before the date on which notice of the revocation is given (including a date before the date of contravention).
In subsection (2), the approval to be revoked, in the case of a contravention of section 38(2), is the approval of those royalties, fees or contributions that are payable under the agreement or arrangement that is the subject of the contravention.
Where an approval of any royalties, fees or contributions is revoked under subsection (2) or section 61, the amount of tax which, but for subsection (1), would have been deductible by the company from the royalties, fees or contributions payable by it to the non-resident person under section 45A of the Income Tax Act 1947 —
company
“company” means any company incorporated or registered in accordance with the provisions of any written law relating to companies;
is considered to have been deducted from any royalties, fees or contributions that were payable from and including the date determined by the Minister under subsection (2) or section 61(3), as the case may be;
is a debt due from the company to the Government; and
is, with the prior sanction of the Minister, recoverable in the manner provided by section 89 of the Income Tax Act 1947.
The Minister charged with the responsibility for finance may waive all or a part of any debt due from a company under subsection (4) that arises from the revocation of any approval under subsection (2), if that Minister is satisfied that the company did not knowingly or intentionally contravene —
section 38(2); or
the condition imposed under section 37(3),as the case may be.
A reference in subsections (2), (3) and (4) to an approval under section 37(3)(a) is, in the case of an approval given under section 61 of this Act as in force before 24 February 2015, a reference to a certificate under that section as in force immediately before that date.[64
certificate
“certificate” includes a letter or other document issued by the Minister to a company pursuant to an application made by the company under a provision of this Act;