Income Tax Act 1947 · 2020 Revised Edition · Part 4 · Exemption from Income Tax
13L. Exemption of income of foreign account of philanthropic purpose trust
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There is exempt from tax such income derived from —
any funds or assets in any foreign account of a philanthropic purpose trust constituted on or after 18 February 2005 and administered by a trustee company in Singapore; and
any funds or assets of an eligible holding company established for the purposes of that philanthropic purpose trust which are held for the foreign account of that trust,as the Minister may by regulations prescribe.
Regulations made under subsection (1) may provide for the deduction of expenses, allowances and losses relating to a foreign account of a philanthropic purpose trust or an eligible holding company established for the purposes of a philanthropic purpose trust, otherwise than in accordance with this Act.
company
“company” means any company incorporated or registered under any law in force in Singapore or elsewhere;
In this section —
“eligible holding company” means a company —
which is incorporated outside Singapore;
which is set up to hold assets of a philanthropic purpose trust administered by a trustee company;
whose operations consist solely of trading or making investments for the purpose of the philanthropic purpose trust;
which does not claim any relief under any arrangement made under section 49 or any tax credit under section 50A; and
all the shares of which are held by the trustees of the philanthropic purpose trust or by their nominee;
“foreign account”, in relation to a philanthropic purpose trust, means an account into which funds or assets are injected solely by settlors who or which are —
individuals that are neither citizens of Singapore nor resident in Singapore, unless the Minister otherwise by regulations prescribes;
companies each of which —
is neither incorporated nor resident in Singapore;
does not have a permanent establishment in Singapore other than a trustee company referred to in subsection (1)(a);
permanent establishment
“permanent establishment” means a fixed place where a business is wholly or partly carried on including —(a)a place of management;(b)a branch;(c)an office;(d)a factory;(e)a warehouse;(f)a workshop;(g)a farm or plantation;(h)a mine, oil well, quarry or other place of extraction of natural resources;(i)a building or work site or a construction, installation or assembly project,and without limiting the foregoing, a person is deemed to have a permanent establishment in Singapore if that person —(j)carries on supervisory activities in connection with a building or work site or a construction, installation or assembly project; or(k)has another person acting on that person’s behalf in Singapore who —(i)has and habitually exercises an authority to conclude contracts;(ii)maintains a stock of goods or merchandise for the purpose of delivery on behalf of that person; or(iii)habitually secures orders wholly or almost wholly for that person or for such other enterprises as are controlled by that person;
does not in the basis period —
in the case of any year of assessment before 2021, carry on a business in Singapore; or
year of assessment
“year of assessment” means the period of 12 months commencing on 1 January 1948, and each subsequent period of 12 months.
in the case of the year of assessment 2021 or a subsequent year of assessment, carry on a business in Singapore or outside Singapore;
does not beneficially own more than 20% of the total number of the issued shares of any company incorporated in Singapore;
does not have 20% or more of the total number of its issued shares beneficially owned, directly or indirectly, by a company which —
has a permanent establishment in Singapore other than a trustee company referred to in subsection (1)(a);
carries on in the basis period —
in the case of any year of assessment before 2021, a business in Singapore; or
in the case of the year of assessment 2021 or a subsequent year of assessment, a business in Singapore or outside Singapore; or
beneficially owns more than 20% of the total number of the issued shares of any company incorporated in Singapore; and
has —
if it has no more than 50 shareholders, all of its issued shares beneficially owned, directly or indirectly, by persons who are neither citizens of Singapore nor resident in Singapore; or
if it has more than 50 shareholders, not less than 95% of the total number of its issued shares beneficially owned, directly or indirectly, by persons who are neither citizens of Singapore nor resident in Singapore;
foreign trusts;
other philanthropic purpose trusts that inject funds or assets from their foreign accounts; or
any other persons that are neither —
resident in Singapore; nor(ii)constituted or registered under any written law in Singapore;
“foreign trust” has the meaning given by section 13F;
“philanthropic purpose trust” means a trust established in writing under any law for a purpose which is for the public benefit and which falls within any of the following descriptions of purposes:
the prevention or relief of poverty;
the advancement of education;
the advancement of religion;
the advancement of health;
the advancement of citizenship or community development;
the advancement of the arts, heritage or science;
the advancement of environmental protection or improvement;
the relief of those in need by reason of youth, age, ill health, disability, financial hardship or other disadvantage;
the advancement of animal welfare;
the advancement of any sport which involves physical skill and exertion;
any other purpose beneficial to the community;
“trustee company” has the meaning given by section 43G(2).
The Minister or an authorised body may in any particular case waive any requirement referred to in paragraph (b)(ii) to (v) of the definition of “foreign account” in subsection (3).
This section does not apply to —
a trust that is constituted on or after 1 January 2028;
a company that is incorporated on or after 1 January 2028;
a trust that —
is constituted before 1 January 2028; and
in the basis period in which 31 December 2027 falls, is not a philanthropic purpose trust that —
has a foreign account; and
is administered by a trustee company in Singapore; or
a company —
is incorporated before 1 January 2028; and
in the basis period in which 31 December 2027 falls, is not an eligible holding company established for the purposes of a philanthropic purpose trust which satisfies the requirements in paragraph (c)(ii)(A) and (B).
Where, in any basis period beginning on or after 1 January 2028, a trust or company does not satisfy the applicable requirement referred to in subsection (7), then this section does not apply to the trust or company for the year of assessment to which that basis period relates, and for every subsequent year of assessment even if that requirement is satisfied in the basis period for the subsequent year of assessment.
In subsection (6), the requirement is —
in the case of the trust, that it is a philanthropic purpose trust that has a foreign account and is administered by a trustee company in Singapore; or
in the case of the company, that it is an eligible holding company established for the purposes of a philanthropic purpose trust which satisfies all of the requirements in paragraph (a).
Where, in any basis period beginning on or after 1 January 2028, the trustee company which administers a philanthropic purpose trust fails to comply with any of the regulations under subsection (1), then this section does not apply to the trust or the eligible holding company established for the purposes of the trust for the year of assessment to which that basis period relates, and for every subsequent year of assessment even if those regulations are satisfied in the basis period for the subsequent year of assessment.[13O