Income Tax Act 1947 · 2020 Revised Edition · Part 11 · Rates of Tax
43W. Concessionary rate of tax for international growth company
Feedback & supportLast amended by an amending law of 2017. 2 amendments in all.
Despite section 43, the Minister may by regulations provide that tax at the rate of 10% is to be levied and paid upon the income derived by an approved international growth company from carrying on all of its qualifying activities within a basis period, or a part of a basis period, that falls within its approval period, which in total exceeds the base amount mentioned in subsection (6).
Subsection (1) does not apply to income from any of the activities mentioned in that subsection that is carried on a date that falls outside of that activity’s concessionary period.
The Minister or such person as the Minister may appoint may, at any time between 1 April 2015 and 31 August 2017 (both dates inclusive), approve a company as an international growth company for a period not exceeding 5 years; and the approval may be given subject to such conditions as the Minister or appointed person may impose.
When granting the approval, the Minister or appointed person must specify for the international growth company —
company
“company” means any company incorporated or registered under any law in force in Singapore or elsewhere;
the date of its approval and its approval period;
one or more qualifying activities; and
a concessionary period for each of those activities.
The Minister or appointed person may at any time during the period the international growth company remains approved specify for it —
one or more additional qualifying activities; and
a concessionary period for each of those activities.
The base amount mentioned in subsection (1) is ascertained in accordance with the following provisions:
where the approved international growth company had, at any time during the period of 3 years immediately before the date of its approval, carried on one or more of the qualifying activities specified for it under subsection (4), the base amount is ascertained by the formulawhere Ais the total net profit before tax as shown in its audited accounts (or such other accounts as the Minister or appointed person may approve for the company) that is derived from carrying on the qualifying activity or activities during that period; andBis the actual number of months (a period of less than a month being reckoned as one month) during that period in which the qualifying activity or activities was or were carried out; (b)where the approved international growth company had not carried on any of those qualifying activities during the period of 3 years immediately before the date of its approval, the base amount is zero;
the Minister or appointed person may specify an amount in substitution for the amount mentioned in paragraph (a) or (b).
The base amount determined in accordance with subsection (6) applies for the entire duration of the company’s approval period, unless the Minister or appointed person decides otherwise.
In determining the income of an approved international growth company from carrying on its qualifying activities —
the allowances under section 16, 17, 18, 18B, 18C, 19, 19A, 20, 21, 22 or 23 must be taken into account even if no claim for such allowances has been made; and
the Comptroller must determine the manner and extent to which —
allowances under section 16, 17, 18, 18B, 18C, 19, 19A, 20, 21, 22 or 23 and any expenses and donations allowable under this Act are to be deducted; and
any loss may be deducted under section 37.
In this section —
“approval period”, in relation to an approved international growth company, means the period of its approval as such a company under subsection (3);
“concessionary period”, in relation to a qualifying activity of an approved international growth company, means the concessionary period specified for that activity under subsection (4) or (5);
“international growth company” means a company incorporated and resident in Singapore which carries on, or which intends to carry on, a trade or business which involves —
the export of goods to a country outside Singapore;
the performance of services in a country outside Singapore; or
the performance of services for a person or permanent establishment outside Singapore,whether or not it also carries on or intends to carry on any other trade or business;
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;
“qualifying activity”, in relation to an approved international growth company, means an activity specified for the company under subsection (4) or (5), being one of the activities prescribed for the purposes of this section in regulations made under this section.[43ZH
prescribed
“prescribed” means prescribed by rules or regulations made under this Act;