Income Tax (Amendment) Bill

This Act may be cited as the Income Tax (Amendment) Act 2011.

Section 30(h) and (i) shall be deemed to have come into operation on 1st January 2006.

Section 21 shall be deemed to have come into operation on 13th February 2007.

Sections 8, 9, 11, 13(a), (b) and (c), 44(a), (b) and (c) and 53(a), (b) and (c) shall be deemed to have come into operation on 1st September 2007.

Section 3 shall be deemed to have come into operation on 31st October 2008.

Section 6(h) shall be deemed to have come into operation on 9th January 2009.

Sections 13(d), 14(a), 44(d) and 53(d) shall be deemed to have come into operation on 1st April 2009.

Section 10(a), (b), (e), (g), (h), (i) and (j) shall be deemed to have come into operation on 22nd February 2010.

Section 28 shall be deemed to have come into operation on 23rd February 2010.

Sections 15 and 35 shall be deemed to have come into operation on 1st April 2010.

Section 14(b) shall be deemed to have come into operation on 7th July 2010.

Sections 4(a), 6(b), (e), (f) and (i), 16(b) and 27(a) shall be deemed to have come into operation on 1st January 2011.

Section 37 shall be deemed to have come into operation on 19th February 2011.

Sections 18, 20, 34, 38 and 40 shall be deemed to have come into operation on 1st April 2011.

Section 41 shall be deemed to have come into operation on 25th April 2011.

Sections 10(f), 48, 49, 69(a) and 71 shall be deemed to have come into operation on 1st June 2011.

Section 16(a) shall be deemed to have come into operation on 1st September 2011.

Sections 6(a), (c) and (d) and 32(b) shall be deemed to have come into operation on 1st January 2012.

Sections 61 and 70 shall have effect for the year of assessment 2011.

Sections 19 (in relation to subsections (1), (9) (for the purpose of a deduction under subsection (1)), (11) and (12) of the re-enacted section 14DA) and 69(c) shall have effect for the year of assessment 2009 and subsequent years of assessment.

Sections 17, 19 (in relation to subsections (2) to (8), (9) (for the purpose of a deduction under subsection (2)) and (10) of the re-enacted section 14DA), 23, 24, 25, 29, 30(a) to (g) and (l), 31, 33 and 69(b) shall have effect for the year of assessment 2011 and subsequent years of assessment.

Sections 4(b) and (c), 7, 10(c) and (d), 22, 26, 27(b) and (c), 36(a) to (k), 54 and 68(c) shall have effect for the year of assessment 2012 and subsequent years of assessment.

This Act may be cited as the Income Tax (Amendment) Act 2011.

Section 30(h) and (i) shall be deemed to have come into operation on 1st January 2006.

Section 21 shall be deemed to have come into operation on 13th February 2007.

Sections 8, 9, 11, 13(a), (b) and (c), 44(a), (b) and (c) and 53(a), (b) and (c) shall be deemed to have come into operation on 1st September 2007.

Section 3 shall be deemed to have come into operation on 31st October 2008.

Section 6(h) shall be deemed to have come into operation on 9th January 2009.

Sections 13(d), 14(a), 44(d) and 53(d) shall be deemed to have come into operation on 1st April 2009.

Section 10(a), (b), (e), (g), (h), (i) and (j) shall be deemed to have come into operation on 22nd February 2010.

Section 28 shall be deemed to have come into operation on 23rd February 2010.

Sections 15 and 35 shall be deemed to have come into operation on 1st April 2010.

Section 14(b) shall be deemed to have come into operation on 7th July 2010.

Sections 4(a), 6(b), (e), (f) and (i), 16(b) and 27(a) shall be deemed to have come into operation on 1st January 2011.

Section 37 shall be deemed to have come into operation on 19th February 2011.

Sections 18, 20, 34, 38 and 40 shall be deemed to have come into operation on 1st April 2011.

Section 41 shall be deemed to have come into operation on 25th April 2011.

Sections 10(f), 48, 49, 69(a) and 71 shall be deemed to have come into operation on 1st June 2011.

Section 16(a) shall be deemed to have come into operation on 1st September 2011.

Sections 6(a), (c) and (d) and 32(b) shall be deemed to have come into operation on 1st January 2012.

Sections 61 and 70 shall have effect for the year of assessment 2011.

Sections 19 (in relation to subsections (1), (9) (for the purpose of a deduction under subsection (1)), (11) and (12) of the re-enacted section 14DA) and 69(c) shall have effect for the year of assessment 2009 and subsequent years of assessment.

Sections 17, 19 (in relation to subsections (2) to (8), (9) (for the purpose of a deduction under subsection (2)) and (10) of the re-enacted section 14DA), 23, 24, 25, 29, 30(a) to (g) and (l), 31, 33 and 69(b) shall have effect for the year of assessment 2011 and subsequent years of assessment.

Sections 4(b) and (c), 7, 10(c) and (d), 22, 26, 27(b) and (c), 36(a) to (k), 54 and 68(c) shall have effect for the year of assessment 2012 and subsequent years of assessment.

Section 6(4) of the Income Tax Act (referred to in this Act as the principal Act) is amended —

by deleting the words “of such facts as may be necessary”;

by inserting, immediately before the words “to enable” in paragraph (a), the words “of such facts as may be necessary”; and

by deleting paragraph (b) and substituting the following paragraph:“(b)of any information for the purpose of discharging an obligation of Singapore under an arrangement between the government of that country and the Government of Singapore that has effect under section 49 or 105BA;”.

Section 10(26) of the principal Act is amended —

by deleting the word “woman” and substituting the word “individual”;

by inserting, immediately after the word “section 9”, the words “or 12B”; and

by deleting the word “her” and substituting the word “his”.

Section 10C of the principal Act is amended —

by deleting subsections (4) and (5) and substituting the following subsections:“(4) Notwithstanding subsection (1)(a) but subject to subsection (6), where a contribution is made by an employer in any year to the medisave account of his employee maintained under the Central Provident Fund Act (Cap. 36), the contribution up to the maximum amount referred to in subsection (5) shall not be deemed to be income accruing to the employee.

The maximum amount is $1,500 less —

any previous contribution made by the same or another employer to that medisave account in that year where the contribution is not deemed to be income under subsection (4); and

any previous contribution made to that medisave account in that year that is exempt from tax under section 13(1)(jc).”;

by deleting the definition of “relevant amount” in subsection (12) and substituting the following definition:“ “relevant amount” means the amount of contributions which would have been required to be made by the relevant employer had such contributions been obligatory under the Central Provident Fund Act in respect of —

the overseas total wages paid to an employee in any year less the aggregate in that year of such part of the overseas ordinary wages paid to the employee in every month in that year as exceeds $4,500 (being a month before September 2011) or $5,000 (being the month of September 2011 or any subsequent month); or

$79,333 (in relation to the year 2011) or $85,000 (in relation to the year 2012 and every subsequent year),whichever is the lesser;”; and

by deleting paragraph (b) of the definition of “specified amount” in subsection (12) and substituting the following paragraphs:“(b)in relation to the year 2006, 2007, 2008, 2009 or 2010, the difference between $76,500 and the total ordinary wages paid to the employee in that year; and for this purpose, any amount of ordinary wages paid to the employee for any month in the year in excess of $4,500 shall be disregarded;

in relation to the year 2011, the difference between $79,333 and the total ordinary wages paid to the employee in that year; and for this purpose, any amount of ordinary wages paid to the employee for any month in the year in excess of $4,500 (being a month before September 2011) or $5,000 (being the month of September 2011 or any subsequent month) shall be disregarded; and

in relation to the year 2012 and every subsequent year, the difference between $85,000 and the total ordinary wages paid to the employee in that year; and for this purpose, any amount of ordinary wages paid to the employee for any month in the year in excess of $5,000 shall be disregarded;”.

Section 10L of the principal Act is amended by inserting, immediately after subsection (3), the following subsections:“(3A) Subject to subsection (3C), where an SRS member has used funds in his SRS account for any investment, any payment to the SRS member thereafter, being —

any gains or profits from the investment made;

any part of the funds the SRS member invested; or

any proceeds from the sale or liquidation of such investment,shall be considered a withdrawal by the SRS member from his SRS account for the purposes of subsections (1), (2) and (3)(b) and (c).

Subsection (3A) applies even if the SRS account has been closed before the payment mentioned in that subsection, and in that event the person to whom the payment is made shall be treated as if he is still an SRS member for the purposes of subsections (1), (2), (2A) and (3)(b) and (c).

Subsection (3A) does not apply to any payment received after any balance remaining or sum standing in the SRS account is deemed withdrawn under subsection (6), (7) or (9).

Where any funds in an SRS account have been used for investment, then all the funds standing in the SRS account shall be considered as having been withdrawn at the same time for the purposes of subsection (3)(a) if, and only if, amounts which the financial product provider declared to the SRS member to be all the gains or profits from the investment, all funds used for the investment and all the proceeds from the sale or liquidation of the investment have been returned to the account and these, together with all funds standing in the SRS account, are withdrawn at the same time.”.

Section 13 of the principal Act is amended —

by deleting the words “31st December 2011” in subsections (1)(b)(i) and (ii), (2C)(a) and (b), (2D)(a) and (b) and (16) (paragraph (a) of the definition of “qualifying project debt securities”) and substituting in each case the words “31st March 2017”;

by inserting, immediately after paragraph (jb) of subsection (1), the following paragraph:“(jc)any voluntary contribution in cash made in 2011 or any subsequent year by a person of a description prescribed by the Minister to the medisave account maintained under the Central Provident Fund Act (Cap. 36) of a self-employed individual, up to $1,500 less —

any previous contribution made to that medisave account in that year that is exempt from tax under this paragraph; and

any previous contribution made to that medisave account in that year which is not deemed to be income under section 10C(4):Provided that the amount of the voluntary contribution does not exceed the amount allowable under the Central Provident Fund Act and is within the medisave contribution ceiling prevailing at the time the contribution is made;”;

by deleting the words “31st December 2011” in subsection (1)(zj)(ii)(B) and (iii)(B) and substituting in each case the words “31st March 2017”;

by deleting the words “1st January 2012” in subsection (1)(zj)(ii)(B) and (iii)(B) and substituting in each case the words “1st April 2017”;

by deleting the word “and” at the end of subsection (1)(zm);

by deleting the full-stop at the end of paragraph (zn) of subsection (1) and substituting the word “; and”, and by inserting immediately thereafter the following paragraph:“(zo)any sum accrued to a woman on or after 1st January 2011 by way of maintenance in accordance with an order of court or deed of separation.”;

by inserting, immediately after subsection (12), the following subsection:“(12A) Every order made under subsection (12) which exempts from tax any income received by —

the trustee of a real estate investment trust; or

a company incorporated in Singapore the share capital of which is 100% owned by the trustee of a real estate investment trust on the date of commencement of the order,is, notwithstanding anything in that order, treated as revoked on 1st April 2015 unless revoked earlier; and any exemption granted under that order shall cease to apply to income received by such person on or after 1st April 2015.”;

by deleting subsection (13) and substituting the following subsections:“(13) An order made under subsection (12) may —

be either general or specific;

prescribe the conditions subject to which the income will be exempt from tax or be taxed at a concessionary rate of tax;

provide that the Minister may require all or any of the conditions referred to in paragraph (b) to be complied with to the satisfaction of the Comptroller;

prescribe a condition requiring the person to satisfy the Comptroller that all or any of the conditions referred to in paragraph (b) have been complied with before the income is received in Singapore.

The conditions referred to in subsection (13) need not be included in the order for the purpose of publication in the Gazette.”; and

by inserting, immediately after the definition of “Islamic debt securities” in subsection (16), the following definition:“ “medisave contribution ceiling” has the same meaning as in section 39(13);”.

Section 13A of the principal Act is amended by inserting, immediately after subsection (1C), the following subsection:“(1D) This section does not apply to income of a shipping enterprise, being an international shipping enterprise approved under section 13F, derived in the basis period for the year of assessment 2012 or any subsequent year of assessment from the operation of foreign ships.”.

Section 13C(1) of the principal Act is amended by deleting the words “prescribed fund manager” and substituting the words “fund manager”.

Section 13CA(1) of the principal Act is amended by deleting the words “prescribed fund manager” and substituting the words “fund manager”.

Section 13F of the principal Act is amended —

by deleting the words “Subject to subsection (2)” in subsection (1) and substituting the words “Subject to subsections (1A) and (2)”;

by inserting, immediately after the words “operated by the qualifying special purpose vehicle” in subsection (1)(e), the words “, unless the conditions of its approval otherwise provides”;

by deleting the full-stop at the end of subsection (1)(e) and substituting a semi-colon;

by inserting, immediately after paragraph (e) of subsection (1), the following paragraph:“(f)for the year of assessment 2012 and subsequent years of assessment from the carriage by any foreign ship of passengers, mails, livestock or goods which are shipped in Singapore, except where such carriage is only within the limits of the port of Singapore.”;

by inserting, immediately after subsection (1), the following subsections:“(1A) Subsection (1)(e) does not apply to the provision by an approved international shipping enterprise of ship management services to a qualifying special purpose vehicle if at least 50% of the total number of the issued ordinary shares of the enterprise are beneficially owned, whether directly or indirectly, by another approved international shipping enterprise.

An application may be made to the Minister or such person as he may appoint for a company —

which is an international shipping enterprise; or

which is not but intends to become an international shipping enterprise,to be approved as an approved international shipping enterprise, and the company is deemed upon approval to be an approved international shipping enterprise.”;

by deleting subsection (2) and substituting the following subsections:“(2) The exemption for each approved international shipping enterprise —

shall be for such period not exceeding 10 years from the date of its approval as the Minister or such person as he may appoint may specify, except that the Minister or such person as he may appoint may extend the period so specified for such further periods, not exceeding 10 years at a time, as he thinks fit; or

if, at the time of its approval, the company does not, in the opinion of the Minister or such person as he may appoint, satisfy such qualifying conditions as the Minister or person may determine for the purposes of paragraph (a), shall be for such period not exceeding 5 years from the date of its approval as the Minister or person may specify.

The approval of an approved international shipping enterprise for a period of exemption referred to in subsection (2)(b) may only be granted at any time between 1st June 2011 and 31st May 2016 (both dates inclusive).”;

by deleting sub-paragraph (ii) of paragraph (a) of the definition of “qualifying special purpose vehicle” in subsection (6) and substituting the following sub-paragraph:“(ii)at least 50% of the total number of the issued ordinary shares of which are beneficially owned, whether directly or indirectly, by —

the approved international shipping enterprise; or

a company which beneficially owns (whether directly or indirectly) at least 50% of the total number of the issued ordinary shares of the approved international shipping enterprise;”;

by deleting the word “or” at the end of paragraph (b)(ii) of the definition of “qualifying special purpose vehicle” in subsection (6);

by deleting sub-paragraph (ii) of paragraph (c) of the definition of “qualifying special purpose vehicle” in subsection (6) and substituting the following sub-paragraph:“(ii)of which the approved international shipping enterprise is entitled, whether directly or indirectly, to at least 25% of its income;”; and

by inserting, immediately after paragraph (c) of the definition of “qualifying special purpose vehicle” in subsection (6), the following paragraphs:“(d)an approved company —

which is incorporated and resident in Singapore, and at least 50% of the total number of the issued ordinary shares of which are beneficially owned directly by another approved company which is a qualifying special purpose vehicle by virtue of paragraph (a)(ii)(B); or

which is incorporated outside Singapore, and at least 25% of the total number of the issued ordinary shares of which are beneficially owned directly by another approved company which is a qualifying special purpose vehicle by virtue of paragraph (a)(ii)(B); or

an approved partnership which is registered or formed outside Singapore and one of the partners of which is an approved company which is a qualifying special purpose vehicle by virtue of paragraph (a)(ii)(B), and is entitled to at least 25% of its income;”.

Section 13R of the principal Act is amended by deleting subsection (1) and substituting the following subsections:“(1) Subject to such conditions as may be prescribed by regulations or specified in the letter of approval of the company, there shall be exempt from tax such income as the Minister may by regulations prescribe of a company incorporated and resident in Singapore and approved by the Minister or such person as he may appoint (referred to in this section as an approved company) arising from funds managed —

in Singapore by a fund manager; or

by a person approved by the Minister or the person appointed by the Minister.

The approval of a person under subsection (1) shall be subject to such conditions as the Minister may impose.”.

Section 13S of the principal Act is amended by deleting the words “31st March 2016” in subsections (2) and (3)(b) and substituting in each case the words “31st May 2016”.

Section 13T(2) of the principal Act is amended —

by deleting the words “a trust arising from funds managed in Singapore by a fund manager” in paragraph (d) and substituting the words “a trust fund”;

by deleting the word “or” at the end of paragraph (e);

by deleting the full-stop at the end of paragraph (f) and substituting a semi-colon, and by inserting immediately thereafter the following paragraph:“(g)any income of a trust the trustee of which is a prescribed person under section 13CA; or”; and

by inserting, immediately after paragraph (g), the following paragraph:“(h)any income of an approved trust fund referred to in the definition of “approved person” under section 13X(5), or of a trust fund that is a feeder fund or master fund approved under section 13X.”.

Section 13X(1) of the principal Act is amended —

by inserting, immediately after the words “prescribed by regulations”, the words “or specified in the letter of approval of the person”; and

by inserting, immediately after the words “letter of approval of the person”, the words “, master fund, feeder fund or master feeder fund structure”.

Section 13Y of the principal Act is amended —

by inserting, immediately after the words “from managing in Singapore the funds of” in subsection (1)(b), the words “, or providing in Singapore any investment advisory service to,”; and

by deleting the words “conditions to which the exemption from tax under that subsection is subject” in subsection (3)(a) and substituting the words “that the conditions to which any approval is subject may be stated in the letter of approval issued to the foreign government-owned entity”.

Section 14 of the principal Act is amended —

by deleting the comma at the end of sub-paragraph (I) of proviso (i) to paragraph (e) of subsection (1) and substituting a semi colon, and by inserting immediately thereafter the following sub-paragraph:“(J)commencing on or after 1st September 2011 shall not exceed 16%,”; and

by inserting, immediately after paragraph (f) of subsection (1), the following paragraph:“(fa)any voluntary contribution in cash made in 2011 or any subsequent year by a person prescribed for the purposes of section 13(1)(jc) to the medisave account maintained under the Central Provident Fund Act (Cap. 36) of a self-employed individual which is exempt from tax under that provision, subject to a maximum deduction of $1,500 for that year for each individual;”.

Section 14A of the principal Act is amended by deleting subsections (1A) to (1D) and substituting the following subsections:“(1A) Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2011 or the year of assessment 2012, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under subsection (1), a deduction for qualifying intellectual property registration costs incurred for the purposes of those trades and businesses, computed in accordance with the following formula:where A is —

for the year of assessment 2011, the lower of the following:

such costs incurred during the basis period for that year of assessment; and

$800,000; and

for the year of assessment 2012, the lower of the following:

such costs incurred during the basis period for that year of assessment; and

the balance after deducting from $800,000 the lower of the amounts specified in paragraph (a)(i) and (ii).

Subject to this section, for the purpose of ascertaining the income of a person carrying on a trade or business during the basis period for the year of assessment 2013, the year of assessment 2014 or the year of assessment 2015, there shall be allowed in respect of all his trades and businesses, in addition to the deduction allowed under subsection (1), a deduction for qualifying intellectual property registration costs incurred for the purposes of those trades and businesses, computed in accordance with the following formula:where A is —

for the year of assessment 2013, the lower of the following:

such costs incurred during the basis period for that year of assessment; and

$1,200,000;

for the year of assessment 2014, the lower of the following:

such costs incurred during the basis period for that year of assessment; and

the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii); and

for the year of assessment 2015, the lower of the following:

such costs incurred during the basis period for that year of assessment; and

the balance after deducting from $1,200,000 the lower of the amounts specified in paragraph (a)(i) and (ii), and the lower of the amounts specified in paragraph (b)(i) and (ii).

In subsection (1A), the amount under paragraph (a)(ii) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2012, and the balance under paragraph (b)(ii) shall be substituted with “$400,000” if the person does not carry on any trade or business during the basis period for the year of assessment 2011.

In subsection (1B) —

if the person does not carry on any trade or business during the basis period for any one year of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the references to “$1,200,000” in the paragraphs of that subsection applicable to the other 2 years of assessment shall be substituted with “$800,000”;

if the person does not carry on any trade or business during the basis periods for any 2 years of assessment between the year of assessment 2013 and the year of assessment 2015 (both years inclusive), the reference to “$1,200,000” in the paragraph of that subsection applicable to the remaining year of assessment shall be substituted with “$400,000”; and

for the avoidance of doubt, no deduction shall be made from the substituted amount in subsection (1B)(b)(ii) or (c)(ii) of the lower of the amounts specified in subsection (1B)(a)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2013, and no deduction shall be made from the substituted amount in subsection (1B)(c)(ii) of the lower of the amounts specified in subsection (1B)(b)(i) and (ii) if the person does not carry on any trade or business during the basis period for the year of assessment 2014.

For the purposes of subsections (1A) and (1B), where an individual carrying on a trade or business through 2 or more firms (excluding partnerships) has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2015 (both years inclusive), incurred qualifying intellectual property registration costs in respect of such firms for the purposes of his trade or business, the deduction that may be allowed to him for those costs in respect of all his trades and businesses shall not exceed the amount computed in accordance with subsection (1A) or (1B) (as the case may be) for that year of assessment.

For the purposes of subsections (1A) and (1B), where a partnership carrying on a trade or business has, during the basis period for any year of assessment between the year of assessment 2011 and the year of assessment 2015 (both years inclusive), incurred qualifying intellectual property registration costs for the purposes of its trade or business, the aggregate of the deductions that may be allowed to all the partners of the partnership for those costs in respect of all the trades and businesses of the partnership shall not exceed the amount computed in accordance with subsection (1A) or (1B) (as the case may be) for that year of assessment.”.

Section 14B of the principal Act is amended —

by deleting the word “and” at the end of subsection (4)(c)(iv) and substituting the word “or”;

by inserting, immediately after subsection (4), the following subsection:“(4A) Notwithstanding subsection (4), the Minister or such person as he may appoint may, in any particular case, subject to such conditions as he may impose, allow a deduction of any expenses referred to in subsection (4)(c)(v) provided that they are not also expenses referred to in subsection (4)(c)(i), (ii), (iii) or (iv).”; and

by inserting, immediately after subsection (11), the following subsection:“(12) No approval shall be granted under this section after 31st March 2016.”.