Singapore legislation
Regulation 2
of Income Tax (Exemption of Foreign Income of Approved International Shipping Enterprises) Order 2018
Regulation 2
Exemption
Subregulation 1
The following income received by an AISE in Singapore is exempt from tax:
shipping income of an approved branch of the AISE outside Singapore;
dividends or partnership profits from an ARE (called in this Order the 1st ARE) of the AISE that are paid out of or derived from —
shipping income of the 1st ARE, including an approved branch of the 1st ARE; or
dividends or partnership profits of the 1st ARE that are paid out of or derived from shipping income of, or from dividends or partnership profits that are directly or indirectly paid out of or derived from shipping income of —
another ARE (called in this Order the 2nd ARE) of the AISE, including an approved branch of the 2nd ARE; or
a related AISE of the AISE, including an approved branch of the related AISE.
Subregulation 2
In this paragraph —
Definition
“AISE” or “approved international shipping enterprise” means a company approved as an approved international shipping enterprise under section 13E of the Act;
Definition
“approved” means approved by the Minister or an authorised body;
Definition
“ARE” or “approved related entity”, in relation to an AISE, means an approved foreign entity at least 25% of the equity interests of which are beneficially owned by the AISE;
Definition
“entity” means a company or a partnership;
Definition
“equity interest”, in relation to an entity, means —
if the entity is a company, an issued share of the company that is not a treasury share; or
if the entity is a partnership, the proportion of its profits that a partner is entitled to;
Definition
“foreign entity” means —
a company incorporated outside Singapore; or
a partnership registered or formed outside Singapore;
Definition
“related AISE”, in relation to another AISE, means an AISE at least 50% (or such other percentage as may be approved for that other AISE at the time of the approval of that other AISE) of the equity interests of which are beneficially owned by that other AISE.
Subregulation 3
For the purposes of the definitions of “ARE” and “related AISE” in sub‑paragraph (2), if —
an entity (called in this sub‑paragraph the subject entity) beneficially owns (including by reason of one or more applications of this paragraph) equity interests in another entity (called in this sub‑paragraph a 1st level entity); and
the 1st level entity beneficially owns equity interests in another entity (called in this sub‑paragraph a 2nd level entity),then the subject entity is taken to beneficially own a percentage of equity interests in the 2nd level entity that is computed according to the formula N × O, where —
N is the percentage which the value of equity interests in the 1st level entity beneficially owned by the subject entity bears to the total value of all equity interests in the 1st level entity; and
O is the percentage which the value of equity interests in the 2nd level entity beneficially owned by the 1st level entity bears to the total value of all equity interests in the 2nd level entity.