Singapore legislation
Regulation 3
Regulation 3
Exemption
Subregulation 1
Subject to the conditions imposed by the Minister pursuant to section 13(4) of the Act, there shall be exempt from tax any qualifying payment that a shipping enterprise is liable to pay on or after the specified date to a person that is neither a resident nor a permanent establishment in Singapore in respect of a loan (including any portion of such loan used to finance any qualifying cost) for any of the following:
the acquisition by the enterprise of any ship —
registered or provisionally registered under the Merchant Shipping Act 1995; or
where the ship is under construction, to be registered or provisionally registered under the Merchant Shipping Act 1995 before or upon completion of its construction;
the acquisition by the enterprise of all the shares of a special purpose vehicle that —
has sole legal and beneficial ownership of any ship —
registered or provisionally registered under the Merchant Shipping Act 1995; or
where the ship is under construction, to be registered or provisionally registered under the Merchant Shipping Act 1995 before or upon completion of its construction; and
does not own any foreign ship;
the costs incurred for lengthening or conversion works carried out on any ship which is —
owned by the enterprise; and
registered or provisionally registered under the Merchant Shipping Act 1995.
Subregulation 2
Without prejudice to sub‑paragraph (1) and subject to the conditions imposed by the Minister pursuant to section 13(4) of the Act, there shall be exempt from tax any qualifying payment that an approved international shipping enterprise or an approved shipping investment enterprise is liable to pay on or after the specified date to a person that is neither a resident nor a permanent establishment in Singapore in respect of a loan (including any portion of such loan used to finance any qualifying cost, whether such loan was obtained before or during the period it is approved as an approved international shipping enterprise or an approved shipping investment enterprise) for any of the following:
the acquisition by the enterprise of any foreign ship; (b)the acquisition by the enterprise of all the shares of a special purpose vehicle that has sole legal and beneficial ownership of any foreign ship;
the costs incurred for lengthening or conversion works carried out on any foreign ship which is owned by the enterprise.
Subregulation 2A
For the purposes of sub-paragraphs (1)(b) and (2)(b), any treasury share in a special purpose vehicle is to be disregarded when determining whether a shipping enterprise, approved international shipping enterprise or approved shipping investment enterprise (as the case may be) acquires all the shares of the special purpose vehicle.
Subregulation 3
Nothing in sub‑paragraph (1) or (2) shall apply in relation to any loan obtained by a shipping enterprise before 1st June 2011 which is already the subject of any other exemption granted to the enterprise under the Act.
Subregulation 4
Sub‑paragraphs (1) and (2) only apply if the shipping enterprise has made a declaration to the Maritime and Port Authority of Singapore established under section 4 of the Maritime and Port Authority of Singapore Act 1996, in the form specified by the Authority, that the requirements of sub‑paragraph (1) or (2), as the case may be, and the conditions imposed by the Minister referred to in that sub‑paragraph are, or (in the case of any condition subsequent) will be, satisfied.
Subregulation 5
Where the loan referred to in sub‑paragraph (1)(a) or (b) is obtained in relation to any ship to be registered or provisionally registered under the Merchant Shipping Act 1995 before or upon the completion of its construction, then the conditions imposed by the Minister referred to in sub‑paragraph (1) shall include the condition that the ship be so registered or provisionally registered for at least one year from the date of delivery of the ship.
Subregulation 6
The exemption under sub-paragraph (1) does not apply to any qualifying payment liable to be made —
after the day that the shipping enterprise or special purpose vehicle (as the case may be) disposes of the ship;
on or after the day that the ship owned by the shipping enterprise or special purpose vehicle (as the case may be) ceases to be registered under the Merchant Shipping Act 1995;
on or after the day that the shipping enterprise fails to satisfy any condition mentioned in sub-paragraph (1); or
after the day that the shipping enterprise disposes of any of the shares in the special purpose vehicle.
Subregulation 7
The exemption under sub-paragraph (2) does not apply to any qualifying payment liable to be made —
after the day that the shipping enterprise or special purpose vehicle (as the case may be) disposes of the ship;
on or after the day that the approval of the shipping enterprise as an approved international shipping enterprise or approved shipping investment enterprise (as the case may be) is revoked or withdrawn;
on or after the day that the shipping enterprise fails to satisfy any condition mentioned in sub-paragraph (2); or
after the day that the shipping enterprise disposes of any of the shares in the special purpose vehicle.
Subregulation 8
Subject to sub‑paragraph (7)(a), (c) and (d), the exemption referred to in sub‑paragraph (2) shall continue to apply to the qualifying payments made in relation to a loan obtained by an approved international shipping enterprise or an approved shipping investment enterprise referred to in sub‑paragraph (2), even after the expiry of the approval of the shipping enterprise as such (other than by way of revocation or withdrawal), and any reference in this paragraph to an approved international shipping enterprise or an approved shipping investment enterprise shall be construed accordingly.