Statute Details
- Title: Income Tax (Baohua Steel International Pte. Limited — Section 13(12) Exemption) Order 2025
- Act Code: ITA1947-S334-2025
- Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act 1947
- Authorising Provision: Section 13(12) of the Income Tax Act 1947
- Enacting Formula / Power: Minister for Finance exercises powers under section 13(12)
- Citation: No. S 334
- Legislation Number: SL 334/2025
- Date Made: 21 May 2025
- Status: Current version as at 27 Mar 2026
- Commencement Date: Not stated in the extract (exemption applies to a specified historical period)
- Key Provisions: Section 1 (Citation); Section 2 (Exemption and conditions)
What Is This Legislation About?
The Income Tax (Baohua Steel International Pte. Limited — Section 13(12) Exemption) Order 2025 is a targeted tax exemption order made under Singapore’s Income Tax Act 1947. In practical terms, it grants an exemption from Singapore income tax for a specific category of income—dividend income—received by a specific Singapore company, Baohua Steel International Pte. Limited.
The exemption is narrow and fact-specific. It applies only to dividend income received in Singapore during a defined window (1 July 2022 to 31 July 2022, inclusive). The dividends must be received from a particular Hong Kong company (Fame Risen Development Limited), and the dividends must be derived from the profits of a particular Chinese company (Rizhao Steel Wire Co., Ltd.). This “chain” of entities and profit source is central to the exemption.
Orders of this type are typically used to implement policy outcomes in relation to cross-border corporate structures and to manage the tax treatment of certain inbound dividends. Here, the Minister for Finance grants relief for dividends that meet the specified conditions, subject to further conditions set out by the Inland Revenue Authority of Singapore (IRAS) in a letter issued on behalf of the Minister.
What Are the Key Provisions?
Section 1 (Citation) provides the formal name and citation of the Order: “Income Tax (Baohua Steel International Pte. Limited — Section 13(12) Exemption) Order 2025.” This is largely administrative, but it is important for practitioners when citing the instrument in submissions, correspondence, or internal tax memos.
Section 2 (Exemption) is the operative provision. Sub-paragraph (1) states that dividend income received in Singapore by Baohua Steel International Pte. Limited is exempt from tax if it is received during the period from 1 July 2022 to 31 July 2022 (both dates inclusive). The exemption is therefore time-bound; dividends received outside that window would not qualify under the Order.
Sub-paragraph (1) further specifies the source and derivation of the dividends. The dividend income must be received from Fame Risen Development Limited, a company incorporated in Hong Kong. The Order also requires that the dividend income is “in turn derived from the profits of Rizhao Steel Wire Co., Ltd.,” a company incorporated in China. This means the exemption is not simply about the payer being Fame Risen Development Limited; it is also about the underlying profit origin—Rizhao Steel Wire Co., Ltd.—from which the dividends ultimately arise.
Section 2(2) (Conditions) makes the exemption conditional. It states that the exemption in sub-paragraph (1) is subject to the conditions specified in a letter from IRAS dated 15 May 2025, issued on behalf of the Minister for Finance and addressed to EY Corporate Advisors Pte. Ltd. This is a critical practitioner point: the Order itself does not list the conditions. Instead, it incorporates them by reference to an external IRAS letter.
From a compliance and risk perspective, this means that eligibility is not only a matter of meeting the factual criteria (recipient, payer, profit source, and receipt period). The taxpayer must also satisfy whatever conditions are imposed in the IRAS letter. Practitioners should therefore obtain and review the referenced letter (or confirm the conditions through the taxpayer’s tax file) before relying on the exemption in filings, tax computations, or audit responses.
How Is This Legislation Structured?
This Order is structured in a very concise format typical of exemption orders. It contains:
(a) A short title/citation provision (Section 1), identifying the instrument; and
(b) An operative exemption provision (Section 2), which is divided into:
- Section 2(1): the substantive exemption—dividend income received in Singapore by the specified company during the specified period, from the specified payer, derived from the specified underlying profits; and
- Section 2(2): the incorporation of conditions via reference to an IRAS letter dated 15 May 2025.
There are no additional parts or complex schedules in the extract provided. The instrument’s legal effect is therefore concentrated in Section 2.
Who Does This Legislation Apply To?
The exemption applies to Baohua Steel International Pte. Limited, a company incorporated in Singapore. While the Order is made under the Income Tax Act 1947, the exemption is not general; it is directed at a particular taxpayer and a particular dividend stream.
In addition, the Order’s scope is defined by the dividend’s characteristics: the dividends must be received from Fame Risen Development Limited (Hong Kong) and must be derived from the profits of Rizhao Steel Wire Co., Ltd. (China). Accordingly, even if Baohua Steel receives dividends from other sources, those dividends would not automatically qualify unless they meet the Order’s specified chain of payer and profit derivation.
Finally, the exemption is conditional on compliance with the IRAS letter dated 15 May 2025. Although the letter is addressed to EY Corporate Advisors Pte. Ltd., the conditions are effectively imposed on the taxpayer’s entitlement to the exemption. Practitioners should treat the conditions as binding for tax computation and reporting purposes.
Why Is This Legislation Important?
This Order is important because it provides a specific mechanism to obtain tax relief for inbound dividends that would otherwise be subject to Singapore tax rules. For a practitioner, the key value lies in the ability to confirm—through a legally binding instrument—that certain dividend income is exempt, provided the taxpayer meets the factual and conditional requirements.
From a practical standpoint, the Order’s narrow scope (a defined one-month period in 2022, specific corporate counterparties, and a specified underlying profit source) means that tax treatment must be handled with precision. Corporate groups often receive multiple dividend payments across different periods and from different subsidiaries. Without careful mapping of dividend payment dates and sources, there is a risk of misclassification—either under-claiming the exemption (leading to unnecessary tax cost) or over-claiming it (leading to potential IRAS adjustments, penalties, or interest).
The conditions incorporated by reference to the IRAS letter are equally significant. Because the Order does not reproduce the conditions, the IRAS letter becomes essential evidence for entitlement. In an audit or dispute, the taxpayer’s ability to demonstrate compliance with those conditions will likely be central. Practitioners should therefore ensure that documentation is retained and that the taxpayer’s internal tax governance (including board approvals, dividend declarations, and payment records) aligns with the conditions.
Finally, this Order illustrates how Singapore’s tax exemption framework can be implemented through subsidiary legislation under section 13(12) of the Income Tax Act 1947. For lawyers advising on cross-border structuring, dividend flows, and tax planning, it provides a concrete example of how exemptions may be granted in a controlled and conditional manner.
Related Legislation
- Income Tax Act 1947 (including section 13(12), the authorising provision for this exemption order)
- Income Tax Act 1947 (general framework governing Singapore income tax and exemptions)
- Legislation timeline (for confirming the correct version and status; the extract indicates current version as at 27 Mar 2026)
Source Documents
This article provides an overview of the Income Tax (Baohua Steel International Pte. Limited — Section 13(12) Exemption) Order 2025 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.