Statute Details
- Title: Income Tax (Exemption from Section 19B(10A)) Order 2018
- Act Code: ITA1947-S707-2018
- Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Authorising Provision: Section 19B(10B) of the Income Tax Act
- Enacting Formula: Minister for Finance makes the Order in exercise of powers under section 19B(10B)
- Citation: No. S 707
- Commencement / Deemed Operation: Deemed to have come into operation on 1 October 2018
- Date Made: 22 October 2018
- Status: Current version as at 27 March 2026
- Key Provisions: Section 1 (Citation and commencement); Section 2 (Exemption)
What Is This Legislation About?
The Income Tax (Exemption from Section 19B(10A)) Order 2018 is a targeted tax exemption order made under Singapore’s Income Tax Act. In plain terms, it grants a specific company an exemption from a particular restriction or disallowance rule contained in section 19B(10A) of the Income Tax Act, but only for a defined set of circumstances.
Section 19B of the Income Tax Act generally deals with tax treatment relating to capital expenditure and, in particular, the conditions under which certain deductions or allowances may be claimed. Subsection 19B(10A) is one of the provisions that can limit or regulate how capital expenditure is treated—especially where intellectual property rights are acquired and where the transaction may fall within a specified category of arrangements.
This Order does not rewrite the Income Tax Act. Instead, it uses the Minister’s statutory power under section 19B(10B) to carve out an exemption for a named taxpayer. The exemption is tied to a specific transaction: Keysight Technologies Singapore (Sales) Pte. Ltd. acquiring intellectual property rights from its related entity, Keysight Technologies Singapore (Holdings) Pte. Ltd., for use in its trade or business, with the relevant capital expenditure incurred on 1 October 2018.
What Are the Key Provisions?
Section 1: Citation and commencement
Section 1 provides the formal title and citation of the Order and, importantly, sets the effective date. The Order is “deemed to have come into operation on 1 October 2018.” This “deemed” commencement is legally significant: it means the exemption is treated as applying from that date, even though the Order was made later (22 October 2018). For practitioners, this affects how tax computations and documentation should be aligned for the relevant Year of Assessment and filing positions.
Section 2: Exemption
Section 2 is the operative provision. Subsection (1) states that Keysight Technologies Singapore (Sales) Pte. Ltd. is exempt from section 19B(10A) of the Income Tax Act in respect of capital expenditure incurred by it on 1 October 2018 for acquiring, for use in its trade or business, any intellectual property rights from Keysight Technologies Singapore (Holdings) Pte. Ltd.
Several elements in this exemption are worth careful attention:
- Named taxpayer: The exemption is not general. It applies only to Keysight Technologies Singapore (Sales) Pte. Ltd.
- Specific statutory target: The exemption is from section 19B(10A) only, not from other provisions of the Income Tax Act.
- Transaction timing: The capital expenditure must be incurred on 1 October 2018. This is a factual and accounting/tax timing issue.
- Nature of asset: The asset acquired must be intellectual property rights.
- Use in trade or business: The intellectual property rights must be acquired “for use in its trade or business.” This links the exemption to the taxpayer’s operational use and may require evidence of intended and actual use.
- Counterparty: The intellectual property rights must be acquired from Keysight Technologies Singapore (Holdings) Pte. Ltd. The exemption is therefore transaction-specific.
Section 2(2): Conditions and the letter dated 1 October 2018
Subsection (2) provides that the exemption is subject to the terms and conditions specified in the letter dated 1 October 2018 addressed to Keysight Technologies Singapore (Sales) Pte. Ltd.
This is a crucial compliance point. Even though the Order itself is short, the practical scope of the exemption may be determined by the referenced letter. For legal and tax advisers, the letter should be treated as an integral part of the exemption framework. If the taxpayer fails to comply with the conditions in that letter, the exemption could be challenged or denied. In practice, this means counsel should obtain and review the letter carefully, confirm that the transaction and documentation match its requirements, and ensure ongoing compliance (if the conditions are continuing in nature).
Made by the Minister’s Permanent Secretary
The Order is signed by TAN CHING YEE, Permanent Secretary, Ministry of Finance, Singapore. While this is largely formal, it confirms the Order’s validity as an instrument made under the Minister’s delegated authority pursuant to the authorising provision.
How Is This Legislation Structured?
This subsidiary legislation is structured in a minimal, two-section format:
- Section 1 (Citation and commencement): Sets out the name/citation and the deemed commencement date (1 October 2018).
- Section 2 (Exemption): Provides the exemption to a named taxpayer, specifies the transaction and timing, and incorporates conditions via a referenced letter dated 1 October 2018.
There are no schedules or additional parts in the extract provided. The brevity is typical of targeted exemption orders: the detailed legal effect is achieved through precise drafting of the exemption’s scope and the incorporation of conditions by reference.
Who Does This Legislation Apply To?
The Order applies to Keysight Technologies Singapore (Sales) Pte. Ltd. only. It does not create a class-based exemption for all taxpayers who meet certain criteria. Instead, it is a person-specific and transaction-specific exemption.
In addition, the exemption is limited to capital expenditure incurred on 1 October 2018 for acquiring intellectual property rights from Keysight Technologies Singapore (Holdings) Pte. Ltd. for use in the taxpayer’s trade or business. Therefore, even within the same corporate group, the exemption would not automatically extend to other entities or other transactions unless they are expressly covered by the Order (or by another exemption instrument).
Why Is This Legislation Important?
Although the Order is short, it can be highly significant for tax computation and corporate structuring. Section 19B(10A) of the Income Tax Act likely imposes a limitation that could affect whether capital expenditure relating to intellectual property is deductible or treated in a particular manner. By exempting the taxpayer from section 19B(10A), the Order can materially change the tax outcome for the relevant capital expenditure.
From a practitioner’s perspective, the key importance lies in three practical areas:
- Tax position certainty: Where a taxpayer’s transaction falls within the Order’s narrow description, the exemption provides a legal basis to treat the capital expenditure without the section 19B(10A) restriction.
- Timing and documentation: Because the exemption is tied to capital expenditure incurred on 1 October 2018 and deemed commencement on the same date, advisers must ensure that accounting records, invoices, agreements, and tax computations align with that timing.
- Condition compliance: The exemption is expressly “subject to” conditions in a letter dated 1 October 2018. This creates an additional compliance layer beyond the statutory text. Failure to satisfy those conditions could undermine reliance on the exemption.
Finally, this Order illustrates how Singapore uses subsidiary legislation to implement targeted relief in the tax system. For lawyers advising on intellectual property transfers, intra-group licensing or assignment, and capital expenditure planning, it signals that relief may be available—but typically only through carefully drafted, transaction-specific instruments and conditions.
Related Legislation
- Income Tax Act (Chapter 134) — in particular section 19B(10A) and the enabling power in section 19B(10B)
- Income Tax Act (Timeline / Legislation history) — to confirm the relevant version of section 19B and any amendments affecting interpretation
Source Documents
This article provides an overview of the Income Tax (Exemption from Section 19B(10A)) Order 2018 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.