Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 13) Order 2017
- Act Code: ITA1947-S605-2017
- Legislative Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Power Exercised: Section 13(12) of the Income Tax Act
- Enacting/Order Date: Made on 23 October 2017
- Published Citation: SL 605/2017 (27 Oct 2017)
- Status: Current version as at 27 Mar 2026 (per the legislation portal)
- Key Provisions: Section 1 (Citation); Section 2 (Exemption)
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 13) Order 2017 is a targeted tax exemption order made under Singapore’s Income Tax Act. In plain terms, it provides that certain foreign-sourced income—specifically, dividends received in Singapore by a particular Singapore company—are exempt from Singapore income tax.
This Order is not a broad, general exemption for all taxpayers. Instead, it is narrowly framed around a specific corporate recipient and specific dividend amounts received during particular months in 2017. Such “exemption orders” are typically used where the Minister for Finance approves an arrangement and then formalises the tax treatment through a subsidiary legislative instrument.
Accordingly, the practical effect of this Order is to remove the Singapore tax charge that would otherwise apply to the specified dividends, provided the conditions attached to the approval letter are satisfied.
What Are the Key Provisions?
Section 1 (Citation) is a standard provision confirming the name of the Order: “Income Tax (Exemption of Foreign Income) (No. 13) Order 2017”. While it does not create substantive tax consequences, it is important for legal referencing and for ensuring the correct instrument is applied.
Section 2 (Exemption) is the core operative provision. Under Section 2(1), income comprising dividends described in Section 2(2) that are received in Singapore by Pacific International Lines (Private) Limited (a company incorporated in Singapore) from Pacific International Lines (United Arab Emirates) LLC (a company incorporated in the United Arab Emirates) is exempt from tax.
Several features of this exemption are legally significant:
- Type of income: The exemption applies only to “dividends” (not interest, royalties, service income, or other categories of foreign income).
- Source and payer: The dividends must be received in Singapore by the specified Singapore company from the specified UAE company.
- Receipt in Singapore: The dividends must be “received in Singapore”. This is a factual and timing concept that can matter in tax administration (e.g., when the dividend is credited/received and where the funds are treated as received).
Section 2(2) (Specified dividends and amounts) narrows the exemption further by listing the exact dividends covered. The Order applies to dividends amounting to:
- AED 568,000 received by Pacific International Lines (Private) Limited in March 2017; and
- AED 1,000,000 received by Pacific International Lines (Private) Limited in August 2017.
From a practitioner’s perspective, this specificity is crucial. If the company receives additional dividends outside these amounts or outside these months, those dividends would not automatically fall within the exemption. The legal analysis would then turn on whether another exemption order exists, whether the general rules under the Income Tax Act apply, or whether other relief mechanisms are available.
Section 2(3) (Condition precedent/ongoing condition) provides that the exemption in Section 2(1) is subject to the terms and conditions specified in the letter of approval dated 28 August 2017 addressed to Pacific International Lines (Private) Limited.
This is often the most operationally important element. Even where the statutory text identifies the dividend type, recipient, payer, and amounts, the exemption may be contingent on compliance with conditions in the approval letter. Such conditions can include requirements relating to corporate structure, documentation, transfer pricing or related-party considerations (where relevant), beneficial ownership, substance, or reporting obligations. Because the Order itself does not reproduce the letter’s terms, a lawyer should obtain and review the approval letter to confirm:
- what conditions must be satisfied;
- by when the conditions must be met;
- what documentation must be retained or submitted; and
- what happens if conditions are breached (e.g., whether exemption is withdrawn or tax becomes payable).
In short, Section 2 creates a statutory exemption, but Section 2(3) makes it conditional upon compliance with the Minister’s approval terms.
How Is This Legislation Structured?
This Order is extremely concise. It contains:
- Section 1: Citation (the short title of the Order).
- Section 2: The substantive exemption provision, including:
- Section 2(1): the general exemption framework for specified dividends;
- Section 2(2): the specific dividends and amounts covered; and
- Section 2(3): the condition that the exemption is subject to the approval letter dated 28 August 2017.
There are no additional parts, schedules, or detailed procedural provisions in the extract provided. The instrument’s brevity reflects its function as a targeted exemption order rather than a comprehensive tax code.
Who Does This Legislation Apply To?
On its face, the Order applies to Pacific International Lines (Private) Limited—and only to that company—in respect of the specified dividends it receives in Singapore from Pacific International Lines (United Arab Emirates) LLC.
Because the exemption is drafted with named parties and specified dividend amounts and receipt months, it does not extend to other Singapore companies, even if they receive dividends from similar foreign entities. For other taxpayers, the legal question would be whether they can rely on this Order (generally they cannot, because the exemption is not expressed in general terms) or whether they must seek their own exemption under the relevant provisions of the Income Tax Act.
Practically, the Order is best understood as part of a particular tax approval arrangement. Therefore, the “who” is not merely the named recipient company; it also includes the corporate relationship and the specific foreign payer identified in the Order.
Why Is This Legislation Important?
Although the Order is short, it can be highly significant for the recipient company’s tax position. Dividends received from foreign subsidiaries or related entities can, depending on the tax regime and facts, be subject to Singapore tax. By granting a statutory exemption for the specified dividends, the Order directly affects the company’s taxable income and potentially its tax payable for the relevant year of assessment.
From a compliance and risk-management standpoint, the conditional nature of the exemption (Section 2(3)) means that practitioners must treat this Order as part of a broader approval package. The approval letter dated 28 August 2017 likely contains conditions that must be satisfied and evidenced. Failure to comply could jeopardise the exemption and lead to tax assessments, penalties, or disputes over whether the exemption applies.
Finally, this Order illustrates how Singapore uses subsidiary legislation to implement specific tax outcomes. For lawyers advising on cross-border corporate structures, dividend flows, and tax planning, the Order is a concrete example of how exemptions may be granted in a controlled, fact-specific manner—through named parties, quantified dividends, and ministerial approval conditions.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the authorising provision for this Order)
- Income Tax Act (timeline / versioning resources) — for understanding the operative framework under which exemption orders are made
Source Documents
This article provides an overview of the Income Tax (Exemption of Foreign Income) (No. 13) Order 2017 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.