Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 2) Order 2007
- Act Code: ITA1947-S367-2007
- Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Authorising Provision: Section 13(12) of the Income Tax Act
- Enacting Date / Made Date: 6 July 2007
- Commencement Date: Not stated in the extract (order is “made” on 6 July 2007)
- Legislative Citation: SL 367/2007 (dated 10 Jul 2007 in the timeline)
- Current Version Status: Current version as at 27 Mar 2026 (per the legislation portal)
- Key Provisions (from extract): Section 1 (Citation); Section 2 (Exemption)
- Exempted Party (from extract): Ghim Li Group Pte Ltd
- Income Type: Dividends received in Singapore
- Source Jurisdiction: Australia
- Relevant Subsidiary: GLG Corp Ltd
- Condition Reference: Subject to terms and conditions in a letter of approval dated 26 February 2007 addressed to the tax agent of Ghim Li Group Pte Ltd
- Maker: TEO MING KIAN, Permanent Secretary, Ministry of Finance, Singapore
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 2) Order 2007 is a targeted tax exemption instrument made under the Income Tax Act. Rather than creating a broad, general rule for all taxpayers, it grants a specific exemption to a named company—Ghim Li Group Pte Ltd—relating to foreign-sourced dividends received in Singapore.
In plain terms, the Order allows the company to receive dividends from its Australian subsidiary, GLG Corp Ltd, without paying Singapore tax on those dividends, provided that the company complies with the conditions set out in an approval letter issued earlier (dated 26 February 2007). This type of subsidiary legislation is commonly used in Singapore to implement tax reliefs that are granted on a case-by-case basis under the Income Tax Act’s discretionary framework.
Because the exemption is “subject to the terms and conditions specified” in the approval letter, the Order functions as the legal vehicle that gives effect to a prior administrative decision. For practitioners, the practical scope of the exemption is therefore not limited to the wording of the Order itself; it also depends on the content of the approval letter and any compliance requirements attached to it.
What Are the Key Provisions?
Section 1 (Citation) is straightforward. It provides the short title: “Income Tax (Exemption of Foreign Income) (No. 2) Order 2007.” This is standard drafting and primarily assists in referencing the instrument in legal documents, correspondence, and filings.
Section 2 (Exemption) is the operative provision. It states that Ghim Li Group Pte Ltd is granted an exemption from tax on the dividends received in Singapore from its subsidiary in Australia, GLG Corp Ltd. The exemption is not unconditional; it is “subject to the terms and conditions specified in the letter of approval dated 26th February 2007 addressed to the tax agent of Ghim Li Group Pte Ltd.”
From a legal and compliance perspective, the conditional language is crucial. Even where the Order clearly identifies the income stream (dividends received in Singapore from an Australian subsidiary), the exemption’s availability and continued operation may depend on satisfying conditions such as (depending on what the approval letter contains) corporate structure requirements, holding period or ownership thresholds, anti-avoidance safeguards, documentation and reporting obligations, and potentially conditions relating to the tax treatment in the source jurisdiction.
Practitioners should also note the statutory basis for the Order: it is made “in exercise of the powers conferred by section 13(12) of the Income Tax Act.” This indicates that the exemption is a form of relief granted under a specific enabling provision, rather than an exemption that automatically applies by operation of law. Accordingly, the exemption is best understood as a legally enforceable outcome of a discretionary approval process under the Income Tax Act.
Finally, the Order includes the making clause and signature of the Permanent Secretary, Ministry of Finance. While this is not a substantive tax rule, it confirms the formal authority under which the exemption is granted and can be relevant when assessing whether the instrument was properly made and whether it is valid on its face.
How Is This Legislation Structured?
The Order is extremely concise and consists of an enacting formula and two substantive provisions:
(1) Citation — identifies the short title of the Order.
(2) Exemption — grants the tax exemption to the named company, specifying the type of income (dividends received in Singapore), the source (Australia), the payor (GLG Corp Ltd), and the key condition (compliance with the terms in the 26 February 2007 approval letter).
There are no parts, schedules, or detailed definitions in the extract. In practice, the “missing” detail is likely contained in the approval letter referenced by Section 2. Therefore, for legal work, the approval letter should be treated as a companion document that completes the exemption’s legal effect.
Who Does This Legislation Apply To?
The Order applies to Ghim Li Group Pte Ltd only. It is a person-specific tax exemption, not a general relief available to all companies meeting certain criteria. The exemption is limited to dividends that are received in Singapore from the company’s Australian subsidiary, GLG Corp Ltd.
Accordingly, other taxpayers—whether they have similar corporate structures or receive dividends from Australian subsidiaries—do not automatically benefit from this Order. Their eligibility would depend on whether they have a separate approval and corresponding subsidiary legislation or whether they qualify under other provisions of the Income Tax Act or other tax exemption orders.
Why Is This Legislation Important?
This Order is important because it demonstrates how Singapore implements foreign income relief through a combination of (i) a statutory enabling provision in the Income Tax Act and (ii) a subsidiary legislation instrument that gives effect to a specific approval. For practitioners advising corporate groups, the Order is a key piece of evidence when assessing whether dividend income from a foreign subsidiary can be exempt from Singapore tax.
From a practical compliance standpoint, the conditional reference to the letter of approval dated 26 February 2007 means that tax treatment cannot be determined solely by reading the Order. A lawyer should obtain and review the approval letter (and any subsequent amendments, renewals, or compliance correspondence) to confirm:
- the exact scope of the exemption (e.g., which dividend payments are covered);
- the conditions that must be met (including any ongoing obligations);
- the documentation and reporting requirements; and
- the consequences of non-compliance (e.g., whether exemption can be withdrawn or tax reassessed).
In addition, because the Order is “current version as at 27 Mar 2026” (per the portal status), practitioners should verify whether the exemption remains in force for the relevant years of assessment and whether any later legislative changes or administrative actions affect its operation. Even where the Order itself is unchanged, the tax position may be impacted by changes in the underlying approvals, corporate restructuring, or compliance outcomes.
Finally, this Order is a useful reference point for understanding the broader policy approach: Singapore’s tax system seeks to manage the treatment of foreign-sourced income, including dividends, through targeted relief mechanisms that can be tailored to specific corporate circumstances. For legal research and advisory work, it provides a concrete example of how section 13(12) of the Income Tax Act can be operationalised via subsidiary legislation.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the enabling provision for the making of this Order)
- Income Tax Act timeline / legislative history — to confirm the version and context of section 13(12) at the time of approval and any subsequent amendments
Source Documents
This article provides an overview of the Income Tax (Exemption of Foreign Income) (No. 2) Order 2007 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.