Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 2) Order 2007
- Act Code: ITA1947-S367-2007
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Power Exercised: Section 13(12) of the Income Tax Act
- Enacting Date: 6 July 2007
- Commencement: Not specified in the extract (commonly effective upon making/registration, subject to the instrument’s terms)
- Key Provisions:
- Section 1 (Citation): Provides the short title of the Order.
- Section 2 (Exemption): Grants a targeted exemption to a specified company for dividends received in Singapore from an Australian subsidiary, subject to approval conditions.
- Status: Current version as at 27 March 2026 (per the platform display)
- Related Legislation: Income Tax Act (Chapter 134); Income tax exemption framework under section 13(12)
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 2) Order 2007 is a narrow, company-specific tax instrument made under Singapore’s Income Tax Act. In substance, it provides an exemption from Singapore tax for certain foreign-sourced income—specifically, dividends received in Singapore by a particular corporate group.
Unlike broad, economy-wide tax rules that apply to all taxpayers meeting general criteria, this Order is directed at a named entity: Ghim Li Group Pte Ltd. The exemption covers dividends received in Singapore from its subsidiary in Australia, GLG Corp Ltd. The exemption is not unconditional; it is granted subject to the terms and conditions set out in a letter of approval dated 26 February 2007 addressed to the company’s tax agent.
Practically, the Order reflects how Singapore administers foreign income participation and dividend taxation relief through ministerial powers. It is designed to facilitate tax planning for qualifying corporate structures while maintaining compliance through approval conditions.
What Are the Key Provisions?
Section 1 (Citation) is a standard provision. It states that the instrument may be cited as the Income Tax (Exemption of Foreign Income) (No. 2) Order 2007. For practitioners, this is mainly relevant for accurate referencing in submissions, correspondence, and filings.
Section 2 (Exemption) is the operative clause. It provides that Ghim Li Group Pte Ltd is granted an exemption from tax on the dividends received in Singapore from its Australian subsidiary, GLG Corp Ltd. The exemption is therefore tied to (i) the payer (the Australian subsidiary), (ii) the income type (dividends), and (iii) the tax location (dividends received in Singapore).
Most importantly, the exemption 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. This means that the legal entitlement to exemption is not solely determined by the Order itself; it also depends on compliance with the approval conditions. For legal and tax practitioners, this is a critical point: the letter of approval effectively functions as the compliance framework that governs whether the exemption applies and on what terms.
The Order also includes the making clause and signature/authority details. It states that it was made on 6 July 2007 by TEO MING KIAN, Permanent Secretary, Ministry of Finance, Singapore. The presence of the ministerial signatory underscores that the exemption is granted through the statutory discretion conferred by section 13(12) of the Income Tax Act.
Finally, the extract includes a bracketed reference to administrative and legislative identifiers (e.g., [MF(R)32.16.056 V36; AG/LEG/SL/134/2005/6 Vol. 1]). While not substantive, these references can be useful when tracing the legislative file, related amendments, or administrative history.
How Is This Legislation Structured?
This Order is extremely short and consists of a minimal structure typical of targeted tax exemptions. It contains:
(1) Enacting formula — states the legal basis for the Minister’s power, namely section 13(12) of the Income Tax Act.
(2) Citation provision (Section 1) — provides the short title.
(3) Substantive exemption provision (Section 2) — identifies the beneficiary company, the income type, the foreign payer, and the conditional nature of the exemption.
(4) Making clause — records the date and the authorised signatory.
There are no “Parts” or detailed schedules in the extract. The practical content is concentrated in Section 2 and the referenced letter of approval.
Who Does This Legislation Apply To?
The Order applies to Ghim Li Group Pte Ltd only. It is not a general exemption for all companies receiving foreign dividends. Therefore, other taxpayers cannot rely on this Order unless they are the named beneficiary or otherwise have their own exemption instrument or approval.
Within the beneficiary’s corporate context, the exemption is limited to dividends received in Singapore from GLG Corp Ltd, the Australian subsidiary. Accordingly, dividends from other foreign subsidiaries, or dividends from different entities, would not fall within the scope of this Order as written.
Because the exemption is expressly subject to the terms and conditions in the 26 February 2007 letter of approval, the practical applicability also depends on whether the company continues to satisfy those conditions. If conditions relate to shareholding, corporate structure, compliance filings, or other eligibility requirements, failure to meet them could affect whether the exemption is available for the relevant dividend payments.
Why Is This Legislation Important?
Although the Order is brief, it is significant for practitioners because it illustrates how Singapore’s foreign income tax relief can be implemented through specific ministerial orders rather than only through general statutory provisions. For corporate tax planning, such instruments can materially affect the effective tax burden on cross-border group structures.
From a compliance perspective, the Order’s conditional language is the key. The exemption is not merely “granted”; it is granted subject to approval conditions. In practice, lawyers and tax advisers must therefore obtain and review the letter of approval dated 26 February 2007 and ensure that the company’s dividend flows and corporate arrangements remain aligned with those conditions. This is particularly important when there are corporate restructurings, changes in shareholding, changes in dividend policy, or changes in the tax agent or compliance processes.
For enforcement and dispute risk, the conditional nature means that the exemption could be challenged if the approval conditions were not met at the time dividends were received, or if the conditions require ongoing compliance. Practitioners should therefore treat the Order and the approval letter as a combined compliance package. When preparing tax computations, submissions, or responses to queries from the Inland Revenue Authority of Singapore (IRAS), the Order provides the legal basis for the exemption, while the approval letter provides the factual and procedural conditions that must be evidenced.
Finally, the Order’s existence may be relevant in due diligence. In acquisitions or group reorganisations, buyers often need to understand whether there are existing tax exemptions or approvals that could be transferable, dependent on the current entity, or affected by structural changes. Because this Order is named to a specific company and refers to a specific subsidiary relationship, it is unlikely to be automatically reusable by a different entity without further approvals.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12), which provides the statutory power for the Minister to make orders granting exemptions.
- Income Tax exemption framework under the Income Tax Act — general principles governing foreign income and dividend taxation, including how exemptions are administered and conditioned.
- Legislation timeline / subsidiary legislation register — for confirming the correct version and any amendments or related instruments.
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.