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: 6 July 2007
- Citation: Income Tax (Exemption of Foreign Income) (No. 2) Order 2007
- Key Provisions: Section 1 (Citation); Section 2 (Exemption)
- Status / Version: Current version as at 27 Mar 2026 (per the legislation portal)
- Legislative Instrument Number: SL 367/2007
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 2) Order 2007 is a Singapore tax order made under the Income Tax Act. In plain terms, it grants a targeted exemption from Singapore income tax for a specific corporate taxpayer in relation to certain dividend income received in Singapore.
Unlike broad, economy-wide tax incentives that apply to categories of taxpayers, this Order is narrow in scope. It is directed to Ghim Li Group Pte Ltd and concerns dividends received in Singapore from its subsidiary in Australia, GLG Corp Ltd. The exemption is not automatic; it is granted subject to 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 certain exemptions for foreign-sourced income through ministerial orders under the Income Tax Act. For lawyers advising on cross-border group structures, dividend flows, and compliance with approval conditions, the key takeaway is that the exemption is conditional and approval-specific.
What Are the Key Provisions?
Section 1 (Citation) provides the short title of the instrument. This is standard drafting: it tells practitioners and courts how to refer to the Order.
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 Australian subsidiary, GLG Corp Ltd. The exemption is expressly “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 advisory perspective, Section 2 contains three essential elements that practitioners must treat as interlocking requirements:
- Identity of the taxpayer: the exemption is granted to Ghim Li Group Pte Ltd (not to a group generally, and not to other entities).
- Nature and source of income: the exemption covers dividends received in Singapore from GLG Corp Ltd (the Australian subsidiary). This indicates that the relevant tax treatment is Singapore tax on dividend income, not other foreign income types such as interest, royalties, or capital gains.
- Conditionality: the exemption is not unconditional. It depends on compliance with the terms and conditions in the 26 February 2007 approval letter to the company’s tax agent.
The conditional reference to the approval letter is particularly important. Even though the Order itself is brief, it incorporates external conditions by reference. In practice, this means that the exemption’s scope, duration, and compliance requirements may be found in that approval letter rather than in the text of the Order. Lawyers should therefore obtain and review the approval letter (and any subsequent amendments or clarifications) to determine:
- what specific conditions must be satisfied (e.g., corporate structure, holding periods, dividend declaration practices, documentation requirements);
- whether the exemption applies to dividends received during a particular period or subject to ongoing criteria; and
- what happens if conditions are breached (e.g., withdrawal of exemption, tax clawback, penalties, or requirement to file amended returns).
Finally, the Order includes the formal making clause: it was made on 6 July 2007 by the Permanent Secretary, Ministry of Finance, Singapore (TEO MING KIAN), under the ministerial powers conferred by the Income Tax Act. This confirms it is an administrative tax instrument rather than a primary statute.
How Is This Legislation Structured?
This Order is extremely concise and is structured around two provisions:
- Section 1 (Citation): sets out the short title.
- Section 2 (Exemption): grants the specific tax exemption to the named company for specified dividend income, subject to approval-letter conditions.
There are no additional parts, schedules, or detailed definitions in the extract provided. The instrument relies on the incorporation of conditions through the referenced approval letter. For practitioners, this means the “real” operational content may be partly external to the Order’s text.
Who Does This Legislation Apply To?
The Order applies to Ghim Li Group Pte Ltd as the named exempt taxpayer. It does not apply to other companies, even if they are similarly situated. In Singapore tax practice, such targeted orders are typically issued for particular corporate groups and specific transactions or structures.
In terms of income, the exemption applies to dividends received in Singapore from GLG Corp Ltd, the Australian subsidiary. Therefore, the exemption is tied to both the payer relationship (subsidiary in Australia) and the jurisdictional fact that the dividends are received in Singapore. Advisers should ensure that the dividend flows in question match the described relationship and characterisation.
Why Is This Legislation Important?
Although the Order is short, it is significant for at least three reasons.
First, it demonstrates how foreign income exemptions can be granted through subsidiary legislation. Under the Income Tax Act, the Minister for Finance has powers to grant exemptions. This Order is an example of how those powers are exercised in a targeted manner. For lawyers, it underscores that the legal basis for a tax position may lie not only in the main Act but also in specific orders and approval letters.
Second, it highlights the centrality of approval-letter conditions. The exemption is expressly “subject to the terms and conditions” in a letter dated 26 February 2007. This is a common feature in Singapore tax approvals: the approval letter often contains compliance obligations and operational constraints. If a taxpayer fails to meet those conditions, the exemption may not be available, or the tax authority may seek to recover tax. Practitioners should treat the approval letter as part of the legal framework governing the exemption.
Third, it has practical consequences for corporate tax reporting and dividend planning. If dividends from the Australian subsidiary are exempt, the company’s tax computation and reporting obligations may change (for example, how dividend income is treated in returns, whether specific schedules or disclosures are required, and how withholding tax credits or foreign tax matters are handled). Even where an exemption reduces tax, documentation and compliance remain critical—particularly where the exemption is conditional.
For ongoing advisory work, the “current version as at 27 Mar 2026” status suggests that the Order remains in force in the database, but it does not necessarily mean the exemption continues indefinitely. The operative question is whether the approval-letter conditions specify a duration or continuing requirements. Lawyers should therefore confirm the temporal scope and any triggers for termination or review.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the authorising provision for this Order)
- Income Tax Act — Timeline / Legislation history (for versioning and contextual 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.