Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 2) Order 2019
- Act Code: ITA1947-S130-2019
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Enacting Power: Section 13(12) of the Income Tax Act
- SL Citation: SL 130/2019
- Date Made: 5 March 2019
- Commencement: Not stated in the extract (practitioners should confirm in the full publication)
- Status: Current version as at 27 Mar 2026 (per the platform display)
- Key Provisions (from extract): Section 1 (Citation); Section 2 (Exemption)
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 2) Order 2019 is a targeted tax exemption instrument made under the Income Tax Act. In plain terms, it grants a specific exemption from Singapore income tax for certain foreign-sourced dividends received in Singapore by a named Singapore company from a named Malaysian company.
Unlike broad-based tax regimes that apply generally to categories of taxpayers, this Order is narrow and fact-specific. It addresses dividends received in Singapore by S&P Global Asian Holdings Pte. Ltd. from RAM Holdings Berhad in the basis periods for the years of assessment 2016 and 2017. The exemption is not automatic for all foreign dividends; it is granted because the Minister for Finance exercised powers under section 13(12) of the Income Tax Act to approve an exemption subject to stated conditions.
Practically, the Order is best understood as a formal legal mechanism to implement an approval decision (reflected in a “letter of approval” dated 1 February 2019). The Order ensures that the approved exemption is given effect in the tax law framework, while also preserving conditionality through reference to the approval letter.
What Are the Key Provisions?
1. Citation (Section 1)
Section 1 simply identifies the instrument: it is the “Income Tax (Exemption of Foreign Income) (No. 2) Order 2019.” This is standard drafting, but it matters for practitioners when cross-referencing the Order in submissions, tax computations, or correspondence with the Inland Revenue Authority of Singapore (IRAS).
2. The exemption for specified dividends (Section 2(1))
The core operative provision is section 2(1). It provides that “dividends amounting to RM1,181,255” received in Singapore by S&P Global Asian Holdings Pte. Ltd. are exempt from tax. These dividends are described as dividends received from RAM Holdings Berhad (a company incorporated in Malaysia) in the basis periods for the years of assessment 2016 and 2017.
Several practical points follow from this wording:
- Named taxpayer: The exemption is for a specific Singapore company, not a class of companies.
- Named payer: The foreign source is tied to a specific Malaysian company.
- Specified amount: The exemption applies to dividends “amounting to RM1,181,255.” This suggests the exemption is limited to that quantified sum, rather than all dividends paid by the Malaysian company.
- Specified tax periods: The exemption covers dividends received in the basis periods for YA 2016 and YA 2017. This is crucial for tax computation and record-keeping, particularly where dividends may be declared in one period but received in another.
3. Conditionality linked to the approval letter (Section 2(2))
Section 2(2) states that the exemption in section 2(1) is “subject to the conditions specified in paragraphs 4 and 5 of the letter of approval dated 1 February 2019 addressed to S&P Global Asian Holdings Pte. Ltd.”
This is a significant legal feature. The Order itself does not reproduce the conditions; instead, it incorporates them by reference to an external document (the approval letter). For practitioners, this means the exemption’s validity and continued availability may depend on compliance with those conditions. If the conditions are not met, IRAS may deny the exemption or require tax to be paid (and potentially impose penalties or interest, depending on the circumstances and the taxpayer’s conduct).
From a drafting and enforcement perspective, incorporation by reference is common in tax approvals. It allows the Minister to tailor conditions to the facts of the case while keeping the Order concise. However, it places a premium on obtaining and reviewing the approval letter, and ensuring that internal tax governance and documentation align with the stated conditions.
4. Formal making and authorisation
The Order is made by the Permanent Secretary, Ministry of Finance, and the enacting formula indicates it is made “in exercise of the powers conferred by section 13(12) of the Income Tax Act.” While the extract does not reproduce section 13(12), practitioners should treat this as confirmation that the exemption is grounded in statutory ministerial power. The making clause also provides an evidentiary anchor for the taxpayer’s entitlement to the exemption.
How Is This Legislation Structured?
This Order is extremely short and consists of:
- Section 1 (Citation): identifies the Order.
- Section 2 (Exemption): sets out the exemption for specified dividends and the conditions governing it.
There are no additional Parts or schedules in the extract. The structure reflects the Order’s function as a specific exemption instrument rather than a comprehensive legislative framework.
Who Does This Legislation Apply To?
The exemption applies to S&P Global Asian Holdings Pte. Ltd., a company incorporated in Singapore, in respect of dividends received in Singapore from RAM Holdings Berhad, a company incorporated in Malaysia. The exemption is limited to the dividends “amounting to RM1,181,255” and to dividends received in the basis periods for years of assessment 2016 and 2017.
Accordingly, the Order does not apply to other Singapore companies receiving foreign dividends, even if they receive dividends from the same Malaysian company, unless the facts and amounts fall within the precise terms of the Order and the conditions in the approval letter are satisfied. Practitioners should therefore avoid treating this as a general “foreign dividend exemption” rule; it is a bespoke exemption.
Why Is This Legislation Important?
Although the Order is narrow, it is important for at least three reasons.
1. It provides legal certainty for a specific tax outcome
For the named taxpayer, the Order offers a clear statutory basis to claim exemption from tax on the specified foreign dividends. In practice, this reduces uncertainty compared to relying solely on administrative assurances. A lawyer advising on tax treatment can cite the Order directly when preparing tax computations, responding to IRAS queries, or supporting claims for exemption.
2. It demonstrates how ministerial approvals translate into enforceable tax exemptions
The Order’s conditionality mechanism—linking the exemption to paragraphs 4 and 5 of a letter of approval dated 1 February 2019—illustrates the typical pathway for such exemptions. The approval letter likely sets out conditions relating to corporate structure, compliance steps, documentation, or other requirements. The Order then “locks in” the exemption, but only to the extent those conditions are met.
For practitioners, this highlights the need to treat the approval letter as part of the legal framework governing the exemption. Advising clients should include reviewing the approval letter, mapping each condition to operational and reporting obligations, and maintaining evidence of compliance.
3. It affects tax planning, reporting, and potential audit exposure
Because the exemption is limited by amount and period, errors in dividend classification, timing, or currency conversion could lead to under- or over-claiming. If the taxpayer claimed exemption beyond RM1,181,255 or for dividends outside the relevant basis periods, IRAS could challenge the claim. Similarly, non-compliance with the approval conditions could jeopardise the exemption.
From a risk management perspective, lawyers should ensure that the taxpayer’s dividend records, board resolutions, dividend payment confirmations, and tax computations align with the Order’s parameters. Where the conditions require ongoing actions, practitioners should also confirm that these actions were completed and documented during the relevant years.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the authorising provision referenced in the enacting formula)
- Income Tax Act — general provisions on exemptions and foreign income (practitioners should consult the relevant sections governing exemption claims and IRAS administration)
- Legislation timeline / versions — to confirm the correct version applicable to the relevant years of assessment
Source Documents
This article provides an overview of the Income Tax (Exemption of Foreign Income) (No. 2) Order 2019 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.