Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 3) Order 2007
- Act Code: ITA1947-S368-2007
- 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 (commencement typically follows the making/notification of the Order)
- Legislative Citation: SL 368/2007
- Status: Current version as at 27 March 2026 (per the legislation portal)
- Key Provisions: Section 1 (Citation); Section 2 (Exemption)
- Exempted Tax Item: Tax on dividends received in Singapore from specified foreign subsidiaries
- Beneficiary: United International Securities Trading (Pte) Ltd
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 3) Order 2007 is a targeted tax exemption order made under the Income Tax Act. In plain terms, it grants a specific company an exemption from Singapore income tax on certain dividends it receives in Singapore from its overseas subsidiaries.
Unlike broad-based tax regimes that apply to categories of taxpayers, this Order is narrow and beneficiary-specific. It identifies the company by name—United International Securities Trading (Pte) Ltd—and specifies the foreign subsidiaries and the nature of the income (dividends) that qualify for exemption.
The Order also makes the exemption conditional. It is “subject to the terms and conditions specified in the letter of approval dated 5 January 2007 addressed to the company.” This means that, in practice, the exemption is not merely automatic; it depends on compliance with the approval conditions set out in that approval letter.
What Are the Key Provisions?
Section 1 (Citation) provides the formal short title of the Order: it may be cited as the Income Tax (Exemption of Foreign Income) (No. 3) Order 2007. While this is standard drafting, it matters for legal referencing, filings, and correspondence with tax authorities.
Section 2 (Exemption) is the operative provision. It states that United International Securities Trading (Pte) Ltd is granted exemption from tax on dividends received in Singapore from its subsidiaries in Indonesia, the Philippines, Australia, and Hong Kong. The subsidiaries are specifically named as:
- Indonesia: P.T. Astra International Tbk
- Philippines: Ayala Corporation
- Australia: Zinifex Ltd
- Hong Kong: Hang Lung Properties Ltd
In practical terms, the exemption covers dividends that are received “in Singapore” from those particular overseas entities. This is important because dividend taxation can depend on the source and the Singapore tax treatment of foreign-sourced income. The Order clarifies that, for these dividends, the company will not be taxed in Singapore, provided the conditions are met.
Conditionality via the letter of approval (5 January 2007) is the second critical element. The exemption is “subject to the terms and conditions specified in the letter of approval dated 5th January 2007 addressed to the company.” For practitioners, this is a major compliance and risk point. If the company fails to satisfy any condition in that approval letter, the exemption could be withdrawn, denied for relevant periods, or lead to tax reassessment and penalties depending on how the tax administration treats non-compliance.
Making and authority: The Order is made by the Minister for Finance in exercise of powers conferred by section 13(12) of the Income Tax Act. The making clause and signature block indicate that the exemption is an administrative-tax instrument grounded in statutory authority. The Order was made on 6 July 2007 by TEO MING KIAN, Permanent Secretary, Ministry of Finance, Singapore.
How Is This Legislation Structured?
This Order is extremely concise. It contains only two substantive provisions:
(1) Citation — a standard provision identifying the Order by its short title; and
(2) Exemption — the substantive grant of tax exemption, including the beneficiary, the income type (dividends), the relevant foreign subsidiaries, and the condition that the exemption is subject to the terms in a specific approval letter.
There are no Parts or schedules in the extract. The structure reflects the nature of subsidiary legislation used for bespoke tax relief: it is drafted to be specific, enforceable, and administratively manageable.
Who Does This Legislation Apply To?
The Order applies to United International Securities Trading (Pte) Ltd only. It does not create a general rule for all companies receiving foreign dividends. Instead, it is a company-specific exemption order.
Within the beneficiary company, the exemption applies to dividends received in Singapore from the named overseas subsidiaries in Indonesia, the Philippines, Australia, and Hong Kong. If the company receives dividends from other subsidiaries not listed in the Order, those dividends would not automatically fall within the exemption. Similarly, dividends from the listed subsidiaries may be outside the exemption if the approval conditions are not satisfied.
Because the exemption is “subject to the terms and conditions” in an approval letter dated 5 January 2007, the practical scope also depends on what those conditions require (for example, corporate structure, holding requirements, compliance reporting, or other eligibility criteria). A lawyer advising the company would need to obtain and review that approval letter to confirm ongoing compliance.
Why Is This Legislation Important?
For the company named in the Order, the significance is straightforward: it reduces Singapore tax exposure on specified foreign dividends. Dividends are often a key component of cross-border investment and group treasury operations. A targeted exemption can materially affect cash flows, effective tax rates, and the structuring of holdings and dividend repatriation.
From a legal and compliance perspective, the Order highlights a common feature of Singapore tax relief instruments: bespoke exemptions are frequently conditional. The reference to a specific approval letter means that the exemption is not purely statutory in the abstract; it is tied to an administrative approval process. Practitioners should treat the approval letter as part of the legal “ecosystem” governing the exemption, even though the Order itself contains only a cross-reference.
In enforcement terms, if conditions are not met, the tax authority may deny the exemption for affected dividends or require tax to be paid. This can lead to reassessment, interest, and potential penalties depending on the circumstances. Accordingly, lawyers should advise on governance and documentation: maintaining records of dividend receipts, confirming that the payers are the named subsidiaries, and ensuring that any conditions in the approval letter are continuously satisfied and evidenced.
Finally, the Order is a useful example for practitioners studying how section 13(12) of the Income Tax Act is used. It demonstrates that the Minister for Finance can grant exemptions by order, and that such orders can be narrow in scope—beneficiary-specific and income-specific—rather than broad and sector-wide.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the authorising provision for this exemption order)
- Income Tax Act (timeline / amendments) — to confirm the current operation of the enabling provision and any related interpretive changes
Source Documents
This article provides an overview of the Income Tax (Exemption of Foreign Income) (No. 3) Order 2007 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.