Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 4) Order 2011
- Act Code: ITA1947-S635-2011
- Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Enacting power: Section 13(12) of the Income Tax Act
- Citation: “Income Tax (Exemption of Foreign Income) (No. 4) Order 2011”
- Key operative provision: Section 2 (Exemption), including the shareholding threshold (70.64% of issued ordinary shares)
- Status: Current version as at 27 Mar 2026 (per the legislation portal)
- SL number: SL 635/2011
- Date made: 24 November 2011
- Ministerial signatory (as shown): Chan Lai Fung, Permanent Secretary (Finance) (Performance)
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 4) Order 2011 is a targeted tax exemption instrument made under the Income Tax Act. In plain terms, it grants a specific company an exemption from Singapore tax on certain dividends it received from a foreign company in Malaysia during specified dates in 2007.
Unlike broad-based tax regimes that apply to categories of taxpayers, this Order is narrow and fact-specific. It names the recipient company—Fu Yu Investment Pte Ltd—and identifies the foreign dividend-paying company—LCTH Corporation Berhad—located in Malaysia. The exemption applies to dividends received on four particular dates in 2007: 16 May 2007, 8 June 2007, 11 September 2007, and 13 December 2007.
The Order also ties eligibility to a shareholding condition. Fu Yu Investment Pte Ltd must own a substantial majority of the foreign company’s issued ordinary shares (70.64% in the circumstances described). Finally, the exemption is not unconditional: it is subject to terms and conditions set out in a separate letter of approval dated 21 November 2011.
What Are the Key Provisions?
1. Citation (Section 1)
Section 1 provides the formal citation of the Order. This is a standard provision, but it is important for practitioners when referencing the legal instrument in submissions, correspondence, or compliance documentation.
2. The exemption grant (Section 2(1))
The core of the Order is Section 2, which grants an exemption from tax on dividends. Under Section 2(1), Fu Yu Investment Pte Ltd is “hereby granted exemption from tax” on dividends received in Singapore on the four specified dates in 2007 from LCTH Corporation Berhad (Malaysia).
Several practical points flow from the wording:
- Exemption is for dividends received in Singapore—the tax relief is linked to the receipt of dividends, not merely to the existence of foreign income.
- Dates are specified—the exemption is limited to dividends received on 16 May 2007, 8 June 2007, 11 September 2007, and 13 December 2007. This date specificity matters for tax computation and for determining whether particular dividend payments fall within the exemption.
- Foreign source is identified—the dividend payer is named (LCTH Corporation Berhad) and its location is stated (Malaysia). This helps prevent the exemption being interpreted as covering dividends from other foreign entities.
- Shareholding threshold is met—the Order states that Fu Yu Investment Pte Ltd owns 70.64% of the total number of issued ordinary shares in the foreign company. This is the factual basis for the exemption.
3. Shareholding condition and the “64%” reference
The metadata you provided highlights “Section 70: 64% of the total number of issued ordinary shares.” While the extract of the Order itself does not reproduce a “Section 70” (and the Order’s operative section is Section 2), the practical meaning for lawyers is that the exemption regime under the Income Tax Act typically requires a minimum shareholding percentage to qualify for foreign dividend exemption. In this Order, the relevant threshold is satisfied because the company’s ownership is 70.64%—comfortably above a 64% benchmark.
For practitioners, the key takeaway is evidentiary: the exemption is premised on a particular ownership percentage. When advising clients, counsel should ensure that corporate records (share registers, beneficial ownership documentation, and any relevant corporate filings) support the stated percentage at the relevant times.
4. Conditions attached to the exemption (Section 2(2))
Section 2(2) makes the exemption conditional. It states that the exemption under sub-paragraph (1) is “subject to the terms and conditions specified in the letter of approval dated 21st November 2011 addressed to Fu Yu Investment Pte Ltd.”
This is a crucial provision. Even where an Order grants an exemption, the operative legal effect may depend on compliance with conditions in the approval letter. In practice, this means:
- Lawyers should obtain and review the approval letter—it may contain reporting obligations, documentation requirements, restrictions on subsequent transactions, or conditions relating to the foreign company and dividend flows.
- Non-compliance can jeopardise the exemption—if conditions are not met, the tax authority may deny the exemption or require adjustments.
- Advising on compliance is as important as advising on eligibility—the Order itself is only one layer; the approval letter is another.
5. Making and formalities
The Order states it was made on 24 November 2011 and is signed by the Permanent Secretary (Finance) (Performance). The formal making date is relevant for understanding when the exemption was granted (even though it applies to dividends received in 2007). This is common in tax exemption orders: the administrative approval is granted later, but it can be structured to apply to earlier dividend receipts.
How Is This Legislation Structured?
This Order is structured in a very concise format, reflecting its nature as a specific exemption instrument rather than a comprehensive tax code. It contains:
- Section 1 (Citation): the short title for referencing the Order.
- Section 2 (Exemption): the operative provision granting the exemption, including:
- Section 2(1): identifies the recipient company, the foreign dividend payer, the dividend receipt dates, and the shareholding percentage.
- Section 2(2): imposes conditions by reference to a separate letter of approval.
There are no additional parts or complex schedules in the extract provided. The legal “work” is done by Section 2, with the approval letter acting as the condition-setting mechanism.
Who Does This Legislation Apply To?
The Order applies to Fu Yu Investment Pte Ltd as the named recipient of the dividends. It does not apply generally to all companies; it is an individualised exemption order. The foreign company involved is LCTH Corporation Berhad in Malaysia, and the exemption is limited to dividends received in Singapore on the four specified dates in 2007.
Accordingly, the practical scope is narrow: even if another Singapore company holds a similar shareholding in a Malaysian company, this Order would not automatically extend to it. Any other company would need its own exemption order or to qualify under the general provisions of the Income Tax Act (if applicable) rather than relying on this specific “No. 4” Order.
Why Is This Legislation Important?
For practitioners, the importance of this Order lies in its role as a mechanism to provide relief from Singapore tax on foreign dividends for a particular corporate group and transaction history. Dividend taxation can materially affect effective tax rates, cash repatriation planning, and post-acquisition income modelling. By granting an exemption, the Order can improve the after-tax value of dividends received in Singapore.
Equally important is the conditional nature of the exemption. Section 2(2) makes the exemption dependent on compliance with the terms and conditions in the letter of approval dated 21 November 2011. This means that legal work does not end at reading the Order: counsel must verify that the client has complied with the approval conditions and has retained the necessary documentation to support the exemption.
Finally, the date-specific and company-specific drafting provides a useful lesson for tax structuring and dispute avoidance. When advising on dividend repatriation and foreign income exemptions, lawyers should ensure that:
- the relevant dividend payments fall within the specified receipt dates (or otherwise within the exemption’s scope);
- the foreign payer is correctly identified; and
- the shareholding percentage is accurate and supported by evidence at the relevant time.
In the event of tax assessments or queries by the tax authority, these details become central to whether the exemption can be claimed and sustained.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, the authorising provision in section 13(12) (as referenced in the enacting formula)
- Income Tax Act — general framework for foreign income/dividend taxation and exemption mechanisms (including provisions that establish shareholding thresholds and conditions)
- Legislation timeline / versions — to confirm the correct version of SL 635/2011 applicable as at the relevant tax year
Source Documents
This article provides an overview of the Income Tax (Exemption of Foreign Income) (No. 4) Order 2011 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.