Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 4) Order 2018
- Act Code: ITA1947-S503-2018
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Authorising Power: Section 13(12) of the Income Tax Act
- Enacting Date / Made On: 16 August 2018
- Publication / Citation: SL 503/2018 (dated 24 Aug 2018)
- Current Version Status: Current version as at 27 Mar 2026 (per the legislation portal)
- Key Provisions: Section 1 (Citation); Section 2 (Exemption)
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 4) Order 2018 is a targeted tax exemption order made under Singapore’s Income Tax Act. In plain terms, it grants a specific exemption from Singapore income tax for a defined category of foreign-sourced income—namely, certain dividends received in Singapore by a particular Singapore company.
Unlike broad tax regimes that apply generally to all taxpayers, this Order is narrow and fact-specific. It identifies the recipient company, the type of income (dividends), the foreign payer companies (incorporated in the British Virgin Islands), the amount (US$3,800,000), and the date the dividends were received in Singapore (12 September 2017). This makes the Order practically important for the recipient and its tax advisers, but it also means it is not a “template” exemption for other taxpayers.
The Order also makes clear that the exemption is not unconditional. It is expressly “subject to” terms and conditions contained in a letter of approval issued by the relevant authority. This reflects a common Singapore tax policy approach: exemptions are granted where the tax authority is satisfied that the statutory and policy conditions are met, and the taxpayer must comply with the approval’s conditions.
What Are the Key Provisions?
1. Citation (Section 1)
Section 1 provides the formal name of the instrument: the “Income Tax (Exemption of Foreign Income) (No. 4) Order 2018.” While this is largely administrative, citation provisions matter for practitioners because they confirm the exact legal instrument that must be relied upon in submissions, tax computations, and correspondence with the Inland Revenue Authority of Singapore (IRAS).
2. The Exemption (Section 2)
The operative provision is Section 2, which sets out the scope of the exemption.
(a) Income covered
Section 2(1) states that “income comprising dividends of US$3,800,000” received in Singapore by Lodgis Hospitality Holdings Pte. Ltd. (a company incorporated in Singapore) is exempt from tax. The dividends were received on 12 September 2017 from two foreign companies: Madrid Holdings (BVI) Limited and Prime Value Asia Limited, both incorporated in the British Virgin Islands.
(b) Recipient and payer specificity
The exemption is tied to a particular recipient and particular foreign payers. For legal practitioners, this specificity is crucial. If the recipient company were different, if the amount differed, if the dividends were received on a different date, or if the dividends were paid by different foreign entities, the exemption would likely not apply. In practice, advisers should treat the Order as defining a “closed set” of facts.
(c) Conditionality: terms and conditions in the approval letter
Section 2(2) provides that the exemption under Section 2(1) is “subject to the terms and conditions specified in paragraphs 3 and 4 of the letter of approval dated 25 July 2018 addressed to Deloitte & Touche LLP, the tax agent of Lodgis Hospitality Holdings Pte. Ltd.”
This conditional language is a key compliance hook. Even where the statutory instrument grants an exemption, the taxpayer’s entitlement may depend on meeting conditions set out in the approval letter. Practitioners should therefore obtain and review the approval letter (or at least the relevant paragraphs) and ensure that the taxpayer’s actions, documentation, and reporting align with those conditions. Failure to comply could expose the taxpayer to denial of the exemption, reassessment, or other tax consequences.
3. Making and authority
The Order records that it was “Made on 16 August 2018” by the Permanent Secretary, Ministry of Finance, Singapore. This confirms the formal exercise of the Minister for Finance’s powers under the Income Tax Act.
How Is This Legislation Structured?
This Order is extremely concise. It consists of:
(i) Enacting formula — states that the Minister for Finance makes the Order in exercise of powers conferred by section 13(12) of the Income Tax Act.
(ii) Section 1 (Citation) — provides the short title.
(iii) Section 2 (Exemption) — contains the substantive exemption and its conditional nature.
There are no Parts, schedules, or detailed procedural provisions in the extract provided. The practical “structure” for practitioners is therefore: identify the exemption facts (recipient, income type, amount, foreign sources, receipt date) and then verify compliance with the approval letter’s conditions referenced in Section 2(2).
Who Does This Legislation Apply To?
On its face, the Order applies to Lodgis Hospitality Holdings Pte. Ltd.—specifically, in relation to the dividends described in Section 2(1). The exemption is granted to income “received in Singapore” by that Singapore-incorporated company from the specified BVI-incorporated payers.
Because the Order is fact-specific, it does not operate as a general exemption for all Singapore companies receiving foreign dividends. Other taxpayers should not assume that they can rely on this Order. Instead, they would need to consider whether there is a different exemption order applicable to their circumstances, or whether they must apply for approval under the relevant provisions of the Income Tax Act and the subsidiary legislation framework.
Why Is This Legislation Important?
Although the Order is brief, it is legally significant for two reasons: (1) it confers a concrete tax benefit for a defined transaction, and (2) it demonstrates how Singapore’s exemption mechanisms can be implemented through subsidiary legislation linked to ministerial approval conditions.
1. Practical tax impact on the recipient
For Lodgis Hospitality Holdings Pte. Ltd., the Order provides statutory support to treat the specified US$3,800,000 dividends as exempt from tax in Singapore. This can affect tax computation, financial reporting, and the company’s tax position for the relevant year of assessment. In practice, advisers will align the exemption with the company’s tax filings and maintain evidence of the dividend receipt and the foreign payer details.
2. Compliance risk due to conditional approval
The conditionality in Section 2(2) is a compliance focal point. The exemption is not merely granted by the Order; it is granted subject to conditions in the approval letter dated 25 July 2018. This means practitioners should treat the approval letter as part of the legal basis for entitlement. If the conditions relate to documentation, corporate structure, anti-avoidance safeguards, or other compliance steps, the taxpayer must be able to demonstrate adherence.
3. Guidance for structuring and advising
For lawyers advising corporate groups, this Order illustrates the “approval + exemption order” pathway. It signals that where foreign income exemptions are sought, the tax authority may require specific assurances and impose conditions. Even though this particular Order is not a general rule, it can inform how advisers approach applications, maintain records, and manage ongoing compliance obligations.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the authorising provision for this exemption order)
- Income Tax (Exemption of Foreign Income) Orders — other subsidiary legislation instruments issued under the same authorising framework (often numbered sequentially)
- Legislation Timeline / Versioning — relevant for confirming the correct version of SL 503/2018 as at the date of reliance (the portal indicates “current version as at 27 Mar 2026”)
Source Documents
This article provides an overview of the Income Tax (Exemption of Foreign Income) (No. 4) Order 2018 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.