Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 7) Order 2013
- Act Code: ITA1947-S405-2013
- Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Authorising Provision: Section 13(12) of the Income Tax Act
- Enacting Formula Date: Made on 25 June 2013
- Commencement (practical effect): Exemption applies to dividends received in Singapore on or after 18 June 2013
- Legislation Number: SL 405/2013
- Key Provisions: Section 1 (Citation); Section 2 (Exemption)
- Status: Current version as at 27 Mar 2026
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 7) Order 2013 is a Singapore tax exemption order made under the Income Tax Act. In plain terms, it grants a specific company an exemption from Singapore tax on certain dividends it receives in Singapore from a foreign company.
Unlike broad-based tax regimes that apply to categories of taxpayers, this Order is targeted. It relates to dividends received by Future Enterprises Pte Ltd from FER (HK) Limited, a company located in Hong Kong. The exemption is designed to reduce or eliminate Singapore tax exposure on qualifying foreign-sourced income (here, dividends), subject to conditions set out in an approval letter.
Practitioners should view this Order as part of Singapore’s wider framework for granting exemptions for foreign income under the Income Tax Act. It is not a general “foreign income exemption” statute; rather, it is one of a series of specific exemption orders (“(No. 7)”) that implement exemptions for particular taxpayers and transactions.
What Are the Key Provisions?
1. Citation (Section 1)
Section 1 provides the short title of the instrument: Income Tax (Exemption of Foreign Income) (No. 7) Order 2013. This is standard legislative drafting and is mainly relevant for referencing the Order in submissions, correspondence, or legal analysis.
2. Exemption from tax on dividends (Section 2)
The operative provision is Section 2, which grants the exemption. Under Section 2(1), Future Enterprises Pte Ltd is “hereby granted exemption from tax on the dividends received in Singapore” on or after 18 June 2013 from FER (HK) Limited (a Hong Kong company).
This wording is important. The exemption is expressly tied to:
- The taxpayer: Future Enterprises Pte Ltd
- The income type: dividends
- The tax incidence location: dividends received “in Singapore”
- The source payer: FER (HK) Limited
- The timing: dividends received on or after 18 June 2013
Accordingly, the exemption is not framed as an exemption for all foreign dividends received by the company, nor is it framed as an exemption for dividends from any foreign company. It is transaction- and counterparty-specific.
3. Conditions and approval letter (Section 2(2))
Section 2(2) makes the exemption conditional. It states that the exemption under Section 2(1) is “subject to the terms and conditions specified in the letter of approval dated 18th June 2013 addressed to the tax agent of Future Enterprises Pte Ltd.”
For legal practice, this is a critical compliance hook. The Order itself does not set out the conditions; instead, it incorporates by reference the terms in the approval letter. That means the approval letter becomes central to determining whether the exemption is validly applied and whether it can be relied upon.
In practice, counsel should expect that the approval letter may address matters such as documentation requirements, eligibility criteria, anti-abuse safeguards, reporting obligations, and consequences of non-compliance. Even though the Order is short, the approval letter may contain detailed operational requirements.
4. Formal making of the Order
The Order records that it was made on 25 June 2013 by the Permanent Secretary (Finance) (Performance), Ministry of Finance, Singapore, and includes the relevant administrative references. While these are not “substantive” provisions, they confirm the instrument’s validity and the authority under which it was issued.
How Is This Legislation Structured?
This Order is structured in a very concise format, typical of subsidiary tax exemption orders. It contains:
- Section 1 (Citation): the short title.
- Section 2 (Exemption): the substantive exemption provision, including both the grant of exemption and the condition that it is subject to an approval letter.
There are no Parts, schedules, or detailed definitions in the extract provided. The structure reflects that the Order is intended to implement a specific exemption rather than to create a comprehensive legislative scheme.
Who Does This Legislation Apply To?
The exemption applies to Future Enterprises Pte Ltd as the named recipient of dividends. It does not apply to other taxpayers, even if they receive dividends from Hong Kong or other foreign companies. The identity of the recipient is expressly stated in Section 2(1).
Further, the exemption is limited to dividends received from FER (HK) Limited. Even if Future Enterprises Pte Ltd receives dividends from other foreign entities, those dividends would not automatically fall within this Order unless another exemption order (or a different basis under the Income Tax Act) applies.
Finally, the exemption is time-bound: it applies to dividends received in Singapore on or after 18 June 2013. Dividends received before that date would not be covered by the exemption under this instrument.
Why Is This Legislation Important?
Although the Order is brief, it can have meaningful tax consequences. Dividends received by a Singapore company may be subject to Singapore tax depending on the applicable tax rules and whether an exemption or relief applies. By granting an exemption, the Order reduces the tax cost associated with receiving foreign dividends from a specified counterparty.
For practitioners, the importance lies in how the exemption is drafted and how it should be operationalised:
- Specificity: The exemption is narrow—limited to a particular company, payer, and timing. This affects how clients should structure their dividend flows and how tax positions are documented.
- Conditionality: The exemption is expressly subject to the terms and conditions in an approval letter dated 18 June 2013. Legal reliance on the exemption therefore requires reviewing and retaining that approval letter and ensuring ongoing compliance with its conditions.
- Evidence and audit readiness: Because the exemption is conditional and incorporated by reference, practitioners should ensure that the client’s records (tax agent correspondence, approval letter, dividend payment documentation, and any reporting) are complete and consistent with the approval terms.
From an enforcement perspective, the incorporation of conditions by reference means that non-compliance could jeopardise the exemption. If the approval letter imposes obligations (for example, reporting, maintaining certain corporate arrangements, or meeting eligibility criteria), failure to satisfy them could lead to tax assessments or adjustments. Accordingly, counsel should treat the approval letter as part of the legal “source” for the exemption’s scope.
Finally, this Order illustrates a broader administrative approach in Singapore tax law: exemptions for foreign income may be granted through subsidiary legislation made under the Income Tax Act’s enabling provisions. Understanding this mechanism helps lawyers advise clients on how to obtain, maintain, and defend tax exemptions that are not automatic but are granted by specific instruments.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the enabling provision under which the Minister for Finance makes exemption orders)
- Income Tax (Exemption of Foreign Income) (No. 7) Order 2013 — the specific subsidiary legislation instrument (SL 405/2013)
- Income Tax timeline / legislation versions — to confirm the applicable version and whether any amendments affect the exemption
Source Documents
This article provides an overview of the Income Tax (Exemption of Foreign Income) (No. 7) Order 2013 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.