Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 9) Order 2017
- Act Code: ITA1947-S483-2017
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Authorising Provision: Section 13(12) of the Income Tax Act
- Enacting/SL Citation: SL 483/2017
- Date Made: 28 August 2017
- Key Provisions: Section 1 (Citation); Section 2 (Exemption)
- Status (as provided): Current version as at 27 March 2026
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 9) Order 2017 is a targeted tax exemption order made under the Income Tax Act. In plain terms, it provides that certain foreign-sourced dividends received by a specific Singapore company are exempt from Singapore income tax, provided the statutory conditions are met.
This is not a general exemption regime applicable to all taxpayers. Instead, it is a bespoke order that applies to a particular corporate group and a particular set of dividend flows. The order identifies the Singapore recipient company (Avelter Investment Singapore Pte. Ltd.) and traces the dividend chain back to foreign entities in Denmark, with the exemption applying to dividends received on a specified date (31 December 2017).
Practitioners should view this order as an example of how Singapore’s tax framework can grant relief for foreign income in circumstances where the Minister for Finance is satisfied that the relevant conditions—typically set out through an approval process—are met. The order therefore operates alongside the general provisions of the Income Tax Act, but it does so by carving out a specific exemption for a defined transaction structure.
What Are the Key Provisions?
Section 1 (Citation) is straightforward. It confirms the short title of the instrument: the Income Tax (Exemption of Foreign Income) (No. 9) Order 2017. While this section is not substantive, it is important for proper legal referencing and for ensuring that the correct subsidiary legislation is being relied upon.
Section 2 (Exemption) contains the operative tax relief. The exemption is structured in three layers: (i) the type of income (dividends), (ii) the recipient and timing (received by Avelter Investment Singapore Pte. Ltd. on 31 December 2017), and (iii) the provenance of those dividends (the dividend chain through specified companies).
First, the exemption applies to “income comprising dividends” described in the order. Specifically, Section 2(1) states that dividends received by Avelter Investment Singapore Pte. Ltd. on 31 December 2017 from Avelter Holding ApS (a company incorporated in Denmark) are exempt from tax. The key practical point is that the exemption is linked to a particular cross-border dividend payment from a Danish holding company to a Singapore investment company.
Second, the order defines which dividends qualify by tracing their source. Section 2(2) provides that the exemption in Section 2(1) applies to dividends that are derived from dividends received by Avelter Holding ApS from two underlying entities: (a) Inventory 2 Pte. Ltd. (a Singapore-incorporated company) and (b) TechEdge ApS (a Danish-incorporated company). It further specifies that the TechEdge ApS dividends are, in turn, derived from dividends received by TechEdge Asia Pacific, Singapore Pte. Ltd. (another Singapore-incorporated company). In other words, the exemption is not merely about any dividend paid by the Danish company; it is about dividends that can be traced through a defined corporate chain.
Third, the exemption is conditional on an approval letter. Section 2(3) states that the exemption in Section 2(1) is subject to the terms and conditions specified in the letter of approval dated 16 August 2017 addressed to the tax agent of Avelter Investment Singapore Pte. Ltd. This is a critical compliance point. Even where the dividend chain and recipient/timing appear to match the order, the exemption may be limited or lost if the taxpayer does not satisfy the approval’s terms and conditions. For practitioners, this means the approval letter is effectively part of the exemption’s legal conditions, and it should be reviewed alongside the order when advising on eligibility and documentation.
Finally, the order is made under ministerial powers. The enacting formula indicates that the Minister for Finance makes the order in exercise of the powers conferred by section 13(12) of the Income Tax Act. This signals that the exemption is discretionary/administrative in origin (subject to statutory power), rather than a purely automatic statutory deduction. Accordingly, advice should consider whether the approval process was properly completed and whether any conditions were ongoing or time-bound.
How Is This Legislation Structured?
The order is concise and consists of a small number of provisions. It follows a typical subsidiary legislation format:
(1) Citation: Section 1 identifies the instrument by name.
(2) Substantive exemption: Section 2 sets out the exemption, including the recipient, the foreign payer, the date of receipt, the qualifying dividend provenance, and the condition that the exemption is subject to an approval letter.
There are no “Parts” or detailed schedules in the extract provided. The entire legal effect is achieved through the single operative section (Section 2), with sub-paragraphs (1) to (3) providing the necessary detail.
Who Does This Legislation Apply To?
On its face, the order applies to Avelter Investment Singapore Pte. Ltd., a company incorporated in Singapore, as the recipient of the relevant dividends. The exemption is specifically tied to dividends received on 31 December 2017 from Avelter Holding ApS, a company incorporated in Denmark.
Because the order is drafted to identify particular entities and a particular dividend chain, it does not operate as a general exemption for all Singapore taxpayers receiving foreign dividends. Instead, it is a transaction- and group-specific exemption. Practitioners advising other taxpayers should not assume eligibility based on similarity of corporate structures; they would need to check whether there is a relevant exemption order (or whether a different statutory mechanism applies under the Income Tax Act and related rules).
Why Is This Legislation Important?
This order is important because it illustrates how Singapore’s tax system can provide relief for foreign income through targeted subsidiary legislation. For the affected taxpayer, the practical effect is that qualifying foreign dividends are exempt from Singapore tax, reducing the tax cost of cross-border investment structures.
From a compliance and advisory perspective, the order also highlights three points that are often decisive in tax exemption matters: (i) precise identification of the recipient and payer, (ii) tracing/characterisation of the dividends through underlying sources, and (iii) strict adherence to conditions in an approval letter. The inclusion of the approval letter dated 16 August 2017 means that eligibility is not purely a matter of corporate geography (Singapore vs Denmark) but also of meeting administrative conditions.
In practice, lawyers and tax advisers should treat this order as requiring careful documentation. Evidence may include dividend vouchers, board resolutions, corporate ownership and dividend flow statements, and the approval letter’s terms. Where dividend chains are complex—particularly where dividends are “derived from” other dividends—taxpayers may need to demonstrate the provenance of the funds and the linkage between upstream and downstream dividend payments.
Related Legislation
- Income Tax Act (Chapter 134) — in particular section 13(12) (authorising power for such orders)
- Income Tax Act (Chapter 134) — general provisions governing the taxation of income and the treatment of foreign-sourced income (as applicable)
- Legislation Timeline (for version control and ensuring the correct SL version is consulted)
Source Documents
This article provides an overview of the Income Tax (Exemption of Foreign Income) (No. 9) Order 2017 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.