Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 9) Order 2017
- Act Code: ITA1947-S483-2017
- Legislation Type: Subsidiary Legislation (Order)
- Authorising Act: Income Tax Act (Chapter 134)
- Authorising Provision: Section 13(12) of the Income Tax Act
- Enacting Formula (Power Source): Minister for Finance makes the Order under section 13(12)
- Key Provisions: Section 1 (Citation); Section 2 (Exemption)
- Commencement: Not expressly stated in the extract (Order is “Made on 28 August 2017” and applies to dividends received on 31 December 2017)
- Publication/Instrument Number: SL 483/2017
- Date Made: 28 August 2017
- Status: Current version as at 27 Mar 2026 (per the legislation portal)
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) (No. 9) Order 2017 is a targeted tax exemption instrument made under Singapore’s Income Tax Act. In plain terms, it provides that certain foreign-sourced income—specifically, dividends—received by a particular Singapore company are exempt from Singapore income tax, provided the statutory conditions are met.
This Order is not a general rule that applies to all taxpayers. Instead, it is designed for a specific corporate structure and a specific set of dividend flows. The exemption is tied to dividends received by Avelter Investment Singapore Pte. Ltd. on 31 December 2017 from Avelter Holding ApS (a Danish company). The Order also traces the origin of those dividends through intermediate holdings, identifying the underlying companies from which the relevant dividends ultimately derive.
Practically, such Orders are used to support approved international investment arrangements and to align Singapore’s tax treatment with the intended commercial and policy outcomes. For practitioners, the key is to understand (i) what income is exempt, (ii) the precise corporate chain that must be satisfied, and (iii) the additional conditions imposed through an approval letter.
What Are the Key Provisions?
Section 1 (Citation) is straightforward. It confirms the name of the Order: “Income Tax (Exemption of Foreign Income) (No. 9) Order 2017.” While not substantive, citation matters for legal referencing, compliance documentation, and for ensuring the correct instrument is relied upon in advice or filings.
Section 2 (Exemption) contains the operative tax relief. The exemption is structured in three layers: (1) the type of income (dividends of a specified description), (2) the recipient and timing (received by the Singapore company on a particular date), and (3) the underlying dividend chain (dividends must be derived from dividends received by specified companies).
First, the income covered: Section 2(1) states that income comprising dividends described in sub-paragraph (2), received by Avelter Investment Singapore Pte. Ltd. (incorporated in Singapore) on 31 December 2017 from Avelter Holding ApS (incorporated in Denmark), is exempt from tax. The wording “income comprising dividends” indicates that the exemption is directed at dividend income (not other categories such as interest, royalties, or gains).
Second, the dividend chain (what the Danish payer must have received): Section 2(2) specifies that the exemption applies to dividends that are derived from dividends received by Avelter Holding ApS from two identified sources:
- (a) dividends derived from dividends received by Avelter Holding ApS from Inventory 2 Pte. Ltd. (Singapore); and
- (b) dividends derived from dividends received by Avelter Holding ApS from TechEdge ApS (Denmark), which are in turn derived from dividends received by TechEdge Asia Pacific, Singapore Pte. Ltd. (Singapore).
This tracing requirement is critical. It means the exemption is not merely about the immediate payer (Avelter Holding ApS). Instead, it is about the underlying source of the dividend profits—how the dividend income was generated within the group and across jurisdictions. For legal and tax compliance, practitioners should treat this as a “look-through” requirement: the exemption depends on the actual dividend history and corporate relationships.
Third, conditions and approval letter: Section 2(3) provides that the exemption 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 significant drafting feature. Even if the dividend chain and timing are satisfied, the exemption remains conditional upon compliance with the approval letter’s terms.
From a practitioner’s perspective, this raises immediate due diligence questions: What were the specific conditions? Were there requirements regarding documentation, reporting, corporate actions, or anti-avoidance safeguards? Because the Order itself does not reproduce the letter’s terms, the approval letter becomes an essential part of the legal basis for claiming the exemption. In practice, advice should typically include obtaining and reviewing the approval letter and confirming that the taxpayer’s facts align with each condition.
Timing: The Order is explicitly tied to dividends received on 31 December 2017. This suggests that the exemption is intended for a particular dividend event (or set of dividend payments) within that tax year. If dividends were received on a different date, or if the dividend amounts differ from what was contemplated, the exemption may not apply. Therefore, practitioners should align the claim with the actual receipt date and the accounting/tax treatment for the relevant Year of Assessment.
How Is This Legislation Structured?
This Order is compact and consists of a short structure typical of targeted tax exemption instruments. It contains:
- Enacting Formula: sets out the Minister for Finance’s power under section 13(12) of the Income Tax Act.
- Section 1 (Citation): identifies the Order.
- Section 2 (Exemption): provides the substantive exemption, including the recipient, the dividend payer, the underlying dividend sources, and the condition that the exemption is subject to an approval letter.
There are no additional Parts or detailed schedules in the extract. The operative content is concentrated in Section 2, which is drafted with a high degree of specificity to the corporate arrangement and dividend flows.
Who Does This Legislation Apply To?
Although the Order is made under the Income Tax Act, its application is limited to the named Singapore company: Avelter Investment Singapore Pte. Ltd. The exemption applies to that company’s dividend income that meets the specified description—dividends received from Avelter Holding ApS on 31 December 2017, and derived from dividends received by the identified underlying companies.
Accordingly, the Order does not create a general exemption regime for all Singapore companies receiving foreign dividends. Instead, it functions as a bespoke approval/exemption for a particular taxpayer and transaction chain. Other taxpayers cannot assume eligibility merely because they receive foreign dividends; they would need their own qualifying basis under the Income Tax Act or a relevant exemption order/approval.
Why Is This Legislation Important?
Orders like this are important because they can materially affect a taxpayer’s Singapore tax position. Dividend income can be taxable or exempt depending on the applicable provisions and conditions. By granting an exemption for specified foreign dividends, the Order can reduce or eliminate Singapore tax on that income, improving after-tax returns and supporting cross-border investment structures.
From an enforcement and compliance perspective, the Order’s specificity means that tax authorities will likely scrutinise whether the statutory description is met precisely. The tracing of dividends through multiple entities (including both Singapore and Denmark-based companies) and the requirement to comply with the approval letter’s terms create clear “gates” for eligibility. Practitioners should therefore treat the exemption as fact-sensitive and documentation-intensive.
Finally, the reference to the letter of approval dated 16 August 2017 underscores a common feature of Singapore tax exemption practice: the legal instrument may be short, but the approval conditions can be detailed. In advising clients, lawyers should ensure that the approval letter is obtained, reviewed, and incorporated into the compliance plan—particularly for audit readiness, tax return disclosures, and any future queries about the basis of the exemption claim.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the enabling provision for making exemption orders)
- Income Tax Act (Timeline / Legislation timeline) — for confirming the correct version and amendments affecting the enabling provision and related exemption framework
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.