Statute Details
- Title: Income Tax (Exemption of Foreign Income) (No. 9) Order 2017
- Act Code: ITA1947-S483-2017
- Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Enacting power: Section 13(12) of the Income Tax Act
- SL Citation: SL 483/2017
- Date made: 28 August 2017
- Key operative provisions: Section 1 (Citation); Section 2 (Exemption)
- Status: Current version as at 27 March 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 order made under the Income Tax Act. In plain terms, it grants an exemption from Singapore income tax for a specific category of foreign-sourced income—namely, certain dividends received by a particular Singapore company on a particular date.
Unlike broad-based tax rules that apply generally to all taxpayers, this Order is narrow and fact-specific. It identifies the recipient company (Avelter Investment Singapore Pte. Ltd.), the foreign payer (Avelter Holding ApS, incorporated in Denmark), the type of income (dividends), and the relevant receiving date (31 December 2017). It also traces the “dividend chain” through intermediate companies to determine which dividends qualify for the exemption.
Practitioners should view this Order as one of a series of “foreign income exemption” instruments used by the Minister for Finance to grant relief in carefully structured corporate arrangements, subject to conditions set out in an approval letter. The exemption is therefore not merely a statutory entitlement; it is also conditional on compliance with the terms and conditions specified by the tax authority.
What Are the Key Provisions?
1. Citation (Section 1)
Section 1 provides the short title of the instrument: the Income Tax (Exemption of Foreign Income) (No. 9) Order 2017. This is standard drafting and does not itself create substantive tax effects.
2. The exemption for specified dividends (Section 2(1) and (2))
The core provision is Section 2. Under Section 2(1), income comprising dividends described in Section 2(2) that are received by Avelter Investment Singapore Pte. Ltd. (a Singapore-incorporated company) on 31 December 2017 from Avelter Holding ApS (a company incorporated in Denmark) is exempt from tax.
Section 2(2) then defines the qualifying dividends by reference to the underlying dividend sources. The exemption applies to dividends that are derived from dividends received by Avelter Holding ApS from two specified entities, namely:
- Inventory 2 Pte. Ltd. (a Singapore-incorporated company); and
- TechEdge ApS (a Denmark-incorporated company).
For the TechEdge ApS limb, the Order further “looks through” another layer: the dividends from TechEdge ApS must be derived from dividends received by Techedge Asia Pacific, Singapore Pte. Ltd. (a Singapore-incorporated company). This layered tracing is important because it determines whether the dividends received by the Singapore recipient ultimately fall within the exemption’s intended scope.
3. Conditions and approval letter (Section 2(3))
Even where the dividends fall within the described chain, the exemption is subject to the terms and conditions specified in a letter of approval dated 16 August 2017 addressed to the tax agent of Avelter Investment Singapore Pte. Ltd.
This is a critical practitioner point. The statutory text makes the exemption conditional on compliance with an external document (the approval letter). In practice, this means that:
- tax advisers must obtain and review the approval letter terms (not just rely on the Order);
- any conditions relating to documentation, reporting, corporate structure, timing, or anti-avoidance safeguards must be satisfied; and
- failure to comply could jeopardise the exemption even if the dividend chain appears to match the statutory description.
4. Made by the Minister for Finance (Enacting formula)
The 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. This indicates that the exemption is an administrative relief mechanism grounded in statutory discretion, rather than a self-executing general rule.
How Is This Legislation Structured?
The Order is extremely short and consists of:
- Section 1 (Citation): identifies the instrument by name.
- Section 2 (Exemption): creates the substantive tax exemption, including:
- the recipient and payer,
- the relevant receiving date,
- the qualifying dividend sources through a specified corporate chain, and
- the condition that the exemption is subject to an approval letter dated 16 August 2017.
There are no additional parts, schedules, or general definitions in the extract provided. The operative content is therefore concentrated entirely in Section 2.
Who Does This Legislation Apply To?
On its face, the Order applies to Avelter Investment Singapore Pte. Ltd. only. The exemption is expressly limited to dividends received by that Singapore company on 31 December 2017 from Avelter Holding ApS in Denmark.
Accordingly, the Order is not a general exemption available to all Singapore taxpayers with foreign dividends. It is a bespoke relief instrument tied to a specific corporate arrangement and a specific dividend event. Other companies—whether similarly situated or holding similar investments—would not automatically benefit unless they are the subject of a corresponding exemption order or otherwise qualify under the general provisions of the Income Tax Act.
Why Is This Legislation Important?
For practitioners, the importance of this Order lies in how it illustrates the Singapore tax system’s approach to foreign income exemptions: relief can be granted, but it is often structured through targeted subsidiary legislation and conditional approvals. This Order demonstrates that the tax outcome depends not only on the nature of the income (dividends) and cross-border element (Denmark), but also on the specific source chain of the dividends and compliance with approval conditions.
From a compliance and advisory perspective, the conditionality in Section 2(3) is particularly significant. Even if the dividend payments match the described corporate lineage, the exemption may be undermined if the taxpayer does not satisfy the terms in the approval letter dated 16 August 2017. Lawyers advising on such matters should therefore treat the approval letter as part of the legal framework governing the exemption.
Finally, this Order is a reminder that subsidiary legislation can be used to implement discrete tax policy decisions for particular transactions. In diligence exercises—such as reviewing group structures, dividend flows, and tax positions—counsel should check whether any relevant exemption orders exist for the taxpayer and the relevant year of receipt. Where an exemption order is present, it can materially affect tax computations, withholding tax planning, and the risk assessment of tax filings.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the authorising provision for making such exemption orders)
- Income Tax Act timeline / legislation timeline — for confirming the correct version and effective date context of the exemption order
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.