Statute Details
- Title: Income Tax (Exemption of Foreign Income) Order 2007
- Act Code: ITA1947-S366-2007
- Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Authorising Provision: Section 13(12) of the Income Tax Act
- Enacting Date: 6 July 2007
- Commencement Date: Not stated in the extract (order dated 6 July 2007; published as SL 366/2007)
- Legislation Number: S 366
- Citation Provision: Section 1
- Substantive Provision: Section 2 (Exemption)
- Status: Current version as at 27 Mar 2026 (per the document header)
- Key Beneficiary (named): United International Securities Ltd
- Foreign Subsidiaries referenced: Korea (Daewoo Shipbuilding & Marine Engineering Co Ltd; KT&G Corporation) and Indonesia (P.T. Astra International Tbk; P.T. Telekomunikasi Indonesia Tbk)
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) Order 2007 is a targeted tax exemption instrument made under the Income Tax Act. In plain terms, it grants a specific company—United International Securities Ltd—an exemption from Singapore tax on certain dividend income it receives in Singapore from specified foreign subsidiaries.
Although the title refers broadly to “foreign income”, the operative effect of this Order is narrow and fact-specific. It does not create a general exemption regime for all taxpayers earning foreign dividends. Instead, it operates as a bespoke approval: the exemption is granted to a named entity and is limited to dividends received from particular subsidiaries in Korea and Indonesia.
The Order also makes the exemption conditional. The exemption is “subject to the terms and conditions specified in the letter of approval dated 5th January 2007 addressed to the company”. This means that the legal entitlement to the exemption is not only determined by the Order itself, but also by the content of the approval letter—an important practical point for counsel advising on compliance and audit readiness.
What Are the Key Provisions?
Section 1 (Citation) provides the short title: the Order may be cited as the Income Tax (Exemption of Foreign Income) Order 2007. While this is standard drafting, it is relevant for practitioners when referencing the instrument in submissions, correspondence with the Inland Revenue Authority of Singapore (IRAS), or internal tax governance documentation.
Section 2 (Exemption) is the core provision. It states that United International Securities Ltd is granted an exemption from tax on the dividends received in Singapore from its subsidiaries in Korea and Indonesia. The subsidiaries are expressly named: in Korea, Daewoo Shipbuilding & Marine Engineering Co Ltd and KT&G Corporation; in Indonesia, P.T. Astra International Tbk and P.T. Telekomunikasi Indonesia Tbk.
In practical terms, the Order addresses the tax treatment of dividend income that is received in Singapore. Dividends are typically within the scope of Singapore’s income tax framework, but the exemption here is designed to relieve tax on specified foreign-sourced dividend flows. The legal mechanism is important: the exemption is not framed as a general statutory deduction or credit; it is granted by ministerial order under a specific enabling provision in the Income Tax Act.
Conditionality—“subject to the terms and conditions” is the second critical element. Section 2 makes the exemption conditional upon the terms and conditions in a letter of approval dated 5 January 2007 addressed to the company. For lawyers, this raises immediate diligence questions: what conditions were imposed (e.g., holding period requirements, corporate structure constraints, compliance reporting obligations, anti-avoidance safeguards, or restrictions on subsequent transactions)? The Order itself does not reproduce those conditions, so the approval letter becomes a central document for interpreting the scope and enforceability of the exemption.
Finally, the Order includes the making clause: it was made on 6 July 2007 by the Permanent Secretary, Ministry of Finance, TEO MING KIAN. This is relevant for formal validity and for confirming that the instrument was executed by the proper authority under the enabling power.
How Is This Legislation Structured?
This Order is extremely concise and consists of two substantive parts:
(1) Section 1 (Citation)—a standard provision identifying the short title.
(2) Section 2 (Exemption)—the operative clause granting the tax exemption to a named taxpayer, specifying the types of income (dividends received in Singapore), the source context (subsidiaries in Korea and Indonesia), the named subsidiaries, and the condition that the exemption is subject to the terms and conditions in the relevant approval letter.
There are no additional schedules, definitions, or procedural provisions in the extract. The absence of further sections means that practitioners should look to the Income Tax Act (especially section 13(12)) and to the approval letter for the broader compliance framework.
Who Does This Legislation Apply To?
The exemption applies to United International Securities Ltd only. The Order is not drafted as a general rule for all taxpayers; it is a targeted instrument granting relief to a specific company. As such, other taxpayers cannot rely on this Order as a basis for exemption unless they are the named beneficiary and their circumstances fall within the exact dividend and subsidiary scope described.
Even for the named company, the exemption is limited to dividends received in Singapore from the specified subsidiaries in Korea and Indonesia. If dividends are received from different subsidiaries, from different jurisdictions, or in a manner not captured by the described relationships, the exemption may not apply. Moreover, the exemption is conditional on the terms and conditions in the 5 January 2007 letter of approval, meaning that continued eligibility may depend on ongoing compliance with those conditions.
Why Is This Legislation Important?
For practitioners, the importance of the Income Tax (Exemption of Foreign Income) Order 2007 lies in how it illustrates the use of ministerial orders to grant bespoke tax relief. Rather than relying solely on general statutory exemptions, Singapore’s tax system permits targeted relief through subsidiary legislation under the Income Tax Act. This can be critical for advising on corporate structuring, dividend planning, and tax risk management for cross-border group structures.
From a compliance and enforcement perspective, the conditional nature of the exemption is the key practical risk point. Because Section 2 ties eligibility to the terms and conditions in a separate approval letter, counsel should treat that letter as part of the “legal basis” for the exemption. In audits, IRAS may examine whether the company complied with the conditions and whether the dividends fall within the precise scope (named subsidiaries and dividend receipts in Singapore). Failure to comply could jeopardise the exemption and expose the company to tax assessments, penalties, and interest.
Additionally, the specificity of the subsidiaries named in the Order means that corporate events—such as reorganisations, mergers, changes in shareholding, or disposal of subsidiaries—may affect whether future dividend flows remain covered. Lawyers advising on group restructuring should therefore consider whether the Order’s coverage continues to match the actual group composition and whether any variation would require a new approval or amendment.
Finally, the Order’s status as “current version as at 27 Mar 2026” indicates that it remains part of the operative legal landscape. Even though it was made in 2007, its continued availability may matter for ongoing tax positions, historical assessments, and the interpretation of rights and obligations tied to the approval letter.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the enabling provision for the Minister’s power to make such orders)
- Legislation timeline / amendments — practitioners should consult the official timeline to confirm whether any subsequent amendments or related approvals affect the scope or conditions
Source Documents
This article provides an overview of the Income Tax (Exemption of Foreign Income) Order 2007 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.