Statute Details
- Title: Income Tax (Exemption of Foreign Income) Order 2007
- Act Code: ITA1947-S366-2007
- Legislative Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Authorising Provision: Section 13(12) of the Income Tax Act
- Enactment Date: 6 July 2007
- Commencement: Not specified in the extract (commonly effective upon making/notification, subject to the instrument’s terms)
- Legislative Citation: No. S 366
- Publication/SL Number: SL 366/2007
- Key Provisions in Extract: Section 1 (Citation); Section 2 (Exemption)
- Status (as provided): Current version as at 27 Mar 2026
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) Order 2007 is a targeted tax exemption instrument made under Singapore’s Income Tax Act. In plain terms, it grants a specific company an exemption from Singapore income tax on certain dividend income it receives in Singapore.
Unlike broad tax regimes that apply to categories of taxpayers, this Order is narrow in scope. It identifies a particular taxpayer—United International Securities Ltd—and specifies the foreign subsidiaries from which the company receives dividends. The exemption is not unconditional: it is expressly “subject to the terms and conditions” in a letter of approval dated 5 January 2007 addressed to the company.
Accordingly, the Order functions as a legal mechanism to implement (and give statutory effect to) an approval process under the Income Tax Act. Practitioners should therefore treat the Order as part of a wider administrative and contractual framework: the statutory exemption is granted, but its scope and enforceability depend on the approval letter’s conditions.
What Are the Key Provisions?
Section 1 (Citation). This provision simply states the short title of the instrument: the “Income Tax (Exemption of Foreign Income) Order 2007”. While not substantive, it is important for legal referencing in filings, correspondence, and tax authority communications.
Section 2 (Exemption). This is the operative provision. It provides that United International Securities Ltd “is hereby granted exemption from tax on the dividends received in Singapore” from specified subsidiaries located in Korea and Indonesia.
The Order identifies the relevant subsidiaries with precision:
- Korea: Daewoo Shipbuilding & Marine Engineering Co Ltd; and KT&G Corporation
- Indonesia: P.T. Astra International Tbk; and P.T. Telekomunikasi Indonesia Tbk
In other words, the exemption relates to dividend income that is received in Singapore by the named company, where the dividends originate from those particular foreign subsidiaries.
Conditionality: “subject to the terms and conditions specified in the letter of approval”. Section 2 makes the exemption conditional. The Order states that the exemption is granted “subject to the terms and conditions specified in the letter of approval dated 5th January 2007 addressed to the company.” This is a critical drafting feature: it means that the exemption’s availability, duration, and compliance requirements may be governed by the approval letter rather than being fully set out in the Order itself.
For practitioners, this raises a practical legal task: the approval letter is likely to contain conditions such as (depending on the underlying policy and the approval process) requirements on corporate structure, holding periods, dividend routing, documentation, reporting obligations, or circumstances that could trigger withdrawal or modification of the exemption. Even though the extract does not reproduce the letter, the statutory language makes it legally relevant.
Legal effect and tax treatment. The Order’s wording—“exemption from tax on the dividends received in Singapore”—indicates that the dividends would otherwise be taxable under the Income Tax Act, but are exempted for the specified dividends. The exemption is therefore best understood as a carve-out from the general tax charge on dividend income, implemented through the Minister’s power under section 13(12) of the Income Tax Act.
From a compliance perspective, the company would typically need to demonstrate that:
- it is the taxpayer named in the Order;
- the income in question consists of dividends;
- the dividends are received in Singapore;
- the dividends are paid by the specified subsidiaries (and not by other entities); and
- the conditions in the 5 January 2007 approval letter are satisfied.
How Is This Legislation Structured?
This Order is extremely concise and follows a standard subsidiary-legislation format. It contains:
- An enacting formula stating that the Minister for Finance makes the Order under the powers conferred by section 13(12) of the Income Tax Act.
- Citation provision (Section 1) giving the short title.
- Substantive exemption provision (Section 2) granting the exemption to a named company for dividends from named foreign subsidiaries, subject to conditions in an approval letter.
- Making clause recording the date the Order was made (6 July 2007) and the signatory (TEO MING KIAN, Permanent Secretary, Ministry of Finance).
Notably, the extract does not show separate “parts” or detailed schedules. The entire instrument is effectively contained within the two numbered sections, with the factual scope (which subsidiaries, which country, which dividends) embedded directly in Section 2.
Who Does This Legislation Apply To?
The Order applies to United International Securities Ltd only. It is not a general exemption available to all companies meeting certain criteria. Instead, it is a company-specific exemption granted by name.
Its scope is further limited by the source of the dividends. The exemption covers dividends received in Singapore from the named subsidiaries in Korea and Indonesia. Dividends from other subsidiaries, even if in the same countries, would not fall within the exemption unless separately authorised by another instrument or amendment.
Finally, the exemption is conditional on the terms and conditions in the letter of approval dated 5 January 2007. Therefore, even for the named company and specified subsidiaries, the exemption’s continued application depends on compliance with those conditions.
Why Is This Legislation Important?
Although the Order is short, it can have significant financial impact. Dividend income can be material, and the difference between taxable and exempt treatment affects effective tax rates, cash flow, and the structuring of cross-border investments and holding arrangements.
From a legal practitioner’s perspective, the Order illustrates how Singapore uses subsidiary legislation to implement bespoke tax approvals. The statutory exemption is not merely an administrative assurance; it is formalised through an Order made under the Income Tax Act. This matters for legal certainty, audit readiness, and dispute resolution.
In practice, the most important compliance and litigation risks will likely arise from the conditionality. Because Section 2 ties the exemption to the approval letter’s terms and conditions, practitioners should treat the approval letter as a central document. If the company fails to satisfy a condition—whether relating to corporate governance, dividend declaration practices, documentation, or other compliance matters—the tax authority could argue that the exemption does not apply (or should be withdrawn), potentially leading to tax assessments, penalties, and interest.
Accordingly, this Order is best approached as part of an integrated tax package: the statutory text provides the legal hook, while the approval letter provides the operational and compliance framework. For counsel advising on dividend flows, group restructuring, or tax reporting, the Order’s narrow scope also underscores the need for careful mapping between dividend payers and the subsidiaries listed in the instrument.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(12) (the enabling provision for the Minister’s power to grant exemptions by Order)
- Income Tax Act — general provisions governing the taxability of dividend income and the administration of exemptions
- Legislation Timeline (as referenced in the source interface) — to confirm the correct version and any amendments affecting the Order
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.