Statute Details
- Title: Income Tax (Exemption of Foreign Income) Order 2007
- Act Code: ITA1947-S366-2007
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Authorising Provision: Section 13(12) of the Income Tax Act
- Enacting Date / Made Date: 6 July 2007
- Citation / SL Number: No. S 366
- SL Publication Date (Timeline): 10 July 2007
- Commencement Date: Not stated in the extract (commonly effective upon making/publication, subject to the instrument’s terms)
- Status: Current version as at 27 March 2026 (per the provided document header)
- Key Provisions (from extract): Section 1 (Citation); Section 2 (Exemption)
What Is This Legislation About?
The Income Tax (Exemption of Foreign Income) Order 2007 is a Singapore subsidiary legislative instrument that grants a specific tax exemption to a particular taxpayer—United International Securities Ltd. In practical terms, it provides relief from Singapore income tax on certain dividends received in Singapore from the company’s overseas subsidiaries.
Although the title refers broadly to “foreign income”, the operative effect of this Order is narrow and targeted. It does not create a general regime for all taxpayers earning foreign dividends. Instead, it grants an exemption for dividends received in Singapore from specified subsidiaries located in Korea and Indonesia. The exemption is also expressly conditional: it applies only “subject to the terms and conditions specified in the letter of approval dated 5th January 2007 addressed to the company”.
From a legal practitioner’s perspective, this Order is best understood as an instrument implementing (and formalising) a tax approval decision under the Income Tax Act. It sits within Singapore’s broader framework where the Minister for Finance may grant exemptions in defined circumstances, typically to support commercial or investment objectives, and where conditions are imposed to ensure compliance and policy alignment.
What Are the Key Provisions?
Section 1 (Citation) is a standard provision. It states that the Order may be cited as the “Income Tax (Exemption of Foreign Income) Order 2007”. This matters for legal referencing, interpretation, and ensuring that the correct instrument is invoked in correspondence, tax computations, and any dispute or audit documentation.
Section 2 (Exemption) is the core operative clause. It provides that United International Securities Ltd “is hereby granted exemption from tax on the dividends received in Singapore” from its subsidiaries in two foreign jurisdictions:
- Korea: Daewoo Shipbuilding & Marine Engineering Co Ltd; and KT&G Corporation
- Indonesia: P.T. Astra International Tbk; and P.T. Telekomunikasi Indonesia Tbk
The exemption is not absolute in the sense of being unconditional. The Order makes the exemption expressly subject to the terms and conditions specified in a letter of approval dated 5 January 2007 addressed to the company. This is a critical drafting feature: it incorporates an external document (the approval letter) into the legal conditions governing the exemption. For practitioners, this means that the approval letter is not merely background—it is likely determinative of whether the exemption applies, whether it continues to apply, and what compliance obligations attach.
Another important legal point is the scope of the exemption. The Order exempts “dividends received in Singapore”. This suggests that the relevant taxable event is the receipt of dividends in Singapore (as opposed to dividends earned abroad but not received in Singapore). In practice, tax treatment will depend on how the dividends are received, the timing of receipt, and whether the dividends fall within the categories described (i.e., dividends from the specified subsidiaries).
Enacting authority and ministerial power: The Order is made “in exercise of the powers conferred by section 13(12) of the Income Tax Act”. This indicates that the exemption is grounded in a statutory discretion. For legal analysis, this is significant because it frames the instrument as an exercise of delegated legislative power under the Income Tax Act. It also implies that the exemption’s validity and interpretation are tied to the statutory purpose and limits of section 13(12), including any procedural or substantive requirements embedded in that provision.
Formality of making: The Order states it was “Made this 6th day of July 2007” and is signed by TEO MING KIAN, Permanent Secretary, Ministry of Finance, Singapore. While largely formal, the signature and making date can matter in confirming the instrument’s authenticity and the timeline for compliance and any conditions that reference dates (such as the 5 January 2007 approval letter).
How Is This Legislation Structured?
The Order is extremely concise and consists of only two substantive provisions:
- Section 1 (Citation): provides the short title for referencing the instrument.
- Section 2 (Exemption): grants the exemption and specifies the taxpayer, the nature of income (dividends), the source (specified subsidiaries), and the condition (terms and conditions in the approval letter).
There are no additional parts, schedules, definitions, or procedural sections in the extract. This structure is typical of targeted tax exemption orders: the legal effect is delivered through a single operative clause, with conditions deferred to an external approval letter.
Who Does This Legislation Apply To?
The Order applies to United International Securities Ltd only. It is not drafted as a general exemption for any company meeting certain criteria. The exemption is tied to a named taxpayer and to named subsidiaries in specific jurisdictions.
Accordingly, other taxpayers cannot rely on this Order as a basis for exemption unless they are the named company and the dividends they receive are from the specified subsidiaries. Even within the named company, the exemption is limited to dividends received in Singapore from the listed Korean and Indonesian subsidiaries. If the company receives dividends from other subsidiaries, or from the same subsidiaries but under different corporate structures or entities not captured by the Order, the exemption may not apply.
Why Is This Legislation Important?
For practitioners, the importance of the Income Tax (Exemption of Foreign Income) Order 2007 lies in its practical tax impact and its conditional legal architecture. The Order can materially affect the company’s Singapore tax liability by exempting dividends from tax—potentially improving cash flows and supporting group financing structures.
However, the exemption is not self-contained. The Order’s condition—“subject to the terms and conditions specified in the letter of approval dated 5th January 2007”—means that the legal outcome depends on documents beyond the statutory text. In disputes, audits, or compliance reviews, the approval letter will likely be central. Lawyers advising the company would typically need to obtain and review the approval letter, identify the conditions (for example, requirements relating to shareholding, dividend policy, corporate restructuring, reporting, or other compliance obligations), and ensure ongoing adherence.
From an enforcement perspective, because the exemption is granted by ministerial order under a statutory power, the tax authority may scrutinise whether the statutory and conditional requirements are satisfied. If conditions are breached, the exemption could be withdrawn or treated as inapplicable for relevant periods, leading to tax assessments, penalties, or interest. Therefore, the Order should be treated as part of a compliance package rather than a standalone document.
Finally, this Order illustrates a broader Singapore policy approach: targeted exemptions are used to facilitate specific investment or corporate arrangements, but they are tightly controlled through named beneficiaries and conditional approvals. This is a useful reference point for counsel dealing with other exemption orders under the Income Tax Act—especially where the instrument incorporates external approval terms.
Related Legislation
- Income Tax Act (Chapter 134): In particular, section 13(12), which authorises the Minister for Finance to make exemption orders.
- Income Tax Act timeline / legislative history: The instrument references the Income Tax Act and is part of the subsidiary legislation framework under that Act.
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.