Statute Details
- Title: Income Tax (Exemption of Interest and Other Payments on Economic and Technological Development Loans) (No. 2) Notification 2005
- Act Code: ITA1947-S43-2005
- Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Authorising Provision: Section 13(4) of the Income Tax Act
- Enacting Formula (key power): Minister for Finance makes the Notification in exercise of powers under section 13(4)
- Citation: “Income Tax (Exemption of Interest and Other Payments on Economic and Technological Development Loans) (No. 2) Notification 2005”
- Key Provision: Section 2 (Exemption)
- Enactment / Made Date: 18 January 2005
- Commencement Date: Not expressly stated in the extract; the exemption applies to a specified interest period
- Status: Current version as at 27 March 2026 (per the platform display)
- Legislative Instrument Reference: SL 43/2005
- Amendments: Not provided in the extract
What Is This Legislation About?
The Income Tax (Exemption of Interest and Other Payments on Economic and Technological Development Loans) (No. 2) Notification 2005 is a targeted tax exemption instrument made under Singapore’s Income Tax Act. In plain terms, it provides that certain interest payments made by a specified borrower are exempt from tax when paid under a particular loan arrangement connected to economic and technological development.
Unlike a broad, general tax regime that applies to all taxpayers, this Notification is highly specific. It identifies the borrower (Ocean Chain Pte. Ltd.), the lenders (Bank of Tokyo-Mitsubishi and Maple Maritime S.A.), the underlying loan agreement (dated 30 June 2004), and even the vessel to which the loan relates (“Global Challenger”). It also fixes the relevant time window for the interest payments: from 30 July 2004 to 30 July 2009, inclusive.
For practitioners, the practical significance is that the Notification operates as a legal basis for granting an exemption from tax on interest payable under that loan. It is therefore relevant to tax computation, withholding tax analysis (where applicable), and documentation for the parties involved—particularly where interest is paid across borders or where tax treatment depends on whether an exemption notification applies.
What Are the Key Provisions?
1. Citation (Section 1)
Section 1 sets out the short title of the Notification. This is standard legislative drafting: it allows the instrument to be cited consistently in correspondence, filings, and legal analysis.
2. The exemption (Section 2)
Section 2 is the operative provision. It states that “there shall be exempt from tax the interest payable by Ocean Chain Pte. Ltd.” to two named recipients—“the Bank of Tokyo-Mitsubishi and Maple Maritime S.A.”—for a defined period. The exemption applies to interest payable “from 30th July 2004 to 30th July 2009 (both dates inclusive).”
3. The underlying loan agreement and asset link
Section 2 further narrows the exemption by tying it to a specific loan agreement: “under the Loan Agreement dated 30th June 2004 in respect of the vessel ‘Global Challenger’.” This means the exemption is not a general exemption for all interest paid by Ocean Chain Pte. Ltd. It is limited to interest that is payable under that particular agreement and in connection with that vessel.
4. Procedural and authority context
Although the extract contains only the Notification text, the enacting formula indicates that the Minister for Finance is acting under section 13(4) of the Income Tax Act. For lawyers, this matters because it confirms the legal pathway by which the exemption is granted. The Notification is therefore not merely a policy statement; it is a legally binding instrument made pursuant to statutory authority.
How Is This Legislation Structured?
This Notification is structured in a minimal, two-section format:
(a) Section 1 (Citation): provides the short title.
(b) Section 2 (Exemption): contains the substantive tax exemption, specifying the taxpayer (Ocean Chain Pte. Ltd.), the payees (Bank of Tokyo-Mitsubishi and Maple Maritime S.A.), the time period for interest payments, and the loan agreement and vessel to which the exemption relates.
There are no additional parts, schedules, definitions, or procedural provisions in the extract. The instrument’s legal effect is therefore concentrated entirely in Section 2.
Who Does This Legislation Apply To?
The Notification applies to the extent that interest is “payable by Ocean Chain Pte. Ltd.” to the specified lenders under the specified loan agreement. In other words, the exemption is directed at a particular borrower’s interest payments and the particular recipients of those payments.
Practically, this means that:
- Ocean Chain Pte. Ltd. is the payer of the interest, and the Notification provides the basis to treat that interest as exempt from tax for the relevant period, subject to the conditions being met (i.e., the interest must be payable under the 30 June 2004 loan agreement in respect of the “Global Challenger”).
- Bank of Tokyo-Mitsubishi and Maple Maritime S.A. are the named recipients. The exemption is framed around interest payable to them, so their receipt of interest under the loan agreement is within the scope of the Notification.
Because the Notification is so specific, it does not create a general entitlement for other companies or other loans. A practitioner should therefore verify whether the interest in question is truly “under” the identified loan agreement and whether it falls within the specified dates.
Why Is This Legislation Important?
Although the Notification is short, it can be highly consequential. Interest payments are often subject to tax treatment that can affect the economics of cross-border financing. By granting an exemption from tax for a defined period and under a defined loan, the Notification can materially reduce the tax burden associated with the financing structure.
From a compliance and advisory perspective, the Notification is important because it provides a clear legal basis for exempt treatment. Where a taxpayer or its advisers are determining whether interest is taxable, whether any withholding obligations arise, or whether a tax exemption can be claimed, the existence of a specific exemption notification is a key piece of evidence.
In practice, lawyers should also pay attention to the Notification’s temporal and transactional limits. The exemption is limited to interest payable between 30 July 2004 and 30 July 2009 (inclusive). It is also limited to the interest payable under the loan agreement dated 30 June 2004 in respect of the vessel “Global Challenger.” If interest is paid outside the period, or if the interest relates to a different agreement, refinancing, novation, or different underlying asset, the exemption may not apply.
Finally, the Notification illustrates how Singapore uses statutory authority under the Income Tax Act to implement targeted incentives for economic and technological development. Even where the broader legislative framework is in the Income Tax Act, the actual exemption for a particular financing arrangement may be implemented through these subsidiary notifications.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(4) (the authorising provision referenced in the enacting formula)
- Income Tax Act (timeline / versioning) — practitioners should consult the legislation timeline to confirm the relevant version of the Income Tax Act and any subsequent amendments affecting section 13(4) or the tax treatment of interest
Source Documents
This article provides an overview of the Income Tax (Exemption of Interest and Other Payments on Economic and Technological Development Loans) (No. 2) Notification 2005 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.