Statute Details
- Title: Income Tax (Exemption of Interest and Other Payments on Economic and Technological Development Loans) (No. 5) Notification 2004
- Act Code: ITA1947-S475-2004
- Type: Subsidiary Legislation (SL) / Notification
- Authorising Act: Income Tax Act (Chapter 134), section 13(4)
- Legislation Status: Current version (as at 27 Mar 2026)
- SL Citation: SL 475/2004
- Date Made: 5 August 2004
- Commencement: Not separately stated in the extract; the Notification is made under the enacting formula and includes a citation and commencement provision.
- Key Provisions: Section 1 (Citation and commencement); Section 2 (Exemption)
What Is This Legislation About?
The Income Tax (Exemption of Interest and Other Payments on Economic and Technological Development Loans) (No. 5) Notification 2004 is a targeted tax exemption instrument made under the Income Tax Act. In practical terms, it grants a specific exemption from tax for certain “swap payments” made by a named company, Shell Tankers (Singapore) Pte Ltd, to a named bank, National Australia Bank Limited, in connection with specified shipping arrangements.
Although the Notification is framed as an “exemption of interest and other payments on economic and technological development loans,” the operative exemption in this particular Notification is focused on swap payments under two “Swap Master Agreements.” These swap arrangements are linked to bareboat charters of two vessels—“Gemmata” and “Granatina”—and the exemption applies for defined periods running from late 2003/early 2004 through 2036.
From a legal and compliance perspective, the Notification matters because it clarifies that, for the relevant swap payments within the specified date ranges, the payments are exempt from tax. This affects how parties structure cross-border or financing-related cashflows and how tax treatment is documented in returns, withholding analyses, and accounting for tax provisions.
What Are the Key Provisions?
Section 1: Citation and commencement provides the formal citation for the Notification. This is standard legislative housekeeping, but it also helps practitioners confirm the correct instrument when advising on tax treatment for payments made during the relevant periods.
Section 2: Exemption is the core operative provision. It states that there “shall be exempt from tax” the swap payments made by Shell Tankers (Singapore) Pte Ltd to National Australia Bank Limited. The exemption is not general; it is tied to specific agreements and specific vessels.
The exemption applies to swap payments made between two sets of dates (both dates inclusive), namely:
- 27 January 2004 to 14 January 2036; and
- 11 December 2003 to 14 January 2036.
These date windows are significant because they define the temporal scope of the exemption. For any swap payments outside these ranges, the exemption would not automatically apply under this Notification (subject to any other exemptions or provisions under the Income Tax Act or other subsidiary instruments).
Section 2 further specifies that the exempt swap payments arise under two Swap Master Agreements dated 8 December 2003, each in respect of a particular bareboat charter:
- One Swap Master Agreement relates to the bareboat charter of the vessel “Gemmata”.
- The other Swap Master Agreement relates to the bareboat charter of the vessel “Granatina”.
This means the exemption is agreement-specific and vessel-specific. A practitioner should therefore treat the Notification as requiring careful mapping between (i) the underlying swap documentation, (ii) the vessel charter arrangements, and (iii) the payment dates.
Finally, the Notification includes the making clause and signature by the Permanent Secretary, Ministry of Finance, indicating it was properly issued under the statutory authority. The enacting formula states it is made “in exercise of the powers conferred by section 13(4) of the Income Tax Act,” reinforcing that the exemption is a statutory carve-out granted by the Minister for Finance.
How Is This Legislation Structured?
This Notification is structured in a brief, two-section format:
(1) Section 1 sets out the citation and commencement provision.
(2) Section 2 contains the substantive exemption, specifying:
- the payer (Shell Tankers (Singapore) Pte Ltd);
- the payee (National Australia Bank Limited);
- the nature of payments (swap payments);
- the relevant time periods (two date ranges); and
- the underlying contractual basis (two Swap Master Agreements dated 8 December 2003) and the linked bareboat charters (vessels “Gemmata” and “Granatina”).
There are no additional Parts, schedules, or definitions in the extract. As a result, practitioners should rely on the text of Section 2 and the underlying swap and charter agreements to interpret the commercial and legal scope.
Who Does This Legislation Apply To?
The Notification applies to the parties and transactions expressly identified in Section 2. In particular, it exempts from tax the swap payments made by Shell Tankers (Singapore) Pte Ltd to National Australia Bank Limited under the specified Swap Master Agreements and in respect of the specified bareboat charters.
Accordingly, it does not operate as a broad exemption for all swap payments in Singapore. Instead, it is a transaction-specific and counterparty-specific exemption. Other taxpayers—whether shipping companies, financiers, or banks—would not automatically benefit from this Notification unless their arrangements fall within the exact parameters (or unless they qualify under other exemptions or provisions).
Why Is This Legislation Important?
For practitioners, the importance of this Notification lies in its role as a targeted tax relief mechanism. Swap payments can have complex tax implications, particularly where payments may be characterised as interest-like or other income streams. By granting an explicit exemption for defined swap payments, the Notification reduces uncertainty and supports the intended economic outcome of the underlying financing structure.
From a compliance standpoint, the Notification’s specificity creates both clarity and a need for precision. The exemption is limited by:
- counterparties (Shell Tankers (Singapore) Pte Ltd and National Australia Bank Limited);
- agreements (two Swap Master Agreements dated 8 December 2003);
- underlying assets/arrangements (bareboat charters of “Gemmata” and “Granatina”); and
- payment timing (two inclusive date ranges ending on 14 January 2036).
Practitioners advising on tax reporting should therefore ensure that payment records, swap statements, and contractual references align with the Notification’s scope. Where payments straddle the boundary dates, careful analysis is required to determine whether the exempt treatment applies to the relevant amounts.
Additionally, because the Notification is made under section 13(4) of the Income Tax Act, it illustrates the statutory pathway by which the Minister for Finance can grant exemptions for particular economic and technological development financing arrangements. This can be relevant when advising on whether future or alternative structures might qualify for similar relief, or when interpreting the policy intent behind such exemptions.
Related Legislation
- Income Tax Act (Chapter 134) — in particular, section 13(4) (the authorising provision for this Notification)
- Income Tax Act timeline / legislation timeline (for confirming the correct version and any subsequent amendments or related notifications)
Source Documents
This article provides an overview of the Income Tax (Exemption of Interest and Other Payments on Economic and Technological Development Loans) (No. 5) Notification 2004 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.