Statute Details
- Title: Income Tax (Lee Latex (Pte) Limited — Section 13(12) Exemption) Order 2021
- Act Code: ITA1947-S935-2021
- Legislative Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act (Chapter 134)
- Key Enabling Provision: Section 13(12) of the Income Tax Act
- SL Citation: No. S 935
- Publication / Date Made: 3 December 2021
- Commencement: Not stated in the extract (practitioners should confirm in the official document)
- Status: Current version as at 27 March 2026
- Exempt Income: Dividends received in Singapore by Lee Latex (Pte) Limited from Kota Trading Company Sendirian Berhad
- Year of Assessment / Basis Period: Basis period for Year of Assessment 2018
- Exempt Amount (as stated): S$8,816,791.78
- Conditions: Subject to terms and conditions in a letter of approval dated 27 July 2021 addressed to EY Corporate Advisors Pte. Ltd.
What Is This Legislation About?
The Income Tax (Lee Latex (Pte) Limited — Section 13(12) Exemption) Order 2021 is a targeted tax exemption order made under the Singapore Income Tax Act. In substance, it grants a specific company—Lee Latex (Pte) Limited—a tax exemption for a defined stream of income: dividends received in Singapore from a specified foreign company.
Unlike broad-based tax regimes that apply to categories of taxpayers or transactions, this Order is narrow and fact-specific. It identifies (i) the recipient company (Lee Latex (Pte) Limited), (ii) the payer company (Kota Trading Company Sendirian Berhad), (iii) the type of income (dividends), (iv) the relevant tax period (basis period for Year of Assessment 2018), and (v) the quantum of dividends to be exempt (S$8,816,791.78). This structure reflects the function of section 13(12) of the Income Tax Act: enabling the Minister to exempt certain income from tax where statutory conditions are met and approved.
For practitioners, the key takeaway is that this is not a general “dividend exemption” rule. It is an exemption order tied to a particular corporate taxpayer and a particular dividend receipt, and it is expressly conditional on an approval letter. Accordingly, compliance and documentation are central to the ability to claim the exemption.
What Are the Key Provisions?
1. Citation (Section 1)
The Order’s first provision sets out its short title: “Income Tax (Lee Latex (Pte) Limited — Section 13(12) Exemption) Order 2021.” While this appears procedural, citation provisions matter for legal certainty and for referencing the instrument in tax filings, correspondence with the Inland Revenue Authority of Singapore (IRAS), and internal tax governance.
2. Exemption of specified dividends (Section 2(1))
The operative exemption is contained in paragraph 2(1). It provides that income comprising dividends amounting to $8,816,791.78 received in Singapore by Lee Latex (Pte) Limited (a Singapore-incorporated company) from Kota Trading Company Sendirian Berhad (a Malaysia-incorporated company) in the basis period for Year of Assessment 2018 is exempt from tax.
This wording is important in several respects:
- “Income comprising dividends” indicates the exemption is limited to dividend income, not other forms of returns (e.g., interest, royalties, or service income).
- “Amounting to $8,816,791.78” suggests a quantified exemption. Practically, this means the exempt amount is tied to the dividend amount as approved/verified for the relevant period. Any difference in the dividend amount (for example, due to withholding tax treatment, exchange rate differences, or subsequent adjustments) could raise questions about whether the exemption covers the revised figure.
- “Received in Singapore” anchors the tax treatment to the receipt location. For cross-border dividend flows, this is typically relevant to whether the income is treated as received in Singapore for Singapore tax purposes.
- “In the basis period for the year of assessment 2018” ties the exemption to a specific accounting/tax period. Practitioners should ensure that the dividend receipt is correctly allocated to the basis period used for YA 2018 under the company’s tax computation and accounting records.
3. Conditionality on approval terms (Section 2(2))
Paragraph 2(2) provides that the exemption in paragraph 2(1) is subject to the terms and conditions specified in the letter of approval dated 27 July 2021 addressed to EY Corporate Advisors Pte. Ltd.
This is a critical compliance hook. The Order itself does not list the conditions; instead, it incorporates them by reference to an external approval letter. For legal and tax practitioners, this means:
- The exemption is not unconditional. If the company fails to satisfy any condition in the approval letter, IRAS may deny the exemption or require tax to be paid (and potentially impose penalties depending on the circumstances).
- Because the conditions are not reproduced in the Order, counsel should obtain and review the approval letter in full. The approval letter may include requirements relating to documentation, beneficial ownership, corporate structure, anti-abuse considerations, reporting obligations, or timelines for submission of evidence.
- Even though the approval letter is addressed to EY Corporate Advisors Pte. Ltd., the exemption is for Lee Latex (Pte) Limited. Practitioners should confirm the contractual/administrative relationship and ensure the company is aware of and responsible for meeting the conditions.
4. Making and signature (final paragraph)
The Order states it was “Made on 3 December 2021” and is signed by TAN CHING YEE, Permanent Secretary, Ministry of Finance, Singapore. This confirms the instrument’s validity as a Ministerial order under the enabling power in section 13(12) of the Income Tax Act.
How Is This Legislation Structured?
This Order is structured in a simple, two-part format typical of targeted exemption orders:
- Section 1 (Citation): provides the formal name of the Order.
- Section 2 (Exemption): contains the substantive exemption and the conditionality clause.
- Section 2(1): sets out the exempt dividends, the recipient and payer companies, and the relevant tax period and amount.
- Section 2(2): incorporates by reference the terms and conditions in the specified approval letter.
There are no additional parts or complex schedules in the extract. The practical “structure” for compliance is therefore: confirm the dividend facts (payer, recipient, receipt timing, amount) and confirm satisfaction of the approval letter conditions.
Who Does This Legislation Apply To?
The exemption applies specifically to Lee Latex (Pte) Limited, a company incorporated in Singapore, in respect of dividends it received in Singapore from Kota Trading Company Sendirian Berhad in the basis period for Year of Assessment 2018. The Order is not drafted as a general rule for all companies; it is a company-specific exemption instrument.
Accordingly, other taxpayers cannot rely on this Order unless they are the named recipient and their facts match the Order’s terms. Even within the same corporate group, the exemption does not automatically extend to other entities. Practitioners should treat this as a bespoke exemption and verify whether any separate exemption orders exist for other companies or other dividend receipts.
Why Is This Legislation Important?
From a tax planning and dispute-avoidance perspective, this Order is important because it provides a legal basis to exempt a substantial dividend amount from Singapore income tax—S$8,816,791.78—for a defined period. For a corporate taxpayer, the difference between taxable and exempt dividend income can materially affect effective tax rates, financial reporting, and cash tax outcomes.
However, the Order’s conditional nature means it is equally important for practitioners to focus on compliance. The exemption is expressly “subject to” the terms and conditions in the approval letter dated 27 July 2021. In practice, this can affect:
- Tax filing positions: whether the company can claim the exemption in its YA 2018 computation and how it should document the basis for the claim.
- Evidence and audit readiness: whether the company can produce the approval letter and any supporting documentation required by IRAS.
- Risk management: whether any condition relates to ongoing requirements (e.g., maintaining certain corporate structures, ensuring beneficial ownership, or meeting reporting obligations) that could be tested after the dividend receipt.
Finally, this Order illustrates how section 13(12) operates in Singapore’s tax framework: it provides a mechanism for the Minister to grant exemptions in appropriate cases. For lawyers advising on cross-border dividend flows, corporate structuring, and tax governance, the Order serves as a practical example of the “approval letter + exemption order” model—where the legal instrument is only one part of the compliance chain.
Related Legislation
- Income Tax Act (Chapter 134) — in particular section 13(12) (the enabling provision for this exemption order)
- Income Tax (Timeline / Legislation Timeline) — to confirm the correct version and effective status of the Order as at the relevant date
Source Documents
This article provides an overview of the Income Tax (Lee Latex (Pte) Limited — Section 13(12) Exemption) Order 2021 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.