Statute Details
- Title: Income Tax (Oasis LNG No 1 Pte. Ltd., etc. — Section 13(4) Exemption) Notification 2025
- Act Code: ITA1947-S98-2025
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act 1947
- Authorising Provision: Section 13(4) of the Income Tax Act 1947
- Enacting Formula / Power Used: Minister for Finance makes the Notification in exercise of powers under section 13(4)
- Citation: No. S 98 (as shown in the legislation extract)
- Deemed Commencement: Deemed to have come into operation on 14 August 2023
- Date Made: 3 February 2025
- Status: Current version as at 27 Mar 2026
- Key Provision(s): Section 1 (Citation and commencement); Section 2 (Exemption)
What Is This Legislation About?
The Income Tax (Oasis LNG No 1 Pte. Ltd., etc. — Section 13(4) Exemption) Notification 2025 is a targeted tax exemption notification issued under the Income Tax Act 1947. In plain terms, it provides that certain fees paid by specified Singapore borrower companies to specified lenders under specified loan facility agreements are exempt from tax.
The notification is “deal-specific” and “party-specific”: it identifies (i) the borrower entities (Oasis LNG No 1 Pte. Ltd. through Oasis LNG No. 7 Pte. Ltd.), (ii) the lenders (a defined list of banks and financial institutions), (iii) the type of fees (an upfront fee and a commitment fee), and (iv) the underlying loan facility agreements (dated 15 June 2023) used to finance the construction of liquefied natural gas (LNG) carriers with specified hull numbers.
Although it is a subsidiary legislation instrument, its practical effect is to remove a tax cost that would otherwise apply to the relevant payments. The notification also makes clear that the exemption is not automatic in all circumstances: it is expressly subject to conditions set out in a letter from the Inland Revenue Authority of Singapore (IRAS) dated 6 January 2025, issued on behalf of the Minister for Finance.
What Are the Key Provisions?
1. Citation and commencement (Section 1)
Section 1 provides the formal title and the commencement rule. Importantly, the notification is “deemed” to have come into operation on 14 August 2023. This backdating matters for tax administration: it means that the exemption is intended to apply to the relevant payments made on or after the deemed date, even though the notification was made later (on 3 February 2025).
2. The exemption itself (Section 2(1))
Section 2(1) is the operative provision. It states that the fees mentioned in the third column of the table are exempt from tax when they are paid by the borrower in the first column to the lenders in the second column, under the agreement in the fourth column corresponding to those fees.
The table identifies two categories of fees for each borrower/lender arrangement:
- Upfront fee (paid on 14 August 2023), and
- Commitment fee (paid on 11 September 2023).
The amounts are specified for each Oasis LNG entity (for example, Oasis LNG No 1 Pte. Ltd. has an upfront fee of $1,887,637 and a commitment fee of $324,855). The lenders are listed as particular banks/financial institutions, including Bank of China Limited (Qatar Financial Centre Branch), Bank of China Limited (Shanghai Branch), Bank of China Limited (Tokyo Branch), Caixabank, S.A., Development Bank of Japan Inc., MUFG Bank, Ltd., SBI Shinsei Bank, Limited, SMBC Bank International plc, and Sumitomo Mitsui Trust Bank, Limited.
Crucially, the agreements are described as loan facility agreements dated 15 June 2023 to finance the construction of a specific LNG carrier. The extract includes the hull numbers (e.g., hull number 3395 for Oasis LNG No 1 Pte. Ltd., and 3396 for Oasis LNG No 2 Pte. Ltd., etc.). This level of specificity indicates that the exemption is intended to match the exact financing structure and payment flows of the relevant project finance transaction.
3. Conditions attached to the exemption (Section 2(2))
Section 2(2) is a key legal safeguard and compliance hook. It provides that the exemption in Section 2(1) is subject to the conditions specified in a letter from IRAS dated 6 January 2025, issued on behalf of the Minister for Finance and addressed to the Oasis LNG entities.
For practitioners, this is significant for two reasons. First, it means that the exemption’s availability may depend on compliance with conditions that are not reproduced in the notification text itself. Second, it creates a compliance timeline: the letter is dated after the payments (which were made in August and September 2023) but before the notification was made (February 2025). In practice, lawyers should treat the IRAS letter as part of the legal framework governing whether and how the exemption is applied.
4. Making and authority
The notification records that it was made on 3 February 2025 and is signed by LAI CHUNG HAN, Permanent Secretary (Development), Ministry of Finance. While this is procedural, it confirms the instrument’s validity and the identity of the signatory acting for the Minister for Finance.
How Is This Legislation Structured?
This notification is structured in a short, conventional format typical of tax exemption subsidiary legislation. It contains:
- Section 1: Citation and commencement (including the deemed commencement date).
- Section 2: Exemption (with two sub-paragraphs: the substantive exemption and the conditions).
There are no additional parts or schedules beyond the embedded table in Section 2(1). The table is effectively the “schedule” for the exemption: it maps borrowers to lenders, fees, and the relevant loan facility agreements.
Who Does This Legislation Apply To?
The notification applies to the specific set of borrower companies named in the table: Oasis LNG No 1 Pte. Ltd. through Oasis LNG No. 7 Pte. Ltd. (as listed in the extract). It also applies to the specific lenders named in the second column of the table. The exemption is therefore not a general exemption for all LNG financing or all bank fees; it is limited to the identified parties and payments.
In addition, the exemption is conditioned on the IRAS letter dated 6 January 2025 addressed to the same Oasis LNG entities. As a result, the practical scope includes not only the named borrowers and lenders, but also the compliance posture of the borrowers in relation to the conditions in that letter. If those conditions are not met, the exemption may be withdrawn or not applied in whole or in part, depending on how the conditions are drafted and administered.
Why Is This Legislation Important?
For tax and finance practitioners, the importance of this notification lies in its direct impact on the tax treatment of cross-border financing costs. By exempting the specified upfront and commitment fees from tax, the notification reduces the effective cost of capital for the project finance structure. This can be material in large-scale LNG carrier construction financing, where fees and charges can be significant and where lenders may price transactions based on expected tax leakage.
From a legal risk perspective, the notification also illustrates how Singapore implements targeted exemptions under the Income Tax Act 1947. Section 13(4) operates as a statutory gateway allowing the Minister for Finance to grant exemptions by notification. However, the notification’s Section 2(2) demonstrates that exemptions may be made conditional on administrative requirements set out by IRAS. Lawyers should therefore treat such notifications as part of a broader compliance package, not merely as a standalone “yes/no” tax ruling.
Finally, the deemed commencement date (14 August 2023) is a practical point for structuring and tax reporting. It suggests that the exemption is intended to apply to fees already paid. This can affect how borrowers account for withholding tax (if applicable), how they file returns, and whether they need to seek adjustments, refunds, or confirm that the exemption was applied correctly from the outset. Practitioners should check the transaction timeline against the deemed date and the payment dates to ensure the exemption aligns with the relevant tax periods.
Related Legislation
- Income Tax Act 1947 (including section 13(4) as the enabling provision)
- Income Tax Act 1947 (general provisions on tax exemptions and administration, as applicable)
- Legislation Timeline (for version control and confirmation of the “current version” status)
Source Documents
This article provides an overview of the Income Tax (Oasis LNG No 1 Pte. Ltd., etc. — Section 13(4) Exemption) Notification 2025 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.