Statute Details
- Title: Income Tax (Sasseur Bishan HK Limited — Section 13(12) Exemption) (No. 2) Order 2024
- Act Code: ITA1947-S389-2024
- Legislation Type: Subsidiary Legislation (SL)
- Authorising Act: Income Tax Act 1947
- Authorising Provision: Section 13(12) of the Income Tax Act 1947
- Legislative Citation: SL 389/2024
- Date Made: 30 April 2024
- Commencement: Applies to qualifying interest income received in Singapore on or after 1 March 2024 (as specified in the exemption provision)
- Current Version Status: Current version as at 27 Mar 2026 (per the legislation portal)
What Is This Legislation About?
The Income Tax (Sasseur Bishan HK Limited — Section 13(12) Exemption) (No. 2) Order 2024 (“the Order”) is a targeted tax exemption instrument issued under Singapore’s Income Tax Act 1947. In plain terms, it grants an exemption from Singapore income tax for certain interest income received in Singapore by a specific company, Sasseur Bishan HK Limited, in relation to specified loan arrangements with a related Chinese operating company.
The Order is not a general tax reform. It is a bespoke exemption order that applies to a defined set of facts: (i) who receives the interest, (ii) from whom the interest is derived, (iii) the relevant loan agreements, and (iv) the timing of receipt. Such orders are typically used to facilitate cross-border financing structures and to provide certainty that qualifying income will not be taxed in Singapore, subject to conditions.
Practically, the Order operates as a legal “switch” that turns off Singapore tax on qualifying interest income—but only for the narrow category of interest described and only if the conditions set out by the Ministry of Finance (as referenced in the Order) are satisfied.
What Are the Key Provisions?
1. Citation and legal basis
Section 1 of the Order provides its short title: it is the “Income Tax (Sasseur Bishan HK Limited — Section 13(12) Exemption) (No. 2) Order 2024.” The Order is made “in exercise of the powers conferred by section 13(12) of the Income Tax Act 1947,” signalling that it is a statutory exemption granted by the Minister for Finance under the specific discretionary/empowering framework in the Income Tax Act.
2. The exemption: interest income received in Singapore
Section 2(1) is the core operative provision. It states that interest income described in sub-paragraph (2), which is received in Singapore by Sasseur Bishan HK Limited (a company incorporated in Hong Kong SAR of the People’s Republic of China) from Chongqing Sasseur Suge Apparel Joint Stock Co., Ltd. (a company incorporated in the People’s Republic of China) on or after 1 March 2024, is exempt from tax.
This wording is important for practitioners because it contains multiple limiting elements:
- Type of income: only “interest income” that falls within the description in section 2(2) is exempt.
- Recipient: the exemption is for interest received by Sasseur Bishan HK Limited—not by any other entity.
- Source payer: the interest must be received from Chongqing Sasseur Suge Apparel Joint Stock Co., Ltd.
- Timing: the exemption applies to interest received on or after 1 March 2024.
- Place of receipt: the interest must be “received in Singapore.” This can raise factual and legal questions (e.g., where funds are credited, the location of the recipient’s bank account, and how “received” is determined under Singapore tax practice).
3. The loan agreements that generate the exempt interest
Section 2(2) narrows the exemption further by specifying the underlying financing documents. It provides that section 2(1) applies to interest income from the loan granted under the agreements dated 20 March 2018, 15 September 2018, and 5 July 2020 between the two named companies.
For legal and tax structuring purposes, this means the exemption is tied to specific contractual instruments. If interest is paid under a different agreement, or if the loan is restructured in a way that changes the legal source of the interest, the exemption may not apply unless the facts still fall within the described loan arrangements.
Practitioners should therefore review:
- whether the interest is indeed “from the loan” under those dated agreements;
- whether any amendments, novations, refinancing, or side letters alter the legal character of the loan;
- whether the interest is paid as consideration for those loans (as opposed to fees or other charges that might be characterised differently).
4. Conditions precedent/ongoing conditions
Section 2(3) provides that the exemption in section 2(1) is subject to the conditions specified in the letter from the Ministry of Finance dated 24 April 2024 and addressed to EY Corporate Advisors Pte. Ltd.
This is a critical compliance point. The Order itself does not reproduce the conditions; instead, it incorporates them by reference to an external letter. In practice, this means:
- the exemption is not unconditional; it depends on meeting conditions set by the Ministry of Finance;
- the relevant conditions may include documentation, reporting, transfer pricing or arm’s length considerations, anti-abuse safeguards, or other administrative requirements (the exact content would need to be obtained and reviewed);
- failure to satisfy conditions could jeopardise the exemption and expose the taxpayer to tax assessments, penalties, or interest.
From a practitioner’s perspective, the letter dated 24 April 2024 should be treated as part of the effective legal framework governing the exemption. Counsel should ensure that the client has access to the letter, understands the conditions, and has systems to evidence compliance.
5. Making date and ministerial signature
The Order was made on 30 April 2024 by LAI WEI LIN, Second Permanent Secretary, Ministry of Finance. While the making date is not the same as the effective date for the exemption (which is tied to receipt on or after 1 March 2024), it confirms the formal issuance and authority under the Income Tax Act.
How Is This Legislation Structured?
The Order is structured in a simple format typical of exemption orders. It contains:
- Section 1 (Citation): identifies the Order by name.
- Section 2 (Exemption): sets out the exemption scope, including the recipient, source, timing, underlying loan agreements, and the condition that the exemption is subject to specified conditions in a Ministry of Finance letter.
There are no additional parts or complex schedules in the extract provided. The operative content is concentrated in section 2, with the key compliance hook being the referenced Ministry of Finance letter.
Who Does This Legislation Apply To?
The exemption applies to Sasseur Bishan HK Limited as the recipient of the relevant interest income. It does not apply to other group entities, even if they are involved in the same financing arrangements.
It also applies only where the interest is paid by Chongqing Sasseur Suge Apparel Joint Stock Co., Ltd. under the specified loan agreements dated 20 March 2018, 15 September 2018, and 5 July 2020, and where the interest is received in Singapore on or after 1 March 2024. Accordingly, the exemption is fact-specific and document-specific.
Why Is This Legislation Important?
This Order is important because it provides legal certainty for a particular cross-border financing arrangement. Interest income is commonly subject to Singapore withholding or income tax rules depending on characterisation and the applicable provisions of the Income Tax Act. By granting a statutory exemption under section 13(12), the Order reduces tax friction and can improve the predictability of cash flows for the recipient.
For practitioners, the significance lies in the narrow tailoring of the exemption and the incorporation of conditions by reference. The exemption is not merely “for interest”; it is for interest that is (i) received by a named entity, (ii) from a named payer, (iii) under named loan agreements, (iv) received in Singapore, and (v) received on or after a specified date. In addition, the exemption is conditional upon compliance with requirements in a Ministry of Finance letter.
From an enforcement and risk perspective, the conditionality in section 2(3) means that counsel should treat the Ministry of Finance letter as essential. If the conditions are not satisfied—whether due to documentation gaps, reporting failures, or structural changes to the financing—the taxpayer may lose the benefit of the exemption. Therefore, the Order is not only a tax planning tool but also a compliance checklist that must be operationalised.
Related Legislation
- Income Tax Act 1947 (including section 13(12), which authorises the Minister for Finance to make exemption orders)
- Income Tax Act 1947 (general framework for the taxation of income and exemptions in Singapore)
Source Documents
This article provides an overview of the Income Tax (Sasseur Bishan HK Limited — Section 13(12) Exemption) (No. 2) Order 2024 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.