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)
- Legislating Authority: Minister for Finance (exercising powers under section 13(12) of the Income Tax Act 1947)
- SL Number: SL 389/2024
- Date Made: 30 April 2024
- Status / Version: Current version as at 27 Mar 2026
- Citation: Income Tax (Sasseur Bishan HK Limited — Section 13(12) Exemption) (No. 2) Order 2024
- Key Provision: Exemption from tax for specified interest income received in Singapore by Sasseur Bishan HK Limited
- Authorising Act: Income Tax Act 1947
What Is This Legislation About?
The Income Tax (Sasseur Bishan HK Limited — Section 13(12) Exemption) (No. 2) Order 2024 is a targeted tax exemption order made under Singapore’s Income Tax Act 1947. In plain language, it grants an exemption from Singapore income tax for certain interest income received in Singapore by a specific company—Sasseur Bishan HK Limited—provided that the interest arises from specified loan arrangements with a related company in China.
This is not a general tax reform statute. Instead, it is a bespoke exemption order. Such orders are typically used to implement policy decisions in relation to particular cross-border financing structures, often where the tax treatment of interest can affect the overall economics of a transaction group. The order identifies the recipient, the payer, the relevant loan agreements, and the time period when the interest must be received to qualify.
Practically, the legislation matters to tax advisers and corporate counsel because it determines whether interest income will be taxed in Singapore or excluded from tax under the Income Tax Act framework. It also signals that the exemption is conditional: it is expressly “subject to the conditions specified” in a letter from the Ministry of Finance. That conditionality is often where compliance and documentation requirements become critical.
What Are the Key Provisions?
1. Citation and legal basis
Section 1 provides the short title/citation of the Order. The operative authority is the Enacting Formula: the Minister for Finance makes the Order in exercise of the powers conferred by section 13(12) of the Income Tax Act 1947. This matters because it frames the exemption as one that is legally carved out through ministerial power rather than through a standalone statutory rule in the Act itself.
2. The exemption: what income is covered
Section 2(1) is the core provision. It states that interest income described in sub-paragraph (2), received in Singapore by Sasseur Bishan HK Limited (a company incorporated in Hong Kong Special Administrative Region 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.
Several elements are important for practitioners:
- Type of income: only “interest income” is exempt (not principal repayments, fees, or other forms of returns unless they are characterised as interest).
- Recipient: the exemption is for interest “received in Singapore” by the named Hong Kong incorporated company. This implies that the place of receipt is relevant to qualification.
- Source/payer: the interest must be received from the specified Chinese company.
- Timing: the interest must be received “on or after 1 March 2024.” Interest received before that date would not fall within the exemption, even if it relates to the same underlying loan.
3. The underlying loan agreements
Section 2(2) narrows the exemption further by specifying that the exemption applies to interest income from the loan granted under agreements dated 20 March 2018, 15 September 2018, and 5 July 2020 between the two named companies. This is a classic “ring-fencing” mechanism: even if interest is paid by the Chinese company to the Hong Kong company, only interest attributable to those particular loan agreements is within scope.
For legal and tax teams, this means that the loan documentation should be reviewed to confirm:
- that the relevant interest payments are indeed under those agreements (or under amendments/variations that do not change the nature of the underlying loan arrangements);
- that the interest is properly characterised as interest under Singapore tax concepts; and
- that the payment flows match the contractual structure (e.g., no substitution of lenders or novations that could affect whether the interest is “from the loan granted under” the specified agreements).
4. Conditions precedent and compliance risk
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 provision. The Order itself does not list the conditions; instead, it incorporates them by reference to a separate Ministry of Finance letter. From a practitioner’s perspective, this raises several practical issues:
- Obtain and review the letter: counsel should ensure the relevant conditions are obtained, understood, and operationalised.
- Document compliance: where conditions relate to reporting, documentation, beneficial ownership, substance, or use of funds, evidence should be retained.
- Monitor ongoing compliance: because the exemption is ongoing for interest received on or after 1 March 2024, conditions may need to be satisfied throughout the period, not merely at inception.
5. Making date and formalities
The Order was made on 30 April 2024 by the Second Permanent Secretary, Ministry of Finance, Singapore (LAI WEI LIN). While the “made” date is later than the start date for the exemption (1 March 2024), the exemption is drafted to apply to interest received on or after 1 March 2024. This retroactive effect (or at least a “backdated” start date) is common in tax exemption orders and should be considered when advising on tax filings for the relevant period.
How Is This Legislation Structured?
This Order is structured in a very concise format, typical of targeted exemption instruments. It contains:
- Section 1 (Citation): identifies the Order by its short title.
- Section 2 (Exemption): sets out the exemption scope, including:
- 2(1): the exemption for specified interest income received in Singapore by the named recipient from the named payer on or after 1 March 2024;
- 2(2): the specific loan agreements that generate the interest income;
- 2(3): the incorporation of conditions from a Ministry of Finance letter dated 24 April 2024.
There are no additional Parts or schedules in the extract provided. The operative content is therefore entirely within section 2, with the conditions being externalised to the referenced letter.
Who Does This Legislation Apply To?
The exemption applies specifically to Sasseur Bishan HK Limited—and only in respect of interest income that it receives in Singapore from Chongqing Sasseur Suge Apparel Joint Stock Co., Ltd. under the specified loan agreements. It is therefore a narrow, entity-specific and transaction-specific instrument.
Although the Order is made under a general provision in the Income Tax Act (section 13(12)), the exemption is not available to all taxpayers. Other companies—whether within the same group or unrelated—would not automatically benefit unless they are named in a similar exemption order or otherwise qualify under the Income Tax Act’s general rules.
Why Is This Legislation Important?
For practitioners, the importance of this Order lies in its direct impact on the taxability of cross-border interest income. Interest is often a key component of financing arrangements, and the tax treatment can materially affect cash flows, transfer pricing outcomes, and the overall cost of capital. By exempting specified interest income, the Order reduces Singapore tax exposure for the recipient company on that income stream.
Second, the Order highlights the significance of conditions incorporated by reference to a Ministry of Finance letter. In practice, many tax exemption orders are contingent upon compliance with policy objectives—such as ensuring that the arrangement aligns with the intended economic substance, that documentation is maintained, and that reporting obligations are met. Failure to satisfy conditions can jeopardise the exemption, potentially leading to tax assessments, penalties, or interest.
Third, the backdated start date (“on or after 1 March 2024”) means that tax advisers must consider filing positions for the relevant period. Where interest was received between 1 March 2024 and the date the Order was made, counsel should assess whether the exemption was claimed or should be claimed, and whether any amendments or disclosures are required. This is especially relevant for companies preparing tax computations and supporting schedules for the Year of Assessment covering that period.
Related Legislation
- Income Tax Act 1947 (in particular, section 13(12), which provides the ministerial power to grant exemptions)
- Income Tax Act 1947 (general framework for chargeability, exemptions, and administration)
- Legislation timeline / version history (to confirm the correct version as at the relevant date)
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.