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
- Key Enabling Provision: Section 13(12) of the Income Tax Act 1947
- Citation: SL 389/2024
- Date Made: 30 April 2024
- Commencement: Applies to qualifying interest income received in Singapore on or after 1 March 2024
- Status: Current version as at 27 Mar 2026
- Legislative Instrument: Income Tax (Sasseur Bishan HK Limited — Section 13(12) Exemption) (No. 2) Order 2024
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 practical terms, it grants an exemption from Singapore tax for certain interest income received in Singapore by a specific foreign company—Sasseur Bishan HK Limited—arising from intra-group lending arrangements with a related Chinese company.
Unlike broad-based tax incentives that apply to categories of taxpayers or industries, this Order is person-specific and transaction-specific. It is designed to exempt interest income that meets defined criteria: (i) the recipient is Sasseur Bishan HK Limited; (ii) the interest is received in Singapore; and (iii) the interest is linked to loans under specified agreements dated 20 March 2018, 15 September 2018, and 5 July 2020.
The Order also makes clear that the exemption is not unconditional. It is subject to conditions set out in a letter from the Ministry of Finance dated 24 April 2024. This structure is typical of Singapore’s use of section 13(12) to grant exemptions while preserving administrative control over compliance and eligibility.
What Are the Key Provisions?
1. Citation (Section 1)
Section 1 identifies the instrument as the “Income Tax (Sasseur Bishan HK Limited — Section 13(12) Exemption) (No. 2) Order 2024”. This is a formal provision, but it matters for practitioners because it fixes the exact legal instrument being relied upon when advising on tax treatment and when preparing filings or correspondence with the tax authority.
2. The Exemption (Section 2(1))
The operative exemption is contained in section 2. Under section 2(1), interest income described in section 2(2) is exempt from tax if it is:
- received in Singapore by Sasseur Bishan HK Limited;
- received on or after 1 March 2024;
- received from Chongqing Sasseur Suge Apparel Joint Stock Co., Ltd. (a company incorporated in the People’s Republic of China); and
- received by the Hong Kong-incorporated company (Sasseur Bishan HK Limited) in the context of the loan arrangements specified in section 2(2).
From a legal analysis perspective, the phrase “interest income described in sub-paragraph (2)” is crucial. It means the exemption is limited to interest that is traceable to the particular loan agreements listed. Practitioners should therefore ensure that the accounting and documentation can support the characterization of the relevant receipts as “interest” and that the interest is attributable to the specified loans.
3. Scope of the Underlying Loans (Section 2(2))
Section 2(2) narrows the exemption to interest income from loans granted under three specific agreements between the two companies:
- agreements dated 20 March 2018;
- agreements dated 15 September 2018; and
- agreements dated 5 July 2020.
This provision is transaction-specific. It prevents the exemption from being extended to interest arising from other financing arrangements, amendments not captured by the agreements, refinancing, or separate intercompany loans unless they fall within the scope of the specified agreements (or are otherwise treated as part of those arrangements under the relevant contractual and factual matrix). Where there have been subsequent amendments, novations, or restructuring, counsel should carefully assess whether the interest remains “from the loan granted under” the listed agreements.
4. Conditions Attached to the Exemption (Section 2(3))
Section 2(3) provides that the exemption 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 significant compliance hook.
Although the text of the conditions is not reproduced in the Order extract, the legal effect is clear: the exemption’s continued availability depends on meeting those conditions. In practice, the conditions may relate to documentation, reporting, the nature of the transactions, beneficial ownership, transfer pricing or arm’s length considerations, or other administrative requirements. For a practitioner, the immediate action is to obtain and review the referenced Ministry of Finance letter and confirm that the taxpayer’s arrangements and tax filings align with each condition.
5. Making Date and Formalities
The Order was made on 30 April 2024 by the Second Permanent Secretary, Ministry of Finance, Singapore. While the making date is procedural, the Order’s substantive effect is anchored to the receipt of interest income on or after 1 March 2024. This means the exemption is intended to cover a period starting before the Order was made, which is common in tax exemption instruments but should still be handled carefully in filing positions and audit trails.
How Is This Legislation Structured?
The Order is concise and follows a standard structure for section 13(12) exemption instruments:
- Section 1 (Citation): identifies the Order.
- Section 2 (Exemption): contains the substantive exemption, subdivided into:
- 2(1): the exemption rule (interest income received in Singapore by the specified recipient from the specified payer on or after the specified date);
- 2(2): the limitation to interest from loans under specified agreements; and
- 2(3): the condition that the exemption is subject to conditions in a referenced Ministry of Finance letter.
There are no additional parts or complex schedules in the extract provided. The legal “work” is done in section 2, particularly the cross-references to the loan agreements and the external conditions letter.
Who Does This Legislation Apply To?
This Order applies to Sasseur Bishan HK Limited, a company incorporated in the Hong Kong Special Administrative Region of the People’s Republic of China. The exemption is for interest income received in Singapore by that company.
The interest must be received from Chongqing Sasseur Suge Apparel Joint Stock Co., Ltd. and must be linked to loans under the three specified agreements. While the payer is not the direct beneficiary of the exemption, the payer’s role is relevant because it defines the source of the interest and therefore the scope of the exemption. In addition, the exemption is conditional on compliance with the Ministry of Finance letter dated 24 April 2024, which effectively imposes obligations on the recipient (and possibly on the transaction structure and documentation maintained by both parties).
Why Is This Legislation Important?
For practitioners, the importance of this Order lies in its ability to change the Singapore tax outcome for a specific stream of cross-border financing income. Interest received in Singapore by a foreign company can be subject to Singapore tax depending on the applicable rules and characterisation. By granting an exemption under section 13(12), the Order provides certainty that qualifying interest income will not be taxed in Singapore, provided the conditions are met.
Second, the Order illustrates how Singapore uses targeted subsidiary legislation to implement tax policy outcomes for particular corporate structures and transactions. The combination of (i) a defined recipient, (ii) a defined payer, (iii) defined loan agreements, and (iv) external conditions creates a controlled framework. This is particularly relevant for tax planning and for defending tax positions during audits, where the tax authority will typically focus on whether the transaction falls squarely within the exemption’s terms.
Third, the retroactive element—covering interest received on or after 1 March 2024—means that timing matters. Counsel should ensure that any tax filings, withholding tax positions (if applicable), and accounting treatment for the period from 1 March 2024 onward are consistent with the exemption and that supporting documentation is retained.
Related Legislation
- Income Tax Act 1947 (particularly section 13(12))
- Income Tax Act 1947 (general provisions on chargeability of income and tax exemptions)
- Legislation timeline (for confirming the correct version and effective period)
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.