§ 13P — Exemption of income of shipping investment enterprise

13P.—(1) Subject to subsections (1G) and (4), there is exempt from tax the income derived by an approved shipping investment enterprise —(a)

before 25 March 2016 from the chartering or finance leasing of any seagoing ship, acquired by the approved shipping investment enterprise before or during the period of its approval referred to in subsection (3), to —(i)

a person who is neither resident in Singapore nor a permanent establishment in Singapore; or

(ii)

an approved international shipping enterprise,

for use outside the limits of the port of Singapore;

(b)

before 25 March 2016 from the chartering or finance leasing of any seagoing Singapore ship, acquired by the approved shipping investment enterprise before or during the period of its approval referred to in subsection (3), to a shipping enterprise within the meaning of section 13A for use outside the limits of the port of Singapore;

(c)

before 25 March 2016, for the year of assessment 2009 and subsequent years of assessment, from foreign exchange and risk management activities which are carried out in connection with and incidental to the activities referred to in paragraphs (a) and (b);

(ca)

on or after 25 March 2016 from the chartering or finance leasing of any seagoing ship acquired by the approved shipping investment enterprise before or during the period of its approval mentioned in subsection (3), for use outside the limits of the port of Singapore;

(cb)

on or after 25 March 2016 from foreign exchange and risk management activities which are carried out in connection with and incidental to any activity mentioned in paragraph (ca);

(cc)

on or after 12 December 2018 from the chartering or finance leasing by the approved shipping investment enterprise of any seagoing ship, for use by the lessee outside the limits of the port of Singapore, if the ship was —(i)

acquired by an approved related party before or during the period of its approval under subsection (3); and

(ii)

chartered, or leased under a finance lease, by the approved related party to the approved shipping investment enterprise;

(cd)

on or after 12 December 2018 from foreign exchange and risk management activities that are carried out in connection with and incidental to an activity mentioned in paragraph (cc); and

(d)

on or after 1 June 2011 from —(i)

the sale of a seagoing ship;

(ii)

the assignment to another of all its rights as the buyer under a contract for the construction of a seagoing ship; or

(iii)

the sale of all of the issued ordinary shares in a special purpose company of the approved shipping investment enterprise where, at the time of the sale of the shares, the special purpose company owns any seagoing ship or is the buyer under a contract for the construction of any seagoing ship.[34/2016; 32/2019]

(1A) Subsection (1), in relation to income referred to in paragraph (a), (b), (c), (ca) or (cb) of that subsection, continues to apply to a shipping investment enterprise the approval of which has expired or been withdrawn, but which continues to derive such income in relation to a seagoing ship acquired before or during the period of the approval, provided that the enterprise has by the date of the expiry or before the withdrawal, fulfilled all the conditions referred to in subsection (3); and any reference in this section to an approved shipping investment enterprise is to be construed accordingly.[34/2016]

(1B) In relation to income mentioned in subsection (1)(cc) or (cd), subsection (1) continues to apply to a shipping investment enterprise the approval of which has expired or been withdrawn, but that continues to derive such income, if both the shipping investment enterprise and the related party mentioned in subsection (1)(cc) have, by the date of the expiry or before the withdrawal, fulfilled all the conditions of their respective approvals under subsection (3).[32/2019]

(1C) For the purpose of subsection (1B), the shipping investment enterprise is treated under this section as an approved shipping investment enterprise.[32/2019]

(1D) Subsection (1)(ca) and (cc) does not apply to —(a)

income derived between 12 December 2018 and 18 February 2025 (both dates inclusive) from the chartering or finance leasing of a seagoing ship that is acquired by the approved shipping investment enterprise or the approved related party by way of a finance lease entered into with an entity that is not an approved related party; or

(b)

income derived on or after 19 February 2025 from the chartering or finance leasing of a seagoing ship that is acquired by the approved shipping investment enterprise or the approved related party by way of a finance lease not treated as a sale under section 10C, entered into with an entity that is not an approved related party.[Act 25 of 2025 wef 19/02/2025]

(1DA) Subsection (1)(ca) and (cc) also does not apply to any income derived by an approved shipping investment enterprise as part of a business of trading in seagoing ships or constructing seagoing ships for sale.[41/2020]

(1E) Subsections (1)(cc) and (cd) and (1B) apply to income derived by an approved shipping investment enterprise in relation to a ship acquired by the related party before the period of the approval of the related party, if and only if the approved shipping investment enterprise is approved on or after 1 April 2008.[32/2019]

(1F) Subsection (1)(d) does not apply to —(a)

any income of an approved shipping investment enterprise derived before 12 December 2018 as a lessor of a seagoing ship under a finance lease that is treated as a sale under section 10C; or

(b)

any income of an approved shipping investment enterprise that is derived as part of a business of trading in seagoing ships or of constructing seagoing ships for sale.[32/2019; 41/2020]

(1G) Subsections (1) and (1A) apply to income derived by an approved shipping investment enterprise in relation to a seagoing ship acquired before the period of its approval, if and only if the enterprise is approved on or after 1 April 2008.[32/2019]

(2) The Minister or an authorised body may, at any time between 1 March 2006 and 31 December 2031 (both dates inclusive), approve a shipping investment enterprise or a related party of an approved shipping investment enterprise for the purposes of subsection (1).[37/2014; 2/2016; 32/2019; 41/2020]

[Act 41 of 2020 wef 12/04/2024]

[Act 25 of 2025 wef 19/02/2025]

(3) The approval under subsection (2) is subject to such conditions as the Minister may specify, and is —(a)

where the approval is granted during the period between 1 March 2006 and 28 February 2011 (both dates inclusive), for such period not exceeding 10 years, as the Minister may specify; and

(b)

where the approval is granted during the period between 1 March 2011 and 31 December 2031 (both dates inclusive), for such period not exceeding 5 years, as the Minister may specify,

except that the Minister may extend the period so specified for such further periods as the Minister thinks fit.

[37/2014; 2/2016; 41/2020]

[Act 25 of 2025 wef 19/02/2025]

(3A) A reference to the Minister in subsection (3), in the case of an approval granted on or after the date of commencement of section 5(1)(a) of the Income Tax (Amendment) Act 2021, includes the authorised body.[Act 27 of 2021 wef 12/04/2024]

(4) The Minister or an authorised body may, in respect of any seagoing ship or class of seagoing ships, specify the period during which the income of the seagoing ship or class of seagoing ships may be exempted from tax under subsection (1) not exceeding —(a)

in the case of any ship used for the carriage of goods or passengers, towage or salvage, a period of 30 years; or

(b)

in the case of any dredger, seismic ship or any ship used for offshore oil or gas activity, offshore renewable energy activity, renewable energy activity or offshore mineral activity, a period of 40 years.[34/2016]

[Act 41 of 2020 wef 12/04/2024]

[Act 25 of 2025 wef 19/02/2025]

(5) In determining the amount of the income of an approved shipping investment enterprise which is exempted under subsection (1), the allowances provided for in sections 16, 17, 18, 18B, 18C, 19, 19A, 20, 21, 22 and 23, other than allowances made to a lessee of a seagoing ship under regulations made under section 10C —(a)

must be taken into account even if no claim for those allowances has been made; and

(b)

may only be deducted against the income referred to in subsection (1), and the balance of those allowances is not available as a deduction against any other income, except that any balance remaining unabsorbed at the end of the tax exempt period of the enterprise is available as a deduction against any other income for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 23.

(6) Where an approved shipping investment enterprise incurs a loss during the tax exempt period in respect of any activity referred to in paragraphs (a), (b), (c), (ca), (cb), (cc) and (cd) of subsection (1), that loss —(a)

must be deducted in accordance with section 37; and

(b)

may only be deducted against the income referred to in any of those paragraphs, and the balance of such loss is not available as a deduction against any other income, except that any balance remaining unabsorbed at the end of the tax exempt period is available as a deduction against any other income for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 37.[34/2016; 32/2019]

(6A) Where an approved shipping investment enterprise incurs a loss on any sale or assignment mentioned in subsection (1)(d) in any basis period falling, in whole or in part, within the tax exempt period, that loss may only be deducted against the gains derived from another sale or assignment mentioned in subsection (1)(d) in that same basis period, and the balance of the loss is not available as a deduction against any other income.

(7) The Comptroller must for each year of assessment for which the income of an approved shipping investment enterprise is exempt from tax under subsection (1) issue to the enterprise a statement (to be included in a notice of any assessment served on the enterprise under section 76) showing the amount of income exempt from tax under subsection (1); and Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if such statement were a notice of assessment.

(8) Where any statement issued to an approved shipping investment enterprise under subsection (7) has become final and conclusive, the amount of income shown in the statement does not form part of the statutory income of the enterprise for the year of assessment to which the statement relates and is exempt from tax.

(9) [Deleted by Act 19 of 2013]

(10) [Deleted by Act 19 of 2013]

(11) [Deleted by Act 19 of 2013]

(12) [Deleted by Act 19 of 2013]

(13) [Deleted by Act 19 of 2013]

(14) [Deleted by Act 19 of 2013]

(15) [Deleted by Act 19 of 2013]

(16) [Deleted by Act 19 of 2013]

(17) An approved shipping investment enterprise must deliver to the Comptroller a statement of the account made up to any date specified by the Comptroller whenever called upon to do so by written notice.

(18) Despite anything in this section, where it appears to the Comptroller that any income of an approved shipping investment enterprise which has been exempted from tax under subsection (1) ought not to have been so exempted for any year of assessment, the Comptroller may, at any time within 4 years after the expiry of that year of assessment, make such assessment or additional assessment upon the enterprise as may appear to be necessary in order to make good any loss of tax.

(19) Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if an assessment under subsection (18) were a notice of assessment.

(19A) [Deleted by Act 2 of 2016]

(20) In this section —“approved international shipping enterprise” means an international shipping enterprise approved by the Minister or an authorised body, subject to such conditions as the Minister or authorised body may impose;[Act 41 of 2020 wef 12/04/2024]

“finance leasing” means the leasing of any seagoing ship (including any arrangement or agreement in connection with such leasing) which has the effect of transferring substantially the obsolescence, risks or rewards incidental to ownership of the seagoing ship to the lessee;

“international shipping enterprise” has the meaning given by section 13E(6);

“registered business trust” has the meaning given by the Business Trusts Act 2004;

“related party”, in relation to an approved shipping investment enterprise, means —(a)

any entity that is related to the approved shipping investment enterprise in such manner as may be prescribed by rules made under section 7; or

(b)

any other entity that is approved by the Minister or authorised body in any particular case to be a related party of the approved shipping investment enterprise;[Act 27 of 2021 wef 12/04/2024]

“ship” has the meaning given by section 2(1) of the Merchant Shipping Act 1995;

“shipping investment enterprise” means —(a)

a company incorporated and resident in Singapore; or

(b)

a registered business trust;

“Singapore ship” has the meaning given by section 13A(16);

“special purpose company”, in relation to an approved shipping investment enterprise, means a company that is wholly‑owned by the enterprise and whose only business or intended business is the chartering or finance leasing of seagoing ships;

“tax exempt period”, in relation to an approved shipping investment enterprise, means —(a)

in a case where the enterprise is approved on or after 1 April 2008 and —(i)

acquired; or

(ii)

chartered, or leased under a finance lease, from a related party,

a seagoing ship for use outside the limits of the port of Singapore before the date of approval of the enterprise — the period from the date of that approval to the date where no income of any seagoing ship of that enterprise is eligible for exemption from tax under subsection (1) (both dates inclusive); or

(b)

in any other case — the period from the date the enterprise —(i)

first acquired; or

(ii)

first chartered, or leased under a finance lease, from a related party,

during the period of approval of the enterprise, a seagoing ship for use outside the limits of the port of Singapore, to the date where no income of any seagoing ship of that enterprise is eligible for exemption from tax under subsection (1) (both dates inclusive).

[2/2016; 32/2019; 27/2021]

(21) Rules made for the purpose of the definition of “related party” in subsection (20) may be made to take effect from (and including) 12 December 2018.[13S

[32/2019]

—(1) Subject to subsections (1G) and (4), there is exempt from tax the income derived by an approved shipping investment enterprise —(a)

before 25 March 2016 from the chartering or finance leasing of any seagoing ship, acquired by the approved shipping investment enterprise before or during the period of its approval referred to in subsection (3), to —(i)

a person who is neither resident in Singapore nor a permanent establishment in Singapore; or

(ii)

an approved international shipping enterprise,

for use outside the limits of the port of Singapore;

(b)

before 25 March 2016 from the chartering or finance leasing of any seagoing Singapore ship, acquired by the approved shipping investment enterprise before or during the period of its approval referred to in subsection (3), to a shipping enterprise within the meaning of section 13A for use outside the limits of the port of Singapore;

(c)

before 25 March 2016, for the year of assessment 2009 and subsequent years of assessment, from foreign exchange and risk management activities which are carried out in connection with and incidental to the activities referred to in paragraphs (a) and (b);

(ca)

on or after 25 March 2016 from the chartering or finance leasing of any seagoing ship acquired by the approved shipping investment enterprise before or during the period of its approval mentioned in subsection (3), for use outside the limits of the port of Singapore;

(cb)

on or after 25 March 2016 from foreign exchange and risk management activities which are carried out in connection with and incidental to any activity mentioned in paragraph (ca);

(cc)

on or after 12 December 2018 from the chartering or finance leasing by the approved shipping investment enterprise of any seagoing ship, for use by the lessee outside the limits of the port of Singapore, if the ship was —(i)

acquired by an approved related party before or during the period of its approval under subsection (3); and

(ii)

chartered, or leased under a finance lease, by the approved related party to the approved shipping investment enterprise;

(cd)

on or after 12 December 2018 from foreign exchange and risk management activities that are carried out in connection with and incidental to an activity mentioned in paragraph (cc); and

(d)

on or after 1 June 2011 from —(i)

the sale of a seagoing ship;

(ii)

the assignment to another of all its rights as the buyer under a contract for the construction of a seagoing ship; or

(iii)

the sale of all of the issued ordinary shares in a special purpose company of the approved shipping investment enterprise where, at the time of the sale of the shares, the special purpose company owns any seagoing ship or is the buyer under a contract for the construction of any seagoing ship.[34/2016; 32/2019]

(1A) Subsection (1), in relation to income referred to in paragraph (a), (b), (c), (ca) or (cb) of that subsection, continues to apply to a shipping investment enterprise the approval of which has expired or been withdrawn, but which continues to derive such income in relation to a seagoing ship acquired before or during the period of the approval, provided that the enterprise has by the date of the expiry or before the withdrawal, fulfilled all the conditions referred to in subsection (3); and any reference in this section to an approved shipping investment enterprise is to be construed accordingly.[34/2016]

(1B) In relation to income mentioned in subsection (1)(cc) or (cd), subsection (1) continues to apply to a shipping investment enterprise the approval of which has expired or been withdrawn, but that continues to derive such income, if both the shipping investment enterprise and the related party mentioned in subsection (1)(cc) have, by the date of the expiry or before the withdrawal, fulfilled all the conditions of their respective approvals under subsection (3).[32/2019]

(1C) For the purpose of subsection (1B), the shipping investment enterprise is treated under this section as an approved shipping investment enterprise.[32/2019]

(1D) Subsection (1)(ca) and (cc) does not apply to —(a)

income derived between 12 December 2018 and 18 February 2025 (both dates inclusive) from the chartering or finance leasing of a seagoing ship that is acquired by the approved shipping investment enterprise or the approved related party by way of a finance lease entered into with an entity that is not an approved related party; or

(b)

income derived on or after 19 February 2025 from the chartering or finance leasing of a seagoing ship that is acquired by the approved shipping investment enterprise or the approved related party by way of a finance lease not treated as a sale under section 10C, entered into with an entity that is not an approved related party.[Act 25 of 2025 wef 19/02/2025]

(1DA) Subsection (1)(ca) and (cc) also does not apply to any income derived by an approved shipping investment enterprise as part of a business of trading in seagoing ships or constructing seagoing ships for sale.[41/2020]

(1E) Subsections (1)(cc) and (cd) and (1B) apply to income derived by an approved shipping investment enterprise in relation to a ship acquired by the related party before the period of the approval of the related party, if and only if the approved shipping investment enterprise is approved on or after 1 April 2008.[32/2019]

(1F) Subsection (1)(d) does not apply to —(a)

any income of an approved shipping investment enterprise derived before 12 December 2018 as a lessor of a seagoing ship under a finance lease that is treated as a sale under section 10C; or

(b)

any income of an approved shipping investment enterprise that is derived as part of a business of trading in seagoing ships or of constructing seagoing ships for sale.[32/2019; 41/2020]

(1G) Subsections (1) and (1A) apply to income derived by an approved shipping investment enterprise in relation to a seagoing ship acquired before the period of its approval, if and only if the enterprise is approved on or after 1 April 2008.[32/2019]

(2) The Minister or an authorised body may, at any time between 1 March 2006 and 31 December 2031 (both dates inclusive), approve a shipping investment enterprise or a related party of an approved shipping investment enterprise for the purposes of subsection (1).[37/2014; 2/2016; 32/2019; 41/2020]

[Act 41 of 2020 wef 12/04/2024]

[Act 25 of 2025 wef 19/02/2025]

(3) The approval under subsection (2) is subject to such conditions as the Minister may specify, and is —(a)

where the approval is granted during the period between 1 March 2006 and 28 February 2011 (both dates inclusive), for such period not exceeding 10 years, as the Minister may specify; and

(b)

where the approval is granted during the period between 1 March 2011 and 31 December 2031 (both dates inclusive), for such period not exceeding 5 years, as the Minister may specify,

except that the Minister may extend the period so specified for such further periods as the Minister thinks fit.

[37/2014; 2/2016; 41/2020]

[Act 25 of 2025 wef 19/02/2025]

(3A) A reference to the Minister in subsection (3), in the case of an approval granted on or after the date of commencement of section 5(1)(a) of the Income Tax (Amendment) Act 2021, includes the authorised body.[Act 27 of 2021 wef 12/04/2024]

(4) The Minister or an authorised body may, in respect of any seagoing ship or class of seagoing ships, specify the period during which the income of the seagoing ship or class of seagoing ships may be exempted from tax under subsection (1) not exceeding —(a)

in the case of any ship used for the carriage of goods or passengers, towage or salvage, a period of 30 years; or

(b)

in the case of any dredger, seismic ship or any ship used for offshore oil or gas activity, offshore renewable energy activity, renewable energy activity or offshore mineral activity, a period of 40 years.[34/2016]

[Act 41 of 2020 wef 12/04/2024]

[Act 25 of 2025 wef 19/02/2025]

(5) In determining the amount of the income of an approved shipping investment enterprise which is exempted under subsection (1), the allowances provided for in sections 16, 17, 18, 18B, 18C, 19, 19A, 20, 21, 22 and 23, other than allowances made to a lessee of a seagoing ship under regulations made under section 10C —(a)

must be taken into account even if no claim for those allowances has been made; and

(b)

may only be deducted against the income referred to in subsection (1), and the balance of those allowances is not available as a deduction against any other income, except that any balance remaining unabsorbed at the end of the tax exempt period of the enterprise is available as a deduction against any other income for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 23.

(6) Where an approved shipping investment enterprise incurs a loss during the tax exempt period in respect of any activity referred to in paragraphs (a), (b), (c), (ca), (cb), (cc) and (cd) of subsection (1), that loss —(a)

must be deducted in accordance with section 37; and

(b)

may only be deducted against the income referred to in any of those paragraphs, and the balance of such loss is not available as a deduction against any other income, except that any balance remaining unabsorbed at the end of the tax exempt period is available as a deduction against any other income for the year of assessment which relates to the basis period in which the tax exemption ceases and for any subsequent year of assessment in accordance with section 37.[34/2016; 32/2019]

(6A) Where an approved shipping investment enterprise incurs a loss on any sale or assignment mentioned in subsection (1)(d) in any basis period falling, in whole or in part, within the tax exempt period, that loss may only be deducted against the gains derived from another sale or assignment mentioned in subsection (1)(d) in that same basis period, and the balance of the loss is not available as a deduction against any other income.

(7) The Comptroller must for each year of assessment for which the income of an approved shipping investment enterprise is exempt from tax under subsection (1) issue to the enterprise a statement (to be included in a notice of any assessment served on the enterprise under section 76) showing the amount of income exempt from tax under subsection (1); and Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if such statement were a notice of assessment.

(8) Where any statement issued to an approved shipping investment enterprise under subsection (7) has become final and conclusive, the amount of income shown in the statement does not form part of the statutory income of the enterprise for the year of assessment to which the statement relates and is exempt from tax.

(9) [Deleted by Act 19 of 2013]

(10) [Deleted by Act 19 of 2013]

(11) [Deleted by Act 19 of 2013]

(12) [Deleted by Act 19 of 2013]

(13) [Deleted by Act 19 of 2013]

(14) [Deleted by Act 19 of 2013]

(15) [Deleted by Act 19 of 2013]

(16) [Deleted by Act 19 of 2013]

(17) An approved shipping investment enterprise must deliver to the Comptroller a statement of the account made up to any date specified by the Comptroller whenever called upon to do so by written notice.

(18) Despite anything in this section, where it appears to the Comptroller that any income of an approved shipping investment enterprise which has been exempted from tax under subsection (1) ought not to have been so exempted for any year of assessment, the Comptroller may, at any time within 4 years after the expiry of that year of assessment, make such assessment or additional assessment upon the enterprise as may appear to be necessary in order to make good any loss of tax.

(19) Parts 17 and 18 (relating to assessments, objections and appeals) and any rules made under this Act apply, with the necessary modifications, as if an assessment under subsection (18) were a notice of assessment.

(19A) [Deleted by Act 2 of 2016]

(20) In this section —“approved international shipping enterprise” means an international shipping enterprise approved by the Minister or an authorised body, subject to such conditions as the Minister or authorised body may impose;[Act 41 of 2020 wef 12/04/2024]

“finance leasing” means the leasing of any seagoing ship (including any arrangement or agreement in connection with such leasing) which has the effect of transferring substantially the obsolescence, risks or rewards incidental to ownership of the seagoing ship to the lessee;

“international shipping enterprise” has the meaning given by section 13E(6);

“registered business trust” has the meaning given by the Business Trusts Act 2004;

“related party”, in relation to an approved shipping investment enterprise, means —(a)

any entity that is related to the approved shipping investment enterprise in such manner as may be prescribed by rules made under section 7; or

(b)

any other entity that is approved by the Minister or authorised body in any particular case to be a related party of the approved shipping investment enterprise;[Act 27 of 2021 wef 12/04/2024]

“ship” has the meaning given by section 2(1) of the Merchant Shipping Act 1995;

“shipping investment enterprise” means —(a)

a company incorporated and resident in Singapore; or

(b)

a registered business trust;

“Singapore ship” has the meaning given by section 13A(16);

“special purpose company”, in relation to an approved shipping investment enterprise, means a company that is wholly‑owned by the enterprise and whose only business or intended business is the chartering or finance leasing of seagoing ships;

“tax exempt period”, in relation to an approved shipping investment enterprise, means —(a)

in a case where the enterprise is approved on or after 1 April 2008 and —(i)

acquired; or

(ii)

chartered, or leased under a finance lease, from a related party,

a seagoing ship for use outside the limits of the port of Singapore before the date of approval of the enterprise — the period from the date of that approval to the date where no income of any seagoing ship of that enterprise is eligible for exemption from tax under subsection (1) (both dates inclusive); or

(b)

in any other case — the period from the date the enterprise —(i)

first acquired; or

(ii)

first chartered, or leased under a finance lease, from a related party,

during the period of approval of the enterprise, a seagoing ship for use outside the limits of the port of Singapore, to the date where no income of any seagoing ship of that enterprise is eligible for exemption from tax under subsection (1) (both dates inclusive).

[2/2016; 32/2019; 27/2021]

(21) Rules made for the purpose of the definition of “related party” in subsection (20) may be made to take effect from (and including) 12 December 2018.[13S

[32/2019]