§ 13W — Exemption of gains or profits from disposal of ordinary shares or preference shares

13W.—(1) There is exempt from tax any gains or profits derived by a company (called in this section divesting company A) from the disposal of ordinary shares in another company (called in this section investee company B) which are legally and beneficially owned by divesting company A immediately before the disposal, being a disposal —(a)

during the period between 1 June 2012 to 31 December 2025 (both dates inclusive); and[Act 25 of 2025 wef 08/12/2025]

(b)

after divesting company A has, at all times during a continuous period of at least 24 months ending on the date immediately prior to the date of disposal of such shares, legally and beneficially owned at least 20% of the ordinary shares in investee company B.[34/2016; 41/2020]

[Act 25 of 2025 wef 08/12/2025]

(1A) There is exempt from tax any gains or profits derived by a company (called in this section divesting company A1) from the disposal of ordinary shares or preference shares (or both) in another company (called in this section investee company B1) which are legally and beneficially owned by divesting company A1 immediately before the disposal, if —(a)

the disposal is made on or after 1 January 2026; and

(b)

the disposal is made after divesting company A1 has, at all times during a continuous period of at least 24 months ending on the date immediately before the date of disposal of such shares —(i)

legally and beneficially owned at least 20% of the ordinary shares in investee company B1; or

(ii)

legally and beneficially owned ordinary shares or preference shares (or both) in investee company B1 the value of which is at least 20% of the total amount of paid-up share capital of ordinary shares and preference shares in investee company B1 under the applicable accounting principles.[Act 25 of 2025 wef 08/12/2025]

(1B) There is exempt from tax any gains or profits derived by a company (called in this section divesting company A2) from the disposal of ordinary shares or preference shares (or both) in another company (called in this section investee company B2) which are legally and beneficially owned by divesting company A2 immediately before the disposal (called in this section the subject shares), if —(a)

the disposal is made on or after 1 January 2026;

(b)

the subject shares were held by divesting company A2 for a continuous period of at least 24 months ending on the date immediately before the date of the disposal; and

(c)

at the beginning (called the start date) of the period of 24 months ending on the date immediately before the date of the disposal, divesting company A2 together with one or more companies in the same group as divesting company A2 —(i)

legally and beneficially owned ordinary shares in investee company B2 (which included the subject shares) that (in total) represent at least 20% of the ordinary shares in investee company B2 as of the start date; or

(ii)

legally and beneficially owned ordinary shares or preference shares (or both) in investee company B2 (which included the subject shares) the value of which is at least 20% of the total amount of paid-up share capital of ordinary shares and preference shares in investee company B2 as of the start date under the applicable accounting principles,

and divesting company A2 and the other company or companies in the same group did not dispose of any of those shares during that period which resulted in the legal and beneficial ownership described in sub-paragraph (i) or (ii) (as the case may be) falling below the percentage specified in that sub-paragraph.

[Act 25 of 2025 wef 08/12/2025]

(1C) For the purpose of subsection (1B) —(a)

shares in investee company B2 are treated as having been disposed of by a company on a first-in-first-out basis; and

(b)

companies are in the same group if —(i)

more than 50% of the total number of issued ordinary shares in one company are beneficially owned by the other company; or

(ii)

more than 50% of the total number of issued ordinary shares in each of those companies are beneficially owned by a common company.[Act 25 of 2025 wef 08/12/2025]

(1D) For the purpose of subsection (1C)(b), if —(a)

a company beneficially owns (including by virtue of one or more applications of this subsection) issued ordinary shares in another company (called in this subsection a 1st level company); and

(b)

the 1st level company beneficially owns issued ordinary shares in another company (called in this subsection a 2nd level company),

then the firstmentioned company is taken to beneficially own issued ordinary shares of the 2nd level company; and the percentage of such beneficial ownership is computed by the formula A × B, where —

(c)

A is the percentage which the number of issued ordinary shares of the 1st level company beneficially owned by the firstmentioned company bears to the total number of all issued ordinary shares of the 1st level company; and

(d)

B is the percentage which the number of issued ordinary shares of the 2nd level company beneficially owned by the 1st level company bears to the total number of all issued ordinary shares of the 2nd level company.[Act 25 of 2025 wef 08/12/2025]

(1E) Any reference to divesting company A2 in subsection (1B) does not include a registered business trust (despite section 36B(1)) or VCC.[Act 25 of 2025 wef 08/12/2025]

(2) Subsection (1), (1A) or (1B) only applies if divesting company A, A1 or A2 provides, at the time of lodgment of its return of income for the year of assessment relating to the basis period in which the disposal occurs, or within such further time as the Comptroller may allow, such information and supporting documents as may be specified by the Comptroller.[Act 25 of 2025 wef 08/12/2025]

(3) In determining the amount of gains or profits which are exempt from tax under subsection (1), (1A) or (1B) for any year of assessment, there are to be deducted all outgoings and expenses wholly and exclusively incurred by divesting company A, A1 or A2 in the production of such gains or profits, including —(a)

the price paid in acquiring those shares;

(b)

any sum payable by way of interest upon any money borrowed by divesting company A, A1 or A2, where the Comptroller is satisfied that the interest was payable on capital employed to acquire the shares;[Act 25 of 2025 wef 08/12/2025]

(c)

any sum payable in the basis period for the year of assessment 2008 or a subsequent year of assessment in lieu of interest or for the reduction thereof, upon any money borrowed by divesting company A, A1 or A2, being a sum of a type prescribed under section 14(1)(a)(ii), where the Comptroller is satisfied that it was payable on capital employed to acquire the shares;[Act 25 of 2025 wef 08/12/2025]

(d)

any legal costs incurred for the acquisition or disposal of the shares;

(e)

any amount paid in respect of stamp duty for the acquisition or disposal of the shares; and

(f)

any other expenses allowable under this Act which are directly attributable to those gains or profits.[Act 25 of 2025 wef 08/12/2025]

(4) For the purposes of subsection (1), (1A) or (1B), a company (X) is treated as legally and beneficially owning any shares in another company (Y) during the borrowing period when the legal interest in those shares had been transferred by X to another under a securities lending or repurchase arrangement.[Act 25 of 2025 wef 08/12/2025]

(5) Where —(a)

gains or profits derived from the disposal of ordinary shares by divesting company A, A1 or A2 is exempt from tax under subsection (1), (1A) or (1B); and[Act 25 of 2025 wef 08/12/2025]

(b)

one or more of the amounts referred to in subsection (6) which are attributable to any of the shares disposed of, have been allowed as a deduction to divesting company A, A1 or A2 for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of,

then the amounts in paragraph (b) are regarded as income of divesting company A, A1 or A2 that is chargeable to tax for the second‑mentioned year of assessment.

[Act 25 of 2025 wef 08/12/2025]

(6) Subsection (5) applies to the following amounts:(a)

any amount provided for a diminution in the value of the shares;

(b)

any amount written off against the value of the shares;

(c)

any impairment loss for the shares;

(d)

any loss recognised in accordance with FRS 39, SFRS for Small Entities, FRS 109 or SFRS(I) 9 (as the case may be), in determining the profit or loss or expense in respect of the shares.[39/2017; 32/2019]

(7) Where —(a)

gains or profits derived from the disposal of ordinary shares by divesting company A, A1 or A2 is exempt from tax under subsection (1), (1A) or (1B); and[Act 25 of 2025 wef 08/12/2025]

(b)

any write‑back for a diminution in the value of the shares, or profit recognised in accordance with FRS 39, SFRS for Small Entities, FRS 109 or SFRS(I) 9 (as the case may be), which is attributable to any of the shares, has been charged to tax as income of divesting company A, A1 or A2 for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of,

then the write‑back or profit referred to in paragraph (b) is regarded as an expense allowable under this Act to divesting company A, A1 or A2 for the second‑mentioned year of assessment.

[39/2017; 32/2019]

[Act 25 of 2025 wef 08/12/2025]

(8) This section does not apply to —(a)

the disposal of shares the gains or profits of which are included as part of the income of a company referred to in section 26;

(b)

the disposal of shares before 1 June 2022 in a company that —(i)

is in the business of trading Singapore immovable properties; or

(ii)

principally carries on the activity of holding Singapore immovable properties,

other than property development, where the shares are not listed on a stock exchange in Singapore or elsewhere;

(ba)

the disposal of shares on or after 1 June 2022 not listed on a stock exchange in Singapore or elsewhere, being shares in a company that the Comptroller is satisfied —(i)

is in the business of trading immovable properties situated whether in Singapore or elsewhere;

(ii)

principally carries on the activity of holding immovable properties situated whether in Singapore or elsewhere; or

(iii)

has undertaken property development in Singapore or elsewhere, except where —(A)

the immovable property developed is used by the company to carry on its trade or business (including the business of letting immovable properties), not being a business mentioned in sub‑paragraph (i); and

(B)

the company did not undertake any property development in Singapore or elsewhere for a period of at least 60 consecutive months before the disposal of shares; or

(c)

the disposal of shares by a partnership, limited partnership or limited liability partnership one or more of the partners of which is a company or are companies.[41/2020]

(9) In this section —“activity of holding immovable properties” excludes the holding of immovable properties where such properties are used to carry on a trade or business, including the business of letting immovable properties;

“applicable accounting principles”, in relation to a company, means —(a)

the accounting principles adopted by the company; or

(b)

if the company is not required to comply with any accounting principles in preparing its financial statements — the International Financial Reporting Standards;[Act 25 of 2025 wef 08/12/2025]

“borrowing period” and “securities lending or repurchase arrangement” have the meanings given by section 10H(12);

“disposal”, in relation to shares, means the transfer of both the legal and beneficial interests in the shares to another;

“FRS 39” and “SFRS for Small Entities” have the meanings given by section 34A(10);

“FRS 109” and “SFRS(I) 9” have the meanings given by section 34AA(15);

“preference shares” means only preference shares that are accounted for as equity by the investee company under the applicable accounting principles;[Act 25 of 2025 wef 08/12/2025]

“property development” means construction or causing the construction of any building or part of a building, and acquisition of land or building for such construction, and for this purpose “construction” means —(a)

any building operations, or demolition and rebuilding operations, in, on, over or under any land for the purpose of erecting a building or part of a building; and

(b)

any alteration or addition to, or partial demolition and rebuilding of, any building or part of a building,

that requires the approval of the Commissioner of Building Control under the Building Control Act 1989 or (if carried out in a country outside of Singapore) would have required such approval if it had been carried out in Singapore.

[13Z

[39/2017; 32/2019; 41/2020]

[Act 25 of 2025 wef 08/12/2025]

—(1) There is exempt from tax any gains or profits derived by a company (called in this section divesting company A) from the disposal of ordinary shares in another company (called in this section investee company B) which are legally and beneficially owned by divesting company A immediately before the disposal, being a disposal —(a)

during the period between 1 June 2012 to 31 December 2025 (both dates inclusive); and[Act 25 of 2025 wef 08/12/2025]

(b)

after divesting company A has, at all times during a continuous period of at least 24 months ending on the date immediately prior to the date of disposal of such shares, legally and beneficially owned at least 20% of the ordinary shares in investee company B.[34/2016; 41/2020]

[Act 25 of 2025 wef 08/12/2025]

(1A) There is exempt from tax any gains or profits derived by a company (called in this section divesting company A1) from the disposal of ordinary shares or preference shares (or both) in another company (called in this section investee company B1) which are legally and beneficially owned by divesting company A1 immediately before the disposal, if —(a)

the disposal is made on or after 1 January 2026; and

(b)

the disposal is made after divesting company A1 has, at all times during a continuous period of at least 24 months ending on the date immediately before the date of disposal of such shares —(i)

legally and beneficially owned at least 20% of the ordinary shares in investee company B1; or

(ii)

legally and beneficially owned ordinary shares or preference shares (or both) in investee company B1 the value of which is at least 20% of the total amount of paid-up share capital of ordinary shares and preference shares in investee company B1 under the applicable accounting principles.[Act 25 of 2025 wef 08/12/2025]

(1B) There is exempt from tax any gains or profits derived by a company (called in this section divesting company A2) from the disposal of ordinary shares or preference shares (or both) in another company (called in this section investee company B2) which are legally and beneficially owned by divesting company A2 immediately before the disposal (called in this section the subject shares), if —(a)

the disposal is made on or after 1 January 2026;

(b)

the subject shares were held by divesting company A2 for a continuous period of at least 24 months ending on the date immediately before the date of the disposal; and

(c)

at the beginning (called the start date) of the period of 24 months ending on the date immediately before the date of the disposal, divesting company A2 together with one or more companies in the same group as divesting company A2 —(i)

legally and beneficially owned ordinary shares in investee company B2 (which included the subject shares) that (in total) represent at least 20% of the ordinary shares in investee company B2 as of the start date; or

(ii)

legally and beneficially owned ordinary shares or preference shares (or both) in investee company B2 (which included the subject shares) the value of which is at least 20% of the total amount of paid-up share capital of ordinary shares and preference shares in investee company B2 as of the start date under the applicable accounting principles,

and divesting company A2 and the other company or companies in the same group did not dispose of any of those shares during that period which resulted in the legal and beneficial ownership described in sub-paragraph (i) or (ii) (as the case may be) falling below the percentage specified in that sub-paragraph.

[Act 25 of 2025 wef 08/12/2025]

(1C) For the purpose of subsection (1B) —(a)

shares in investee company B2 are treated as having been disposed of by a company on a first-in-first-out basis; and

(b)

companies are in the same group if —(i)

more than 50% of the total number of issued ordinary shares in one company are beneficially owned by the other company; or

(ii)

more than 50% of the total number of issued ordinary shares in each of those companies are beneficially owned by a common company.[Act 25 of 2025 wef 08/12/2025]

(1D) For the purpose of subsection (1C)(b), if —(a)

a company beneficially owns (including by virtue of one or more applications of this subsection) issued ordinary shares in another company (called in this subsection a 1st level company); and

(b)

the 1st level company beneficially owns issued ordinary shares in another company (called in this subsection a 2nd level company),

then the firstmentioned company is taken to beneficially own issued ordinary shares of the 2nd level company; and the percentage of such beneficial ownership is computed by the formula A × B, where —

(c)

A is the percentage which the number of issued ordinary shares of the 1st level company beneficially owned by the firstmentioned company bears to the total number of all issued ordinary shares of the 1st level company; and

(d)

B is the percentage which the number of issued ordinary shares of the 2nd level company beneficially owned by the 1st level company bears to the total number of all issued ordinary shares of the 2nd level company.[Act 25 of 2025 wef 08/12/2025]

(1E) Any reference to divesting company A2 in subsection (1B) does not include a registered business trust (despite section 36B(1)) or VCC.[Act 25 of 2025 wef 08/12/2025]

(2) Subsection (1), (1A) or (1B) only applies if divesting company A, A1 or A2 provides, at the time of lodgment of its return of income for the year of assessment relating to the basis period in which the disposal occurs, or within such further time as the Comptroller may allow, such information and supporting documents as may be specified by the Comptroller.[Act 25 of 2025 wef 08/12/2025]

(3) In determining the amount of gains or profits which are exempt from tax under subsection (1), (1A) or (1B) for any year of assessment, there are to be deducted all outgoings and expenses wholly and exclusively incurred by divesting company A, A1 or A2 in the production of such gains or profits, including —(a)

the price paid in acquiring those shares;

(b)

any sum payable by way of interest upon any money borrowed by divesting company A, A1 or A2, where the Comptroller is satisfied that the interest was payable on capital employed to acquire the shares;[Act 25 of 2025 wef 08/12/2025]

(c)

any sum payable in the basis period for the year of assessment 2008 or a subsequent year of assessment in lieu of interest or for the reduction thereof, upon any money borrowed by divesting company A, A1 or A2, being a sum of a type prescribed under section 14(1)(a)(ii), where the Comptroller is satisfied that it was payable on capital employed to acquire the shares;[Act 25 of 2025 wef 08/12/2025]

(d)

any legal costs incurred for the acquisition or disposal of the shares;

(e)

any amount paid in respect of stamp duty for the acquisition or disposal of the shares; and

(f)

any other expenses allowable under this Act which are directly attributable to those gains or profits.[Act 25 of 2025 wef 08/12/2025]

(4) For the purposes of subsection (1), (1A) or (1B), a company (X) is treated as legally and beneficially owning any shares in another company (Y) during the borrowing period when the legal interest in those shares had been transferred by X to another under a securities lending or repurchase arrangement.[Act 25 of 2025 wef 08/12/2025]

(5) Where —(a)

gains or profits derived from the disposal of ordinary shares by divesting company A, A1 or A2 is exempt from tax under subsection (1), (1A) or (1B); and[Act 25 of 2025 wef 08/12/2025]

(b)

one or more of the amounts referred to in subsection (6) which are attributable to any of the shares disposed of, have been allowed as a deduction to divesting company A, A1 or A2 for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of,

then the amounts in paragraph (b) are regarded as income of divesting company A, A1 or A2 that is chargeable to tax for the second‑mentioned year of assessment.

[Act 25 of 2025 wef 08/12/2025]

(6) Subsection (5) applies to the following amounts:(a)

any amount provided for a diminution in the value of the shares;

(b)

any amount written off against the value of the shares;

(c)

any impairment loss for the shares;

(d)

any loss recognised in accordance with FRS 39, SFRS for Small Entities, FRS 109 or SFRS(I) 9 (as the case may be), in determining the profit or loss or expense in respect of the shares.[39/2017; 32/2019]

(7) Where —(a)

gains or profits derived from the disposal of ordinary shares by divesting company A, A1 or A2 is exempt from tax under subsection (1), (1A) or (1B); and[Act 25 of 2025 wef 08/12/2025]

(b)

any write‑back for a diminution in the value of the shares, or profit recognised in accordance with FRS 39, SFRS for Small Entities, FRS 109 or SFRS(I) 9 (as the case may be), which is attributable to any of the shares, has been charged to tax as income of divesting company A, A1 or A2 for any year of assessment prior to the year of assessment relating to the basis period in which the shares are disposed of,

then the write‑back or profit referred to in paragraph (b) is regarded as an expense allowable under this Act to divesting company A, A1 or A2 for the second‑mentioned year of assessment.

[39/2017; 32/2019]

[Act 25 of 2025 wef 08/12/2025]

(8) This section does not apply to —(a)

the disposal of shares the gains or profits of which are included as part of the income of a company referred to in section 26;

(b)

the disposal of shares before 1 June 2022 in a company that —(i)

is in the business of trading Singapore immovable properties; or

(ii)

principally carries on the activity of holding Singapore immovable properties,

other than property development, where the shares are not listed on a stock exchange in Singapore or elsewhere;

(ba)

the disposal of shares on or after 1 June 2022 not listed on a stock exchange in Singapore or elsewhere, being shares in a company that the Comptroller is satisfied —(i)

is in the business of trading immovable properties situated whether in Singapore or elsewhere;

(ii)

principally carries on the activity of holding immovable properties situated whether in Singapore or elsewhere; or

(iii)

has undertaken property development in Singapore or elsewhere, except where —(A)

the immovable property developed is used by the company to carry on its trade or business (including the business of letting immovable properties), not being a business mentioned in sub‑paragraph (i); and

(B)

the company did not undertake any property development in Singapore or elsewhere for a period of at least 60 consecutive months before the disposal of shares; or

(c)

the disposal of shares by a partnership, limited partnership or limited liability partnership one or more of the partners of which is a company or are companies.[41/2020]

(9) In this section —“activity of holding immovable properties” excludes the holding of immovable properties where such properties are used to carry on a trade or business, including the business of letting immovable properties;

“applicable accounting principles”, in relation to a company, means —(a)

the accounting principles adopted by the company; or

(b)

if the company is not required to comply with any accounting principles in preparing its financial statements — the International Financial Reporting Standards;[Act 25 of 2025 wef 08/12/2025]

“borrowing period” and “securities lending or repurchase arrangement” have the meanings given by section 10H(12);

“disposal”, in relation to shares, means the transfer of both the legal and beneficial interests in the shares to another;

“FRS 39” and “SFRS for Small Entities” have the meanings given by section 34A(10);

“FRS 109” and “SFRS(I) 9” have the meanings given by section 34AA(15);

“preference shares” means only preference shares that are accounted for as equity by the investee company under the applicable accounting principles;[Act 25 of 2025 wef 08/12/2025]

“property development” means construction or causing the construction of any building or part of a building, and acquisition of land or building for such construction, and for this purpose “construction” means —(a)

any building operations, or demolition and rebuilding operations, in, on, over or under any land for the purpose of erecting a building or part of a building; and

(b)

any alteration or addition to, or partial demolition and rebuilding of, any building or part of a building,

that requires the approval of the Commissioner of Building Control under the Building Control Act 1989 or (if carried out in a country outside of Singapore) would have required such approval if it had been carried out in Singapore.

[13Z

[39/2017; 32/2019; 41/2020]

[Act 25 of 2025 wef 08/12/2025]