§ 35 — Basis for computing statutory income

35.—(1) Except as provided in this section, the income of any person for each year of assessment (called in this Act the statutory income) is the full amount of the person’s income for the year preceding the year of assessment from each source of income after the deduction provided under subsection (2).(2) There is to be deducted any allowance falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 that is not fully deducted and which would otherwise be added to, and deemed to form part of, the corresponding allowance for the next succeeding year of assessment under section 23(1).

(2A) A deduction under subsection (2) is to be made in the following order:(a)

firstly, against income from any trade, business, profession or vocation; and

(b)

secondly, against income from any other source.

(3) For the purposes of subsection (2), the balance of allowance for the earliest year of assessment is deemed to have been deducted first, followed by the balance of allowance for the next earliest year of assessment, and so on.

(4) Where the Comptroller is satisfied that any person usually makes up the person’s accounts to a day other than 31 December, the Comptroller may direct that —(a)

where the person is not an individual, the statutory income of that person from all sources be computed on the amount of gains or profits of the year ending on that day in the year preceding the year of assessment;

(b)

where the accounts relate to a partnership, the income of the partnership be computed under section 36 on the amount of gains or profits of the year ending on that day in the year preceding the year of assessment; or

(c)

where the person is an individual, the statutory income of that person from any trade, business, profession or vocation to which the accounts relate be computed on the amount of gains or profits of the year ending on that day in the year preceding the year of assessment.

(5) [Deleted by Act 19 of 2013]

(6) Where the statutory income of any person has been computed by reference to an account made up to a certain day, and such person fails for any reason whatsoever to make up an account to the corresponding day in the year following, the statutory income both of the year of assessment in which such failure occurs and of the 2 years of assessment following is to be computed on such basis as the Comptroller in his or her discretion thinks fit.

(7) Where it is necessary in order to arrive at the income of any year of assessment or other period, to divide and apportion to specific periods the income of any period for which accounts have been made up, or to aggregate such income or any apportioned parts thereof, it is lawful to make such a division, and apportionment or aggregation, and any apportionment under this section is to be made in proportion to the number of days in the respective periods, unless the Comptroller, having regard to any special circumstances, otherwise directs.

(8) The statutory income of an executor of a deceased person for any year of assessment is the income of the estate administered by such executor computed in accordance with subsections (1) to (7).

(9) In the case of an estate administered in Singapore, a deduction is allowed in respect of any income included in the computation of the statutory income if such income is received by, distributed to or applied to the benefit of any beneficiary of the estate within the calendar year in which the income is derived, or such longer period that the Comptroller may permit in any particular case or class of cases.[Act 30 of 2023 wef 30/10/2023]

(10) The statutory income of any beneficiary of such estate is the amount so received by, or distributed to the beneficiary, or applied to the beneficiary’s benefit during the year preceding the year of assessment.

(11) The statutory income of a trustee (not being the trustee of an incapacitated person) for any year of assessment is to be computed in accordance with subsections (1) to (7).

(12) The trustee of a designated unit trust for a year of assessment may elect to apply this subsection to the trustee’s income referred to in section 10(20)(a), (b) and (c) and (20A)(a) to (i) derived in the basis period or any part of the basis period for that year of assessment, and thereupon that income does not form part of the trustee’s statutory income for that year of assessment.[37/2014]

(12A) Subsection (12) only applies to income derived on or after 1 September 2014.[37/2014]

(12B) An election under subsection (12) must be made by submitting such form as the Comptroller may specify, together with the trustee’s return of income for the year of assessment in question, before the expiry of the time the return of income is to be delivered or within such extended time as the Comptroller may allow.[37/2014]

(12C) An election under subsection (12) is irrevocable.[37/2014]

(12D) To avoid doubt, subsection (12) does not affect the operation of section 43(2) (read with section 43(2A)(ba)) in relation to a designated unit trust that is also an approved REIT exchange‑traded fund within the meaning of section 43(10).[45/2018]

(13) No deduction under section 14 is allowed for any year of assessment in respect of any outgoings and expenses (including any expenses arising from the management of investments) incurred by the trustee of a designated unit trust for that year of assessment in respect of the unit trust, against any income derived by the trustee in respect of the unit trust from —(a)

dividends paid by any company resident in Singapore; or

(b)

interest for which tax has been deducted under section 45.[37/2014]

(13A) No deduction under section 14 is allowed for any year of assessment in respect of any outgoings and expenses (including any expenses arising from the management of investments) incurred by the trustee of a designated unit trust for that year of assessment in respect of the unit trust, against any income derived by the trustee in respect of the unit trust from discount, fees and compensatory payments for which tax has been deducted under section 45A.[37/2014]

(14) In subsections (12), (13), (13A), (14A), (14B), (14C) and (14D) —“compensatory payment” has the meaning given by section 10H(12);

“designated unit trust”, in relation to a year of assessment, means a trust that is —(a)

a unit trust scheme or an exchange traded fund interest scheme, in which any moneys standing to the credit of a member of the Central Provident Fund in the Fund have been or may be invested, and which remains prescribed by the Minister for the purposes of this definition throughout the basis period for that year of assessment; or

(b)

a unit trust which satisfies all of the following conditions throughout the basis period for that year of assessment:(i)

it is one of the following:(A)

a collective investment scheme which is authorised under section 286 of the Securities and Futures Act 2001 and the units of which are offered to the public for subscription;

(B)

a collective investment scheme which was a former designated unit trust, is a restricted Singapore scheme within the meaning of section 13(16), and satisfies the conditions in subsection (14B);

(C)

a collective investment scheme which was a former designated unit trust, is a collective investment scheme the units of which are offered only to institutional investors, and satisfies the conditions set out in subsection (14B);

(ii)

it is neither a real estate investment trust within the meaning of section 43(10), nor a property trust that invests directly in immovable properties in Singapore;

(iii)

the trustee of the unit trust is resident in Singapore;

(iv)

the unit trust is managed in Singapore by a fund manager;

“exchange traded fund interest scheme” means any scheme or arrangement which is made for the purpose, or having the effect, of providing facilities for the participation by persons as beneficiaries under a trust, in profits or income arising from the acquisition, holding, management or disposal of a portfolio of predetermined proportions, which constituent assets comprise securities listed for quotation on any stock exchange;

“former designated unit trust” means a unit trust that, immediately before 21 February 2014, was a designated unit trust under this section in force immediately before that date;

“securities” has the meaning given by section 10(23);

“unit” and “unit trust” have the meanings given by section 10A.[37/2014; 32/2019]

(14A) For the purposes of paragraph (a) of the definition of “designated unit trust” in subsection (14), the Minister may prescribe, as designated unit trusts, descriptions of unit trust schemes and exchange traded fund interest schemes set out on a specified website of the Central Provident Fund Board, as amended from time to time.[37/2014]

(14B) The conditions referred to in paragraph (b)(i)(B) and (C) of the definition of “designated unit trust” in subsection (14) are as follows:(a)

no more than 50% of the units in the unit trust is beneficially held by related parties of the fund manager;[Act 33 of 2022 wef 04/11/2022]

(b)

the unit holders have no control over the management of the property of the unit trust and have no right to be consulted or to give directions in respect of such management;

(c)

the unit holders have no control over any matter relating to distributions to be made out of the income of the unit trust;

(d)

no property was transferred (other than by way of a sale in accordance with market terms and conditions), directly or indirectly, to the trustee of the unit trust to be held as its property, by a company which has derived income from that property that is chargeable to tax under this Act; and

(e)

the investment strategy of the unit trust as of 20 February 2014 remains unchanged.[37/2014]

(14C) Despite the definition of “designated unit trust” in subsection (14), a collective investment scheme (being a former designated unit trust) —(a)

which is a restricted Singapore scheme within the meaning of section 13(16); or

(b)

the units of which are offered only to institutional investors,

which fails to satisfy the conditions set out in subsection (14B) in any part of the basis period for a year of assessment is not treated as a designated unit trust for the year of assessment to which that basis period relates, or for any subsequent year of assessment even if all of the requirements in the definition of that term have been satisfied for that subsequent year of assessment.

[37/2014]

(14D) For the purposes of paragraphs (a) and (b) of the definition of “designated unit trust” in subsection (14), a reference to a condition being satisfied throughout the basis period for a year of assessment is, where the unit trust is dissolved at any time in the basis period, a reference to the condition being satisfied from the beginning of the basis period up to the date of the dissolution.[37/2014]

(14E) Subsections (12), (13) and (13A) do not apply to a trust that is constituted on or after 1 April 2019.[37/2014]

(14F) In the case of a trust that is constituted before 1 April 2019 —(a)

that is not a designated unit trust (as defined in subsection (14)) for a year of assessment in respect of any basis period beginning on or after 1 April 2019; or

(b)

whose trustee did not make an election for subsection (12) to apply to the trustee’s income for any basis period beginning on or after that date,

subsections (12), (13) and (13A) do not apply to that trust for the year of assessment to which that basis period relates and for every subsequent year of assessment.

[37/2014]

(14G) Subsection (14F) applies to the trust for a subsequent year of assessment even if all of the requirements in the definition of “designated unit trust” in subsection (14) have been satisfied for that year of assessment.[37/2014]

(14H) In the case of a trust that is constituted before 1 April 2019 whose trustee did not make an election for subsection (12) to apply to the trustee’s income for the basis period immediately preceding the basis period in which 1 April 2019 falls, subsections (12), (13) and (13A) do not apply to that trust for the year of assessment to which the second‑mentioned basis period relates and for every subsequent year of assessment.[37/2014]

(14I) Subsection (14H) applies to the trust for the year of assessment to which the second‑mentioned basis period in that subsection relates or a subsequent year of assessment, even if all of the requirements in the definition of “designated unit trust” in subsection (14) have been satisfied for that year of assessment or that subsequent year of assessment.[37/2014]

(15) The statutory income for any year of assessment of any beneficiary under a trust is that share of the statutory income of the trustee for that year of assessment which corresponds to the share of the trust income to which the beneficiary is entitled for the year preceding the year of assessment.

(15A) Despite subsection (15), the statutory income for any year of assessment of a beneficiary of a trust (called in this subsection the first trust), where the beneficiary is itself a trustee of an approved REIT exchange‑traded fund, is that share of the statutory income of the trustee of the first trust that corresponds to the share of the income of the first trust to which the beneficiary is entitled for the year preceding the year of assessment.[45/2018]

(15B) To avoid doubt, section 43(2) (read with section 43(2A)(ba)) applies to the statutory income under subsection (15A) of the beneficiary.[45/2018]

(15C) Where a unitholder of a real estate investment trust is entitled to an amount, being a return of capital, from a trustee of the real estate investment trust, the cost of the units to the unitholder is reduced by the amount entitled.[45/2018]

(16) In subsection (15), “statutory income of the trustee” does not include —(a)

in relation to a trustee of a real estate investment trust within the meaning of section 43(10), any income from any trade or business carried on by the trustee other than the income of the kinds referred to in section 43(2A)(a)(i), (ii), (iii), (iv) and (v);

(b)

in relation to a trustee of an approved sub‑trust of a real estate investment trust within the meaning of section 43(10), any income from any trade or business carried on by the trustee other than income of the kinds referred to in section 43(2A)(b)(i), (ii) and (iii);

(ba)

in relation to a trustee of an approved REIT exchange‑traded fund within the meaning of section 43(10), any income from a trade or business carried on by the trustee, other than a distribution received from a real estate investment trust that is in turn made out of income of the kinds mentioned in section 43(2A)(a)(i), (ii), (iii), (iv) and (v); or

(c)

in relation to a trustee of any other trust, any income from any trade or business carried on by the trustee.[34/2016; 45/2018]

—(1) Except as provided in this section, the income of any person for each year of assessment (called in this Act the statutory income) is the full amount of the person’s income for the year preceding the year of assessment from each source of income after the deduction provided under subsection (2).

(2) There is to be deducted any allowance falling to be made under section 16, 17, 18A (repealed), 18B, 18C, 19, 19A, 19B, 19C, 19D or 20 that is not fully deducted and which would otherwise be added to, and deemed to form part of, the corresponding allowance for the next succeeding year of assessment under section 23(1).

(2A) A deduction under subsection (2) is to be made in the following order:(a)

firstly, against income from any trade, business, profession or vocation; and

(b)

secondly, against income from any other source.

(3) For the purposes of subsection (2), the balance of allowance for the earliest year of assessment is deemed to have been deducted first, followed by the balance of allowance for the next earliest year of assessment, and so on.

(4) Where the Comptroller is satisfied that any person usually makes up the person’s accounts to a day other than 31 December, the Comptroller may direct that —(a)

where the person is not an individual, the statutory income of that person from all sources be computed on the amount of gains or profits of the year ending on that day in the year preceding the year of assessment;

(b)

where the accounts relate to a partnership, the income of the partnership be computed under section 36 on the amount of gains or profits of the year ending on that day in the year preceding the year of assessment; or

(c)

where the person is an individual, the statutory income of that person from any trade, business, profession or vocation to which the accounts relate be computed on the amount of gains or profits of the year ending on that day in the year preceding the year of assessment.

(5) [Deleted by Act 19 of 2013]

(6) Where the statutory income of any person has been computed by reference to an account made up to a certain day, and such person fails for any reason whatsoever to make up an account to the corresponding day in the year following, the statutory income both of the year of assessment in which such failure occurs and of the 2 years of assessment following is to be computed on such basis as the Comptroller in his or her discretion thinks fit.

(7) Where it is necessary in order to arrive at the income of any year of assessment or other period, to divide and apportion to specific periods the income of any period for which accounts have been made up, or to aggregate such income or any apportioned parts thereof, it is lawful to make such a division, and apportionment or aggregation, and any apportionment under this section is to be made in proportion to the number of days in the respective periods, unless the Comptroller, having regard to any special circumstances, otherwise directs.

(8) The statutory income of an executor of a deceased person for any year of assessment is the income of the estate administered by such executor computed in accordance with subsections (1) to (7).

(9) In the case of an estate administered in Singapore, a deduction is allowed in respect of any income included in the computation of the statutory income if such income is received by, distributed to or applied to the benefit of any beneficiary of the estate within the calendar year in which the income is derived, or such longer period that the Comptroller may permit in any particular case or class of cases.[Act 30 of 2023 wef 30/10/2023]

(10) The statutory income of any beneficiary of such estate is the amount so received by, or distributed to the beneficiary, or applied to the beneficiary’s benefit during the year preceding the year of assessment.

(11) The statutory income of a trustee (not being the trustee of an incapacitated person) for any year of assessment is to be computed in accordance with subsections (1) to (7).

(12) The trustee of a designated unit trust for a year of assessment may elect to apply this subsection to the trustee’s income referred to in section 10(20)(a), (b) and (c) and (20A)(a) to (i) derived in the basis period or any part of the basis period for that year of assessment, and thereupon that income does not form part of the trustee’s statutory income for that year of assessment.[37/2014]

(12A) Subsection (12) only applies to income derived on or after 1 September 2014.[37/2014]

(12B) An election under subsection (12) must be made by submitting such form as the Comptroller may specify, together with the trustee’s return of income for the year of assessment in question, before the expiry of the time the return of income is to be delivered or within such extended time as the Comptroller may allow.[37/2014]

(12C) An election under subsection (12) is irrevocable.[37/2014]

(12D) To avoid doubt, subsection (12) does not affect the operation of section 43(2) (read with section 43(2A)(ba)) in relation to a designated unit trust that is also an approved REIT exchange‑traded fund within the meaning of section 43(10).[45/2018]

(13) No deduction under section 14 is allowed for any year of assessment in respect of any outgoings and expenses (including any expenses arising from the management of investments) incurred by the trustee of a designated unit trust for that year of assessment in respect of the unit trust, against any income derived by the trustee in respect of the unit trust from —(a)

dividends paid by any company resident in Singapore; or

(b)

interest for which tax has been deducted under section 45.[37/2014]

(13A) No deduction under section 14 is allowed for any year of assessment in respect of any outgoings and expenses (including any expenses arising from the management of investments) incurred by the trustee of a designated unit trust for that year of assessment in respect of the unit trust, against any income derived by the trustee in respect of the unit trust from discount, fees and compensatory payments for which tax has been deducted under section 45A.[37/2014]

(14) In subsections (12), (13), (13A), (14A), (14B), (14C) and (14D) —“compensatory payment” has the meaning given by section 10H(12);

“designated unit trust”, in relation to a year of assessment, means a trust that is —(a)

a unit trust scheme or an exchange traded fund interest scheme, in which any moneys standing to the credit of a member of the Central Provident Fund in the Fund have been or may be invested, and which remains prescribed by the Minister for the purposes of this definition throughout the basis period for that year of assessment; or

(b)

a unit trust which satisfies all of the following conditions throughout the basis period for that year of assessment:(i)

it is one of the following:(A)

a collective investment scheme which is authorised under section 286 of the Securities and Futures Act 2001 and the units of which are offered to the public for subscription;

(B)

a collective investment scheme which was a former designated unit trust, is a restricted Singapore scheme within the meaning of section 13(16), and satisfies the conditions in subsection (14B);

(C)

a collective investment scheme which was a former designated unit trust, is a collective investment scheme the units of which are offered only to institutional investors, and satisfies the conditions set out in subsection (14B);

(ii)

it is neither a real estate investment trust within the meaning of section 43(10), nor a property trust that invests directly in immovable properties in Singapore;

(iii)

the trustee of the unit trust is resident in Singapore;

(iv)

the unit trust is managed in Singapore by a fund manager;

“exchange traded fund interest scheme” means any scheme or arrangement which is made for the purpose, or having the effect, of providing facilities for the participation by persons as beneficiaries under a trust, in profits or income arising from the acquisition, holding, management or disposal of a portfolio of predetermined proportions, which constituent assets comprise securities listed for quotation on any stock exchange;

“former designated unit trust” means a unit trust that, immediately before 21 February 2014, was a designated unit trust under this section in force immediately before that date;

“securities” has the meaning given by section 10(23);

“unit” and “unit trust” have the meanings given by section 10A.[37/2014; 32/2019]

(14A) For the purposes of paragraph (a) of the definition of “designated unit trust” in subsection (14), the Minister may prescribe, as designated unit trusts, descriptions of unit trust schemes and exchange traded fund interest schemes set out on a specified website of the Central Provident Fund Board, as amended from time to time.[37/2014]

(14B) The conditions referred to in paragraph (b)(i)(B) and (C) of the definition of “designated unit trust” in subsection (14) are as follows:(a)

no more than 50% of the units in the unit trust is beneficially held by related parties of the fund manager;[Act 33 of 2022 wef 04/11/2022]

(b)

the unit holders have no control over the management of the property of the unit trust and have no right to be consulted or to give directions in respect of such management;

(c)

the unit holders have no control over any matter relating to distributions to be made out of the income of the unit trust;

(d)

no property was transferred (other than by way of a sale in accordance with market terms and conditions), directly or indirectly, to the trustee of the unit trust to be held as its property, by a company which has derived income from that property that is chargeable to tax under this Act; and

(e)

the investment strategy of the unit trust as of 20 February 2014 remains unchanged.[37/2014]

(14C) Despite the definition of “designated unit trust” in subsection (14), a collective investment scheme (being a former designated unit trust) —(a)

which is a restricted Singapore scheme within the meaning of section 13(16); or

(b)

the units of which are offered only to institutional investors,

which fails to satisfy the conditions set out in subsection (14B) in any part of the basis period for a year of assessment is not treated as a designated unit trust for the year of assessment to which that basis period relates, or for any subsequent year of assessment even if all of the requirements in the definition of that term have been satisfied for that subsequent year of assessment.

[37/2014]

(14D) For the purposes of paragraphs (a) and (b) of the definition of “designated unit trust” in subsection (14), a reference to a condition being satisfied throughout the basis period for a year of assessment is, where the unit trust is dissolved at any time in the basis period, a reference to the condition being satisfied from the beginning of the basis period up to the date of the dissolution.[37/2014]

(14E) Subsections (12), (13) and (13A) do not apply to a trust that is constituted on or after 1 April 2019.[37/2014]

(14F) In the case of a trust that is constituted before 1 April 2019 —(a)

that is not a designated unit trust (as defined in subsection (14)) for a year of assessment in respect of any basis period beginning on or after 1 April 2019; or

(b)

whose trustee did not make an election for subsection (12) to apply to the trustee’s income for any basis period beginning on or after that date,

subsections (12), (13) and (13A) do not apply to that trust for the year of assessment to which that basis period relates and for every subsequent year of assessment.

[37/2014]

(14G) Subsection (14F) applies to the trust for a subsequent year of assessment even if all of the requirements in the definition of “designated unit trust” in subsection (14) have been satisfied for that year of assessment.[37/2014]

(14H) In the case of a trust that is constituted before 1 April 2019 whose trustee did not make an election for subsection (12) to apply to the trustee’s income for the basis period immediately preceding the basis period in which 1 April 2019 falls, subsections (12), (13) and (13A) do not apply to that trust for the year of assessment to which the second‑mentioned basis period relates and for every subsequent year of assessment.[37/2014]

(14I) Subsection (14H) applies to the trust for the year of assessment to which the second‑mentioned basis period in that subsection relates or a subsequent year of assessment, even if all of the requirements in the definition of “designated unit trust” in subsection (14) have been satisfied for that year of assessment or that subsequent year of assessment.[37/2014]

(15) The statutory income for any year of assessment of any beneficiary under a trust is that share of the statutory income of the trustee for that year of assessment which corresponds to the share of the trust income to which the beneficiary is entitled for the year preceding the year of assessment.

(15A) Despite subsection (15), the statutory income for any year of assessment of a beneficiary of a trust (called in this subsection the first trust), where the beneficiary is itself a trustee of an approved REIT exchange‑traded fund, is that share of the statutory income of the trustee of the first trust that corresponds to the share of the income of the first trust to which the beneficiary is entitled for the year preceding the year of assessment.[45/2018]

(15B) To avoid doubt, section 43(2) (read with section 43(2A)(ba)) applies to the statutory income under subsection (15A) of the beneficiary.[45/2018]

(15C) Where a unitholder of a real estate investment trust is entitled to an amount, being a return of capital, from a trustee of the real estate investment trust, the cost of the units to the unitholder is reduced by the amount entitled.[45/2018]

(16) In subsection (15), “statutory income of the trustee” does not include —(a)

in relation to a trustee of a real estate investment trust within the meaning of section 43(10), any income from any trade or business carried on by the trustee other than the income of the kinds referred to in section 43(2A)(a)(i), (ii), (iii), (iv) and (v);

(b)

in relation to a trustee of an approved sub‑trust of a real estate investment trust within the meaning of section 43(10), any income from any trade or business carried on by the trustee other than income of the kinds referred to in section 43(2A)(b)(i), (ii) and (iii);

(ba)

in relation to a trustee of an approved REIT exchange‑traded fund within the meaning of section 43(10), any income from a trade or business carried on by the trustee, other than a distribution received from a real estate investment trust that is in turn made out of income of the kinds mentioned in section 43(2A)(a)(i), (ii), (iii), (iv) and (v); or

(c)

in relation to a trustee of any other trust, any income from any trade or business carried on by the trustee.[34/2016; 45/2018]