§ 43D — Concessionary rate of tax for headquarters company

43D.—(1) Despite section 43, the Minister may by regulations provide that tax at the rate of 10% is to be levied and paid for each year of assessment upon such income as the Minister may specify of an approved headquarters company derived by it from —(a)

the provision of such qualifying services as may be prescribed to its offices, associated companies and other persons where such offices, associated companies and persons are outside Singapore; or

(b)

such qualifying treasury, investment or financial activities as may be prescribed,

and those regulations may provide for the deduction of losses otherwise than in accordance with section 37(3).

[34/2016]

(1A) This section does not apply to any income derived on or after 1 October 2015.[2/2016]

(2) The concessionary rate of tax referred to in subsection (1) applies to an approved headquarters company —(a)

in respect of any qualifying service only where the qualifying service and the office, associated company or person to whom the service is rendered have been approved in relation to that headquarters company for such concessionary rate;

(b)

in respect of any qualifying treasury, investment or financial activity only where the qualifying activity has been approved in relation to that headquarters company for such concessionary rate; and

(c)

subject to such conditions as the Minister or such person as the Minister may appoint may impose.

(3) Regulations made under subsection (1) may provide for exemption from tax of income derived by an approved headquarters company from the provision of any qualifying service if —(a)

the qualifying service and the office, associated company or person to whom the service is rendered have been approved in relation to the approved headquarters company for the purposes of the exemption from tax; and

(b)

the approved headquarters company has global responsibility for the provision of any qualifying service.

(4) In this section —“approved” means approved by the Minister or such person as the Minister appoints;

“associated company”, in relation to an approved headquarters company, means a company —(a)

the operations of which are or can be controlled, directly or indirectly, by that headquarters company;

(b)

which controls or can control, directly or indirectly, the operations of that headquarters company; or

(c)

the operations of which are or can be controlled, directly or indirectly, by a person or persons who control or can control, directly or indirectly, the operations of that headquarters company;

“headquarters company” means a company carrying on the business in Singapore of providing management, technical or other supporting services to its offices outside Singapore or to its associated companies outside Singapore.[34/2016]

(5) For the purposes of subsection (4), a company is deemed to be an associated company in relation to an approved headquarters company if —(a)

at least 25% of the total number of its issued shares are beneficially owned, directly or indirectly, by the approved headquarters company; or

(b)

at least 25% of the total number of the issued shares of the approved headquarters company are beneficially owned, directly or indirectly, by the firstmentioned company.[43E

—(1) Despite section 43, the Minister may by regulations provide that tax at the rate of 10% is to be levied and paid for each year of assessment upon such income as the Minister may specify of an approved headquarters company derived by it from —(a)

the provision of such qualifying services as may be prescribed to its offices, associated companies and other persons where such offices, associated companies and persons are outside Singapore; or

(b)

such qualifying treasury, investment or financial activities as may be prescribed,

and those regulations may provide for the deduction of losses otherwise than in accordance with section 37(3).

[34/2016]

(1A) This section does not apply to any income derived on or after 1 October 2015.[2/2016]

(2) The concessionary rate of tax referred to in subsection (1) applies to an approved headquarters company —(a)

in respect of any qualifying service only where the qualifying service and the office, associated company or person to whom the service is rendered have been approved in relation to that headquarters company for such concessionary rate;

(b)

in respect of any qualifying treasury, investment or financial activity only where the qualifying activity has been approved in relation to that headquarters company for such concessionary rate; and

(c)

subject to such conditions as the Minister or such person as the Minister may appoint may impose.

(3) Regulations made under subsection (1) may provide for exemption from tax of income derived by an approved headquarters company from the provision of any qualifying service if —(a)

the qualifying service and the office, associated company or person to whom the service is rendered have been approved in relation to the approved headquarters company for the purposes of the exemption from tax; and

(b)

the approved headquarters company has global responsibility for the provision of any qualifying service.

(4) In this section —“approved” means approved by the Minister or such person as the Minister appoints;

“associated company”, in relation to an approved headquarters company, means a company —(a)

the operations of which are or can be controlled, directly or indirectly, by that headquarters company;

(b)

which controls or can control, directly or indirectly, the operations of that headquarters company; or

(c)

the operations of which are or can be controlled, directly or indirectly, by a person or persons who control or can control, directly or indirectly, the operations of that headquarters company;

“headquarters company” means a company carrying on the business in Singapore of providing management, technical or other supporting services to its offices outside Singapore or to its associated companies outside Singapore.[34/2016]

(5) For the purposes of subsection (4), a company is deemed to be an associated company in relation to an approved headquarters company if —(a)

at least 25% of the total number of its issued shares are beneficially owned, directly or indirectly, by the approved headquarters company; or

(b)

at least 25% of the total number of the issued shares of the approved headquarters company are beneficially owned, directly or indirectly, by the firstmentioned company.[43E