§ 43F — Concessionary rate of tax for offshore leasing of machinery and plant

43F.—(1) Despite section 43, tax at the rate of 10% is to be levied and paid for each year of assessment upon the income of a leasing company accruing in or derived from Singapore in respect of offshore leasing of any machinery or plant or such other activity as may be prescribed by regulations.[34/2016]

(1A) This section does not apply to any income accruing in or derived from Singapore on or after 1 January 2016.[2/2016]

(2) In determining the income of a leasing company from offshore leasing —(a)

the allowances under section 19, 19A, 20, 21, 22 or 23 must be taken into account even if no claim for such allowances has been made;

(b)

the allowances under section 19, 19A, 20, 21, 22 or 23 in respect of offshore finance leasing in any year of assessment after deduction against the income from such leasing are available as a deduction against any income from onshore finance leasing for that year of assessment, and any balance of the allowances is not, subject to paragraph (c), available as a deduction against any other income or available for transfer under section 37B;

(c)

where the leasing company ceases to derive income from finance leasing in the basis period for any year of assessment, any balance of the allowances in respect of finance leasing after the deduction in paragraph (b) is available as a deduction against any other income for that year of assessment and for any subsequent year of assessment in accordance with section 23; and

(d)

the Comptroller must determine the manner and extent to which —(i)

allowances under section 19, 19A, 20, 21, 22 or 23 and any expenses and donations allowable under this Act are to be deducted; and

(ii)

any loss may be deducted under section 37.

(3) Subsection (2) applies, with the necessary modifications, in determining the income of a leasing company from any activity prescribed by regulations made under subsection (1) as if such income were income from offshore operating leasing.

(4) [Deleted by Act 53 of 2007]

(5) [Deleted by Act 53 of 2007]

(6) Despite subsection (1), a leasing company may, at any time, elect that the whole of its income accruing in or derived from Singapore in respect of offshore leasing of any machinery or plant be taxed at the rate prescribed by section 43(1)(a).

(7) An election under subsection (6) must be made by a leasing company by written notice to the Comptroller and is irrevocable.

(8) Where a leasing company has made an election under subsection (6) —(a)

subsections (1), (2) and (3) do not apply to the income of the leasing company for the year of assessment immediately following the year in which the election is made and for subsequent years of assessment; and

(b)

any allowance or the balance thereof in respect of finance leasing which was not deducted against the income of the leasing company for any year of assessment during which the concessionary rate prescribed by subsection (1) applies is available as a deduction against the income from finance leasing for the first year of assessment to which paragraph (a) applies and for any subsequent year of assessment.

(9) In this section —“finance lease”, “finance leasing” and “onshore finance leasing” have the meanings given by section 10C(3);

“leasing company” means any company carrying on a business of leasing machinery or plant;

“offshore finance leasing” means the offshore leasing of any machinery or plant under any finance lease;

“offshore leasing” means the leasing of any machinery or plant, other than those which have been treated as though they had been sold pursuant to regulations made under section 10C(1), where such machinery or plant is used outside Singapore, and the payments under the lease —(a)

are in currencies other than Singapore dollars; and

(b)

are not deductible against any income accruing in or derived from Singapore;

“offshore operating leasing” means the offshore leasing of any machinery or plant, other than offshore finance leasing.[43I

—(1) Despite section 43, tax at the rate of 10% is to be levied and paid for each year of assessment upon the income of a leasing company accruing in or derived from Singapore in respect of offshore leasing of any machinery or plant or such other activity as may be prescribed by regulations.[34/2016]

(1A) This section does not apply to any income accruing in or derived from Singapore on or after 1 January 2016.[2/2016]

(2) In determining the income of a leasing company from offshore leasing —(a)

the allowances under section 19, 19A, 20, 21, 22 or 23 must be taken into account even if no claim for such allowances has been made;

(b)

the allowances under section 19, 19A, 20, 21, 22 or 23 in respect of offshore finance leasing in any year of assessment after deduction against the income from such leasing are available as a deduction against any income from onshore finance leasing for that year of assessment, and any balance of the allowances is not, subject to paragraph (c), available as a deduction against any other income or available for transfer under section 37B;

(c)

where the leasing company ceases to derive income from finance leasing in the basis period for any year of assessment, any balance of the allowances in respect of finance leasing after the deduction in paragraph (b) is available as a deduction against any other income for that year of assessment and for any subsequent year of assessment in accordance with section 23; and

(d)

the Comptroller must determine the manner and extent to which —(i)

allowances under section 19, 19A, 20, 21, 22 or 23 and any expenses and donations allowable under this Act are to be deducted; and

(ii)

any loss may be deducted under section 37.

(3) Subsection (2) applies, with the necessary modifications, in determining the income of a leasing company from any activity prescribed by regulations made under subsection (1) as if such income were income from offshore operating leasing.

(4) [Deleted by Act 53 of 2007]

(5) [Deleted by Act 53 of 2007]

(6) Despite subsection (1), a leasing company may, at any time, elect that the whole of its income accruing in or derived from Singapore in respect of offshore leasing of any machinery or plant be taxed at the rate prescribed by section 43(1)(a).

(7) An election under subsection (6) must be made by a leasing company by written notice to the Comptroller and is irrevocable.

(8) Where a leasing company has made an election under subsection (6) —(a)

subsections (1), (2) and (3) do not apply to the income of the leasing company for the year of assessment immediately following the year in which the election is made and for subsequent years of assessment; and

(b)

any allowance or the balance thereof in respect of finance leasing which was not deducted against the income of the leasing company for any year of assessment during which the concessionary rate prescribed by subsection (1) applies is available as a deduction against the income from finance leasing for the first year of assessment to which paragraph (a) applies and for any subsequent year of assessment.

(9) In this section —“finance lease”, “finance leasing” and “onshore finance leasing” have the meanings given by section 10C(3);

“leasing company” means any company carrying on a business of leasing machinery or plant;

“offshore finance leasing” means the offshore leasing of any machinery or plant under any finance lease;

“offshore leasing” means the leasing of any machinery or plant, other than those which have been treated as though they had been sold pursuant to regulations made under section 10C(1), where such machinery or plant is used outside Singapore, and the payments under the lease —(a)

are in currencies other than Singapore dollars; and

(b)

are not deductible against any income accruing in or derived from Singapore;

“offshore operating leasing” means the offshore leasing of any machinery or plant, other than offshore finance leasing.[43I