§ 43N — Concessionary rate of tax for leasing of aircraft and aircraft engines

43N.—(1) Despite section 43, tax at the following rate is to be levied, and paid, for each year of assessment upon the income of an approved aircraft leasing company accruing in or derived from Singapore in respect of the leasing of any aircraft or aircraft engine or such other activity as the Minister may by regulations prescribe:(a)

where the company is approved before 1 April 2017, 5% or 10%, as specified by the Minister or such person as the Minister may appoint;

(b)

where the company is approved between 1 April 2017 and 16 February 2024 (both dates inclusive), 8%;[Act 35 of 2024 wef 01/01/2024]

(c)

where the company is approved on or after 17 February 2024, 8% or 10%, as specified by the Minister or an authorised body to the company;[Act 35 of 2024 wef 01/01/2024]

(d)

where subsection (1D) applies, the substituted concessionary rate mentioned in that subsection but only for income derived from (and including) the date specified by the Minister or authorised body to the company for the application of that rate, which may be a date earlier than the notice mentioned in that subsection but not earlier than 1 January 2024.[39/2017]

[Act 35 of 2024 wef 01/01/2024]

(1A) Despite subsection (1), where —(a)

a company was approved as an approved aircraft leasing company on or before 31 March 2017;

(b)

the company is approved again as an approved aircraft leasing company at any time on or after 1 April 2017;

(c)

the period of approval in paragraph (b) (called in this subsection the current approval period) starts immediately upon the expiry of the period of the approval in paragraph (a) (called in this subsection the previous approval period); and

(d)

the company elects to apply the concessionary rate of tax specified to it under subsection (1)(a) for the previous approval period, to the company’s income that accrues in or is derived from Singapore between the date of commencement of the current approval period and 31 December 2027 (both dates inclusive), in respect of an aircraft or aircraft engine to which this subsection applies,

then that concessionary rate of tax applies to such income if the company remains an approved aircraft leasing company at the time the income accrues to or is derived by the company.

[45/2018]

(1AA) To avoid doubt, the approval in subsection (1A)(b) includes an approval made under subsection (2) as in force immediately before the date of commencement of section 61(26) of the Income Tax (Amendment) Act 2020.[Act 41 of 2020 wef 12/04/2024]

(1B) Subsection (1A) —(a)

applies to an aircraft or aircraft engine that the company either owned (whether legally or beneficially) or of which it was a lessee under a finance lease treated as a sale under section 10C, as at the last day of the previous approval period; and

(b)

does not apply to any aircraft or aircraft engine that —(i)

has been disposed of by the company after that day and then re‑acquired by or leased back to the company; or

(ii)

has not been delivered to the company as of that day.[45/2018]

(1C) The election under subsection (1A) must be made by written notice to the Comptroller at the time of lodgment of the return of income for the year of assessment relating to the basis period in which the approval in subsection (1A)(b) is given or within such extended time as the Comptroller may allow.[45/2018]

(1D) The Minister or an authorised body may, on or after 17 February 2024, on the Minister’s or authorised body’s own initiative or on the application of the approved aircraft leasing company, by notice to the company substitute the concessionary rate of tax applicable to the company under subsection (1)(b) or (c) or (1A) with 8% or 10% (as the case may be), for the remaining part of the period in subsection (3).[Act 35 of 2024 wef 01/01/2024]

(2) The Minister or an authorised body may, subject to such conditions as the Minister or authorised body may impose, approve an aircraft leasing company as an approved aircraft leasing company for the purposes of this section.[32/2019]

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

(3) Tax at the concessionary rate of the income of an approved aircraft leasing company under subsection (1) is for a period not exceeding 5 years, except that the Minister or an authorised body may extend that period for a further period or periods, each of which must not exceed 5 years.[Act 41 of 2020 wef 12/04/2024]

(4) Approval may be granted under this section between 1 March 2007 and 31 December 2027 (both dates inclusive).[37/2014; 39/2017]

[Act 33 of 2022 wef 04/11/2022]

(5) In determining the income of an approved aircraft leasing company from the leasing of any aircraft or aircraft engine —(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 finance leasing in any year of assessment must be deducted against the income from such 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 approved aircraft 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 against the income from such leasing 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.

(6) Subsection (5) applies, with the necessary modifications, in determining the income of an approved aircraft leasing company from any activity prescribed by regulations made under subsection (1) as if such income were income from operating leasing.

(7) In this section —“aircraft leasing company” means a company incorporated and resident in Singapore or a registered business trust, carrying on a business of leasing aircraft or aircraft engines;

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

“leasing of any aircraft or aircraft engine” means the leasing of any aircraft or aircraft engine, other than one which has been treated as though it had been sold pursuant to regulations made under section 10C(1);

“operating leasing”, in relation to any aircraft or aircraft engine, means the leasing of the aircraft or aircraft engine, other than finance leasing.

(8) The reference to an authorised body in subsection (1)(c) is, in a case where the concessionary rate of tax in that provision applicable to an approved aircraft leasing company is specified to the company during the period from 17 February 2024 to 11 April 2024 (both dates inclusive), a reference to a person appointed by the Minister.[Act 25 of 2025 wef 01/01/2024]

(9) A reference in subsections (1)(d) and (1D) to an authorised body is, in a case where the notice to substitute the concessionary rate of tax applicable to an approved aircraft leasing company is given to the company during the period from 17 February 2024 to 11 April 2024 (both dates inclusive), a reference to a person appointed by the Minister.[Act 25 of 2025 wef 01/01/2024]

[43Y

[32/2019]

—(1) Despite section 43, tax at the following rate is to be levied, and paid, for each year of assessment upon the income of an approved aircraft leasing company accruing in or derived from Singapore in respect of the leasing of any aircraft or aircraft engine or such other activity as the Minister may by regulations prescribe:(a)

where the company is approved before 1 April 2017, 5% or 10%, as specified by the Minister or such person as the Minister may appoint;

(b)

where the company is approved between 1 April 2017 and 16 February 2024 (both dates inclusive), 8%;[Act 35 of 2024 wef 01/01/2024]

(c)

where the company is approved on or after 17 February 2024, 8% or 10%, as specified by the Minister or an authorised body to the company;[Act 35 of 2024 wef 01/01/2024]

(d)

where subsection (1D) applies, the substituted concessionary rate mentioned in that subsection but only for income derived from (and including) the date specified by the Minister or authorised body to the company for the application of that rate, which may be a date earlier than the notice mentioned in that subsection but not earlier than 1 January 2024.[39/2017]

[Act 35 of 2024 wef 01/01/2024]

(1A) Despite subsection (1), where —(a)

a company was approved as an approved aircraft leasing company on or before 31 March 2017;

(b)

the company is approved again as an approved aircraft leasing company at any time on or after 1 April 2017;

(c)

the period of approval in paragraph (b) (called in this subsection the current approval period) starts immediately upon the expiry of the period of the approval in paragraph (a) (called in this subsection the previous approval period); and

(d)

the company elects to apply the concessionary rate of tax specified to it under subsection (1)(a) for the previous approval period, to the company’s income that accrues in or is derived from Singapore between the date of commencement of the current approval period and 31 December 2027 (both dates inclusive), in respect of an aircraft or aircraft engine to which this subsection applies,

then that concessionary rate of tax applies to such income if the company remains an approved aircraft leasing company at the time the income accrues to or is derived by the company.

[45/2018]

(1AA) To avoid doubt, the approval in subsection (1A)(b) includes an approval made under subsection (2) as in force immediately before the date of commencement of section 61(26) of the Income Tax (Amendment) Act 2020.[Act 41 of 2020 wef 12/04/2024]

(1B) Subsection (1A) —(a)

applies to an aircraft or aircraft engine that the company either owned (whether legally or beneficially) or of which it was a lessee under a finance lease treated as a sale under section 10C, as at the last day of the previous approval period; and

(b)

does not apply to any aircraft or aircraft engine that —(i)

has been disposed of by the company after that day and then re‑acquired by or leased back to the company; or

(ii)

has not been delivered to the company as of that day.[45/2018]

(1C) The election under subsection (1A) must be made by written notice to the Comptroller at the time of lodgment of the return of income for the year of assessment relating to the basis period in which the approval in subsection (1A)(b) is given or within such extended time as the Comptroller may allow.[45/2018]

(1D) The Minister or an authorised body may, on or after 17 February 2024, on the Minister’s or authorised body’s own initiative or on the application of the approved aircraft leasing company, by notice to the company substitute the concessionary rate of tax applicable to the company under subsection (1)(b) or (c) or (1A) with 8% or 10% (as the case may be), for the remaining part of the period in subsection (3).[Act 35 of 2024 wef 01/01/2024]

(2) The Minister or an authorised body may, subject to such conditions as the Minister or authorised body may impose, approve an aircraft leasing company as an approved aircraft leasing company for the purposes of this section.[32/2019]

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

(3) Tax at the concessionary rate of the income of an approved aircraft leasing company under subsection (1) is for a period not exceeding 5 years, except that the Minister or an authorised body may extend that period for a further period or periods, each of which must not exceed 5 years.[Act 41 of 2020 wef 12/04/2024]

(4) Approval may be granted under this section between 1 March 2007 and 31 December 2027 (both dates inclusive).[37/2014; 39/2017]

[Act 33 of 2022 wef 04/11/2022]

(5) In determining the income of an approved aircraft leasing company from the leasing of any aircraft or aircraft engine —(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 finance leasing in any year of assessment must be deducted against the income from such 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 approved aircraft 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 against the income from such leasing 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.

(6) Subsection (5) applies, with the necessary modifications, in determining the income of an approved aircraft leasing company from any activity prescribed by regulations made under subsection (1) as if such income were income from operating leasing.

(7) In this section —“aircraft leasing company” means a company incorporated and resident in Singapore or a registered business trust, carrying on a business of leasing aircraft or aircraft engines;

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

“leasing of any aircraft or aircraft engine” means the leasing of any aircraft or aircraft engine, other than one which has been treated as though it had been sold pursuant to regulations made under section 10C(1);

“operating leasing”, in relation to any aircraft or aircraft engine, means the leasing of the aircraft or aircraft engine, other than finance leasing.

(8) The reference to an authorised body in subsection (1)(c) is, in a case where the concessionary rate of tax in that provision applicable to an approved aircraft leasing company is specified to the company during the period from 17 February 2024 to 11 April 2024 (both dates inclusive), a reference to a person appointed by the Minister.[Act 25 of 2025 wef 01/01/2024]

(9) A reference in subsections (1)(d) and (1D) to an authorised body is, in a case where the notice to substitute the concessionary rate of tax applicable to an approved aircraft leasing company is given to the company during the period from 17 February 2024 to 11 April 2024 (both dates inclusive), a reference to a person appointed by the Minister.[Act 25 of 2025 wef 01/01/2024]

[43Y

[32/2019]