§ 50 — Tax credits

50.—(1) This section has effect where, under arrangements having effect under section 49, tax payable in respect of any income in the territory with the government of which the arrangements are made is to be allowed as a credit against tax payable in respect of that income in Singapore.(1A) To avoid doubt, this section —(a)

does not apply where the tax payable in respect of income in that territory is an excluded top-up tax; and

(b)

applies where the tax payable in respect of income in that territory is a qualified domestic minimum top-up tax that is payable —(i)

in respect of the income of a permanent establishment in a territory; or

(ii)

in the cases in subsections (5)(c) and (7)(a), by a company in respect of the profits out of which it pays the dividend.[Act 36 of 2024 wef 20/03/2025]

(2) The amount of the income tax chargeable in respect of the income is reduced by the amount of the credit; except that credit is not allowed against income tax for any year of assessment unless the person entitled to the income is resident in Singapore during that year.

(3) The credit must not exceed the amount which would be produced by computing the amount of the income in accordance with the provisions of this Act and then charging it to income tax at a rate ascertained by dividing the income tax chargeable (before allowance of credit under any arrangements having effect under section 49) on the assessable income of the person entitled to the income by the amount of the person’s assessable income.

(4) Without limiting subsection (3), the total credit to be allowed to a person for any year of assessment for foreign tax under all arrangements having effect under section 49 must not exceed the total income tax payable by the person for that year of assessment, excluding any tax payable by the person under section 45.

(5) In computing the amount of the income —(a)

no deduction is allowed in respect of foreign tax (whether in respect of the same or any other income);

(b)

where the income tax chargeable depends on the amount received in Singapore, that amount is to be increased by the appropriate amount of the foreign tax in respect of the income; and

(c)

where the income includes a dividend and under the arrangements foreign tax not chargeable directly or by deduction in respect of the dividend is to be taken into account in considering whether any (and if so what) credit is to be given against income tax in respect of the dividend, the amount of the income is to be increased by the amount of the foreign tax not so chargeable that falls to be taken into account in computing the amount of the credit.

(6) Subsection (5)(a) and (b) applies to the computation of assessable income for the purposes of determining the rate mentioned in subsection (3), and applies to such computation in relation to all income in the case of which credit falls to be given for foreign tax under arrangements for the time being in force under section 49.

(7) Where —(a)

the arrangements provide, in relation to dividends of some classes, but not in relation to dividends of other classes, that foreign tax not chargeable directly or by deduction in respect of dividends is to be taken into account in considering whether any (and if so what) credit is to be given against income tax in respect of the dividends; and

(b)

a dividend is paid that is not of a class in relation to which the arrangements so provide,

then, if the dividend is paid to a company which controls, directly or indirectly, not less than one‑half of the voting power in the company paying the dividend, credit is to be allowed as if the dividend were a dividend of a class in relation to which the arrangements so provide.

(8) Credit is not allowed under the arrangements against income tax chargeable in respect of the income of any person for any year of assessment if the person elects that credit is not to be allowed in the case of the person’s income for that year.

(9) Any claim for an allowance by way of credit must be made not later than 2 years after the end of the year of assessment to which the claim relates (if the year of assessment is the year of assessment 2021 or a previous year of assessment), or 4 years after the end of the year of assessment to which the claim relates (if the year of assessment is any other year of assessment), and in the event of any dispute as to the amount allowable the claim is subject to objection and appeal in like manner as an assessment.[27/2021]

(10) Where the amount of any credit given under the arrangements is rendered excessive or insufficient by reason of any adjustment of the amount of any tax payable either in Singapore or elsewhere, nothing in this Act limiting the time for the making of assessments or claims for relief applies to any assessment or claim to which the adjustment gives rise, being an assessment or claim made not later than 3 years from the time when all such assessments, adjustments and other determinations have been made, whether in Singapore or elsewhere, as are material in determining whether any (and if so what) credit falls to be given.[27/2021]

(11) If the amount of any credit given under the arrangements to a person is rendered excessive by reason of any adjustment of the amount of any tax payable in any territory outside Singapore, the person must give the Comptroller a written notice of the particulars of the adjustment, in the manner specified by the Comptroller, within one year after the adjustment is made.[27/2021]

(11A) Any person who, without reasonable excuse, fails to comply with subsection (11) shall be guilty of an offence and shall be liable on conviction to a penalty not exceeding the amount of the excess credit under subsection (11).[27/2021]

(11B) The Comptroller may compound any offence under subsection (11A).[27/2021]

(12) In this section —“foreign tax” means any tax payable in that territory which under the arrangements is to be so allowed;

“income tax” means tax chargeable under this Act.

—(1) This section has effect where, under arrangements having effect under section 49, tax payable in respect of any income in the territory with the government of which the arrangements are made is to be allowed as a credit against tax payable in respect of that income in Singapore.

(1A) To avoid doubt, this section —(a)

does not apply where the tax payable in respect of income in that territory is an excluded top-up tax; and

(b)

applies where the tax payable in respect of income in that territory is a qualified domestic minimum top-up tax that is payable —(i)

in respect of the income of a permanent establishment in a territory; or

(ii)

in the cases in subsections (5)(c) and (7)(a), by a company in respect of the profits out of which it pays the dividend.[Act 36 of 2024 wef 20/03/2025]

(2) The amount of the income tax chargeable in respect of the income is reduced by the amount of the credit; except that credit is not allowed against income tax for any year of assessment unless the person entitled to the income is resident in Singapore during that year.

(3) The credit must not exceed the amount which would be produced by computing the amount of the income in accordance with the provisions of this Act and then charging it to income tax at a rate ascertained by dividing the income tax chargeable (before allowance of credit under any arrangements having effect under section 49) on the assessable income of the person entitled to the income by the amount of the person’s assessable income.

(4) Without limiting subsection (3), the total credit to be allowed to a person for any year of assessment for foreign tax under all arrangements having effect under section 49 must not exceed the total income tax payable by the person for that year of assessment, excluding any tax payable by the person under section 45.

(5) In computing the amount of the income —(a)

no deduction is allowed in respect of foreign tax (whether in respect of the same or any other income);

(b)

where the income tax chargeable depends on the amount received in Singapore, that amount is to be increased by the appropriate amount of the foreign tax in respect of the income; and

(c)

where the income includes a dividend and under the arrangements foreign tax not chargeable directly or by deduction in respect of the dividend is to be taken into account in considering whether any (and if so what) credit is to be given against income tax in respect of the dividend, the amount of the income is to be increased by the amount of the foreign tax not so chargeable that falls to be taken into account in computing the amount of the credit.

(6) Subsection (5)(a) and (b) applies to the computation of assessable income for the purposes of determining the rate mentioned in subsection (3), and applies to such computation in relation to all income in the case of which credit falls to be given for foreign tax under arrangements for the time being in force under section 49.

(7) Where —(a)

the arrangements provide, in relation to dividends of some classes, but not in relation to dividends of other classes, that foreign tax not chargeable directly or by deduction in respect of dividends is to be taken into account in considering whether any (and if so what) credit is to be given against income tax in respect of the dividends; and

(b)

a dividend is paid that is not of a class in relation to which the arrangements so provide,

then, if the dividend is paid to a company which controls, directly or indirectly, not less than one‑half of the voting power in the company paying the dividend, credit is to be allowed as if the dividend were a dividend of a class in relation to which the arrangements so provide.

(8) Credit is not allowed under the arrangements against income tax chargeable in respect of the income of any person for any year of assessment if the person elects that credit is not to be allowed in the case of the person’s income for that year.

(9) Any claim for an allowance by way of credit must be made not later than 2 years after the end of the year of assessment to which the claim relates (if the year of assessment is the year of assessment 2021 or a previous year of assessment), or 4 years after the end of the year of assessment to which the claim relates (if the year of assessment is any other year of assessment), and in the event of any dispute as to the amount allowable the claim is subject to objection and appeal in like manner as an assessment.[27/2021]

(10) Where the amount of any credit given under the arrangements is rendered excessive or insufficient by reason of any adjustment of the amount of any tax payable either in Singapore or elsewhere, nothing in this Act limiting the time for the making of assessments or claims for relief applies to any assessment or claim to which the adjustment gives rise, being an assessment or claim made not later than 3 years from the time when all such assessments, adjustments and other determinations have been made, whether in Singapore or elsewhere, as are material in determining whether any (and if so what) credit falls to be given.[27/2021]

(11) If the amount of any credit given under the arrangements to a person is rendered excessive by reason of any adjustment of the amount of any tax payable in any territory outside Singapore, the person must give the Comptroller a written notice of the particulars of the adjustment, in the manner specified by the Comptroller, within one year after the adjustment is made.[27/2021]

(11A) Any person who, without reasonable excuse, fails to comply with subsection (11) shall be guilty of an offence and shall be liable on conviction to a penalty not exceeding the amount of the excess credit under subsection (11).[27/2021]

(11B) The Comptroller may compound any offence under subsection (11A).[27/2021]

(12) In this section —“foreign tax” means any tax payable in that territory which under the arrangements is to be so allowed;

“income tax” means tax chargeable under this Act.