Economic Expansion Incentives (Relief from Income Tax) Act 1967

“approved foreign loan” means a loan which is approved under section 33 to be an approved foreign loan;

“approved royalties, fees or contributions” means royalties, technical assistance fees or contributions to research and development costs which have been approved under section 37 to be approved royalties, fees or contributions;

“certificate” includes a letter or other document issued by the Minister to a company pursuant to an application made by the company under a provision of this Act;

“company” means any company incorporated or registered in accordance with the provisions of any written law relating to companies;

“Comptroller” means the Comptroller of Income Tax appointed under the Income Tax Act 1947;

“foreign loan certificate” means a foreign loan certificate issued under section 33;

“intellectual property income” means any intellectual property income prescribed by the Minister under section 64;

“manufacture”, in relation to a product, includes any process or method used in making or developing the product;

“new trade or business” means the trade or business —

“old trade or business” means the trade or business of a pioneer enterprise which satisfies all of the following conditions:

“pioneer certificate” means a pioneer certificate issued under section 5;

“pioneer enterprise” means any company which has been approved by the Minister under section 5 for a pioneer product and to which a pioneer certificate is issued under that section;

“pioneer industry” means an industry approved under section 4 to be a pioneer industry;

“pioneer product” means a product approved under section 4 to be a pioneer product;

“production day”, in relation to a pioneer product that is approved under section 5(3) for a pioneer enterprise, means the date specified in the pioneer enterprise’s pioneer certificate under section 5(5)(b) or (7)(a) or (c) as the production day of that product;

“productive equipment” means machinery or plant which would normally qualify for deduction under sections 19, 19A, 20, 21 and 22 of the Income Tax Act 1947;

“royalties, fees or contributions certificate” means a certificate issued under section 37;

“royalties or technical assistance fees” includes —

“tax” means income tax imposed by the Income Tax Act 1947;

“tax relief expiry date”, in relation to an old trade or business, means —

The Minister may, if he or she considers it expedient in the public interest to do so, approve an industry, which is not being carried on in Singapore on a scale adequate to the economic needs of Singapore and for which in the Minister’s opinion there are favourable prospects for development, to be a pioneer industry and any specific product of that industry to be a pioneer product.

The Minister may revoke any approval given under this section but any such revocation does not affect the operation of any pioneer certificate issued to any pioneer enterprise before the revocation.

Any industry which has been approved as a pioneer industry or any product which has been approved as a pioneer product before 25 November 2004 is deemed to have been approved under this section.

Any company which is desirous of producing a pioneer product may make a written application to the Minister to be approved as a pioneer enterprise for that pioneer product in such form and with such particulars as may be prescribed.

A company may make an application under subsection (1) to be approved as a pioneer enterprise for more than one pioneer product which it is desirous of producing.

Where the Minister is satisfied that it is expedient in the public interest to do so and, in particular, having regard to the production or anticipated production of the pioneer product from all sources of production in Singapore, the Minister may approve that company as a pioneer enterprise for that pioneer product and issue a pioneer certificate to the company in respect of that pioneer product, subject to such conditions as the Minister thinks fit.

No company may be approved as a pioneer enterprise on or after 1 January 2024.

Every pioneer certificate issued under this section to a pioneer enterprise must be in respect of a pioneer product and must specify —

Where the Minister approves a company as a pioneer enterprise for 2 or more pioneer products, the Minister may issue a single pioneer certificate in respect of those pioneer products if —

The Minister may, upon the application of any pioneer enterprise, amend a pioneer certificate issued to the pioneer enterprise —

Without affecting section 61, the Minister may, on the Minister’s own initiative, remove any pioneer product from a pioneer certificate with effect from a date determined by the Minister, if the Minister is satisfied that the pioneer enterprise has contravened —

The tax relief period of a pioneer enterprise for a pioneer product commences on the production day of that pioneer product and continues for such period, not exceeding 15 years, as the Minister may determine.

Subject to subsections (3) and (4), the Minister may, if the Minister is satisfied that it is expedient in the public interest to do so and subject to such conditions as the Minister may impose —

The total tax relief period for a pioneer product, together with all extensions, must not in total exceed 15 years.

Where the Minister extends the tax relief periods of a pioneer enterprise for more than one of the pioneer products specified in the pioneer certificate under subsection (2)(b), the Minister must ensure that all the tax relief periods of those pioneer products, after such extension, expire on the same day.

Where a pioneer product is removed from a pioneer certificate under section 5(7)(b) or (8), its tax relief period expires on the effective date of its removal.

Where at any time —

Where the carrying on of such separate trade or business results in a loss in any accounting period, the loss must be brought into the computation of the income of the pioneer enterprise from the old trade or business for that period unless the Comptroller, having regard to all the circumstances of the case, is satisfied that the loss was not incurred for the purpose of obtaining a tax advantage.

Where the carrying on of such separate trade or business results in a profit in any accounting period, and the profit, computed in accordance with the provisions of the Income Tax Act 1947 as modified by this section, amounts to less than 5% of the full sum receivable from the sale of goods or the provision of services, the statutory income from that source is deemed to be 5% (or such lower rate as the Comptroller may specify in any particular case) of the full sum so receivable and the income of the pioneer enterprise from the old trade or business is to be abated accordingly.

Where, in the opinion of the Comptroller, the carrying on of such separate trade or business is subordinate and incidental to the carrying on of the old trade or business, the income or loss arising from such separate trade or business is considered to form part of the income or loss of the pioneer enterprise from that old trade or business.

The income of a pioneer enterprise from each of its old trades or businesses is to be ascertained in accordance with the provisions of the Income Tax Act 1947 after making such adjustments as may be necessary in consequence of any direction given under section 9.

In determining the income of a pioneer enterprise referred to in subsection (1), the allowances provided for in sections 16, 17, 18, 18B, 18C, 19, 19A, 19B, 20, 21 and 22 of the Income Tax Act 1947 for capital expenditure incurred for the purposes of each old trade or business must be taken into account even though no claim for such allowances has been made.

Where the tax relief expiry date of an old trade or business of a pioneer enterprise is before the last day of the basis period for any year of assessment, then, for the purpose of determining the income in respect of —

For the purpose of computing the allowances under subsection (3) —

Where in any year of assessment full effect cannot, by reason of an insufficiency of profits for that year of assessment, be given to the allowances mentioned in subsection (2), then the balance of the allowances must be added to, and is deemed to form part of, the corresponding allowances (if any) for the next succeeding year of assessment and, if no such corresponding allowances fall to be made for that year, is deemed to constitute the corresponding allowances for that year, and so on for subsequent years of assessment.

Despite subsections (1) and (2), where a pioneer enterprise has incurred or has given a written undertaking to the Minister to incur a capital expenditure of not less than $150 million and —

Where a pioneer enterprise referred to in subsection (6) carries on a separate trade or business, and any building, plant or machinery is used both for the purposes of that trade or business and the trade or business relating to the relevant pioneer product, subsection (6) applies to that building, plant or machinery.

Where a pioneer enterprise has, before 16 August 1991, incurred a capital expenditure of not less than $1,000 million, subsection (6) applies to that enterprise in respect of that expenditure even though the enterprise has not complied with paragraphs (a) and (b) of that subsection.

Where —

In subsections (6) and (8), “capital expenditure” means capital expenditure in connection with a pioneer product, on factory building (excluding land) in Singapore, on any new plant or new machinery used in Singapore and on intellectual property rights for use in Singapore and, subject to the Minister’s approval, on any secondhand plant or secondhand machinery used in Singapore.

Where any statement issued under section 12 has become final and conclusive, the amount of the income shown by the statement does not form part of the statutory income of the pioneer enterprise for any year of assessment and is exempt from tax.

The Comptroller may, in his or her discretion and before the statement mentioned in subsection (1) has become final and conclusive, declare that a specified part of the amount of such income is not in dispute and such an undisputed amount of income is exempt from tax, pending such a statement becoming final and conclusive.

Despite section 13, the Comptroller may, subject to section 74 of the Income Tax Act 1947, make an assessment or additional assessment as described in subsection (2) upon a pioneer enterprise if it appears to the Comptroller that any amount of income of the pioneer enterprise exempted from tax ought not to have been exempted by reason of —

The assessment or additional assessment under subsection (1) is at an amount that appears to the Comptroller to be necessary to counteract any profit obtained by the pioneer enterprise from the exempted income.

Parts 17 and 18 of the Income Tax Act 1947 (relating to assessments, objections and appeals) and any rules made under that Act apply, with the necessary modifications, to an assessment or additional assessment under subsection (1) as if it were a notice of assessment under those Parts.

Where a pioneer enterprise has at any time —

The balance of any such loss which remains unabsorbed on the tax relief expiry date of the old trade or business is available as a deduction for the year of assessment which relates to the basis period in which the new trade or business commences and for any subsequent year of assessment in accordance with section 37 of the Income Tax Act 1947, in the following descending order of priority:

Despite section 7(a), the balance of any allowance as provided for in section 10 which remains unabsorbed on the tax relief expiry date of the old trade or business is available as a deduction for the year of assessment which relates to the basis period in which the new trade or business commences and for any subsequent year of assessment in accordance with section 23 of the Income Tax Act 1947, in the following descending order of priority:

“commencement day”, in relation to a qualifying activity that is approved under section 17(3) for a pioneer service company, means the date specified in the pioneer service company’s certificate under section 17(5)(b) or (7)(a) or (c) as the commencement day of that qualifying activity;

“pioneer service company” means a company which has been issued with a certificate under section 17;

“qualifying activity” means any of the following:

Where a company is engaged in or desires to engage in any qualifying activity, the company may apply in the prescribed form to the Minister for approval as a pioneer service company for that qualifying activity.

A company may make an application under subsection (1) to be approved as a pioneer service company for more than one qualifying activity which it is engaged in or desires to engage in.

The Minister may, if he or she considers it expedient in the public interest to do so, approve the company as a pioneer service company for the qualifying activity and issue to that company a certificate subject to such conditions as the Minister thinks fit.

No company may be approved as a pioneer service company on or after 1 January 2024.

Every certificate issued under this section to a pioneer service company must be in respect of a qualifying activity and must specify —

Where the Minister approves a company as a pioneer service company for 2 or more qualifying activities, the Minister may issue a single certificate in respect of those qualifying activities if —

The Minister may, upon the application of any pioneer service company, amend a certificate issued to the company —

Without affecting section 61, the Minister may, on the Minister’s own initiative, remove any qualifying activity from a certificate with effect from a date determined by the Minister, if the Minister is satisfied that the pioneer service company has contravened —

In ascertaining the income of a pioneer service company from a qualifying activity under section 10 (as applied by section 18), any intellectual property income produced by the activity, as well as any allowance for capital expenditure incurred for the purposes of that activity that is attributable to or apportioned by the Comptroller to any intellectual property income, must be excluded.

For the purposes of the application of section 15 (as applied by section 18), a reference to income in section 15(1) excludes any intellectual property income.

To avoid doubt, intellectual property income excluded under subsection (1) remains chargeable to tax under the Income Tax Act 1947.[19A

“commencement day”, in relation to a qualifying activity that is approved under section 21(3) for a development and expansion company, means the date specified in the development and expansion company’s certificate under section 21(5)(b) or (7)(a) or (c) as the commencement day of that qualifying activity;

“development and expansion company” means a company which has been issued with a certificate under section 21(3);

“qualifying activity” means any of the following:

Any company engaged in, or which desires to engage in, any qualifying activity may apply in the prescribed form to the Minister for approval as a development and expansion company for that qualifying activity.

A company may make an application under subsection (1) to be approved as a development and expansion company for more than one qualifying activity which it is engaged in or desires to engage in.

The Minister may, if the Minister considers it expedient in the public interest to do so, approve the company as a development and expansion company for the qualifying activity and issue to that company a certificate subject to such conditions as the Minister may impose.

No company may be approved as a development and expansion company on or after 1 January 2024.

Every certificate issued to a development and expansion company must be in respect of a qualifying activity and must specify —

Where the Minister approves a company as a development and expansion company for 2 or more qualifying activities, the Minister may issue a single certificate in respect of those qualifying activities if —

The Minister may, upon the application of any development and expansion company, amend a certificate issued to the company —

Without affecting section 61, the Minister may, on the Minister’s own initiative, remove any qualifying activity from a certificate with effect from a date determined by the Minister, if the Minister is satisfied that the development and expansion company has contravened —

Despite section 43 of the Income Tax Act 1947, tax at the applicable concessionary rate in subsections (10), (11), (13) and (15) (whichever is applicable) is levied and must be paid for each year of assessment —

In subsection (9), the concessionary rate is —

The Minister may, on the Minister’s own initiative or on the application of a development and expansion company, amend the company’s certificate by substituting the concessionary rate of tax specified in the certificate in accordance with subsection (10), with a concessionary rate of either 5% or 10%, and in that event the concessionary rate is the rate as substituted.

Subsection (11) applies whether the development and expansion company was approved as such before, on or after 4 May 2018.

Subject to subsection (14), in the case of a development and expansion company that is approved as such on or after 29 February 2012, or that has been granted on or after that date an extension of its tax relief period or periods for any qualifying activity or activities, the concessionary rate of tax applicable to the expansion income derived by it —

The Minister may, on the Minister’s own initiative or on the application of a development and expansion company mentioned in subsection (13), amend the company’s certificate for any qualifying activity by substituting the rate of tax specified in the certificate in accordance with that subsection (called in this section the initial rate) for expansion income derived from that activity during a part of the tax relief period, with a rate of tax that complies with subsection (16) (called in this section the substituted rate).

Where subsection (14) applies, then —

The substituted rate for a part of the tax relief period mentioned in subsection (14) is a rate computed by the formula A + B, where —

In subsections (13), (14), (15) and (16), the parts of a tax relief period for a qualifying activity are —

The expansion income is the income from such qualifying activity or activities (called in this section and section 25 the qualifying income) to which the certificate issued under this section relates that exceeds the average corresponding income.

The average corresponding income referred to in subsection (18) is to be determined by taking one‑third of the total of the corresponding qualifying income for the 3 years immediately preceding the commencement day specified in the certificate issued under this section from that qualifying activity or those qualifying activities.

Where a development and expansion company which has been approved as such at any time before 29 February 2012, and has been granted a tax relief period of at least 10 years, is granted at any time before that date an extension or a further extension of its tax relief period under section 22(1)(b) or (2), the Minister must compute the average corresponding income for each such extension or further extension in accordance with subsection (21).

The average corresponding income for each extension or further extension referred to in subsection (20) is to be determined by taking one-third of the total of the corresponding qualifying income for the 3 years immediately preceding the date of that extension or further extension of its tax relief period, as the case may be.

Despite subsections (19), (20) and (21), the Minister may, if he or she thinks fit, specify any amount to be the average corresponding income in substitution of the amount determined under those subsections.[19J

Subject to subsection (3), the tax relief period of a development and expansion company for a qualifying activity commences on its commencement day of that qualifying activity and continues —

Subject to subsection (3), the Minister may, if the Minister is satisfied that it is expedient in the public interest to do so and subject to such conditions as the Minister may impose —

The total tax relief period of a development and expansion company for a qualifying activity under subsections (1) and (2) must not in the aggregate exceed 20 years.

Despite subsection (3) and subject to subsection (5), the Minister may, if the Minister is satisfied that it is expedient in the public interest to do so and subject to such terms and conditions as the Minister may impose, extend the tax relief period of a relevant development and expansion company for a qualifying activity (beyond the maximum total period allowed under subsection (3)) for such further period or periods, not exceeding 10 years at any one time, as the Minister may determine.

The total tax relief period of a relevant development and expansion company for a qualifying activity under subsections (1), (2) and (4) must not in the aggregate exceed 40 years.

An extension of the tax relief period of a relevant development and expansion company for a qualifying activity under subsection (4) may only be granted during the period between 18 February 2008 and 31 December 2023 (both dates inclusive).

In subsections (4), (5) and (6), “relevant development and expansion company” means a development and expansion company which engages in one or more qualifying activities, and oversees, manages or controls the conduct of any activity on a regional or global basis.

Any tax relief period initially granted to a development and expansion company before 25 November 2004 which exceeds 10 years is deemed to have been granted under this section.

Where a development and expansion company has been granted tax relief under Part IIIA in force immediately before 28 April 2004 in respect of any qualifying activity specified in the certificate issued under section 21(3), the Minister must, in extending the tax relief period of the company for that qualifying activity under subsection (1), (2) or (4), take into account the tax relief period of the company for that qualifying activity under that Part.

The Minister must, in extending the tax relief period of a development and expansion company for international legal services as defined in section 23(3), take into account any tax relief period which it enjoyed for such services under section 23.

Despite anything in this section, the tax relief period of a development and expansion company that is deemed to be an approved company for the purposes of section 43U of the Income Tax Act 1947 under regulations made under that section, expires on 1 June 2011 and may not be extended.[19K

If a company engaged in international legal services is approved under section 21(1) as a development and expansion company for those services at any time between 1 April 2010 and 30 June 2017 (both dates inclusive), then —

This section does not apply to a company approved under section 13S(1) of the Income Tax Act 1947.

In this section —

“expansion income” has the meaning given by section 21;

“international legal services” means any qualifying activity comprising legal services that qualify for zero‑rating under section 21(3) of the Goods and Services Tax Act 1993.[19KA

Subject to subsections (4) and (6) —

The deductions and adjustments for subsection (1) are as follows:

To avoid doubt, intellectual property income deducted under subsection (1) (read with subsection (2)) remains chargeable to tax under the Income Tax Act 1947.

In determining the qualifying income of a development and expansion company mentioned in subsection (1)(a) or the total qualifying income of a development and expansion company mentioned in subsection (1)(b) for the basis period for any year of assessment —

In subsection (4), a reference to allowances for capital expenditure incurred for the purposes of a qualifying activity excludes any such allowance that is attributable to or apportioned by the Comptroller to intellectual property income.

Section 37A of the Income Tax Act 1947 applies, with the necessary modifications, in relation to —

For the purpose of the application under subsection (6), any reference in section 37A of the Income Tax Act 1947 to income of a company subject to tax at a higher or lower rate of tax or income of the company subject to tax at a higher or lower rate of tax (as the case may be) is a reference to the qualifying income or the total qualifying income of the development and expansion company.[19M

Where at any time —

Where, in the Comptroller’s opinion, the carrying on of such other trade or business is subordinate or incidental to the carrying on of the qualifying activity or activities, the income or loss arising from the other trade or business is considered to form part of the income or loss of the company from that qualifying activity or the total income or total loss of the company from those qualifying activities.[19N

“average corresponding income” means the average corresponding income mentioned in section 21(18);

“development and expansion award” means an approval given by the Minister to a company under Part 4 to be a development and expansion company for a Part 4 qualifying activity;

“development and expansion company” means a development and expansion company as defined in section 20;

“Part 3 commencement day”, in relation to a Part 3 qualifying activity, has the meaning given to “commencement day” in section 16;

“Part 3 qualifying activity” means any qualifying activity as defined in section 16;

“Part 4 commencement day”, in relation to a Part 4 qualifying activity, has the meaning given to “commencement day” in section 20;

“Part 4 qualifying activity” means any qualifying activity as defined in section 20;

“pioneer industry award” means an approval given by the Minister to a company under Part 2 to be a pioneer enterprise for a pioneer product;

“pioneer service award” means an approval given by the Minister to a company under Part 3 to be a pioneer service company for a Part 3 qualifying activity;

“pioneer service company” means a pioneer service company as defined in section 16.[20

This Part applies where, because of a transfer or proposed transfer to a company (called in this Part a transferee company) of any business of a pioneer enterprise, pioneer service company or development and expansion company (called in this Part a transferor company) to which the transferor company’s pioneer industry award, pioneer service award or development and expansion award (as the case may be) relates —

In subsection (1), a transferee company includes a company that results from an amalgamation or merger involving the transferor company.[21

The transferor company may apply to the Minister to transfer to the transferee company the whole or part of its pioneer industry award, pioneer service award or development and expansion award (called in this section the subject award) that relates to the subject product or subject activity, as the case may be.

The application under subsection (1) must be made in writing, in the form and containing the particulars specified by the Minister.

The Minister may approve the application under subsection (1) if the Minister is satisfied that —

In approving an application under subsection (1), the Minister may —

In approving an application under subsection (1) that relates to a development and expansion award, the Minister may, despite section 21(19), (20) and (21) —

Where the Minister approves an application under subsection (1), then —

The Minister may, instead of approving the application under subsection (1), require the transferee company to apply for a new pioneer industry award, pioneer service award or development and expansion award, as the case may be.

To avoid doubt —

A certificate issued to a transferee company under section 31(6)(f) must specify —

Where the Minister approves an application under section 31(1) involving 2 or more pioneer products, 2 or more Part 3 qualifying activities or 2 or more Part 4 qualifying activities (as the case may be), the Minister may issue a single certificate to the transferee company in respect of those pioneer products, Part 3 qualifying activities or Part 4 qualifying activities if —

A certificate issued to a transferee company under section 31(6)(f) is treated as a pioneer certificate, a certificate issued under section 17 or a certificate issued under section 21, as the case may be.[23

A company that has obtained, or desires to obtain, a loan of not less than $20 million from a non‑resident person (called in this Part a foreign lender) by means of an agreement under which credit facilities are granted for the purchase of productive equipment for the purposes of its trade or business, may apply to the Minister for that loan to be approved as an approved foreign loan.

The Minister may, where the Minister thinks it expedient to do so, consider an application for approval in respect of a foreign loan of less than $20 million.

The application must be in such form and with such particulars as may be prescribed, and must be accompanied by a copy of the agreement.

Where the Minister is satisfied as to the bona fides of such an application and that it is expedient in the public interest to do so, the Minister may —

Every certificate issued under subsection (4) must be in such form and contain such particulars as may be prescribed.

The Minister may not approve any loan as an approved foreign loan on or after 1 January 2024.[57

Despite section 43(1) of the Income Tax Act 1947, the Minister may, subject to subsection (2), if the Minister is satisfied that it is expedient in the public interest to do so, by an endorsement to that effect on the approved foreign loan certificate, exempt from tax or authorise that tax at such concessionary rate as specified in the certificate be levied and paid upon any interest on an approved foreign loan payable to a foreign lender.

Where a company has contravened section 34 or any conditions imposed by the Minister under section 33(5), the amount which, but for subsection (1), would have been deductible by the company from the interest paid by it to the foreign lender under section 45 of the Income Tax Act 1947 is deemed to have been deducted from that interest and is a debt due from the company to the Government and recoverable in the manner provided by section 89 of the Income Tax Act 1947.

No action may be taken by the Comptroller to recover any debt under subsection (2) without the prior sanction of the Minister.[59

Subject to subsection (3), section 35 applies to any additional interest payable on an approved foreign loan by reason of any arrangement whereby the period within which the loan must be repaid in full has been extended.

The rate of interest payable in respect of any such extended period must not, without the prior sanction of the Minister, be higher than the rate of interest specified in the certificate relating to the approved foreign loan.

Any company making any such arrangement must give written notice thereof to the Minister within 30 days from the date on which the arrangement is made.[60

A company engaged in any industry which is desirous of entering into an agreement or arrangement with a non‑resident person whereby royalties or technical assistance fees or contributions to research and development costs are payable to the non‑resident person, may apply to the Minister for those royalties, fees or contributions to be approved as approved royalties, fees or contributions (as the case may be) for the purposes of this Part.

The application must be in such form and contain such particulars as the Minister may require, and must be accompanied by —

Where the Minister is satisfied as to the bona fides of an application and that it is expedient in the public interest to do so, the Minister may —

The Minister may not approve any royalties, fees or contributions as approved royalties, fees or contributions on or after 1 January 2024.[61

If for any reason any approved royalties, fees or contributions payable by a company cease to become payable before the expiry of the period of agreement or arrangement related thereto, the company must, within 30 days from the date on which the royalties, fees or contributions cease to become payable, give notice thereof to the Minister.

The company to which a certificate has been issued under section 37 must not, without the prior sanction of the Minister, amend or otherwise vary the terms of the agreement or arrangement related thereto, except in cases where for the same consideration the amount of the approved royalties, fees or contributions is to be reduced and in that event the company must notify the Minister accordingly within 30 days from the date on which the amount is reduced.[62

Despite section 43(1) of the Income Tax Act 1947, the Minister may, subject to subsection (2), if he or she is satisfied that it is expedient in the public interest to do so, by an endorsement to that effect on the approved royalties, fees or contributions certificate, exempt from tax or authorise that tax at such concessionary rate as specified in the certificate be levied and paid upon any approved royalties, fees or contributions received by a non-resident person.

Where —

In subsection (2), the approval to be revoked, in the case of a contravention of section 38(2), is the approval of those royalties, fees or contributions that are payable under the agreement or arrangement that is the subject of the contravention.