Public Consultation on Draft Income Tax (Amendment) Bill 2009

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1. The Ministry of Finance is seeking comments on the draft Income Tax (Amendment) Bill 2009 which sets out the legislative amendments to the Income Tax Act. We invite you to contribute comments on the amendments. Your views are important as they would help improve the draft legislation.


2. The draft Income Tax (Amendment) Bill 2009 incorporates amendments to the Income Tax Act relating to the following tax changes:

Budget 2009 tax changes:

These are the tax changes announced by Minister for Finance Mr Tharman Shanmugaratnam in the 2009 Budget Statement. The key changes include:

a. Cut in the corporate income tax rate from 18% to 17% with effect from Year of Assessment (YA) 2010;

b. Resilience Package Tax Changes, which include:
i) accelerated capital allowances for plant and machinery in the basis periods for YA 2010 and YA 2011;
ii) enhanced loss carryback in the basis periods for YA 2009 and YA 2010, and;
iii) liberalized exemption for remittance of foreign-sourced income, with effect from 22 January 2009 to 21 January 2010 (both dates inclusive);

c. New Tax framework for facilitating corporate amalgamations taking place on or after 22 January 2009;

d. Enhancements to incentives for promoting fund management in Singapore, with effect 1 April 2009 to 31 March 2014 (both dates inclusive).

Other tax changes:

These are changes or refinements to existing tax policies and administration resulting from on-going reviews of the income tax system. These refinements include:

e. Provision to disregard, for tax purposes, certain gains and losses from disposal of real properties;

f. Provision for arm’s length principle. For the avoidance of doubt, Comptroller of Income Tax may make adjustments to taxable profits where in his opinion, a transaction between related parties has been made on terms which differ from those which would be made between independent persons;

g. Removal of Commonwealth Tax Relief, as part of our rationalization of the relief for alleviating double taxation for tax residents following the recent extension of Unilateral Tax Credit for all foreign-sourced income in Budget 2008;

3. The summary tables [1] [2] list all the tax changes and explains the amendments to the Income Tax Act.

4. The aim of this exercise is to obtain feedback on areas of the draft legislation that could be improved in terms of clarity or compliance by taxpayers. For the Budget 2009 tax changes, we are primarily seeking feedback on the drafting of the legislation as the policies have been adopted after feedback and extensive debate in Parliament. For non-Budget 2009 tax changes, we welcome comments on both the policy and drafting aspects of the proposed legislative amendments.


5. We seek your support to ensure that the consultation exercise is productive and focused. Respondents are requested to follow these guidelines:

Please identify yourself as well as the organisation you represent (if any) so that we may follow up to clarify any issues, if necessary. Make your comments clear and concise.

Please use the prescribed template provided to help us understand your feedback better.

Your comments should focus on how the legislative amendments can be better written to make them clearer and to make compliance easier.

Please explain your points with illustrations, examples, data or alternative formulations of the amendments as far as possible.

6. This draft legislation is released only for the purpose of consultation and should therefore not be used for individual or business decisions as it does not represent the final legislation or regulations. All comments received during the consultation exercise will be reviewed thoroughly and, if accepted, will be incorporated in the Bill for introduction in Parliament.


7. The draft Income Tax (Amendment) Bill 2009 is available for public consultation from 22 June to 14 July 2009. We regret that comments received by the Ministry after 14 July 2009 will not be considered as they will be too late for incorporation into the final Bill.


8. We encourage all interested participants to submit your comments via our online submission form. Using this online submission form is the easiest and quickest way for your comments to reach us for consideration.

You can also send us your comments, using the prescribed template, through:

a. email to; or
b. fax to 6337 4134; or
c. post to: Ministry of Finance
100 High Street, #10-01
The Treasury
Singapore 179434.


9. We will publish on the Ministry of Finance website a summary of the main comments we receive together with our responses by September 2009. The summary will not disclose the identity of respondents, and will not separately address or acknowledge every comment received.


10. For your convenience, the relevant documents relating to this public consultation exercise can be downloaded for further reference.

Public Consultation