Legislation

New Subsidiary Legislation

Goods and Services Tax (General) (Amendment No 2) Regulations 2003 (S316/2003)

With effect from 1 July 2003, the Goods and Services Tax (General) Regulations (Rg 1) have been amended with the deletion of Rg 106. Regulation 106 dealt with the zero-rating of services supplied by trustees and listed the conditions which must be satisfied for such services to enjoy zero-rating.

The zero-rating of services supplied by trustees is now provided for in the Goods and Services (International Services) (Amendment) Order 2003 (S317/2003).

Goods and Services (International Services) (Amendment) Order 2003 (S317/2003)

The Goods and Services (International Services) Order 2003 (O 1) has been amended with effect from 1 July 2003 to provide for the conditions which must be satisfied for trust services to enjoy zero-rating. For this purpose, a new Fourth Schedule has been inserted.

Broadly, the services supplied in relation to a trust will be zero-rated if the services are supplied in relation to a foreign trust by:

(a) a trustee of the foreign trust (including a trust company providing services in its capacity as trustee of the foreign trust); or

(b) a trust company to a trustee of the foreign trust.

However, trust services supplied in relation to a foreign trust will not be zero-rated if:

(i) the services are provided directly in connection with land or goods situated in Singapore; or

(ii) the services are provided to the trustee by any agent other than the services provided by a trust company as specified in paragraph (b) above.

The Fourth Schedule lists the requirements which must be satisfied for a trust to be regarded as a foreign trust for the purposes of zero-rating.

Regulation of Imports and Exports (Amendment No 3) Regulations 2003 (S319/2003)

The Regulation of Imports and Exports Regulations have been amended with effect from 26 June 2003.

Previously, the importation into Singapore of any goods originating or manufactured in Iraq was prohibited. Also prohibited was the exportation from Singapore of any goods destined for Iraq.

Following the amendments to the Regulation of Imports and Exports Regulations, only exportation from Singapore of arms and related materials to Iraq is prohibited.

There is no prohibition on the import of goods originating from Iraq.

Income Tax (Singapore-Kuwait) (Avoidance of Double Taxation Agreement) Order 2003 (S322/2003)

An Agreement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income was signed on the 21 February 2002 between the Republic of Singapore and the State of Kuwait. This Agreement entered into force on 2 July 2003 following the completion of ratification formalities. The provisions of this Agreement will have effect on income derived on or after 1 January 2004.

Patents (Amendment) Rules 2003 (S324/2003)

The Patent Rules have been amended with effect from 1 August 2003.

With effect from 1 August 2003, applicants would need to furnish an English translation of a priority application only upon request from the Registrar of Patents. The applicants would then be required to furnish such a translation, verified to the satisfaction of the Registrar, within two months from the date of the notice of the request by the Registrar.

The Patent Rules are also amended to specify the patent forms which are required to be filed through IPOS’s Electronic Online System (‘EOS’). IPOS will continue to accept filing of these patents forms manually via its Service Bureau. However, these filings are subject to a surcharge.

Banking (Recognition of Persons Authorised to Receive Customer Information from Credit Bureau) Notification 2003 (S339/2003)

Under the Sixth Schedule to the Banking Act, one of the exceptions to the statutory requirement of banking secrecy is where disclosure is strictly necessary for the assessment, by other members of a credit bureau, of the credit-worthiness of the customers of banks.

The members of a credit bureau shall comprise:

• a bank or merchant bank; or
• a person, or a person belonging to a class of persons, recognised by the Authority, by notification published in the Gazette, as authorised to receive the information,
  

Pursuant to the Banking (Recognition of Persons Authorised to Receive Customer Information from Credit Bureau) Notification 2003, effective from 16 July 2003, every finance company is recognised by the Monetary Authority of Singapore as authorised to receive customer information from a credit bureau, subject to the following conditions:

(a) the finance company has provided confirmation in writing to the Authority, before its membership in the credit bureau, that:

(i) it has in place appropriate operational systems and procedures for membership in the credit bureau;

(ii) it is ready, willing and able to abide by the credit bureau’s code of conduct and to meet its obligations under the credit bureau’s subscriber’s agreement; and

(iii) it is aware of the restrictions against further disclosure imposed by S 47(5) of the Banking Act; and

(b) the finance company complies with such other conditions as may be specified in notices issued or otherwise imposed from time to time by the Monetary Authority of Singapore.

Customs (Duties) (Amendment No 5) Order 2003 (S347/2003)

The Customs (Duties) Order (O 4) is amended with effect from 28 July 2003 to extend the application of preferential rates of duty (where available) to goods which have originated from and consigned direct from the Australia.

Goods shall be deemed to have originated from and be consigned direct from Australia where they conform with the Rules of Origin set out in the Singapore-Australia Free Trade Agreement (‘SAFTA’).

Income Tax (Concessionary Rate of Tax for Approved Trustee Companies) (Amendment) Regulations (S349/2003)

With effect from the Year of Assessment 2003 and subsequent years of assessment, the 10% concessionary rate of tax under the Income Tax (Concessionary Rate of Tax for Approved Trustee Companies) Regulations (Rg 21) has been extended to income derived by an approved trustee company from the provision of:

• any custodian services for or on behalf of any foreign mutual fund corporation, where the funds of the foreign mutual fund corporation are invested in designated investments within the meaning of the Income Tax (Income from Funds Managed for Foreign Investors) Regulations; and
• any trust management or administration services provided to any trustee of a relevant foreign trust.
  

A ‘foreign mutual fund corporation’ is defined to mean a mutual fund corporation where not more than 20% (excluding the total percentage held directly by designated persons) of the value of its shares is beneficially held, directly or indirectly, by persons who are not foreign investors referred to in paragraph (a) or (b) of the definition of ‘foreign investor’ in Rg 2 of the Income Tax (Income from Funds Managed for Foreign Investors) Regulations (Rg 8);

A ‘mutual fund corporation’ means a collective investment scheme or closed-end fund as defined in S 2 of the Securities and Futures Act (Cap 289) that is constituted as a corporation;

A ‘relevant foreign trust’ means a foreign trust as defined in Rg 2A of the Income Tax (Exemption of Income of Foreign Trusts) Regulations (Rg 24), other than a unit trust referred to in paragraph (1)(b) of that regulation.

Income Tax (Exemption of Income of Foreign Trusts) (Amendment) Regulations 2003 (S350/2003)

Previously, under the Income Tax (Exemption of Income of Foreign Trusts) Regulations (Rg 24), there was exempt from tax the specified income derived from designated investments by a foreign trust administered by a trustee company approved under S 43J of the Income Tax Act (Cap ).

The Income Tax (Exemption of Income of Foreign Trusts) Regulations have recently been amended.

There is now exempt from tax:

(a) the specified income derived from designated investments by an eligible holding company; and

(b) the following income derived by a foreign trust administered by a trustee company approved under S 43J of the Act:

(i) any dividends paid or payable by an eligible holding company from the income referred to in paragraph (a); and

(ii) the specified income derived from designated investments.

A ‘eligible holding company’ refers to a company:

(a) which is incorporated outside Singapore;

(b) which is set up to hold assets of a foreign trust administered by a trustee company approved under s 43J of the Act;

(c) whose operations consist solely of trading or making investments for the purpose of the foreign trust;

(d) which does not claim any relief under any arrangement made under s 49 of the Act or any tax credit under s 50A of the Act; and

(e) all the shares of which are held by the trustees of the foreign trust, or by their nominee.

The phrase ‘administered by a trustee company’ means:

(a) the provision of services by a trustee company in its capacity as trustee of a foreign trust, including services provided as manager or administrator of an eligible holding company in relation to that foreign trust; or

(b) the provision of services by a trustee company to a trustee of a foreign trust under a contract for services with that trustee, such services being all or any of the following:

(i) the establishing of a foreign trust or an eligible holding company;

(ii) the administration or management of a foreign trust or an eligible holding company.

A new Rg 2A has also been inserted to define the features of a foreign trust to which the Income Tax (Exemption of Income of Foreign Trusts) Regulations applies. A trust shall be regarded as a foreign trust for the purposes of the regulations if:

(a) it is a trust created in writing and every settlor and every beneficiary thereof are:

(i) individuals who are neither citizens of Singapore nor resident in Singapore; or

(ii) foreign companies; or

(b) it is a unit trust and the whole value of the unit trust fund is beneficially held, directly or indirectly, by:

(i) individuals who are neither citizens of Singapore nor resident in Singapore; or

(ii) foreign companies.

The changes are effective for the year of assessment 2003 and subsequent years of assessment.

Business Registration (Amendment No 2) Regulations 2003 (S356/2003)

The Registry of Companies and Businesses (‘RCB’) will be reducing the registration fee for business firms from S$100 to S$50. The annual renewal fee will also be lowered from S$25 to S$20. The new fees will apply to registrations and renewals from 15 August 2003.

The fee reductions are part of the government’s on-going efforts to encourage entrepreneurship and reduce business cost.

Rules of Court (Amendment No 2) Rules 2003 (S364/2003)

The Rules of Court (r 5) have been amended with effect from 15 August 2003. Some of the amendments are as follows:

• The word ‘attend’ has been defined to include the appearance by any person using electronic, mechanical or other means permitted by the Court.
• Order 55D (Appeals from the Subordinate Courts) has been amended in relation to security for costs. It is now possible for an appellant to provide security for costs by procuring an undertaking in the prescribed form (Form 114C) from his solicitor and filing a certificate in the prescribed form (Form 114D).
• Order 57 (Appeals to the Court of Appeal) has also been amended in relation to security for costs. It is now possible for an appellant to provide security for costs by procuring an undertaking in the prescribed form (Form 114C) from his solicitor and filing a certificate in the prescribed form (Form 114D).
• Order 87 (Trade Marks Act) has been deleted and re-enacted. In addition to proceedings for infringement of a registered trade mark, the new O 87 also provides for appeals to the Court from decisions of the Registrar of Trade Marks in any case in which a right of appeal is given by the Trade Marks Act or the Trade Marks Act (1992 Edition). Any such appeal is to be brought by originating motion. A new rule pertaining to a respondent’s notice has also been introduced.
• A new O 89E has been inserted pertaining to applications under the Terrorism (Suppression of Financing) Act 2002.
• New Form 114C (Undertaking for Security for Costs) and Form 114D (Certificate for Security for Costs (by way of an Undertaking)) have been introduced.
   

Elizabeth Wong
Allen and Gledhill