Legislation

Immigration (Amendment) Bill 2004 (B51/2004)

Among other things, the Immigration Act (Cap 133) will be amended to deal with the following matters:

•     the immigration pass for a child who is born in Singapore and who is not a citizen of Singapore. Such a child is deemed to be issued with a special pass valid for 42 days from his date of birth, unless extended by the Controller of Immigration upon the application of either the child’s father or mother;

•     persons who cease to be Singapore citizens but who remain in Singapore. It is an offence for such persons to remain in Singapore for more than 24 hours after the date of cessation of citizenship, unless they have been issued with a permit or a pass authorising them to remain in Singapore;

•     arming immigration officers with batons, arms, ammunition and other accoutrements; and

•     empowering the Minister for Home Affairs to make regulations to provide for a deposit or security to be made by or in respect of any person as a condition of, or for the grant of, an entry permit, a re-entry permit, or a pass to him, and the conditions subject to which the deposit or security may be forfeited.

Merchant Shipping (Amendment) Bill 2004 (B53/2004)

On 19 October 2004, the Merchant Shipping (Amendment) Bill (B53/2004) (‘Bill’) was introduced in Parliament. The Bill seeks to repeal and re-enact Part VIII (‘new Part VIII’) of the Merchant Shipping Act (‘Act’) (Cap 179) to give effect to the Convention on Limitation of Liability for Maritime Claims 1976 (‘1976 Convention’).

Presently, Part VIII of the Act relates to the liability limits of a shipowner, which gave effect to the 1957 International Convention relating to the Limitation of the Liability of Owners of Sea-going Ships. This limitation of liability regime in the Act will be replaced by the 1976 Convention when the new Part VIII comes into operation. However, this would only affect liability arising out of an occurrence which took place after the new Part VIII comes into effect. Liability arising out of an occurrence which took place before the new Part VIII comes into effect would continue to be governed by the present regime.

The 1976 Convention will be inserted as a Schedule to the Act when the Bill comes into force.

Economic Expansion Incentives (Relief from Income Tax) (Amendment No 2) Bill 2004 (B56/2004)

The Economic Expansion Incentives (Relief from Income Tax) Act (Cap 86) will be amended to implement tax changes announced in the 2004 Budget Statement, namely:

•     to extend the tax relief period of up to 15 years to be granted to a pioneer enterprise or a pioneer service company; and

•     to extend the scope of the technopreneur investment incentive to cover all forms of start-ups, and to re-name the incentive as enterprise investment incentive.

Countervailing and Anti-Dumping Duties (Amendment) Bill 2004 (B57/2004)

On 19 October 2004, the Countervailing and Anti-Dumping Duties (Amendment) Bill (B57/2004) was introduced in the Singapore Parliament. This follows a recent public consultation exercise in September/October 2004, whereby the Ministry of Trade and Industry (‘MTI’) released a Consultation Paper seeking feedback from the public on the draft Countervailing and Anti-Dumping Duties (Amendment) Bill.

Basically the Bill creates a new s 45A which intends to tighten Singapore’s existing anti-dumping rules. It allows the MTI to make regulations specific to the exports from each of Singapore’s Free Trade Agreement (‘FTA’) partners, according to what has been agreed in the relevant FTA. The regulations would either modify the application of the Countervailing and Anti-Dumping Duties Act (Cap 65B) provisions to goods from Singapore’s FTA partners, or exempt such goods from its provisions.

Income Tax (Amendment) Bill 2004 (B58/2004)

Apart from proposing provisions for the income tax treatment of limited liability partnerships (discussed under the Limited Liability Partnerships Bill 2004), the Income Tax Act (Cap 134) will be amended for the following purposes:

•     to implement the tax changes announced in the 2004 Budget Statement;

•     to provide for the marriage and parenthood incentives announced by the Minister for Trade and Industry on 25 August 2004.

Goods and Services Tax (Amendment) Bill 2004 (B59/2004)

Among other things, the Goods and Services Tax Act (Cap 117A) will be amended to facilitate the following:

•     to enable the Minister for Finance to provide by regulations for a new scheme under which tax chargeable on the supply of goods need not be paid;

•     to provide for an electronic service for the registration of taxable persons, the filing or submission of returns, declarations and documents by any person or his agent, and the service of notices, directions, orders, permits, receipts and documents by the Comptroller of Goods and Services Tax.

Estate Duty (Amendment) Bill 2004 (B61/2004)

Among other matters, the Estate Duty Act (Cap 96) will be amended to provide for revised rates of interest on estate duty payable for persons dying on or after 1 January 2005.

Property Tax (Amendment) Bill 2004 (B62/2004)

The Property Tax Act (Cap 254) will be amended to provide for an electronic service for the filing or submission of returns and documents by any person or his agent, and the service of notices, orders and documents by the Comptroller of Property Tax.

Appraisers and House Agents (Amendment) (B63/2004) Bill 2004

When the proposed changes are in force, the Appraisers and House Agents Act (Cap 16) will exempt appraisers of the following movable property from the licensing requirements under the Act:

•     motor vehicles;

•     cargo;

•     ships;

•     machinery of ships;

•     bulk oil;

•     cargo and marine insurance;

•     loss adjustment, adjustment of cargo, casualty or loss adjustment for fire, workmen’s compensation, burglary or insurance claims;

•     plants, machinery and equipment;

•     gems, gold and jewellery;

•     general merchandise and consumer goods;

•     numismatic and philatelic items, works of art, collectibles and antiquities;

•     carpets;

•     fine and rare wines;

•     tangible goods; and

•     aeroplanes and aircraft.

Limited Liability Partnerships Bill 2004 (B64/2004)

On 19 October 2004, the Limited Liability Partnerships Bill (B64/2004) (‘LLP Bill’) was tabled in Parliament for first reading, to introduce a new investment vehicle — the limited liability partnership (‘LLP’) into Singapore.

Modelled on the US Delaware Revised Uniform Partnerships Act as well as the relevant UK statutory provisions, the LLP Bill will be administered by the Accounting and Corporate Regulatory Authority.

Broadly, the scope of the LLP Bill encompasses the following areas:

•     nature of LLPs;

•     registration;

•     conversion from firm or private company to LLP;

•     management and administration;

•     receivership and winding-up;

•     disqualification of managers in specified circumstances; and

•     default provisions for LLP agreement.

As an investment vehicle, LLPs accord passive investors with limited liability, privacy (as the accounts are not publicly filed) and tax transparency (as the partnership is not treated as a distinct tax entity from the partners).

Some of the key provisions of the LLP Bill are as follows:

•     an LLP is a body corporate with a legal personality separate from that of its partners (s 4 of the LLP Bill). Any obligation of the LLP is solely the obligation of the LLP. The LLP partners would not be personally liable solely by reason of being a partner (s 8(2) of the LLP Bill). However, where a partner is liable to any person (other than another partner) as a result of a wrongful act or omission of his in the course of the business of the LLP or with his authority, the LLP would be liable to the same extent as the liable partner (s 8(4) of the LLP Bill);

•     the law relating to partnerships does not apply to an LLP, except as otherwise provided in the LLP Bill (s 6 of the LLP Bill);

•     every partner of an LLP is an agent of the LLP, however, the LLP is not bound by anything done by a partner in dealing with a third party if that partner did not in fact have any authority to act for the LLP by doing that thing and the third party knows that he had no such authority or did not know or believe him to be partner of the LLP (s 9 of the LLP Bill);

•     there must be a minimum of two partners in every LLP (s 22 of the LLP Bill);

•     every LLP must have at least one manager who is a natural person of full age and capacity and ordinarily resident in Singapore (s 23 of the LLP Bill); and

•     a firm or a company may convert to an LLP through detailed conversion processes set out in the Second Schedule or the Third Schedule to the LLP Bill respectively (sections 20 and 21 of the LLP Bill).

Relevant tax legislation also amended to provide for LLPs

The Stamp Duties (Amendment) Bill 2004 and the Income Tax (Amendment) Bill 2004 were also introduced in Parliament on 19 October 2004, to provide for the tax treatment of LLPs.

Stamp Duties (Amendment) Bill 2004 (B60/2004)

Principally, s 15 will be amended to provide for relief from ad valorem stamp duty in the event of a conversion of a firm to a LLP under the proposed s 20 of the Limited Liability Partnerships Act 2004.

In addition, the following new provisions will be introduced:

•     a new s 31 which treats a notice of registration issued by the Registrar of Limited Liability Partnerships, upon a firm or private company converting to an LLP (under s 20 or 21 of the LLP Bill), as a conveyance, on sale from the firm or private company to the LLP, of the chargeable property vested in the LLP upon such conversion;

•     a new s 32 which determines when a change of LLP partners (resulting from either a person becoming a new partner or a partner leaving an LLP) would constitute a significant change of partners for the purposes of new sections 32A and 32B of the Stamp Duties Act (Cap 312);

•     a new s 32A which provides for certain matters relating to a transfer of an interest in an LLP, where there is a significant change of partners of the LLP; and

•     a new s 32B which provides for the reduction of ad valorem stamp duty where there is a conveyance between an LLP and a partner.

Income Tax (Amendment) Bill 2004 (B58/2004)

The Income Tax Act (Cap 134) will be amended to, inter alia, make provision for the income tax treatment of LLPs incorporated or registered under any law in force in Singapore or elsewhere. In particular, this new provision is set out in a proposed new s 36A to be included in the Income Tax Act.

The introduction of the Stamp Duties (Amendment) Bill 2004 and the Income Tax (Amendment) Bill 2004 follows a period of consultation in July/August 2004 conducted by the MOF on proposed amendments to various tax legislation to provide for the taxation of LLPs. An article covering this consultation was featured in the July 2004 issue of the Legal Monthly Report.

Elizabeth Wong

Allen & Gledhill