The Inland Revenue Authority of Singapore (IRAS) on 1 Jul 2026 published Advance Ruling Summary No. 10/2026, confirming that foreign-sourced dividend income paid directly from an offshore bank account to a shareholder's offshore account is not regarded as income received in Singapore under Section 10(25) of the Income Tax Act 1947 (ITA), subject to specified conditions.
The Inland Revenue Authority of Singapore (IRAS) published Advance Ruling Summary No. 10/2026 on 1 Jul 2026, clarifying when dividend income received from an offshore subsidiary and subsequently paid to shareholders is not regarded as being “received in Singapore” under Section 10(25) of the Income Tax Act 1947 (ITA).
According to the ruling, the Comptroller determined that dividend income received by a Singapore tax resident company from its offshore subsidiary will not be treated as income received or deemed received in Singapore if the funds are paid directly from the company’s offshore bank account to the shareholder’s offshore account. The ruling applies where there is no physical remittance or transmission of the funds into Singapore.
IRAS said the tax treatment applies only if several conditions are satisfied. These include that the income is genuinely foreign-sourced income, the dividend payment is made through a direct offshore transfer without any physical remittance or transmission into Singapore, the funds have not previously been remitted, transmitted, or brought into Singapore before being paid to the shareholder, and the arrangement is not a tax avoidance scheme under Section 33 of the ITA.
IRAS noted that the advance ruling is binding only on the applicant and the specific transaction described in the ruling. The authority also said advance ruling summaries are not updated to reflect subsequent changes in tax law or interpretation.
