1 ion Kingdom AG is a public listed company resident in Country X has a wholly owned subsidiary, Food Zebra Pe Ltd, incorporated and tax resident in Singapore since 2010. For the financial year ended 30 June 2019, Food Zebra Pte Ltd's derived the following income: Amount Foreign Tax (SS) paid(SS) Adjusted profits after capital allowances 3,500,000 Gross Foreign Income: (a) Dividend income from Country A 120,000 24,000 (b) Dividend income from Country B 50,000 7,500 (c) Interest income from Country C 250,000 37,500 (d) Technical fees from Country A 40,000 3,200 Amount Foreign Tax Adjusted profits after capital allowances (SS) paid(ss) 3,500,000 Gross Foreign Income : (a) Dividend income from Country A 120,000 (b) Dividend income from Country B 24,000 50,000 (c) Interest income from Country C 7.500 250,000 37,500 (d) Technical fees from Country A 40,000 3.200 Tax Rates Table Headline Dividend Interest Technical Fee Tax Rate Withholding tax Withholding Tax Withholding Tax Countru Tax Rates Table Headline Dividend Interest Tax Rate Technical Fee Withholding tax Country A Withholding Tax 20% Withholding Tax NA Country B 10% 15% 8% N.A. Country C 15% 10% 15% 10% 15% Country X 10% 20% 5% 10% Singapore 10% 17% N.A. 15% 17% Singapore does not have a tax treaty with any of the three countries. Food Zebra Pte Ltd holds at least 50% of the shareholding in each of the respective companies in the three countries. Additional information on the Food Zehra Pte Ltd's foreign inoon It's toreistri income Country Company in Country A has substantial trading activities in the country and enjoys tax concessionary rate of 5% until 2022. The dividends declared in FY2018 were received in Singapore on 1st May 2019. Food Zebra Pte Ltd also received technical service fee (provided through a fixed place of operations) from customers in Country A on 2nd July 2019 for which 8% withholding tax was deducted. Customer provided the relevant withholding tax receipts as proof of payment. Country B Country 13 Dividends was deposited into the bank account in Country B. During the year, it was used to pay for purchase a computer server that was received by Food Zebra Pte Lid in Singapore on 13 March 2019, Country C Net interest was remitted to Singapore on 15 October 2018. (a) Discuss the type of income and criteria to qualify for tax exemption under Foreign-Sourced Income Exemption. (4.5 marks) (a) Discuss the type of income and criteria to qualify for tax exemption under Foreign-Sourced Income Exemption. (4.5 marks) (b) Using the rules, determine the taxability of Food Zebra Pte Ltd's foreign income for Year of Assessment 2020. (4.5 marks) (c) Advise if Food Zebra Pte Ltd should opt for tax exemption under the Foreign-Sourced Income Exemption (FSIE) scheme, with supporting workings on tax payable for Year of Assessment 2020. In your workings, show the tax payable where tax exemption is opted for as well as where tax exemption is not opted for. Please use foreign tax credit pooling, where applicable, when computing the double taxation relief claim. (21 marks) 1 ion Kingdom AG is a public listed company resident in Country X has a wholly owned subsidiary, Food Zebra Pe Ltd, incorporated and tax resident in Singapore since 2010. For the financial year ended 30 June 2019, Food Zebra Pte Ltd's derived the following income: Amount Foreign Tax (SS) paid(SS) Adjusted profits after capital allowances 3,500,000 Gross Foreign Income: (a) Dividend income from Country A 120,000 24,000 (b) Dividend income from Country B 50,000 7,500 (c) Interest income from Country C 250,000 37,500 (d) Technical fees from Country A 40,000 3,200 Amount Foreign Tax Adjusted profits after capital allowances (SS) paid(ss) 3,500,000 Gross Foreign Income : (a) Dividend income from Country A 120,000 (b) Dividend income from Country B 24,000 50,000 (c) Interest income from Country C 7.500 250,000 37,500 (d) Technical fees from Country A 40,000 3.200 Tax Rates Table Headline Dividend Interest Technical Fee Tax Rate Withholding tax Withholding Tax Withholding Tax Countru Tax Rates Table Headline Dividend Interest Tax Rate Technical Fee Withholding tax Country A Withholding Tax 20% Withholding Tax NA Country B 10% 15% 8% N.A. Country C 15% 10% 15% 10% 15% Country X 10% 20% 5% 10% Singapore 10% 17% N.A. 15% 17% Singapore does not have a tax treaty with any of the three countries. Food Zebra Pte Ltd holds at least 50% of the shareholding in each of the respective companies in the three countries. Additional information on the Food Zehra Pte Ltd's foreign inoon It's toreistri income Country Company in Country A has substantial trading activities in the country and enjoys tax concessionary rate of 5% until 2022. The dividends declared in FY2018 were received in Singapore on 1st May 2019. Food Zebra Pte Ltd also received technical service fee (provided through a fixed place of operations) from customers in Country A on 2nd July 2019 for which 8% withholding tax was deducted. Customer provided the relevant withholding tax receipts as proof of payment. Country B Country 13 Dividends was deposited into the bank account in Country B. During the year, it was used to pay for purchase a computer server that was received by Food Zebra Pte Lid in Singapore on 13 March 2019, Country C Net interest was remitted to Singapore on 15 October 2018. (a) Discuss the type of income and criteria to qualify for tax exemption under Foreign-Sourced Income Exemption. (4.5 marks) (a) Discuss the type of income and criteria to qualify for tax exemption under Foreign-Sourced Income Exemption. (4.5 marks) (b) Using the rules, determine the taxability of Food Zebra Pte Ltd's foreign income for Year of Assessment 2020. (4.5 marks) (c) Advise if Food Zebra Pte Ltd should opt for tax exemption under the Foreign-Sourced Income Exemption (FSIE) scheme, with supporting workings on tax payable for Year of Assessment 2020. In your workings, show the tax payable where tax exemption is opted for as well as where tax exemption is not opted for. Please use foreign tax credit pooling, where applicable, when computing the double taxation relief claim. (21 marks)