O TTO M ARINE L IMITED - Microsoft Internet Explorer - SGX

TAXATION
The following is a discussion of certain tax matters arising under the current tax laws and announced
2008 Singapore Budget changes in Singapore and the United States and is not intended to be and does not
constitute legal or tax advice. The following summary is subject to changes in Singapore law, including
changes that could have retroactive effects. No assurance can be given that courts or fiscal authorities
responsible for the administration of such laws will agree with this interpretation or that changes in such laws
will not occur.
The discussion is limited to a general description of certain tax consequences in Singapore with respect
to the holding or disposal of the Shares by Singapore investors, and does not purport to be a comprehensive
nor exhaustive description of all of the tax considerations that may be relevant to a decision to subscribe for
the Shares. Prospective investors in all jurisdictions are urged to consult their own tax advisers about the tax
consequences of an investment in the Shares under the laws of Singapore and their constituent jurisdictions,
and any other jurisdictions where the investors of the Shares may be subject to taxation.
It is emphasised that neither we, our Directors, the Vendors, the Issue Managers, the Underwriter, nor
any other persons involved in the Offering accepts responsibility for any tax effects or liabilities resulting from
the subscription for, purchase, holding or disposal of our Shares.
Singapore Taxation
Income Tax
Singapore income tax is imposed, subject to specific exemptions, on income accruing in or derived from
Singapore, and subject to certain exceptions, on foreign income received or deemed to be received in
Singapore.
Generally, foreign income remitted or deemed remitted into Singapore, by corporate taxpayers, are,
subject to certain exceptions, subject to Singapore income tax. Foreign-sourced income in the form of
dividends, branch profits and service income received or deemed received in Singapore by tax resident
corporate taxpayers will be exempt from tax if certain prescribed conditions are met.
A company will be regarded as being resident in Singapore if the control and management of its business
is exercised in Singapore. An individual will be regarded as being resident in Singapore in a year of
assessment if, in the preceding year, he was physically present in Singapore or exercised employment in
Singapore (other than as a director of a company) for 183 days or more, or if he resides in Singapore.
The corporate tax rate in Singapore is currently 18.0%, with effect from the year of assessment 2008,
with certain exemptions for the first S$300,000 of chargeable income. The above tax exemption does not apply
to Singapore franked dividends received by companies.
For a Singapore tax resident individual, income tax will be imposed based on progressive rates which will
vary according to the individual’s income bands, and the current top rate for a residential individual is 20.0%.
Dividend Distributions
Singapore currently operates a one-tier corporate tax system on 1 January 2003. Under the one-tier
corporate tax system, the tax payable on normal chargeable income by resident and non-resident companies
would constitute a final tax.
Dividends payable by companies under the one-tier corporate tax system would be tax exempt in the
hands of its shareholders. Such dividends are referred to as tax exempt (one-tier) dividends.
There is no withholding tax on dividends paid to non-Singapore tax resident shareholders. Foreign
shareholders are advised to consult their own tax advisers in respect of the tax laws of their respective
countries of residence and the applicability of any double taxation agreement that their country of residence
may have with Singapore.
Gains on Disposal of Ordinary Shares
Singapore does not impose tax on capital gains. However, there are no specific laws or regulations which
deal with the characterisation of capital gains. Hence, gains arising from the disposal of ordinary shares are
not taxable in Singapore unless the seller is regarded as having derived gains of an income nature in
Singapore, in which case, the disposal profits would be taxable as trading income.
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