The Story So Far...

1. 1990 : IRAS review. Employees will not be taxed on the imputed benefits of interest-free loans or loans at below market interest rates, provided by employers, so long as the employees do not : (1) have substantial shareholdings; or (2) do not have control or influence over the company.
   
   
2. 1993 : S.2(a) of the Income Tax Act amended to deem "a director" an employee.
   
   
3. 1998 : IRAS has specifically listed interest-free/subsidised loans to employees as taxable benefits in its Form IR8A.
   
   
4. 1999 : NYK & Anor vs Comptroller of Income Tax - Case started
   

NYK & Anor vs Comptroller of Income Tax (Income Tax Board of Review, Appeals No. 4 to 11 of 1999, MSTC 5297). Judgment delivered 23 March 2001.

The two taxpayers were directors and shareholders of NHA & Sons Pte Ltd, a family investment holding company. They did not enter into any contract of service with the Company and did not receive any wages or other remuneration. The loans outstanding for 1993 to 1996 ranged from S$2.997 million to S$7.758 million. There were four issues before the court :

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