Income Tax (Income from Syndicated Offshore Credit and Underwriting Facilities) Regulations

Income Tax Act

(Chapter 134, Section 43A)

Rg 4

REVISED EDITION 1990

(25th March 1992)

[14th February 1986]

Citation

1. These Regulations may be cited as the Income Tax (Income from Syndicated Offshore Credit and Underwriting Facilities) Regulations and shall have effect for the year of assessment 1984 and subsequent years of assessment.

Approval of syndicated offshore credit facility

2.—(1) The Minister, or such person as he may appoint, may approve any syndicated offshore credit facility, syndicated guarantee facility or any syndicated offshore underwriting facility for the purposes of these Regulations where the agreement for the credit or underwriting facility is made at any time during the period from 1st April 1983 to 31st March 1998, and where he is satisfied that —

(a)	the syndicate providing the credit, guarantee or underwriting facility consists of not less than 3 parties;
(b)	the lead manager of the syndicate providing the credit, guarantee or underwriting facility is as approved securities companies or a financial institution resident in Singapore or is a permanent establishment in Singapore of a non-resident financial institution, or where there are two or more lead managers at least half of them are approved securities companies or financial institutions resident in Singapore or permanent establishments in Singapore of non-resident financial institutions; and
(c)	the syndication work in respect of the credit, guarantee or underwriting facility is carried out substantially in Singapore. [S 72/95 wef 01/03/1994] [S 101/93 wef 01/04/1993]

(2) Subject to these Regulations, there shall be exempt from tax the income of a financial institution derived by its Asian Currency Unit or of an approved securities company from any such approved syndicated offshore credit or underwriting facility or syndicated guarantee facility.

[S 72/95]

(3) In the case of an underwriting facility, where a financial institution or an approved securities company holds any of the notes, bonds or certificates of deposit or other instruments of indebtedness underwritten by the syndicate, the income derived from the holding of those notes, bonds or certificates of deposit or other instruments of indebtedness or the profits arising from the sale thereof shall not be exempt from tax under these Regulations.

[S 72/95]

(4) The Minister may in any particular case waive the requirements specified in paragraph (1)(a), (b) and (c) subject to such conditions as he may impose.

(5) A financial institution which is entitled to any exemption under paragraph (2) may, with the approval of the Comptroller, elect not to have such exemption.

Comptroller to determine amount of income to be exempted

3.—(1) The amount of the income to be exempted from tax under regulation 2(2) shall be determined by the Comptroller, having regard to such expenses, capital allowances and donations allowable under the Act as are, in his opinion, to be deducted in ascertaining the income to be exempted.

(2) In determining the amount of the income to be exempted, any loss incurred in respect of an approved syndicated offshore credit or underwriting facility, or syndicated guarantee facility or any capital allowances attributable to that income shall only be deducted against income to be exempted under regulation 2(2), and any balance of such loss or capital allowances shall not be available as a deduction against any other income.

Definitions

4. In these Regulations —

“approved securities company” means a company approved under section 43A(1)(c) of the Act;

[S 72/95]

“financial institution” means a financial institution with an Asian Currency Unit in Singapore;

“syndicated guarantee facility” means any syndicated facility whereby any guarantee or letter of credit is made available to any financial institution or any approved securities company where —

(a)	the facility is in currencies other than Singapore dollars;
(b)	the guarantee or letter of credit was issued in favour of an Asian Currency Unit of a financial institution or an approved securities company, as the case may be, for the purpose of providing or participating in a loan in currencies other than Singapore dollars made to a non-resident person (but excluding its permanent establishment in Singapore) and the loan is to be used outside Singapore; and [S 72/95]
(c)	no interest in respect of the loan referred to in sub-paragraph (b) is borne, directly or indirectly, by any person resident in Singapore (except in respect of any business carried on outside Singapore by a person resident in Singapore through a permanent establishment outside Singapore) or by any permanent establishment in Singapore; [S 72/95]

“syndicated offshore credit facility” means any syndicated loan or advance or any facility whereby any fund, guarantee or letter of credit is made available to a non-resident person (but excluding its permanent establishment in Singapore) or to a permanent establishment outside Singapore of a person resident in Singapore in respect of any business carried on outside Singapore through that permanent establishment where —

(a)

the credit facility is in currencies other than Singapore dollars;

(b)

in the case of —

(i)	a loan, advance or a facility whereby funds are made available, such loan, advance or facility is to be used outside Singapore;
(ii)	a guarantee or letter of credit, the facility was issued in favour of a non-resident person (but excluding its permanent establishment in Singapore) or of a person resident in Singapore in respect of any business carried on outside Singapore through a permanent establishment outside Singapore; and

(c)

no interest, commission, fee or any other payment in respect of the credit facility is borne, directly or indirectly, by any person resident in Singapore (except in respect of any business carried on outside Singapore by a person resident in Singapore through a permanent establishment outside Singapore) or by any permanent establishment in Singapore;

“syndicated offshore underwriting facility” means any facility for the underwriting of bonds, notes, certificates of deposit or other instruments of indebtedness provided to a non-resident person (but excluding its permanent establishment in Singapore) or to a permanent establishment outside Singapore of a person resident in Singapore in respect of any business carried on outside Singapore through that permanent establishment where —

(a)	the bonds, notes, certificates of deposit or other instruments of indebtedness are in currencies other than Singapore dollars;
(b)	the proceeds from the issue of such bonds, notes, certificates of deposit or other instruments of indebtedness are to be used outside Singapore; and
(c)	no interest, commission, fee payable or any other payment in respect of the underwriting facility is borne, directly or indirectly, by any person resident in Singapore (except in respect of any business carried on outside Singapore by a person resident in Singapore through a permanent establishment outside Singapore) or by any permanent establishment in Singapore.

5. Any syndicated offshore loan approved by the Minister under the Income Tax (Income Arising from Syndicated Offshore Loans) Regulations 1984, revoked by these Regulations, shall be deemed to have been approved for the purposes of these Regulations.

[S 74/84]

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