Income Tax (Exemption of Interest and Other Payments for Economic and Technological Development) Notification 2007

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Published in Subsidiary Legislation Supplement
on 02 Mar 2007

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No. S 101

Income Tax Act

(Chapter 134)

Income Tax (Exemption of Interest and Other Payments for Economic and Technological Development) Notification 2007

In exercise of the powers conferred by section 13(4) of the Income Tax Act, the Minister for Finance hereby makes the following Notification:

Citation and commencement

1. This Notification may be cited as the Income Tax (Exemption of Interest and Other Payments for Economic and Technological Development) Notification 2007 and shall be deemed to have come into operation on 1st February 2006.

Definitions

2. In this Notification —

“debt securities” has the same meaning as in section 43N(4) of the Act;

“financial sector incentive (bond market) company”, “qualifying debt securities” and “related party” have the same meanings as in section 13(16) of the Act;

“funds from Singapore operations”, in relation to a person, means the funds and profits of that person’s operations through a permanent establishment in Singapore;

“programme” means the US$1,000,000,000 Euro Medium Term Note Programme first entered into on 4th March 1996 by Toshiba Capital (Asia) Ltd;

“specified interest” means —

(a)	any interest payable on or after 1st February 2006 in respect of any notes issued by Toshiba Capital (Asia) Ltd before the specified period under the programme; and
(b)	any interest payable in respect of any notes issued by Toshiba Capital (Asia) Ltd during the specified period under the programme;

“specified period” means the period from 1st February 2006 to 31st December 2008 (both dates inclusive).

Exemption

3.—(1) Subject to sub-paragraph (2), there shall be exempt from tax the specified interest payable by Toshiba Capital (Asia) Ltd on notes issued under the programme to any noteholder who is not resident in Singapore and —

(a)	who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the notes under the programme are not obtained from that operation; or
(b)	who does not have any permanent establishment in Singapore.

(2) The exemption under sub-paragraph (1) is subject to the following terms and conditions:

(a)

that the annual update in October 2006, and all future annual updates up to 31st December 2008, to the programme are arranged by a financial sector incentive (bond market) company;

(b)

unless otherwise approved by the Minister or such person as he may appoint, the tax exemption shall not apply to any notes issued during the specified period if, during their primary launch —

(i)	the notes are issued to less than 4 persons; and
(ii)	50% or more of the notes so issued is beneficially held or funded, directly or indirectly, by related parties of Toshiba Capital (Asia) Ltd;

(c)

where the notes are issued during the specified period and —

(i)	during their primary launch, the notes are issued to 4 persons or more, or less than 50% of the notes so issued is beneficially held or funded, directly or indirectly, by related parties of Toshiba Capital (Asia) Ltd; and
(ii)	at any time during the term of the notes, 50% or more of the notes so issued is beneficially held or funded, directly or indirectly, by related parties of Toshiba Capital (Asia) Ltd,

then, unless otherwise approved by the Minister or such person as he may appoint, the tax exemption shall apply only to interest from those notes derived by any noteholder referred to in sub-paragraph (1) —

(A)	who is not a related party of Toshiba Capital (Asia) Ltd; and
(B)	if the funds used by that noteholder to acquire those notes are not obtained, directly or indirectly, from any related party of Toshiba Capital (Asia) Ltd;

(d)

that Toshiba Capital (Asia) Ltd includes in all offering documents a statement to the effect that, where interest is derived from any notes issued during the specified period by any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, the tax exemption shall not apply if such person acquires such notes using funds from Singapore operations;

(e)

where the notes are issued during the specified period to any person who is not resident in Singapore (referred to in this sub-paragraph as the non-resident person) in connection with or for the purpose of enabling that non-resident person to issue debt securities (referred to in this sub-paragraph as the relevant securities), directly or indirectly, to investors, the tax exemption shall apply only if —

(i)	the relevant securities are qualifying debt securities;
(ii)	the relevant securities contain restrictions against the acquisition of such relevant securities by any investor who is a resident of or a permanent establishment in Singapore; and
(iii)	the relevant securities are not acquired by any investor using funds from its Singapore operations; and

(f)

that Toshiba Capital (Asia) Ltd, or such other person as the Comptroller may direct, furnishes to the Comptroller a return on the debt securities within such period as the Comptroller may specify and such other particulars in connection with those securities as the Comptroller may require.

Made this 27th day of February 2007.

TEO MING KIAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF(R) R32.19.2871 Vol. 5; AG/LEG/SL/134/2005/8 Vol. 1]