Income Tax (Exemption of Interest and Other Payments on Economic and Technological Development Loans) (No. 4) Notification 2014

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Published in Subsidiary Legislation Supplement
on 11 Mar 2014

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No. S 169

Income Tax Act

(CHAPTER 134)

Income Tax
(Exemption of Interest and
Other Payments on Economic and
Technological Development Loans) (No. 4)
Notification 2014

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 on Economic and Technological Development Loans) (No. 4) Notification 2014 and shall be deemed to have come into operation on 1st May 2012.

Exemption

2.—(1) Subject to the conditions imposed by the Minister pursuant to section 13(4) of the Act, there shall be exempt from tax any qualifying payment that an approved aircraft leasing company or approved partnership is liable to pay on or after the specified date to a person who is neither a resident nor a permanent establishment in Singapore in respect of a loan (including any portion of such loan used to finance any qualifying cost), where the loan is —

(a)	obtained from a lender who is neither a resident nor permanent establishment in Singapore; and
(b)	for the acquisition by the company or partnership of one or more aircraft or aircraft engines.

(2) Nothing in sub‑paragraph (1) shall apply in relation to any loan obtained by an approved aircraft leasing company or approved partnership before 1st May 2012, where the loan is already the subject of any other exemption granted to the company or partnership under the Act.

(3) Sub‑paragraph (1) only applies if the approved aircraft leasing company or approved partnership has made a declaration to the Economic Development Board established under section 3 of the Economic Development Board Act (Cap. 85), in the form specified by the Board, that the requirements of sub‑paragraph (1) and the conditions imposed by the Minister referred to in that sub‑paragraph are, or (in the case of any condition subsequent) will be, satisfied.

(4) The exemption granted under sub‑paragraph (1) to an approved aircraft leasing company or approved partnership shall cease to apply from and including the date of occurrence of the earliest of the following events:

(a)	the company or partnership disposes of the aircraft or aircraft engine, as the case may be;
(b)	the approval of the company as an approved aircraft leasing company or of the partnership as an approved partnership, is revoked or withdrawn;
(c)	the company or partnership fails to satisfy any requirement of sub‑paragraph (1) or any condition imposed by the Minister referred to in that sub‑paragraph.

(5) Subject to sub‑paragraph (4), the exemption referred to in sub‑paragraph (1) shall continue to apply to the qualifying payments made in relation to a loan obtained by an approved aircraft leasing company or approved partnership referred to in sub‑paragraph (1), even after the expiry of the approval of the company or partnership as such (other than by way of revocation or withdrawal), and any reference in this paragraph to an approved aircraft leasing company or an approved partnership shall be construed accordingly.

(6) In this paragraph —

“aircraft leasing company” has the same meaning as in section 43Y(7) of the Act;

“approved aircraft leasing company” means an aircraft leasing company approved under section 43Y of the Act;

“approved partnership” means an approved partnership referred to in regulation 8 of the Income Tax (Tax Incentives for Partnerships) Regulations 2012 (G.N. No. S 685/2012);

“loan” means a loan or other arrangement similar in nature to a loan, that is entered into on or before 31st March 2017;

“qualifying payment”, in relation to a loan, means any of the following payments made in connection with the loan:

(a)	interest;
(b)	agency fees;
(c)	arrangement fees;
(d)	commitment fees;
(e)	currency swap payments;
(f)	exposure fees;
(g)	front‑end fees;
(h)	interest rate swap payments;
(i)	retainer fees;
(j)	security trustee fees;
(k)	underwriting fees;

“specified date”, in relation to a qualifying payment by an approved aircraft leasing company or approved partnership, means the latest of the following dates:

(a)

1st May 2012;

(b)

the date on which the company or partnership is approved as an approved aircraft leasing company or approved partnership;

(c)

either of the following dates, whichever is applicable:

(i)	in a case where the declaration referred to in sub‑paragraph (3) is made on or before the 15th day of the month immediately following the date on which the qualifying payment is liable to be made, the date on which the qualifying payment is liable to be made;
(ii)	in any other case, the date on which the declaration referred to in sub‑paragraph (3) is made.

(7) In this paragraph, a reference to a qualifying cost that is financed by a loan referred to in sub‑paragraph (1) (referred to in this sub‑paragraph as the subject loan), is a reference to a qualifying payment due on a previous loan taken by the approved aircraft leasing company or approved partnership for any purpose referred to in sub‑paragraph (1)(b), and which, being unpaid at the time the subject loan is entered into, is refinanced by the subject loan.

Made this 5th day of March 2014.

LIM SOO HOON

Permanent Secretary
(Finance) (Performance),
Ministry of Finance,
Singapore.

[MOF R032.018.0014 Pt 2 Vol. 15; AG/LLRD/SL/134/2010/5 Vol. 3]