Income Tax (Qualifying Debt Securities) (Amendment) Regulations 2009

No. S 268

Income Tax Act

(Chapter 134)

Income Tax (Qualifying Debt Securities) (Amendment) Regulations 2009

In exercise of the powers conferred by sections 13(1)(a), (aa), (ab), (ba), (bc) and (bd), (2E) and (16), 45(9) and 45A(2), (2A) and (2B) of the Income Tax Act, the Minister for Finance hereby makes the following Regulations:

Citation and commencement

1.—(1) These Regulations may be cited as the Income Tax (Qualifying Debt Securities) (Amendment) Regulations 2009.

(2) Regulations 7 and 9 shall be deemed to have come into operation on 16th February 2008.

(3) Regulations 3 to 6, 8 and 10 shall be deemed to have come into operation on 1st January 2009.

(4) Regulation 2 shall come into operation on 10th June 2009.

Amendment of regulation 1

2. Regulation 1 of the Income Tax (Qualifying Debt Securities) Regulations (Rg 35) (referred to in these Regulations as the principal Regulations) is amended —

(a)	by deleting paragraphs (2) and (3); and
(b)	by deleting the words “and application” in the regulation heading.

Amendment of regulation 3

3. Regulation 3(1) of the principal Regulations is amended by deleting “2008” in the 6th line of sub-paragraph (a)(ii) and substituting “2013”.

Amendment of regulation 3A

4. Regulation 3A(1) of the principal Regulations is amended by deleting “2008” in sub-paragraphs (a)(ii)(B) and (iii)(B) and substituting in each case “2013”.

Amendment of regulation 3B

5. Regulation 3B(1) of the principal Regulations is amended by deleting “2008” in sub-paragraphs (a)(ii) (4th line) and (iii) (4th line) and (b) (3rd line) and substituting in each case “2013”.

Amendment of regulation 3C

6. Regulation 3C(1) of the principal Regulations is amended by deleting “2008” in sub-paragraphs (a)(ii) (7th line) and (iii) and (b) (3rd line) and substituting in each case “2013”.

New regulations 3D and 3E

7. The principal Regulations are amended by inserting, immediately after regulation 3C, the following regulations:

“Prescribed condition for tax exemption under section 13(1)(bc) of Act

3D. The exemption from tax under section 13(1)(bc) of the Act shall not apply if the issuer of the qualifying debt securities, or such other person as the Comptroller may direct, has not furnished to the Comptroller —

(a)	a return on the debt securities within such period as the Comptroller may specify; and
(b)	such other particulars in connection with those securities as the Comptroller may require.

Prescribed condition for tax exemption under section 13(1)( bd) of Act

3E. The exemption from tax under section 13(1)(bd) of the Act shall not apply if the issuer of the Islamic debt securities, or such other person as the Comptroller may direct, has not furnished to the Comptroller —

(a)	a return on the debt securities within such period as the Comptroller may specify; and
(b)	such other particulars in connection with those securities as the Comptroller may require.”.

Amendment of regulation 4

8. Regulation 4(1) of the principal Regulations is amended by deleting “2008” in sub-paragraphs (b) to (e) and substituting in each case “2013”.

New regulation 4A

9. The principal Regulations are amended by inserting, immediately after regulation 4, the following regulation:

“Determination of exempt income, and deductions

4A.—(1) In determining the income of a person to be exempted from tax under section 13(1)(bc) or (bd) of the Act —

(a)	the Comptroller shall have regard to such expenses, capital allowances and donations allowable under the Act as are, in his opinion, to be deducted in ascertaining such income; and
(b)	there shall be deducted from that income any allowances under section 19, 19A, 20, 21 or 22 of the Act attributable to that income notwithstanding that no claim for those allowances has been made.

(2) Any balance of the allowances mentioned in paragraph (1)(b) shall only be deducted against any income referred to in section 13(1)(bc) or (bd) of the Act of the person for subsequent years of assessment, and shall not be deducted against any other income of the person.

(3) Any losses incurred in respect of any qualifying debt securities referred to in section 13(1)(bc) or (bd) of the Act shall only be deducted against any income referred to in section 13(1)(bc) or (bd) of the Act of the person for subsequent years of assessment, and shall not be deducted against any other income of the person.

(4) Any balance of the allowances mentioned in paragraph (2) and losses mentioned in paragraph (3) remaining unabsorbed on the date the tax exemption ceases shall, subject to paragraphs (5), (6) and (7), be available as a deduction against any other income of the person for the year of assessment which relates to the basis period in which the tax exemption ceases, and any subsequent year of assessment.

(5) Section 37B of the Act shall, with the necessary modifications, apply to a deduction under paragraph (4) as if the balance of the allowances or losses available as a deduction under that paragraph were unabsorbed allowances or losses in respect of the income of a company subject to tax at a lower rate of tax under that section, and for this purpose the rate of tax shall be taken to be the concessionary rate of tax in accordance with the regulations made under section 43N of the Act.

(6) Allowances may be deducted under paragraph (4) only if the person continues to carry on the trade or business in respect of the gains or profits of which the allowances falls to be made, and the allowances shall be disregarded if he has ceased to do so.

(7) Sections 23(4) to (8) and 37(12) to (17) of the Act shall apply, with the necessary modifications, to a deduction under paragraph (4).

(8) In paragraph (4), the tax exemption ceases when the person ceases to be in a position to derive income referred to in section 13(1)(bc) or (bd) of the Act, whether because the qualifying debt securities have reached maturity, the person has disposed of them or otherwise.”.

Amendment of regulation 5

10. Regulation 5(2) of the principal Regulations is amended by deleting “2008” in sub-paragraphs (a) and (b) and substituting in each case “2013”.

[G.N. Nos. S 350/2005; S52/2006; S 99/2007; S 399/2008]

Made this 2nd day of June 2009.

TEO MING KIAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF R32.19.2871.V10; AG/LEG/SL/134/2005/2 Vol. 1]

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