Income Tax (Qualifying Debt Securities) (Amendment) Regulations 2008

Status:

Published in Subsidiary Legislation Supplement
on 07 Aug 2008

No. S 399

Income Tax Act

(Chapter 134)

Income Tax (Qualifying Debt Securities) (Amendment) Regulations 2008

In exercise of the powers conferred by section 13(1)(ba) of the Income Tax Act, the Minister for Finance hereby makes the following Regulations:

Citation and commencement

1. These Regulations may be cited as the Income Tax (Qualifying Debt Securities) (Amendment) Regulations 2008 and shall be deemed to have come into operation on 15th February 2007.

Amendment of regulation 2

2. Regulation 2 of the Income Tax (Qualifying Debt Securities) Regulations (Rg 35) (referred to in these Regulations as the principal Regulations) is amended by deleting the definitions of “ “approved bond intermediary”, “financial institution”, “financial sector incentive (bond market) company” and “qualifying debt securities” ” and substituting the following definitions:

“ “approved bond intermediary”, “break cost”, “financial institution”, “financial sector incentive (bond market) company”, “prepayment fee”, “qualifying debt securities” and “redemption premium” have the same meanings as in section 13(16) of the Act;”.

New regulation 3C

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

“Prescribed conditions for tax exemption on break cost, prepayment fee and redemption premium from qualifying debt securities

3C.—(1) The conditions referred to in section 13(1)(ba) of the Act are —

(a)

the exemption from tax shall not apply —

(i)	to any break cost, prepayment fee or redemption premium derived by a permanent establishment in Singapore;
(ii)	if the issuer of the qualifying debt securities does not include in all offering documents a statement to the effect that where any break cost, prepayment fee or redemption premium is derived from any qualifying debt securities issued during the period from 15th February 2007 to 31st December 2008 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 securities using funds from its Singapore operations; or
(iii)	if the issuer of the qualifying debt securities issued during the period from 15th February 2007 to 31st December 2008, or such other person as the Comptroller may direct, has not furnished 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; and

(b)

where the issuer of the qualifying debt securities issued during the period from 15th February 2007 to 31st December 2008, is a person who is a resident of or a permanent establishment in Singapore and where such securities are issued to any person who is not a resident of Singapore (referred to in this sub-paragraph as a non-resident person) in connection with or for the purpose of enabling that non-resident person to issue securities (referred to in this sub-paragraph as the relevant securities), directly or indirectly, to investors, the exemption from tax 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.

(2) For the purposes of paragraph (1)(a)(i), where any break cost, prepayment fee or redemption premium from any qualifying debt securities is derived —

(a)	from funds managed by a fund manager in Singapore, by a foreign investor as defined in regulations made under section 13C or 13CA of the Act;
(b)	from funds managed by a headquarters company approved under section 43E of the Act, by its associated company outside Singapore approved under that section; or
(c)	from funds managed by a Finance and Treasury Centre approved under section 43G of the Act, by its associated company outside Singapore approved under that section,

that fund manager, headquarters company or Finance and Treasury Centre shall not be regarded as a permanent establishment of the foreign investor or approved associated company (as the case may be) solely by virtue of its management of funds on behalf of the foreign investor or approved associated company.”.

Amendment of regulation 5

4. Regulation 5 of the principal Regulations is amended by inserting, immediately after paragraph (2), the following paragraph:

“(3) The conditions referred to in section 45A(2B) of the Act are —

(a)	an issuer of any qualifying debt securities includes in all offering documents a statement to the effect that any person whose break cost, prepayment fee or redemption premium derived from those securities is not exempt from tax shall include such break cost, prepayment fee or redemption premium in a return of income made under the Act; and
(b)	an issuer of any qualifying debt securities, 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.”.

[G.N. Nos. S 350/2005; S 52/2006; S 99/2007]

Made this 4th day of August 2008.

TEO MING KIAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF (R) 32.19.2871 V8; AG/LEG/SL/134/2005/2 Vol. 1]

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