Income Tax (Exemption of Interest and Other Payments for Economic and Technological Development) (No. 7) Notification 2008

Status:

Published in Subsidiary Legislation Supplement
on 29 Dec 2008

No. S 684

Income Tax Act

(Chapter 134)

Income Tax (Exemption of Interest and Other Payments for Economic and Technological Development) (No. 7) Notification 2008

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) (No. 7) Notification 2008 and shall come into operation on 1st January 2009.

Definitions

2. In this Notification —

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

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

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

“notes” means notes issued by Toshiba Capital (Asia) Ltd under the programme;

“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 income” means any interest, prepayment fee, redemption premium or break cost payable in respect of any notes;

“specified period” means the period from 1st January 2009 to 31st December 2013 (both dates inclusive).

Exemption

3.—(1) Subject to sub-paragraph (2), there shall be exempt from tax the specified income payable by Toshiba Capital (Asia) Ltd on notes issued during the specified period 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 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)

all future annual updates up to 31st December 2013 to the programme are arranged by a financial sector incentive (bond market) company;

(b)

the conditions imposed by the Minister, or such person as he may appoint, on Toshiba Capital (Asia) Ltd for the approval of its Finance and Treasury Centre as an approved Finance and Treasury Centre for the purposes of section 43G of the Act are satisfied;

(c)

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

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

(d)

where —

(i)	during the primary launch of the notes issued during the specified period, the notes are issued to 4 or more persons, or less than 50% of the notes so issued are 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 are 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 exemption shall apply to the specified income derived by any noteholder referred to in sub-paragraph (1) only if —

(A)	the noteholder is not a related party of Toshiba Capital (Asia) Ltd; and
(B)	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;

(e)

Toshiba Capital (Asia) Ltd includes in all offering documents for the notes a statement to the effect that, where the specified income 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 exemption shall not apply if such person acquires such notes using funds from the Singapore operations;

(f)

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 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 the Singapore operations of the investor; and

(g)

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 24th day of December 2008.

TEO MING KIAN

Permanent Secretary,
Ministry of Finance,
Singapore.

[MF(R) R32.16.59 Vol. 13; AG/LEG/SL/134/2005/8 Vol. 2]

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