Comparison View

Formal Consolidation |  Amended S 557/2020
5% tax payable on qualifying income of financial sector incentive company
8.—(1)  Tax is payable at the rate of 5% on the income derived by a financial sector incentive (credit facilities syndication) company from the following activities:
(a)arranging, underwriting, or granting loans under, a syndicated facility that is a credit facility or a guarantee facility, if —
(i)the agreement for the facility is made on or after 1 January 2004; and
(ii)the syndication work in respect of the facility is carried out substantially in Singapore;
[S 557/2020 wef 16/07/2020]
(b)if the financial sector incentive (credit facilities syndication) company is a bank licensed under the Banking Act (Cap. 19) or a merchant bank approved under section 28 of the Monetary Authority of Singapore Act (Cap. 186), trading in secondary loans under a syndicated facility that is a credit facility or a guarantee facility, if —
(i)the agreement for the facility is made on or after 1 January 2004; and
(ii)the syndication work in respect of the facility is carried out substantially in Singapore;
[S 557/2020 wef 16/07/2020]
(c)arranging, underwriting or granting a loan, after the loan has become a syndicated facility, if —
(i)at the time of signing of the initial loan agreement, there exists a clear intention by the arranger, underwriter or agent bank of the loan to syndicate the loan as a syndicated facility within 6 months after the date of the signing of that agreement;
[S 557/2020 wef 16/07/2020]
(ii)the arranger, underwriter or agent bank of the loan syndicates the loan as a syndicated facility within 6 months after the date of the signing of the initial loan agreement;
[S 557/2020 wef 16/07/2020]
(iii)the loan agreement becomes an agreement for a syndicated facility on or after 1 May 2009;
[S 557/2020 wef 16/07/2020]
(iv)all the lenders in the syndicated facility are reflected as lenders of records in the records of the arranger or agent bank of the loan; and
[S 557/2020 wef 16/07/2020]
(v)the syndication work in respect of the facility is carried out substantially in Singapore;
[S 557/2020 wef 16/07/2020]
(d)providing project finance advisory services in connection with a syndicated facility relating to any prescribed asset or project.
(1A)  For the purposes of paragraph (1)(a), (b) and (c), the agent bank of the syndicated facility mentioned in those provisions must submit to the Comptroller within a time specified by the Comptroller —
(a)a return on the facility and a declaration from the arranger of the facility that the facility is a syndicated facility; and
(b)any other information or particulars that the Comptroller may require.
[S 557/2020 wef 16/07/2020]
(2)  Tax is payable at the rate of 5% on the income derived by a financial sector incentive (capital market) company from the following activities:
(a)trading or investing in, or providing services (including services as a broker, nominee or custodian, and the grant of a loan of the securities under a securities lending or repurchase arrangement) in respect of —
(i)debt securities; or
(ii)stocks, shares, or other equity securities issued by a company, a collective investment scheme or a business trust;
(b)providing services for the purpose of a listing on the Singapore Exchange to a company.
(3)  Tax is payable at the rate of 5% on the income derived by a financial sector incentive (derivatives market) company from the following activities:
(a)trading in, or providing services as an intermediary in connection with transactions relating to financial derivatives, commodity derivatives, emission derivatives or freight derivatives;
(b)incidental physical trading, but subject to paragraph (6).
(4)  Paragraph (1)(a) does not apply to any income derived from —
(a)the holding of any bonds, notes, certificates of deposit or other instruments of indebtedness (not being an agreement for a loan or advance, guarantee or letter of credit) as a result of arranging, underwriting, or granting loans under, a syndicated facility; or
(b)the sale of such bonds, notes, certificates of deposit or other instruments of indebtedness (not being an agreement for a loan or advance, guarantee or letter of credit).
(5)  [Deleted by S 557/2020 wef 16/07/2020]
(6)  For the purposes of paragraph (3)(b), where, in a relevant year of assessment, the volume of the incidental physical trading of the financial sector incentive (derivatives market) company exceeds 15% of the total volume of its incidental physical trading and trading in commodity derivatives, whether transacted over‑the‑counter or on an exchange, the concessionary rate of tax only applies to a portion of the income derived from the incidental physical trading that is calculated in accordance with the formula where —
(a)A is 15% of the total volume of incidental physical trading and trading in commodity derivatives (whether transacted over‑the‑counter or on an exchange) in that year of assessment;
(b)B is the total volume of all incidental physical trading in that year of assessment; and
(c)C is the total income derived from all incidental physical trading in that year of assessment.
(7)  For the purposes of this regulation, a facility is treated as a syndicated facility if —
(a)the total amount of the facility is at least US$20 million or the equivalent in another currency;
(b)the facility is documented as one agreement;
(c)either —
(i)the facility has at least 3 lenders and, where there are fewer than 5 lenders, each lender has a share of at least 10% of the total amount of the facility; or
(ii)in the case of a facility that provides a guarantee or letter of credit in addition to the provision of loans, advances or funds —
(A)the facility complies with sub-paragraph (i); or
(B)there are at least 3 issuers of the guarantee or letter of credit and, where there are fewer than 5 issuers, each issuer’s undertaking represents at least 10% of the total amount of the facility; and
(d)the funds of the facility have not been, and are not intended to be used to finance or refinance any previous borrowing used to finance immovable properties, other than a prescribed asset or project.
[S 557/2020 wef 16/07/2020]
(8)  For the purposes of this regulation, the syndication work in respect of a facility is treated as being carried out substantially in Singapore if all of the following functions are carried out by a bank licensed under the Banking Act, a merchant bank approved under section 28 of the Monetary Authority of Singapore Act, or a financial sector incentive (credit facilities syndication) company that holds a capital markets services licence under the Securities and Futures Act to deal in securities or that is exempt under that Act from holding such a licence:
(a)originating and structuring of the facility;
(b)running the book;
(c)facility documentation;
(d)facility agency.
[S 557/2020 wef 16/07/2020]
Informal Consolidation | Amended S 488/2021
5% tax payable on qualifying income of financial sector incentive company
8.—(1)  Tax is payable at the rate of 5% on the income derived by a financial sector incentive (credit facilities syndication) company from the following activities:
(a)arranging, underwriting, or granting loans under, a syndicated facility that is a credit facility or a guarantee facility, if —
(i)the agreement for the facility is made on or after 1 January 2004; and
(ii)the syndication work in respect of the facility is carried out substantially in Singapore;
[S 557/2020 wef 16/07/2020]
(b)if the financial sector incentive (credit facilities syndication) company is a bank that holds a licence under section 7 or 79 of the Banking Act or a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under that Act, trading in secondary loans under a syndicated facility that is a credit facility or a guarantee facility, if —
(i)the agreement for the facility is made on or after 1 January 2004; and
(ii)the syndication work in respect of the facility is carried out substantially in Singapore;
[S 557/2020 wef 16/07/2020]
[S 488/2021 wef 01/07/2021]
(c)arranging, underwriting or granting a loan, after the loan has become a syndicated facility, if —
(i)at the time of signing of the initial loan agreement, there exists a clear intention by the arranger, underwriter or agent bank of the loan to syndicate the loan as a syndicated facility within 6 months after the date of the signing of that agreement;
[S 557/2020 wef 16/07/2020]
(ii)the arranger, underwriter or agent bank of the loan syndicates the loan as a syndicated facility within 6 months after the date of the signing of the initial loan agreement;
[S 557/2020 wef 16/07/2020]
(iii)the loan agreement becomes an agreement for a syndicated facility on or after 1 May 2009;
[S 557/2020 wef 16/07/2020]
(iv)all the lenders in the syndicated facility are reflected as lenders of records in the records of the arranger or agent bank of the loan; and
[S 557/2020 wef 16/07/2020]
(v)the syndication work in respect of the facility is carried out substantially in Singapore;
[S 557/2020 wef 16/07/2020]
(d)providing project finance advisory services in connection with a syndicated facility relating to any prescribed asset or project.
(1A)  For the purposes of paragraph (1)(a), (b) and (c), the agent bank of the syndicated facility mentioned in those provisions must submit to the Comptroller within a time specified by the Comptroller —
(a)a return on the facility and a declaration from the arranger of the facility that the facility is a syndicated facility; and
(b)any other information or particulars that the Comptroller may require.
[S 557/2020 wef 16/07/2020]
(2)  Tax is payable at the rate of 5% on the income derived by a financial sector incentive (capital market) company from the following activities:
(a)trading or investing in, or providing services (including services as a broker, nominee or custodian, and the grant of a loan of the securities under a securities lending or repurchase arrangement) in respect of —
(i)debt securities; or
(ii)stocks, shares, or other equity securities issued by a company, a collective investment scheme or a business trust;
(b)providing services for the purpose of a listing on the Singapore Exchange to a company.
(3)  Tax is payable at the rate of 5% on the income derived by a financial sector incentive (derivatives market) company from the following activities:
(a)trading in, or providing services as an intermediary in connection with transactions relating to financial derivatives, commodity derivatives, emission derivatives or freight derivatives;
(b)incidental physical trading, but subject to paragraph (6).
(4)  Paragraph (1)(a) does not apply to any income derived from —
(a)the holding of any bonds, notes, certificates of deposit or other instruments of indebtedness (not being an agreement for a loan or advance, guarantee or letter of credit) as a result of arranging, underwriting, or granting loans under, a syndicated facility; or
(b)the sale of such bonds, notes, certificates of deposit or other instruments of indebtedness (not being an agreement for a loan or advance, guarantee or letter of credit).
(5)  [Deleted by S 557/2020 wef 16/07/2020]
(6)  For the purposes of paragraph (3)(b), where, in a relevant year of assessment, the volume of the incidental physical trading of the financial sector incentive (derivatives market) company exceeds 15% of the total volume of its incidental physical trading and trading in commodity derivatives, whether transacted over‑the‑counter or on an exchange, the concessionary rate of tax only applies to a portion of the income derived from the incidental physical trading that is calculated in accordance with the formula where —
(a)A is 15% of the total volume of incidental physical trading and trading in commodity derivatives (whether transacted over‑the‑counter or on an exchange) in that year of assessment;
(b)B is the total volume of all incidental physical trading in that year of assessment; and
(c)C is the total income derived from all incidental physical trading in that year of assessment.
(7)  For the purposes of this regulation, a facility is treated as a syndicated facility if —
(a)the total amount of the facility is at least US$20 million or the equivalent in another currency;
(b)the facility is documented as one agreement;
(c)either —
(i)the facility has at least 3 lenders and, where there are fewer than 5 lenders, each lender has a share of at least 10% of the total amount of the facility; or
(ii)in the case of a facility that provides a guarantee or letter of credit in addition to the provision of loans, advances or funds —
(A)the facility complies with sub-paragraph (i); or
(B)there are at least 3 issuers of the guarantee or letter of credit and, where there are fewer than 5 issuers, each issuer’s undertaking represents at least 10% of the total amount of the facility; and
(d)the funds of the facility have not been, and are not intended to be used to finance or refinance any previous borrowing used to finance immovable properties, other than a prescribed asset or project.
[S 557/2020 wef 16/07/2020]
(8)  For the purposes of this regulation, the syndication work in respect of a facility is treated as being carried out substantially in Singapore if all of the following functions are carried out by a bank that holds a licence under section 7 or 79 of the Banking Act, a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under that Act, or a financial sector incentive (credit facilities syndication) company that holds a capital markets services licence under the Securities and Futures Act to deal in securities or that is exempt under that Act from holding such a licence:
(a)originating and structuring of the facility;
(b)running the book;
(c)facility documentation;
(d)facility agency.
[S 557/2020 wef 16/07/2020]
[S 488/2021 wef 01/07/2021]