10% tax payable on qualifying income of financial sector incentive (headquarter services) company
5.—(1) Tax shall be payable at the rate of 10% on the income of a financial sector incentive (headquarter services) company derived from the provision of any of the following services, which is approved by the Minister or approving authority in relation to that financial sector incentive (headquarter services) company, to any approved office of the financial sector incentive (headquarter services) company or any approved person:
(a)
general management and administration;
(b)
business planning and co-ordination;
(c)
procurement of raw materials and components for use in the business of the approved office or approved person;
(d)
technical support services;
(e)
marketing control and sales promotion planning;
(f)
training and personnel management;
(g)
corporate finance advisory services;
(h)
economic or investment research and analysis;
(i)
credit control and administration;
(j)
research and development work carried out in Singapore on behalf of the approved office;
(k)
arranging credit facilities for the approved office in foreign currencies where the funds for providing the facilities are obtained from —
(i)
financial institutions in Singapore; or
(ii)
the accumulated profits of other approved offices;
(l)
providing guarantees, performance bonds, standby letters of credit and services relating to remittances where —
(i)
in the case of a guarantee, performance bond or standby letter of credit, the party in whose favour the facility is issued is —
(A)
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), which is a financial sector incentive company;
(B)
a person who is neither a resident of nor a permanent establishment in Singapore; or
(C)
a permanent establishment outside Singapore of a person resident in Singapore in respect of any business carried on outside Singapore through that permanent establishment; and
(ii)
in the case of services relating to remittances, the person to whom the remittances are made is —
(A)
a bank licensed under the Banking Act, or a merchant bank approved under section 28 of the Monetary Authority of Singapore Act, which is a financial sector incentive company; or
(B)
a person who is neither a resident of nor a permanent establishment in Singapore;
(m)
arranging interest rate or currency swaps in foreign currencies with —
(i)
a bank licensed under the Banking Act, or a merchant bank approved under section 28 of the Monetary Authority of Singapore Act, which is a financial sector incentive company;
(ii)
a person who is neither a resident of nor a permanent establishment in Singapore; or
(iii)
a branch office outside Singapore of a company resident in Singapore;
(n)
managing the funds of the approved office for the purpose of any designated investments, and in the case where the approved office is an associated company —
(i)
the approved office is not resident in Singapore; and
(ii)
unless otherwise approved by the Minister or approving authority —
(A)
not less than 80% of the total number of the issued shares of the approved office are beneficially owned, directly or indirectly, by persons who are neither citizens of Singapore nor resident in Singapore;
(B)
the approved office has no permanent establishment in Singapore other than the financial sector incentive (headquarter services) company;
(C)
the approved office does not carry on business in Singapore;
(D)
the approved office does not beneficially own more than 20% of the total number of the issued shares of any company incorporated in Singapore; and
(E)
the approved office has less than 20% of the total number of its issued shares beneficially owned, directly or indirectly, by a company which —
(EA)
has a permanent establishment in Singapore other than the financial sector incentive (headquarter services) company;
(EB)
carries on business in Singapore; or
(EC)
beneficially owns more than 20% of the total number of the issued shares of any company incorporated in Singapore.
(2) In this regulation —
“approved office”, in relation to a financial sector incentive (headquarter services) company, means an office or associated company of the financial sector incentive (headquarter services) company which is —
(a)
outside Singapore; and
(b)
approved by the Minister or approving authority;
“approved person”, in relation to a financial sector incentive (headquarter services) company, means a person (other than an approved office of the financial sector incentive (headquarter services) company) who is —
(a)
outside Singapore; and
(b)
approved by the Minister or approving authority;
“associated company”, in relation to a financial sector incentive (headquarter services) company, means a company —
(a)
the operations of which are or can be controlled, directly or indirectly, by that financial sector incentive (headquarter services) company;
(b)
which controls or can control, directly or indirectly, the operations of that financial sector incentive (headquarter services) company; or
(c)
the operations of which are or can be controlled, directly or indirectly, by a person or persons who control or can control, directly or indirectly, the operations of that financial sector incentive (headquarter services) company.
(3) For the purpose of paragraph (2), a company shall be deemed to be an associated company in relation to a financial sector incentive (headquarter services) company if —
(a)
at least 25% of the total number of the issued shares of the first-mentioned company are beneficially owned, directly or indirectly, by the financial sector incentive (headquarter services) company; or
(b)
at least 25% of the total number of the issued shares of the financial sector incentive (headquarter services) company are beneficially owned, directly or indirectly, by the first-mentioned company.