8.—(1) Tax shall be payable at the rate of 5% on the income derived —| (a) | by a financial sector incentive (bond market) company —| (i) | on or after 1st January 2004, from arranging, underwriting or distributing any qualifying debt securities, subject to the conditions specified in the Income Tax (Qualifying Debt Securities) Regulations (Rg 35); | | (ii) | on or after 16th February 2008, from trading in any qualifying debt securities or qualifying project debt securities; |
| | (b) | on or after 1st January 2004, by a financial sector incentive (credit facilities syndication) company from arranging, underwriting or granting loans under any syndicated offshore facility which is an offshore credit facility or an offshore guarantee facility, if —| (i) | the agreement for the facility is made on or after 1st January 2004; and | | (ii) | the conditions specified in the Second Schedule are satisfied; |
| | (c) | on or after 1st January 2004, by a financial sector incentive (credit facilities syndication) company which 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) from trading in secondary loans under any syndicated offshore facility which is an offshore credit facility or an offshore guarantee facility, if —| (i) | the agreement for the facility is made on or after 1st January 2004; and | | (ii) | the conditions specified in the Second Schedule are satisfied; |
| | (d) | by a financial sector incentive (derivatives market) company —| (i) | on or after 1st January 2004, from trading in qualifying derivatives or providing services as an intermediary in connection with transactions relating to qualifying derivatives; | | (ii) | on or after 16th February 2008, from trading in financial derivatives that are transacted on an exchange or providing services as an intermediary in connection with transactions relating to such derivatives; |
| | (e) | on or after 1st January 2004, by a financial sector incentive (equity market) company from the following activities:| (i) | services (including services as a broker, nominee or custodian) in connection with transactions relating to stocks, shares, bonds or other securities listed on the Singapore Exchange that are issued by —| (A) | a company which is neither incorporated in Singapore nor resident in Singapore; or | | (B) | a company which —| (BA) | is incorporated in Singapore; | | (BB) | has at least 50% of its annual turnover derived from outside Singapore; and | | (BC) | is approved for the purpose of these Regulations by the Minister or approving authority, |
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| except where the payments for these services and other expenses in connection with the transactions are borne, directly or indirectly, by a person resident in Singapore or by a permanent establishment in Singapore of a person who is not resident in Singapore; |
| | (ii) | the sale of any stocks, shares, bonds or other securities referred to in sub-paragraph (i); | | (iii) | services on behalf of a company which is neither incorporated in Singapore nor resident in Singapore (excluding any permanent establishment it may have in Singapore) in respect of the arrangement, underwriting, management and placement of an initial public offering by the company of securities for the purpose of a listing on the Singapore Exchange, where the payments for these services and other expenses in connection with the issue of such securities are not borne, directly or indirectly, by a person resident in Singapore or a permanent establishment in Singapore; and | | (iv) | services on behalf of a company which —| (A) | is incorporated in Singapore; | | (B) | has at least 50% of its annual turnover derived from outside Singapore; and | | (C) | is approved, for the purpose of these Regulations, by the Minister or approving authority, |
| in respect of the arrangement, underwriting, management and placement of an initial public offering by the company of securities for the purpose of a listing on the Singapore Exchange; |
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| | (f) | on or after 1st November 2006, by a financial sector incentive (project finance) company from any of the following activities:| (i) | arranging, underwriting or distributing any qualifying project debt securities; | | (ii) | arranging or underwriting any qualifying project loan; | | (iii) | providing project finance advisory services in connection with transactions relating to any prescribed asset or project; [S 586/2008 wef 01/11/2006] |
| | (g) | on or after 1st April 2008, by a financial sector incentive (debt capital market) company from —| (i) | arranging, underwriting or distributing any qualifying debt securities, subject to the conditions specified in the Income Tax (Qualifying Debt Securities) Regulations (Rg 35); | | (ii) | trading in any qualifying debt securities or qualifying project debt securities; | | (iii) | arranging, underwriting or granting loans under any syndicated offshore facility which is an offshore credit facility or an offshore guarantee facility, if —| (AA) | the agreement for the facility is made on or after 1st January 2004; and | | (BB) | the conditions specified in the Second Schedule are satisfied; |
| | (iv) | arranging, underwriting or distributing any qualifying project debt securities; | | (v) | arranging or underwriting any qualifying project loan; | | (vi) | providing project finance advisory services in connection with transactions relating to any prescribed asset or project; | | (vii) | where the financial sector incentive (debt capital market) 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 any syndicated offshore facility which is an offshore credit facility or an offshore guarantee facility, if —| (AA) | the agreement for the facility is made on or after 1st January 2004; and | | (BB) | the conditions specified in the Second Schedule are satisfied; |
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| | (h) | on or after 1st April 2008, by a financial sector incentive (Islamic finance) company, which 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), from the activities of the kinds referred to in regulation 4(1)(a), if the following conditions are satisfied:| (i) | the activities are endorsed by any Shari’ah council or body, or by any committee formed for the purpose of providing guidance on compliance with Shari’ah law; and | | (ii) | the activities are structured in accordance with Murabaha, Ijara Wa Igtina, Musharaka or Istisna; |
| | (i) | on or after 1st April 2008, by a financial sector incentive (Islamic finance) company, being a fund manager, from the activities of the kinds referred to in regulation 4(1)(m), (2E) or (2F), provided that the activities are endorsed by any Shari’ah council or body, or by any committee formed for the purpose of providing guidance on compliance with Shari’ah law ; | | (j) | on or after 27th February 2009, by a financial sector incentive (derivatives market) (financial) company from —| (i) | trading in financial derivatives; or | | (ii) | providing services as an intermediary in connection with transactions relating to financial derivatives; [S 835/2010 wef 27/02/2009] |
| | (k) | on or after 27th February 2009, by a financial sector incentive (derivatives market) (over-the-counter commodity derivatives) company from —| (i) | trading in commodity derivatives or emission derivatives transacted over-the-counter with any specified person; | | (ii) | providing services as an intermediary in connection with transactions relating to commodity derivatives or emission derivatives transacted over-the-counter between specified persons; | | (iii) | trading in freight derivatives transacted over-the-counter with —| (A) | a specified person; or | | (B) | a shipping enterprise; |
| | (iv) | providing services as an intermediary in connection with transactions relating to freight derivatives transacted over-the-counter between —| (A) | specified persons; | | (B) | shipping enterprises; or | | (C) | a specified person and a shipping enterprise; |
| | (v) | from incidental physical trading; except that where, in a relevant year of assessment, the volume of the incidental physical trading exceeds 15% of the total volume of incidental physical trading and trading in commodity derivatives transacted over-the-counter with specified persons in that year of assessment, the concessionary rate shall only apply to a portion of the income derived from the incidental physical trading calculated in accordance with the formula | | is 15% of the total volume of incidental physical trading and trading in commodity derivatives transacted over-the-counter with specified persons in that year of assessment; |
| | | is the total volume of all incidental physical trading with specified persons in that year of assessment; and |
| | | is the total income derived from all incidental physical trading with specified persons in that year of assessment; or |
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| | (vi) | trading with any person in commodity derivatives or freight derivatives transacted over-the-counter, where such trade is cleared through the SGX AsiaClear Facility by the Singapore Exchange Derivatives Clearing Limited; [S 835/2010 wef 27/02/2009] |
| | (l) | on or after 27th February 2009, by a financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company from —| (i) | trading in commodity derivatives or emission derivatives transacted on an exchange where —| (A) | the financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company is a member of a qualifying exchange; or | | (B) | such trade is executed through a specified person who is a member of any exchange, and on behalf of the financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company; |
| | (ii) | providing services as an intermediary in connection with transactions relating to commodity derivatives or emission derivatives transacted on an exchange between —| (A) | specified persons; or | | (B) | a specified person and a qualifying exchange; |
| | (iii) | trading in freight derivatives transacted on an exchange where —| (A) | the financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company is a member of a qualifying exchange; or | | (B) | such trade is executed through a specified person who is a member of any exchange, and on behalf of the financial sector incentive (derivatives market) (exchange-traded commodity derivatives) company; |
| | (iv) | providing services as an intermediary in connection with transactions relating to freight derivatives transacted on an exchange between —| (A) | specified persons; | | (B) | shipping enterprises; | | (C) | qualifying exchanges; | | (D) | a specified person and a shipping enterprise; | | (E) | a specified person and a qualifying exchange; or | | (F) | a shipping enterprise and a qualifying exchange; or |
| | (v) | from incidental physical trading; except that where, in a relevant year of assessment, the volume of the incidental physical trading exceeds 15% of the total volume of incidental physical trading and trading in commodity derivatives transacted on an exchange with specified persons in that year of assessment, the concessionary rate shall only apply to a portion of the income derived from the incidental physical trading calculated in accordance with the formula | | is 15% of the total volume of incidental physical trading and trading in commodity derivatives transacted on an exchange with specified persons in that year of assessment; |
| | | is the total volume of all incidental physical trading with specified persons in that year of assessment; and |
| | | is the total income derived from all incidental physical trading with specified persons in that year of assessment; |
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[S 835/2010 wef 27/02/2009] |
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| | (m) | on or after 27th February 2009, by a financial sector incentive (derivatives market) (over-the-counter and exchange-traded commodity derivatives) company from —| (i) | activities referred to in sub-paragraph (k)(i), (ii), (iii), (iv) or (vi) or (l)(i), (ii), (iii) or (iv); or | | (ii) | from incidental physical trading; except that where, in a relevant year of assessment, the volume of the incidental physical trading exceeds 15% of the total volume of incidental physical trading and trading in commodity derivatives, whether transacted over-the-counter or on an exchange, with specified persons in that year of assessment, the concessionary rate shall only apply to a portion of the income derived from the incidental physical trading calculated in accordance with the formula | | is 15% of the total volume of incidental physical trading and trading in commodity derivatives (whether transacted over-the-counter or on an exchange) with specified persons in that year of assessment; |
| | | is the total volume of all incidental physical trading with specified persons in that year of assessment; and |
| | | is the total income derived from all incidental physical trading with specified persons in that year of assessment; |
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[S 835/2010 wef 27/02/2009] |
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| | (n) | on or after 27th February 2009, by a financial sector incentive (derivatives market) (financial, over-the-counter and exchange-traded commodity derivatives) company from activities referred to in sub-paragraph (j), (k)(i), (ii), (iii), (iv) or (vi), (l)(i), (ii), (iii) or (iv) or (m)(ii); and [S 835/2010 wef 27/02/2009] [S 54/2010 wef 16/02/2008] |
| (2) Notwithstanding paragraph (1)(b), where a financial sector incentive (credit facilities syndication) company holds any bonds, notes, certificates of deposit or other instruments of indebtedness issued under a facility referred to in paragraph (d) or (e) of the definition of “offshore credit facility” in regulation 2(1), the rate of tax of 5% referred to in paragraph (1) shall not apply to any income derived from the holding of those bonds, notes, certificates of deposit or other instruments of indebtedness or the profits arising from the sale thereof. [S 54/2010 wef 16/02/2008] |
(3) Notwithstanding paragraph (1)(b), (g) and (o), where —| (a) | funds raised from any syndicated offshore facility are used solely to refinance previous borrowings; or | | (b) | part of the funds raised from any syndicated offshore facility are used to refinance previous borrowings, and the remaining part of which are used outside Singapore, |
| (i) | the previous borrowings were granted by a person resident in Singapore or permanent establishment in Singapore (other than those borrowings the income derived therefrom was exempt from tax under section 43A(2) of the Act); or | | (ii) | the funds raised from previous borrowings were used in Singapore, |
| the income of a financial sector incentive (credit facilities syndication) company in relation to that syndicated offshore facility shall, for the purpose of paragraph (1), be determined by multiplying the income from the syndicated offshore facility by (1-A/B), where — |
| | is the amount of the funds raised from the syndicated offshore facility used to refinance previous borrowings where — |
| | | (i) the previous borrowings were granted by a person resident in Singapore or permanent establishment in Singapore (other than those borrowings the income derived therefrom was exempt from tax under section 43A(2) of the Act); or |
| | | (ii) the funds raised from previous borrowings were used in Singapore; and |
| | | is the total amount of the syndicated offshore facility. |
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[S 54/2010 wef 16/02/2008] |
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