Singapore legislation
Section 43H
Section 43H
Concessionary rate of tax for income derived from debt securities
(1)
Despite section 43, the Minister may by regulations provide that tax at the rate of 10% is to be levied and paid for each year of assessment upon —
interest derived by any company from any qualifying debt securities;
(aa)discount derived by any company from any qualifying debt securities issued during the period from 17 February 2006 to 31 December 2023 (both dates inclusive);
(ab)any amount payable to any company from any Islamic debt securities which are qualifying debt securities, and issued during the period from 1 January 2005 to 31 December 2023 (both dates inclusive);
(ac)any prepayment fee, redemption premium or break cost derived by any company from qualifying debt securities issued during the period from 15 February 2007 to 31 December 2023 (both dates inclusive); and
(ad)such other income derived by any company that is directly attributable to qualifying debt securities issued on or after a prescribed date, as may be prescribed by regulations.
(2)
Subsection (1)(a), (aa), (ab), (ac) or (ad) (as the case may be) does not, unless otherwise approved by the Minister or such person as he may appoint, apply to —
any interest derived from any qualifying debt securities issued during the period from 10 May 1999 to 31 December 2023 (both dates inclusive);
any discount from any qualifying debt securities issued during the period from 17 February 2006 to 31 December 2023 (both dates inclusive);
any amount payable from any Islamic debt securities which are qualifying debt securities, and issued during the period from 1 January 2005 to 31 December 2023;
any prepayment fee, redemption premium or break cost from qualifying debt securities issued during the period from 15 February 2007 to 31 December 2023 (both dates inclusive); and
such other income directly attributable to qualifying debt securities issued on or after a prescribed date, as may be prescribed by regulations,where 50% or more of those securities which are outstanding at any time during the life of the issue is beneficially held or funded, directly or indirectly, by related parties of the issuer of those securities and where such income is derived by —
any company which is a related party of the issuer of those securities; or
any company where the funds used by such company to acquire those securities are obtained, directly or indirectly, from any related party of the issuer of those securities.
(2A)
Subsection (1) does not apply to income from qualifying debt securities derived by a financial sector incentive (standard tier) company.
(2B)
Subsection (1) does not apply to income derived by a financial sector incentive (capital market) company from qualifying debt securities on or after 1 January 2014.
(3)
Regulations made under subsection (1) may provide for exemption from tax of income derived by a primary dealer from trading in any Singapore Government securities during the period from 27 February 1999 to 31 December 2023 (both dates inclusive), and for deduction of losses otherwise than in accordance with section 37(3).
(3A)
A primary dealer mentioned in subsection (3) may elect in accordance with subsection (3B) not to be subject to the regulations made under subsection (1); and if the primary dealer so elects, the regulations cease to apply to the income of that primary dealer for the year of assessment for which the election is made and for subsequent years of assessment.
(3B)
The election mentioned in subsection (3A) must be made by the primary dealer by written notice to the Comptroller —
at the time of lodgment of the return of income for a year of assessment; or
at such further time as the Comptroller may allow.
(3C)
The election made by a primary dealer under subsection (3A) is irrevocable.
(4)
In this section —
Definition
“break cost”, “financial institution”, “prepayment fee”, “qualifying debt securities”, “redemption premium” and “related party” have the meanings given by section 13(16);
Definition
“debt securities” means bonds, notes, commercial papers, treasury bills, certificates of deposits, and AT1 instruments within the meaning of section 10I(2);
Definition
“financial sector incentive (capital market) company” means a company approved as such under section 43J;
Definition
“financial sector incentive (standard tier) company” means a company approved as such under section 43J;
Definition
“Islamic debt securities” means debt securities and trust certificates —
which 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
the amounts payable from such securities and trust certificates are periodic and supported by a regular stream of receipts from underlying assets;
Definition
“primary dealer” means any financial institution appointed by the Monetary Authority of Singapore as a primary dealer under section 29A of the Government Securities Act 1992;
Definition
“Singapore Government securities” means debt securities issued under the Government Securities Act 1992, the Local Treasury Bills Act 1923, the Significant Infrastructure Government Loan Act 2021 or by the Government under any other written law, and is deemed to include any issue of bills and notes by the Monetary Authority of Singapore that are approved by the Minister for the purposes of this Act;
Definition
“trust certificates” means certificates evidencing beneficial ownership in underlying assets.
(5)
Subsections (1)(a), (aa), (ab), (ac) and (ad) and (2) and regulations made under any of those provisions apply to a body of persons for the year of assessment 2010 and subsequent years of assessment.[43N