/akn/sg/act/sub_leg/1947/ITA-RG35
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Income Tax (Qualifying Debt Securities) Regulations is Singapore Subsidiary Legislation, cited as Subsidiary Legislation ITA-RG35 1947, currently marked in force and first recorded in 1947.
Citation
These Regulations may be cited as the Income Tax (Qualifying Debt Securities) Regulations.(2) [Deleted by S 268/2009 wef 10/06/2009](3) [Deleted by S 268/2009 wef 10/06/2009]
These Regulations may be cited as the Income Tax (Qualifying Debt Securities) Regulations.
[Deleted by S 268/2009 wef 10/06/2009]
[Deleted by S 268/2009 wef 10/06/2009]
Definitions
In these Regulations —“approved bond intermediary”, “early redemption fee”, “financial institution”, “financial sector incentive (bond market) company”, “financial sector incentive (capital market) company”, “financial sector incentive (standard tier) company”, “qualifying debt securities” and “redemption premium” have the same meanings as in section 13(16) of the Act;“Authority” means the Monetary Authority of Singapore;“debt securities” means bonds, notes, commercial papers, certificates of deposit, and AT1 instruments (as defined in section 10I(2) of the Act), other than Singapore Government securities;“funds from Singapore operations”, in relation to a person, means the funds and profits of that person’s operations through a permanent establishment in Singapore;“Islamic debt securities” has the same meaning as in section 43H(4) of the Act;“offering documents” means the prospectuses, offering circulars, information memoranda, pricing supplements or other documents issued to investors in connection with an issue of securities;“programme” includes a medium term note programme, a commercial paper programme or any similar programme for the issue of debt securities;“Singapore-based issuer” —
in relation to an issuer which is not a special purpose vehicle, means an entity which carries on any operation in Singapore; and
in relation to an issuer which is a special purpose vehicle, means an entity whose sponsor carries on any operation in Singapore;“specified licensed entity” means any of the following persons:
a bank or merchant bank licensed under the Banking Act 1970;
a finance company licensed under the Finance Companies Act 1967;
a person who holds a capital markets services licence under the Securities and Futures Act 2001 to carry on a business in any of the following regulated activities:
advising on corporate finance;
dealing in capital markets products;“tranche” means a particular issue of debt securities under a programme.
“approved bond intermediary”, “early redemption fee”, “financial institution”, “financial sector incentive (bond market) company”, “financial sector incentive (capital market) company”, “financial sector incentive (standard tier) company”, “qualifying debt securities” and “redemption premium” have the same meanings as in section 13(16) of the Act;
“Authority” means the Monetary Authority of Singapore;
“debt securities” means bonds, notes, commercial papers, certificates of deposit, and AT1 instruments (as defined in section 10I(2) of the Act), other than Singapore Government securities;
“funds from Singapore operations”, in relation to a person, means the funds and profits of that person’s operations through a permanent establishment in Singapore;
“Islamic debt securities” has the same meaning as in section 43H(4) of the Act;
“offering documents” means the prospectuses, offering circulars, information memoranda, pricing supplements or other documents issued to investors in connection with an issue of securities;
“programme” includes a medium term note programme, a commercial paper programme or any similar programme for the issue of debt securities;
“Singapore-based issuer” —
in relation to an issuer which is not a special purpose vehicle, means an entity which carries on any operation in Singapore; and
in relation to an issuer which is a special purpose vehicle, means an entity whose sponsor carries on any operation in Singapore;
“specified licensed entity” means any of the following persons:
a bank or merchant bank licensed under the Banking Act 1970;
a finance company licensed under the Finance Companies Act 1967;
a person who holds a capital markets services licence under the Securities and Futures Act 2001 to carry on a business in any of the following regulated activities:
advising on corporate finance;
dealing in capital markets products;
“tranche” means a particular issue of debt securities under a programme.
Prescribed conditions for tax exemption on interest income from qualifying debt securities
The conditions referred to in section 13(1)(a) of the Act are as follows:
the exemption from tax shall not apply —
to any interest derived by any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the qualifying debt securities are obtained from its Singapore operations;
if the issuer of the qualifying debt securities does not include in all offering documents a statement to the effect that where interest is derived from any qualifying debt securities issued during the period from 27 February 1999 to 31 December 2028 (both dates inclusive) by any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, the tax exemption shall not apply if such person acquires such securities using funds from its Singapore operations; or
if the issuer of the qualifying debt securities, or such other person as the Authority may direct, has not furnished to the Authority a return on the debt securities within such period as the Authority may specify and such other particulars in connection with those securities as the Authority may require; and
[Deleted by S 52/2006 wef 01/01/2005](c)where the issuer of the qualifying debt securities is a person who is resident in Singapore, or a person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, and where such securities are issued 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 securities (referred to in this sub-paragraph as the relevant securities), directly or indirectly, to investors, the exemption from tax shall apply only if —
the relevant securities are qualifying debt securities; and
the relevant securities contain restrictions against the acquisition of those securities by any investor who is resident in Singapore, or any investor who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that investor to acquire those securities are obtained from its Singapore operations.(iii)[Deleted by S 196/2026 wef 02/04/2026](d)[Deleted by S 52/2006 wef 01/01/2005]
For the purpose of paragraph (1)(a)(i), where interest on a qualifying debt security is derived —
from funds managed by a fund manager in Singapore, by a foreign investor who is not resident in Singapore and is —
a prescribed person as defined in regulation 2(1) of the Income Tax (Exemption of Income of Prescribed Persons Arising from Funds Managed by Fund Manager in Singapore) Regulations 2010 (G.N. No. S 6/2010); or
an approved person as defined in section 13U(5) of the Act;
from funds managed by a headquarters company approved under section 43D of the Act, by its associated company outside Singapore approved under that section; or
from funds managed by a Finance and Treasury Centre approved under section 43E of the Act, by its associated company outside Singapore approved under that section,that fund manager, headquarters company or Finance and Treasury Centre shall not be regarded as a permanent establishment of the foreign investor or approved associated company (as the case may be) solely by virtue of its management of funds on behalf of the foreign investor or approved associated company.
[Deleted by S 196/2026 wef 02/04/2026]
Prescribed conditions for tax exemption on discount from qualifying debt securities
The conditions referred to in section 13(1)(aa) of the Act are as follows:
the exemption from tax shall not apply —
to any discount derived by any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the qualifying debt securities are obtained from its Singapore operations;
if the issuer of the qualifying debt securities does not include in all offering documents a statement to the effect that where any discount is derived from any qualifying debt securities which —
[Deleted by S 196/2026 wef 02/04/2026](B)are issued during the period from 17 February 2006 to 31 December 2028 (both dates inclusive),by any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, the tax exemption shall not apply if such person acquires such securities using funds from its Singapore operations; or
if the issuer of the qualifying debt securities which are —
[Deleted by S 196/2026 wef 02/04/2026](B)issued during the period from 17 February 2006 to 31 December 2028 (both dates inclusive),or such other person as the Authority may direct, has not furnished to the Authority a return on the debt securities within such period as the Authority may specify and such other particulars in connection with those securities as the Authority may require; and
[Deleted by S 52/2006 wef 01/01/2005](c)where the issuer of the qualifying debt securities is a person who is resident in Singapore, or a person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, and where such securities are issued 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 securities (referred to in this sub-paragraph as the relevant securities), directly or indirectly, to investors, the exemption from tax shall apply only if —
the relevant securities are qualifying debt securities; and (ii)the relevant securities contain restrictions against the acquisition of those securities by any investor who is resident in Singapore, or any investor who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that investor to acquire those securities are obtained from its Singapore operations.(iii)[Deleted by S 196/2026 wef 02/04/2026]
For the purpose of paragraph (1)(a)(i), where any discount from any qualifying debt securities is derived —
from funds managed by a fund manager in Singapore, by a foreign investor who is not resident in Singapore and is —
a prescribed person as defined in regulation 2(1) of the Income Tax (Exemption of Income of Prescribed Persons Arising from Funds Managed by Fund Manager in Singapore) Regulations 2010; or
an approved person as defined in section 13U(5) of the Act;
from funds managed by a headquarters company approved under section 43D of the Act, by its associated company outside Singapore approved under that section; or
from funds managed by a Finance and Treasury Centre approved under section 43E of the Act, by its associated company outside Singapore approved under that section,that fund manager, headquarters company or Finance and Treasury Centre shall not be regarded as a permanent establishment of the foreign investor or approved associated company (as the case may be) solely by virtue of its management of funds on behalf of the foreign investor or approved associated company.
Prescribed conditions for tax exemption on any amount payable from Islamic debt securities which are qualifying debt securities
The conditions referred to in section 13(1)(ab) of the Act are —
the exemption from tax shall not apply —
to any amount that is payable from Islamic debt securities which are qualifying debt securities to any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the qualifying debt securities are obtained from its Singapore operations;
if the issuer of the Islamic debt securities which are qualifying debt securities, and issued during the period from 1 January 2005 to 31 December 2028 (both dates inclusive), does not include in all offering documents a statement to the effect that the tax exemption shall not apply where any amount from those Islamic debt securities is payable to any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, if such person acquires such securities using funds from its Singapore operations; or
if the issuer of the Islamic debt securities which are qualifying debt securities, and issued during the period from 1 January 2005 to 31 December 2028 (both dates inclusive), or such other person as the Authority may direct, has not furnished to the Authority a return on the Islamic debt securities within such period as the Authority may specify and such other particulars in connection with those securities as the Authority may require; and
where the issuer of the Islamic debt securities which are qualifying debt securities, and issued during the period from 1 January 2005 to 31 December 2028 (both dates inclusive), is a person who is resident in Singapore, or a person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, and where such securities are issued to any person who is not resident in Singapore (referred to in this sub-paragraph as a non-resident person) in connection with or for the purpose of enabling that non-resident person to issue securities (referred to in this sub-paragraph as the relevant securities), directly or indirectly, to investors, the exemption from tax shall apply only if —
the relevant securities are qualifying debt securities; and (ii)the relevant securities contain restrictions against the acquisition of those securities by any investor who is resident in Singapore, or any investor who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that investor to acquire those securities are obtained from its Singapore operations.(iii)[Deleted by S 196/2026 wef 02/04/2026]
For the purposes of paragraph (1)(a)(i) —
where a fund manager has invested the funds of a foreign investor who is not resident in Singapore and is —
a prescribed person as defined in regulation 2(1) of the Income Tax (Exemption of Income of Prescribed Persons Arising from Funds Managed by Fund Manager in Singapore) Regulations 2010; or
an approved person as defined in section 13U(5) of the Act,as part of the management of those funds on behalf of the foreign investor, and the amount from the Islamic debt securities is payable to the foreign investor through the fund manager;
where a headquarters company approved under section 43D of the Act has invested the funds of its associated company outside Singapore approved under that section in the Islamic debt securities as part of the management of those funds on behalf of the associated company, and the amount from the Islamic debt securities is payable to the associated company through the headquarters company; or
where a Finance and Treasury Centre approved under section 43E of the Act has invested the funds of its associated company outside Singapore approved under that section in the Islamic debt securities as part of the management of those funds on behalf of the associated company, and the amount from the Islamic debt securities is payable to the associated company through the Finance and Treasury Centre,the fund manager, headquarters company or Finance and Treasury Centre shall not be regarded as a permanent establishment of the foreign investor or approved associated company (as the case may be) solely by virtue of its management of funds on behalf of the foreign investor or approved associated company.
Prescribed conditions for tax exemption on early redemption fee and redemption premium from qualifying debt securities
The conditions referred to in section 13(1)(ba) of the Act are —
the exemption from tax shall not apply —
to any early redemption fee or redemption premium derived by any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that person to acquire the qualifying debt securities are obtained from its Singapore operations;
if the issuer of the qualifying debt securities does not include in all offering documents a statement to the effect that where any early redemption fee or redemption premium is derived from any qualifying debt securities issued during the period from 15 February 2007 to 31 December 2028 (both dates inclusive) by any person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, the tax exemption shall not apply if such person acquires such securities using funds from its Singapore operations; or
if the issuer of the qualifying debt securities issued during the period from 15 February 2007 to 31 December 2028 (both dates inclusive), or such other person as the Authority may direct, has not furnished to the Authority a return on the debt securities within such period as the Authority may specify and such other particulars in connection with those securities as the Authority may require; and
where the issuer of the qualifying debt securities issued during the period from 15 February 2007 to 31 December 2028 (both dates inclusive), is a person who is resident in Singapore, or a person who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore, and where such securities are issued to any person who is not resident in Singapore (referred to in this sub-paragraph as a non-resident person) in connection with or for the purpose of enabling that non-resident person to issue securities (referred to in this sub-paragraph as the relevant securities), directly or indirectly, to investors, the exemption from tax shall apply only if —
the relevant securities are qualifying debt securities; and
the relevant securities contain restrictions against the acquisition of those securities by any investor who is resident in Singapore, or any investor who is not resident in Singapore and who carries on any operation in Singapore through a permanent establishment in Singapore where the funds used by that investor to acquire those securities are obtained from its Singapore operations.(iii)[Deleted by S 196/2026 wef 02/04/2026]
For the purposes of paragraph (1)(a)(i), where any early redemption fee or redemption premium from any qualifying debt securities is derived —
from funds managed by a fund manager in Singapore, by a foreign investor who is not resident in Singapore and is —
a prescribed person as defined in regulation 2(1) of the Income Tax (Exemption of Income of Prescribed Persons Arising from Funds Managed by Fund Manager in Singapore) Regulations 2010; or
an approved person as defined in section 13U(5) of the Act;
from funds managed by a headquarters company approved under section 43D of the Act, by its associated company outside Singapore approved under that section; or
from funds managed by a Finance and Treasury Centre approved under section 43E of the Act, by its associated company outside Singapore approved under that section,that fund manager, headquarters company or Finance and Treasury Centre shall not be regarded as a permanent establishment of the foreign investor or approved associated company (as the case may be) solely by virtue of its management of funds on behalf of the foreign investor or approved associated company.
Prescribed condition for tax exemption under section 13(1)(bc) of Act
The exemption from tax under section 13(1)(bc) of the Act shall not apply if the issuer of the qualifying debt securities, or such other person as the Authority may direct, has not furnished to the Authority —
a return on the debt securities within such period as the Authority may specify; and
such other particulars in connection with those securities as the Authority may require.
Prescribed circumstances for tax exemption under section 13(1)(bc) of Act
The circumstances mentioned in section 13(1)(bc)(i)(C)(CB) and (ii)(C) of the Act under which the tenure of the qualifying debt securities may be shortened to less than 10 years from the date of their issue are —
the shortening of the tenure is a result of any early termination pursuant to an early termination clause specified in the Schedule which the issuer included in any offering document for those qualifying debt securities; and
the qualifying debt securities do not contain any call, put, conversion, exchange or similar option that can be triggered at specified dates or at specified prices which have been priced into the value of the securities at the time of their issue.
Prescribed condition for tax exemption under section 13(1)(bd) of Act
The exemption from tax under section 13(1)(bd) of the Act shall not apply if the issuer of the Islamic debt securities, or such other person as the Authority may direct, has not furnished to the Authority —
a return on the debt securities within such period as the Authority may specify; and
such other particulars in connection with those securities as the Authority may require.
Arrangements for qualifying debt securities
The arrangements referred to in paragraph (b) of the definition of “qualifying debt securities” in section 13(16) of the Act are as follows:
where the debt securities are issued during the period from 28th February 1998 to 9th May 1999 —
the securities are substantially arranged by a financial institution in Singapore; and
at least half of the following functions in connection with the issue of the securities are performed by financial institutions in Singapore:
securing the mandate;
originating and structuring the debt issue;
documentation and preparation of the offering circular;
distribution of the issue of the securities;
where the debt securities are issued during the period from 10th May 1999 to 31st December 2013 and where such securities are not issued under a programme —
the lead manager is —
in the case of an arrangement made before 1st January 2004, an approved bond intermediary;
in the case of an arrangement made on or after 1st January 2004, a financial sector incentive (bond market) company; or
the staff of the financial institution arranging the issue who are based in Singapore have a leading and substantial role in originating and structuring the issue and its distribution;
(ba)where the debt securities are issued during the period from 1 January 2014 to 14 February 2023 (both dates inclusive) and are not issued under a programme, any one of the following is satisfied:
the lead manager is any, or if there is more than one lead manager, more than half of the lead managers are any or any combination, of the following:
a financial sector incentive (bond market) company;
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
if the issuer is a Singapore-based issuer —
more than half of the amount of gross revenue from arranging the issue is attributable to any or any combination of the following: (AA)a financial sector incentive (bond market) company;
(AB)a financial sector incentive (capital market) company;
(AC)a financial sector incentive (standard tier) company; and (B)more than half of the staff arranging the issue, of the company or cumulatively of the companies mentioned in sub-paragraph (A), are based in Singapore; (iii)if the issuer is not a Singapore-based issuer, more than half of the debt securities issued under the issue are distributed by any or any combination of the following:
a financial sector incentive (bond market) company;
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
(bb)where the debt securities are issued during the period from 15 February 2023 to 31 December 2023 (both dates inclusive) and are not issued under a programme, any one of the following is satisfied:
the lead manager is any, or if there is more than one lead manager, more than half of the lead managers are any or any combination, of the following:
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
a specified licensed entity;
if the issuer is a Singapore-based issuer —
more than half of the amount of gross revenue from arranging the issue is attributable to any or any combination of the following: (AA)a financial sector incentive (capital market) company;
(AB)a financial sector incentive (standard tier) company;
(AC)a specified licensed entity; and
more than half of the staff arranging the issue, of the company or cumulatively of the companies mentioned in sub-paragraph (A), are based in Singapore;
if the issuer is not a Singapore-based issuer, more than half of the debt securities issued under the issue are distributed by any or any combination of the following:
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
a specified licensed entity;
(bc)where the debt securities are issued during the period from 1 January 2024 to 31 December 2028 (both dates inclusive) and are not issued under a programme, any one of the following is satisfied:
the lead manager is a specified licensed entity, or if there is more than one lead manager, more than half of the lead managers are specified licensed entities;
if the issuer is a Singapore-based issuer —
more than half of the amount of gross revenue from arranging the issue is attributable to one or more specified licensed entities; and
more than half of the staff arranging the issue, of the specified licensed entity or entities mentioned in sub-paragraph (A), are based in Singapore;
if the issuer is not a Singapore-based issuer, more than half of the debt securities issued under the issue are distributed by one or more specified licensed entities;
where the debt securities are issued during the period from 10 May 1999 to 31 December 2028 (both dates inclusive) under a programme —
the programme as a whole is arranged by an approved bond intermediary, the arrangement of which is completed on or before 31st December 2003;
the programme as a whole is arranged by an approved bond intermediary, the arrangement of which is not completed on or before 31st December 2003 by the approved bond intermediary and the arrangement is completed on or before 31 December 2018 by a financial sector incentive (bond market) company;
the programme as a whole is arranged by a financial sector incentive (bond market) company and the arrangement is completed on or before 31 December 2018;
the programme as a whole is arranged by a financial sector incentive (bond market) company, the arrangement of which is not completed on or before 31 December 2013 by the financial sector incentive (bond market) company, and the arrangement is completed during the period from 1 January 2014 to 31 December 2023 (both dates inclusive) by a financial sector incentive (capital market) company or a financial sector incentive (standard tier) company; (v)the programme as a whole is arranged on or after 1 January 2014 by a financial sector incentive (capital market) company or a financial sector incentive (standard tier) company, and the arrangement is completed on or before 31 December 2023;
the programme as a whole is arranged on or after 1 January 2014 by a financial sector incentive (capital market) company or a financial sector incentive (standard tier) company, and the arrangement —
is not completed on or before 14 February 2023 by the financial sector incentive (capital market) company or the financial sector incentive (standard tier) company; and (B)is completed on or after 15 February 2023 by any specified licensed entity; or
the programme as a whole is arranged on or after 15 February 2023 by one or more specified licensed entities, and the arrangement is completed on or after that date by any specified licensed entity;
where the debt securities are issued during the period from 10 May 1999 to 31 December 2028 (both dates inclusive) by a new issuer who joins an existing programme which does not satisfy the requirement in sub-paragraph (c) —
the participation of the new issuer in the programme is arranged by an approved bond intermediary, the arrangement of which is completed on or before 31st December 2003, and that programme as a whole was previously arranged by an affiliate of any approved bond intermediary, the arrangement of which is completed on or before 31st December 2003;
the participation of the new issuer in the programme is arranged by a financial sector incentive (bond market) company, and the arrangement of the participation is completed on or before 31 December 2018, and that programme as a whole was previously arranged by an affiliate of any approved bond intermediary, the arrangement of which is completed on or before 31st December 2003;
the participation of the new issuer in the programme is arranged by a financial sector incentive (bond market) company, and the arrangement of the participation is completed on or before 31 December 2018, and that programme as a whole was previously arranged by an affiliate of any financial sector incentive (bond market) company and the arrangement of the programme is completed on or before that date; (iv)the participation of the new issuer in the programme is arranged on or after 1 January 2014 by a financial sector incentive (capital market) company or a financial sector incentive (standard tier) company and the arrangement of the participation is completed on or before 31 December 2023, and that programme as a whole —
was previously arranged by an affiliate of any financial sector incentive (bond market) company and the arrangement of the programme is completed on or before 31 December 2018; or
was previously arranged on or after 1 January 2014 by an affiliate of any financial sector incentive (capital market) company or financial sector incentive (standard tier) company, and the arrangement of the programme is completed on or before 31 December 2023; or
the participation of the new issuer in the programme is arranged on or after 15 February 2023 by one or more specified licensed entities and the arrangement of the participation is completed on or after that date by any specified licensed entity, and that programme as a whole —
was previously arranged by an affiliate of any financial sector incentive (bond market) company, and the arrangement of the programme is completed on or before 31 December 2018;
was previously arranged on or after 1 January 2014 by an affiliate of any financial sector incentive (capital market) company or financial sector incentive (standard tier) company, and the arrangement of the programme is completed on or before 31 December 2023; or
was previously arranged on or after 15 February 2023 by an affiliate of any specified licensed entity, and the arrangement of the programme is completed on or after that date;
where the debt securities are issued during the period from 10th May 1999 to 31st December 2013 under a tranche of a programme which does not satisfy the requirement in sub-paragraph (c) or (d), the dealers for more than half of the debt securities issued under that tranche are —
financial institutions in Singapore where their staff based in Singapore have a leading and substantial role in the distribution of the debt securities;
approved bond intermediaries; or
financial sector incentive (bond market) companies;
where the debt securities are issued during the period from 1 January 2014 to 14 February 2023 (both dates inclusive) under a tranche of a programme and the programme does not satisfy the requirements in sub-paragraph (c) or (d), more than half of the debt securities issued under that tranche are distributed by any or any combination of the following:
a financial sector incentive (bond market) company;
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
where the debt securities are issued during the period from 15 February 2023 to 31 December 2023 (both dates inclusive) under a tranche of a programme and the programme does not satisfy the requirements in sub-paragraph (c) or (d), more than half of the debt securities issued under that tranche are distributed by any or any combination of the following:
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
a specified licensed entity;
where the debt securities are issued during the period from 1 January 2024 to 31 December 2028 (both dates inclusive) under a tranche of a programme and the programme does not satisfy the requirements in sub-paragraph (c) or (d), more than half of the debt securities issued under that tranche are distributed by one or more specified licensed entities.
The arrangements referred to in paragraph (c) of the definition of “qualifying debt securities” in section 13(16) of the Act are —
where the Islamic debt securities are issued during the period from 1 January 2005 to 31 December 2013 and are not issued under a programme —
the lead manager is a financial sector incentive (bond market) company; or
the staff of the financial institution arranging the issue who are based in Singapore have a leading and substantial role in originating and structuring the issue and its distribution;
(aa)where the Islamic debt securities are issued during the period from 1 January 2014 to 14 February 2023 (both dates inclusive) and are not issued under a programme, any one of the following is satisfied:
the lead manager is any, or if there is more than one lead manager, more than half of the lead managers are any or any combination, of the following:
a financial sector incentive (bond market) company;
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company; (ii)if the issuer is a Singapore-based issuer —
more than half of the amount of gross revenue from arranging the issue is attributable to any or any combination of the following:
(AA)a financial sector incentive (bond market) company;
(AB)a financial sector incentive (capital market) company;
(AC)a financial sector incentive (standard tier) company; and
more than half of the staff arranging the issue, of the company or cumulatively of the companies mentioned in sub-paragraph (A), are based in Singapore; (iii)if the issuer is not a Singapore-based issuer, more than half of the debt securities issued under the issue are distributed by any or any combination of the following:
a financial sector incentive (bond market) company;
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
(ab)where the Islamic debt securities are issued during the period from 15 February 2023 to 31 December 2023 (both dates inclusive) and are not issued under a programme, any one of the following is satisfied:
the lead manager is any, or if there is more than one lead manager, more than half of the lead managers are any or any combination, of the following:
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
a specified licensed entity;
if the issuer is a Singapore-based issuer —
more than half of the amount of gross revenue from arranging the issue is attributable to any or any combination of the following:
(AA)a financial sector incentive (capital market) company;
(AB)a financial sector incentive (standard tier) company;
(AC)a specified licensed entity; and
more than half of the staff arranging the issue, of the company or cumulatively of the companies mentioned in sub-paragraph (A), are based in Singapore;
if the issuer is not a Singapore-based issuer, more than half of the debt securities issued under the issue are distributed by any or any combination of the following:
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
a specified licensed entity;
(ac)where the Islamic debt securities are issued during the period from 1 January 2024 to 31 December 2028 (both dates inclusive) and are not issued under a programme, any one of the following is satisfied:
the lead manager is a specified licensed entity, or if there is more than one lead manager, more than half of the lead managers are specified licensed entities;
if the issuer is a Singapore-based issuer —
more than half of the amount of gross revenue from arranging the issue is attributable to one or more specified licensed entities; and
more than half of the staff arranging the issue, of the specified licensed entity or entities mentioned in sub-paragraph (A), are based in Singapore;
if the issuer is not a Singapore-based issuer, more than half of the debt securities issued under the issue are distributed by one or more specified licensed entities;
where the Islamic debt securities are issued during the period from 1 January 2005 to 31 December 2028 (both dates inclusive) under a programme —
the programme as a whole is arranged by an approved bond intermediary, the arrangement of which is completed on or before 31st December 2003;
the programme as a whole is arranged by an approved bond intermediary, the arrangement of which is not completed on or before 31st December 2003 by the approved bond intermediary and the arrangement is completed on or before 31 December 2018 by a financial sector incentive (bond market) company;
the programme as a whole is arranged by a financial sector incentive (bond market) company and the arrangement is completed on or before 31 December 2018;
the programme as a whole is arranged by a financial sector incentive (bond market) company, the arrangement of which is not completed on or before 31 December 2013 by the financial sector incentive (bond market) company, and the arrangement is completed during the period from 1 January 2014 to 31 December 2023 (both dates inclusive) by a financial sector incentive (capital market) company or a financial sector incentive (standard tier) company; (v)the programme as a whole is arranged on or after 1 January 2014 by a financial sector incentive (capital market) company or a financial sector incentive (standard tier) company, and the arrangement is completed on or before 31 December 2023;
the programme as a whole is arranged on or after 1 January 2014 by a financial sector incentive (capital market) company or a financial sector incentive (standard tier) company, and the arrangement —
is not completed on or before 14 February 2023 by the financial sector incentive (capital market) company or the financial sector incentive (standard tier) company; and
is completed on or after 15 February 2023 by any specified licensed entity; or
the programme as a whole is arranged on or after 15 February 2023 by one or more specified licensed entities, and the arrangement is completed on or after that date by any specified licensed entity;
where the Islamic debt securities are issued during the period from 1 January 2005 to 31 December 2028 (both dates inclusive) by a new issuer who joins an existing programme which does not satisfy the requirement in sub-paragraph (b) —
the participation of the new issuer in the programme is arranged by a financial sector incentive (bond market) company, and the arrangement of the participation is completed on or before 31 December 2018, and that programme as a whole was previously arranged by an affiliate of any approved bond intermediary, the arrangement of which is completed on or before 31st December 2003;
the participation of the new issuer in the programme is arranged by a financial sector incentive (bond market) company, and the arrangement of the participation is completed on or before 31 December 2018, and that programme as a whole was previously arranged by an affiliate of any financial sector incentive (bond market) company and the arrangement of the programme is completed on or before 31 December 2018; (iii)the participation of the new issuer in the programme is arranged on or after 1 January 2014 by a financial sector incentive (capital market) company or a financial sector incentive (standard tier) company and the arrangement of the participation is completed on or before 31 December 2023, and that programme as a whole —
was previously arranged by an affiliate of any financial sector incentive (bond market) company and the arrangement of the programme is completed on or before 31 December 2018; or
was previously arranged on or after 1 January 2014 by an affiliate of any financial sector incentive (capital market) company or financial sector incentive (standard tier) company, and the arrangement of the programme is completed on or before 31 December 2023; or
the participation of the new issuer in the programme is arranged on or after 15 February 2023 by one or more specified licensed entities and the arrangement of the participation is completed on or after that date by any specified licensed entity, and that programme as a whole —
was previously arranged by an affiliate of any financial sector incentive (bond market) company, and the arrangement of the programme is completed on or before 31 December 2018;
was previously arranged on or after 1 January 2014 by an affiliate of any financial sector incentive (capital market) company or financial sector incentive (standard tier) company, and the arrangement of the programme is completed on or before 31 December 2023; or
was previously arranged on or after 15 February 2023 by an affiliate of any specified licensed entity, and the arrangement of the programme is completed on or after that date;
where the Islamic debt securities are issued during the period from 1 January 2005 to 31 December 2013 under a tranche of a programme which does not satisfy the requirement in sub-paragraph (b) or (c), the dealers for more than half of the Islamic debt securities issued under that tranche are —
financial institutions in Singapore where their staff based in Singapore have a leading and substantial role in the distribution of the Islamic debt securities; or
financial sector incentive (bond market) companies; (e)where the Islamic debt securities are issued during the period from 1 January 2014 to 14 February 2023 (both dates inclusive) under a tranche of a programme and the programme does not satisfy the requirements in sub-paragraph (b) or (c), more than half of the Islamic debt securities issued under that tranche are distributed by any or any combination of the following:
a financial sector incentive (bond market) company;
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
where the Islamic debt securities are issued during the period from 15 February 2023 to 31 December 2023 (both dates inclusive) under a tranche of a programme and the programme does not satisfy the requirements in sub-paragraph (b) or (c), more than half of the Islamic debt securities issued under that tranche are distributed by any or any combination of the following:
a financial sector incentive (capital market) company;
a financial sector incentive (standard tier) company;
a specified licensed entity; and
where the Islamic debt securities are issued during the period from 1 January 2024 to 31 December 2028 (both dates inclusive) under a tranche of a programme and the programme does not satisfy the requirements in sub-paragraph (b) or (c), more than half of the Islamic debt securities issued under that tranche are distributed by one or more specified licensed entities.
For the purposes of paragraphs (1)(b)(ii) and (e) and (1A)(a)(ii) and (d), the Singapore-based staff of a financial institution (other than an approved bond intermediary or a financial sector incentive (bond market) company) arranging an issue of debt securities shall be deemed not to have a leading and substantial role in originating and structuring of the issue and its distribution if a major role in the origination, structuring or distribution of the issue was played by staff (whether of that financial institution, its affiliate or otherwise) based outside Singapore.
Determination of exempt income, and deductions
In determining the income of a person to be exempted from tax under section 13(1)(bc) or (bd) of the Act —
the Comptroller shall have regard to such expenses and capital allowances allowable under the Act as are, in his opinion, to be deducted in ascertaining such income; and
there shall be deducted from that income any allowances under section 19, 19A, 20, 21 or 22 of the Act attributable to that income notwithstanding that no claim for those allowances has been made.
Any balance of the allowances mentioned in paragraph (1)(b) shall only be deducted against any income referred to in section 13(1)(bc) or (bd) of the Act of the person for subsequent years of assessment, and shall not be deducted against any other income of the person.
Any losses incurred in respect of any qualifying debt securities referred to in section 13(1)(bc) or (bd) of the Act shall only be deducted against any income referred to in section 13(1)(bc) or (bd) of the Act of the person for subsequent years of assessment, and shall not be deducted against any other income of the person.
Any balance of the allowances mentioned in paragraph (2) and losses mentioned in paragraph (3) remaining unabsorbed on the date the tax exemption ceases shall, subject to paragraphs (5), (6) and (7) be available as a deduction against any other income of the person for the year of assessment which relates to the basis period in which the tax exemption ceases, and any subsequent year of assessment.
Section 37A of the Act shall, with the necessary modifications, apply to a deduction under paragraph (4) as if the balance of the allowances or losses available as a deduction under that paragraph were unabsorbed allowances or losses in respect of the income of a company subject to tax at a lower rate of tax under that section, and for this purpose the rate of tax shall be taken to be the concessionary rate of tax in accordance with the regulations made under section 43H of the Act.
Allowances may be deducted under paragraph (4) only if the person continues to carry on the trade or business in respect of the gains or profits of which the allowances falls to be made, and the allowances shall be disregarded if he has ceased to do so.
Sections 23(4) to (8) and 37(12) to (17) of the Act shall apply, with the necessary modifications, to a deduction under paragraph (4).
In paragraph (4), the tax exemption ceases when the person ceases to be in a position to derive income referred to in section 13(1)(bc) or (bd) of the Act, whether because the qualifying debt securities have reached maturity, the person has disposed of them or otherwise.
Waiver of withholding of tax in respect of interest paid to or discount derived by non-resident person
The conditions referred to in sections 45(9) and 45A(2) of the Act are as follows:
an issuer of any qualifying debt securities includes in all offering documents a statement to the effect that any person whose interest or discount derived from those securities is not exempt from tax shall include such interest or discount in a return of income made under the Act; and
an issuer of any qualifying debt securities, or such other person as the Authority may direct, furnishes to the Authority a return on the debt securities within such period as the Authority may specify and such other particulars in connection with those securities as the Authority may require.
The conditions referred to in section 45A(2A) of the Act are —
an issuer of any Islamic debt securities which are qualifying debt securities, and issued during the period from 1 January 2005 to 31 December 2028 (both dates inclusive), includes in all offering documents a statement to the effect that any person to whom an amount from those Islamic debt securities is payable shall, where such amount is not exempt from tax, include such amount in a return of income made under the Act;
an issuer of any Islamic debt securities which are qualifying debt securities, and issued during the period from 1 January 2005 to 31 December 2028 (both dates inclusive), or such other person as the Authority may direct, furnishes to the Authority —
a return on the debt securities within such period as the Authority may specify; and
such other particulars in connection with those Islamic debt securities as the Authority may require.
The conditions referred to in section 45A(2B) of the Act are —
an issuer of any qualifying debt securities includes in all offering documents a statement to the effect that any person whose early redemption fee or redemption premium derived from those securities is not exempt from tax shall include such early redemption fee or redemption premium in a return of income made under the Act; and
an issuer of any qualifying debt securities, or such other person as the Authority may direct, furnishes to the Authority a return on the debt securities within such period as the Authority may specify and such other particulars in connection with those securities as the Authority may require.