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Prescribed conditions for tax exemption on discount from qualifying debt securities

Income Tax (Qualifying Debt Securities) Regulations

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—(1) The conditions referred to in section 13(1)(aa) of the Act are as follows:(a)the exemption from tax shall not apply —(i)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;(ii)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 —(A)[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(iii)if the issuer of the qualifying debt securities which are —(A)[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(b)[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 —(i)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](2) For the purpose of paragraph (1)(a)(i), where any discount from any qualifying debt securities is derived —(a)from funds managed by a fund manager in Singapore, by a foreign investor who is not resident in Singapore and is —(i)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(ii)an approved person as defined in section 13U(5) of the Act;(b)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(c)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.

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