/akn/sg/act/sub_leg/1947/ITA-S183-2003

Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003

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Type: Subsidiary Legislation
Status: In force
Enacted: 1947
Sections: 7

Quick answer

About this subsidiary legislation

Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003 is Singapore Subsidiary Legislation, cited as Subsidiary Legislation ITA-S183-2003 1947, currently marked in force and first recorded in 1947.

Regulation 1

Citation

These Regulations may be cited as the Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003.

Regulation 2

Definitions

Amended byS 237/2009 wef 17/01/2008S 237/2009 wef 17/01/2008S 55/2020 wef 12/11/2018S 237/2009 wef 17/01/2008S 55/2020 wef 12/11/2018S 481/2021 wef 01/07/2021S 481/2021 wef 01/07/2021

In these Regulations, unless the context otherwise requires —“corresponding Regulations” means the Income Tax (Income from Syndicated Offshore Credit and Underwriting Facilities) Regulations (Rg 4);“FRS 39” has the same meaning as in section 34A of the Act;“FRS 109” and “SFRS(I) 9” have the meanings given to those expressions in section 34AA(15) of the Act;“impairment loss” means an impairment loss recognised under FRS 39 or an expected credit loss recognised under FRS 109 or SFRS(I) 9, as the case may be;“offshore credit facility” means —

(a)

any facility where —

(i)

loans, advances or funds are made available to a person referred to in paragraph (a) of the definition of “specified person”;

(ii)

the loans, advances or funds made available are to be used outside Singapore; and

(iii)

no interest, commission, fee or other payment in respect of the facility is borne, directly or indirectly, by any person resident in Singapore (except in respect of any business carried on outside Singapore by a person resident in Singapore through a permanent establishment outside Singapore) or by any permanent establishment in Singapore;

(b)

any facility where —

(i)

loans, advances or funds are made available to a person referred to in paragraph (b) of the definition of “specified person”;

(ii)

the loans, advances or funds made available are to be used outside Singapore; and

(iii)

no interest, commission, fee or other payment in respect of the facility is deductible against any income of that person accruing in or derived from Singapore;

(c)

any facility where —

(i)

guarantees or letters of credit are made available to, and issued in favour of, a non-resident person (other than his permanent establishment in Singapore) or a person resident in Singapore in respect of any business carried on outside Singapore through a permanent establishment outside Singapore; and

(ii)

(d)

any facility where —

(i)

the issue of bonds, notes, certificates of deposit or other instruments of indebtedness is provided to a person referred to in paragraph (a) of the definition of “specified person”;

(ii)

the funds raised from the issue of such bonds, notes, certificates of deposit or other instruments of indebtedness are to be used outside Singapore; and (iii)no interest, commission, fee or other payment in respect of the facility is borne, directly or indirectly, by any person resident in Singapore (except in respect of any business carried on outside Singapore by a person resident in Singapore through a permanent establishment outside Singapore) or by any permanent establishment in Singapore; or (e)any facility where —

(i)

the issue of bonds, notes, certificates of deposit or other instruments of indebtedness is provided to a person referred to in paragraph (b) of the definition of “specified person”;

(ii)

the funds raised from the issue of such bonds, notes, certificates of deposit or other instruments of indebtedness are to be used outside Singapore; and (iii)no interest, commission, fee or other payment in respect of the facility is deductible against any income of that person accruing in or derived from Singapore;“offshore guarantee facility” means any facility where —

(a)

guarantees or letters of credit are made available to and issued in favour of a specified financial institution for the purpose of providing or participating in a loan made to a non-resident person (other than his permanent establishment in Singapore);

(b)

the loan is to be used outside Singapore; and

(c)

no interest in respect of the loan is borne, directly or indirectly, by any person resident in Singapore (except in respect of any business carried on outside Singapore by a person resident in Singapore through a permanent establishment outside Singapore) or by any permanent establishment in Singapore;“related party”, in relation to any specified person, means any other person who —

(a)

controls the specified person, whether directly or indirectly;

(b)

is controlled by the specified person, whether directly or indirectly; or

(c)

together with the specified person, is controlled by a common person, whether directly or indirectly;“specified financial institution” means —

(a)

a bank that holds a licence under section 7 or 79 of the Banking Act (Cap. 19);

(b)

a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act; or

(c)

a company approved under section 43A(1)(c) of the Act;“specified person”, in relation to any offshore credit facility —

(a)

means a non-resident person (other than his permanent establishment in Singapore) or 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

(b)

where the agreement for the offshore credit facility is made on or after 1st April 1998, includes a person resident in Singapore (except in respect of any business carried on outside Singapore by a person resident in Singapore through a permanent establishment outside Singapore) and a permanent establishment in Singapore.

Definition

“corresponding Regulations” means the Income Tax (Income from Syndicated Offshore Credit and Underwriting Facilities) Regulations (Rg 4);

Amended byS 237/2009 wef 17/01/2008

Definition

“FRS 39” has the same meaning as in section 34A of the Act;

Amended byS 237/2009 wef 17/01/2008

Definition

“FRS 109” and “SFRS(I) 9” have the meanings given to those expressions in section 34AA(15) of the Act;

Amended byS 55/2020 wef 12/11/2018

Definition

“impairment loss” means an impairment loss recognised under FRS 39 or an expected credit loss recognised under FRS 109 or SFRS(I) 9, as the case may be;

Amended byS 237/2009 wef 17/01/2008S 55/2020 wef 12/11/2018

Definition

“offshore credit facility” means —

(a)

any facility where —

(i)

loans, advances or funds are made available to a person referred to in paragraph (a) of the definition of “specified person”;

(ii)

the loans, advances or funds made available are to be used outside Singapore; and

(iii)

(b)

any facility where —

(i)

loans, advances or funds are made available to a person referred to in paragraph (b) of the definition of “specified person”;

(ii)

the loans, advances or funds made available are to be used outside Singapore; and

(iii)

no interest, commission, fee or other payment in respect of the facility is deductible against any income of that person accruing in or derived from Singapore;

(c)

any facility where —

(i)

(ii)

(d)

any facility where —

(i)

the issue of bonds, notes, certificates of deposit or other instruments of indebtedness is provided to a person referred to in paragraph (a) of the definition of “specified person”;

(ii)

(i)

the issue of bonds, notes, certificates of deposit or other instruments of indebtedness is provided to a person referred to in paragraph (b) of the definition of “specified person”;

(ii)

Definition

“offshore guarantee facility” means any facility where —

(a)

(b)

the loan is to be used outside Singapore; and

(c)

Definition

“related party”, in relation to any specified person, means any other person who —

(a)

controls the specified person, whether directly or indirectly;

(b)

is controlled by the specified person, whether directly or indirectly; or

(c)

together with the specified person, is controlled by a common person, whether directly or indirectly;

Definition

“specified financial institution” means —

(a)

a bank that holds a licence under section 7 or 79 of the Banking Act (Cap. 19);

(b)

a merchant bank that holds a merchant bank licence, or is treated as having been granted a merchant bank licence, under the Banking Act; or

(c)

a company approved under section 43A(1)(c) of the Act;

Amended byS 481/2021 wef 01/07/2021S 481/2021 wef 01/07/2021

Definition

“specified person”, in relation to any offshore credit facility —

(a)

(b)

Regulation 3

Application

Subregulation 1

These Regulations shall apply to any syndicated offshore facility which is an offshore credit facility or an offshore guarantee facility where —

(a)

the agreement for the facility is made during the period from 27th February 1998 to 31st December 2003 (both dates inclusive);

(b)

the facility is a syndicated facility, as determined in accordance with paragraph 1 of the Schedule; (c)the syndication work in respect of the facility is carried out substantially in Singapore, as determined in accordance with paragraph 2 of the Schedule; and

(d)

in the case of a facility where the agreement for the facility is made during the period from 27th February 1998 to 13th August 1998 (both dates inclusive), the facility is in currencies other than Singapore dollars.

Subregulation 2

The Minister or such person as he may appoint may in any particular case waive any requirement specified in paragraph (1) or the Schedule, subject to such conditions as he may impose.

Regulation 4

Tax exemption

Subregulation 1

Subject to these Regulations, there shall be exempt from tax the income of a specified financial institution from any syndicated offshore facility.

Subregulation 2

Where a specified financial institution 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, the exemption 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.

Subregulation 3

The exemption referred to in paragraph (1) shall not apply in relation to a syndicated offshore facility unless the agent bank of the facility has submitted to the Comptroller within such time as may be specified by the Comptroller —

(a)

a return on the facility and a declaration from the arrangers of the facility that the facility is a syndicated offshore facility;

(b)

a declaration from the specified person to whom the facility is provided and who has any related party in Singapore, that the funds from the facility have not been, and are not intended to be, transferred to that related party in Singapore; and

(c)

such other particulars as may be required by the Comptroller.

Subregulation 4

A specified financial institution which is entitled to any exemption under paragraph (1) may elect not to have such exemption by notifying the Comptroller within the time referred to in paragraph (3) in such form as the Comptroller may require.

Regulation 5

Determination of income exempted from tax

Amended byS 511/2013 wef Y/A 2013 & Sub. Ys/AS 511/2013 wef Y/A 2013 & Sub. Ys/AS 237/2009 wef 17/01/2008

Subregulation 1

Amended byS 511/2013 wef Y/A 2013 & Sub. Ys/A

The exemption under regulation 4 shall apply to such amount of the income of a specified financial institution from any syndicated offshore facility as may be determined by the Comptroller, having regard to such expenses and capital allowances allowable under the Act as are, in his opinion, to be deducted in ascertaining the amount of the income to be exempted.

Subregulation 2

Amended byS 511/2013 wef Y/A 2013 & Sub. Ys/A

In determining the amount of the income to be exempted, any loss incurred in respect of a syndicated offshore facility or any capital allowances attributable to that income shall only be deducted against income to be exempted under these Regulations, and any balance of such loss or capital allowances shall not be available as a deduction against any other income.

Subregulation 2A

[Deleted by S 511/2013 wef 13/08/2013]

Subregulation 2B

Amended byS 237/2009 wef 17/01/2008

Where the income to be exempted from tax under regulation 4(1) is income referred to in regulation 6(5)(b) or 7(6)(b), then the income to be so exempted shall be further reduced by the amount of deemed income referred to in regulation 6(5) or 7(6).

Subregulation 2C

[Deleted by S 237/2009 wef 17/01/2008]

Subregulation 2D

[Deleted by S 237/2009 wef 17/01/2008]

Subregulation 3

Where the funds raised from any syndicated offshore facility are used —

(a)

solely to refinance previous borrowings; or

(b)

partly outside Singapore and partly to refinance previous borrowings, and 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 is exempt from tax under section 43A(3) of the Act); or (ii)the funds raised from previous borrowings were used in Singapore,the income of a specified financial institution 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 A is the amount of the funds raised from the syndicated offshore facility used to refinance previous borrowings where —

(i)

Regulation 6

Deduction of unabsorbed losses and capital allowances

Amended byS 511/2013 wef Y/A 2013 & Sub. Ys/AS 511/2013 wef Y/A 2013 & Sub. Ys/AS 55/2020 wef 12/11/2018S 237/2009 wef 28/05/2009S 237/2009 wef 17/01/2008

Subregulation 1

Amended byS 511/2013 wef Y/A 2013 & Sub. Ys/A

Any balance of the losses and capital allowances referred to in regulation 5(1) and (2) remaining unabsorbed on the day the specified financial institution permanently ceases to provide any syndicated offshore facility, or any approved syndicated offshore credit or underwriting facility or syndicated guarantee facility referred to in the corresponding Regulations, shall be available as a deduction —

(a)

for the year of assessment which relates to the basis period in which the institution permanently ceases to provide such facility, against the following income of the institution and in the following order:

(i)

any income subject to tax at the rate of tax of 5%;

(ii)

any income subject to tax at a rate of tax other than 5% or the rate of tax specified in section 43(1)(a) of the Act;

(iii)

any income subject to tax at the rate of tax specified in section 43(1)(a) of the Act; and

(b)

so far as the deduction cannot be allowed under sub-paragraph (a), for any subsequent year of assessment against any income of the institution referred to in sub-paragraph (a)(i), (ii) and (iii) and in the order specified therein.

Subregulation 2

Capital allowances may be deducted under paragraph (1) only if the specified financial institution continues to carry on the same 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 the institution has ceased to do so.

Subregulation 3

Amended byS 511/2013 wef Y/A 2013 & Sub. Ys/A

Section 37B of the Act shall apply to any deduction under sub-paragraphs (a) and (b) of paragraph (1) as if the balance of losses, and capital allowances available as a deduction under those sub-paragraphs were unabsorbed losses and capital allowances in respect of income subject to tax at the rate of tax of 5%.

Subregulation 4

Sections 23(4) to (8) and 37(12) to (17) of the Act shall apply, with the necessary modifications, to any deduction under paragraph (1)(a) or (b).

Subregulation 5

Where ––

(a)

a deduction has been allowed under paragraph (1)(a) or (b) to a specified financial institution for the year of assessment relating to any basis period (referred to in this paragraph as the initial basis period); and

(b)

the institution derives exempt income in any basis period subsequent to the initial basis period (referred to in this paragraph as the subsequent basis period),then an amount equal to the lower of the following shall be deemed to be income derived by the institution in the subsequent basis period and chargeable to tax at the rate of tax of 5% for the year of assessment relating to that basis period:

(i)

the amount of the deduction allowed under paragraph (1)(a) or (b), less any amount or amounts deemed to be income of the institution by virtue of one or more earlier applications of this paragraph; and

(ii)

the amount of the exempt income derived in the subsequent basis period.

Subregulation 5A

Amended byS 55/2020 wef 12/11/2018S 237/2009 wef 28/05/2009

Where —

(a)

(b)

the amount deducted consists of or includes bad debt, provision for doubtful debt or impairment loss; and

(c)

in any basis period subsequent to the initial basis period (referred to in this paragraph as the subsequent basis period), the bad debt or any part of it is recovered, the provision or any part of it is written back or the impairment loss or any part of it is reversed (such reversal being recognised under FRS 39, FRS 109 or SFRS(I) 9, as the case may be), then an amount equal to the lower of the following shall be deemed to be income derived by the institution in the subsequent basis period and chargeable to tax at the rate of tax of 5% for the year of assessment relating to that basis period:

(i)

the amount of the bad debt, provision for doubtful debt or impairment loss allowed as a deduction under paragraph (1)(a) or (b), less any amount or amounts deemed to be income of the institution by virtue of one or more earlier applications of this paragraph; and

(ii)

the amount of the bad debt so recovered, provision so written back or impairment loss so reversed.

Subregulation 6

Amended byS 237/2009 wef 17/01/2008

In paragraph (5), “exempt income” means income that is exempt from tax under regulation 4(1), or under regulation 3(2) of the corresponding Regulations.

Regulation 7

Deduction of bad debt, provision for doubtful debt and impairment loss

Amended byS 55/2020 wef 12/11/2018S 237/2009 wef 17/01/2008

Subregulation 1

Any bad debt, provision for doubtful debt or impairment loss in respect of a syndicated offshore facility that is allowable as a deduction under the Act in any year of assessment to the specified financial institution that provided the facility, being the year of assessment relating to any basis period that is subsequent to the basis period in which the institution permanently ceases to provide any syndicated offshore facility, or any approved syndicated offshore credit or underwriting facility or syndicated guarantee facility referred to in the corresponding Regulations, shall be deducted in the following manner:

(a)

for that year of assessment, against the following income of the institution and in the following order:

(i)

any income subject to tax at the rate of tax of 5%;

(ii)

any income subject to tax at a rate of tax other than 5% or the rate of tax specified in section 43(1)(a) of the Act;

(iii)

any income subject to tax at the rate of tax specified in section 43(1)(a) of the Act;

(b)

Subregulation 2

Section 37B of the Act shall apply, with the necessary modifications, to a deduction under sub-paragraphs (a) and (b) of paragraph (1) as if the bad debt, provision for doubtful debt or impairment loss available as a deduction under those sub-paragraphs were unabsorbed losses of the institution in respect of income subject to tax at the rate of tax of 5%.

Subregulation 3

Section 37(12) to (17) of the Act shall apply, with the necessary modifications, to a deduction under sub-paragraphs (a) and (b) of paragraph (1) as if the bad debt, provision for doubtful debt or impairment loss available as a deduction under those sub-paragraphs were a loss incurred by the institution in a trade or business.

Subregulation 4

Where —

(a)

any bad debt or provision for doubtful debt has been allowed as a deduction to a specified financial institution under paragraph (1)(a) or (b); and

(b)

the bad debt or any part of it is subsequently recovered or the provision or any part of it is subsequently written back,then the amount of the bad debt recovered or provision written back shall be deemed to be income derived by the institution in the basis period in which the bad debt is recovered or the provision written back and chargeable to tax at the rate of tax of 5% for the year of assessment relating to that basis period.

Subregulation 5

Amended byS 55/2020 wef 12/11/2018

Where ––

(a)

any impairment loss has been allowed as a deduction to a specified financial institution under paragraph (1)(a) or (b); and

(b)

the impairment loss or any part of it is subsequently reversed and such reversal is recognised under FRS 39, FRS 109 or SFRS(I) 9, as the case may be,then the amount of the reversal shall be deemed to be income derived by the institution in the basis period in which the reversal is made and chargeable to tax at the rate of tax of 5% for the year of assessment relating to that basis period.

Subregulation 6

Where ––

(a)

(b)

(i)

(ii)

the amount of the exempt income derived in the subsequent basis period.

Subregulation 7

Amended byS 237/2009 wef 17/01/2008

In paragraph (6), “exempt income” means income that is exempt from tax under regulation 4(1), or under regulation 3(2) of the corresponding Regulations.

Common questions

What is Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003?: Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003 is Singapore Subsidiary Legislation, cited as Subsidiary Legislation ITA-S183-2003 1947, currently marked in force and first recorded in 1947.
Is Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003 still in force?: Yes — Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003 is currently in force.
When did Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003 take effect?: Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003 was first recorded in 1947.
How many regulations does Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003 have?: Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003 contains 7 regulations.
Where can I read the official version of Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003?: The official text of Income Tax (Exemption of Income from Syndicated Offshore Facilities) Regulations 2003 is published at sso.agc.gov.sg.