Prescribed conditions for tax exemption on interest income from qualifying debt securities3.—(1) The conditions referred to in section 13(1)(a) of the Act are as follows:(a)the exemption from tax shall not apply —(i)to any interest derived by a permanent establishment in Singapore;(ii)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 27th February 1999 to 31st December 2023 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 Singapore operations; or [S 268/2009 wef 01/01/2009] Show [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (iii)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[S 52/2006 wef 01/01/2005] [S 240/2016 wef 28/06/2013] (b)[Deleted by S 52/2006 wef 01/01/2005](c)where the issuer of the qualifying debt securities is a person who is a resident of or a permanent establishment in Singapore and where such securities are issued to any person who is not a resident of 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;(ii)the relevant securities contain restrictions against the acquisition of such relevant securities by any investor who is a resident of or a permanent establishment in Singapore; and(iii)the relevant securities are not acquired by any investor using funds from its Singapore operations.[S 52/2006 wef 01/01/2005] (d)[Deleted by S 52/2006 wef 01/01/2005](2) For the purpose of paragraph (1)(a)(i), where interest on a qualifying debt security is derived —(a)from funds managed —(i)before 3rd May 2002, by an Asian Currency Unit of a financial institution or a fund manager approved under section 13C(a) of the Act in force immediately before 3rd May 2002 or section 43A of the Act; or(ii)on or after 3rd May 2002, by a fund manager in Singapore, by a foreign investor as defined in the Income Tax (Income from Funds Managed for Foreign Investors) Regulations 2003 (G.N. No. S 640/2003);[S 350/2005 wef 03/05/2002] (b)from funds managed by a headquarters company approved under section 43E 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 43G of the Act, by its associated company outside Singapore approved under that section,that Asian Currency Unit of the financial institution, 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.(3) In this regulation, “Asian Currency Unit” means an operational unit that was approved by the Monetary Authority of Singapore under section 77(5) of the Banking Act (Cap. 19) as in force immediately before 1 July 2021.[S 490/2021 wef 01/07/2021] Prescribed conditions for tax exemption on discount from qualifying debt securities3A.—(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 a permanent establishment in Singapore; [S 52/2006 wef 26/01/2006] [S 99/2007 wef 17/02/2006] [S 99/2007 wef 17/02/2006] [S 268/2009 wef 01/01/2009] [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] [S 268/2009 wef 01/01/2009] [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] [S 99/2007 wef 17/02/2006] [S 240/2016 wef 28/06/2013] [S 52/2006 wef 01/01/2005] (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 as defined in the Income Tax (Income from Funds Managed for Foreign Investors) Regulations 2003 (G.N. No. S 640/2003);(b)from funds managed by a headquarters company approved under section 43E 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 43G 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.[S 350/2005 wef 27/02/2004] [S 52/2006 wef 01/01/2005] Prescribed conditions for tax exemption on any amount payable from Islamic debt securities which are qualifying debt securities3B.—(1) The conditions referred to in section 13(1)(ab) of the Act are —(a)the exemption from tax shall not apply —(i)to any amount that is payable to a permanent establishment in Singapore from Islamic debt securities which are qualifying debt securities;(ii)if the issuer of the Islamic debt securities which are qualifying debt securities, and issued during the period from 1st January 2005 to 31st December 2023, 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 [S 268/2009 wef 01/01/2009] [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] [S 268/2009 wef 01/01/2009] [S 240/2016 wef 28/06/2013] [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] [S 268/2009 wef 01/01/2009] [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] [S 52/2006 wef 01/01/2005] Prescribed conditions for tax exemption on break cost, prepayment fee and redemption premium from qualifying debt securities3C.—(1) The conditions referred to in section 13(1)(ba) of the Act are —(a)the exemption from tax shall not apply —(i)to any break cost, prepayment fee or redemption premium derived by a permanent establishment in Singapore;(ii)if the issuer of the qualifying debt securities does not include in all offering documents a statement to the effect that where any break cost, prepayment fee or redemption premium is derived from any qualifying debt securities issued during the period from 15th February 2007 to 31st December 2023 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 [S 268/2009 wef 01/01/2009] [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] [S 268/2009 wef 01/01/2009] [S 240/2016 wef 28/06/2013] [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (b)where the issuer of the qualifying debt securities issued during the period from 15th February 2007 to 31st December 2023, is a person who is a resident of or a permanent establishment in Singapore and where such securities are issued to any person who is not a resident of 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 —(i)the relevant securities are qualifying debt securities;(ii)the relevant securities contain restrictions against the acquisition of such relevant securities by any investor who is a resident of or a permanent establishment in Singapore; and(iii)the relevant securities are not acquired by any investor using funds from its Singapore operations.[S 268/2009 wef 01/01/2005] [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (2) For the purposes of paragraph (1)(a)(i), where any break cost, prepayment fee or redemption premium from any qualifying debt securities is derived —(a)from funds managed by a fund manager in Singapore, by a foreign investor as defined in regulations made under section 13C or 13CA of the Act;(b)from funds managed by a headquarters company approved under section 43E 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 43G 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.[S 399/2008 wef 15/02/2007] Prescribed condition for tax exemption under section 13(1)(bc) of Act3D. 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)a return on the debt securities within such period as the Authority may specify; and [S 240/2016 wef 28/06/2013] (b)such other particulars in connection with those securities as the Authority may require.[S 268/2009 wef 16/02/2009] [S 240/2016 wef 28/06/2013] Prescribed circumstances for tax exemption under section 13(1)(bc) of Act3DA. 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 —(a)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(b)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. [S 240/2016 wef 28/06/2013] Prescribed condition for tax exemption under section 13(1)(bd) of Act3E. 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)a return on the debt securities within such period as the Authority may specify; and [S 240/2016 wef 28/06/2013] (b)such other particulars in connection with those securities as the Authority may require.[S 268/2009 wef 16/02/2009] [S 240/2016 wef 28/06/2013] Arrangements for qualifying debt securities4.—(1) The arrangements referred to in paragraph (b) of the definition of “qualifying debt securities” in section 13(16) of the Act are as follows:(a)where the debt securities are issued during the period from 28th February 1998 to 9th May 1999 —(i)the securities are substantially arranged by a financial institution in Singapore; and(ii)at least half of the following functions in connection with the issue of the securities are performed by financial institutions in Singapore:(A)securing the mandate;(B)originating and structuring the debt issue;(C)documentation and preparation of the offering circular;(D)distribution of the issue of the securities;(b)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 —(i)the lead manager is —(A)in the case of an arrangement made before 1st January 2004, an approved bond intermediary;(B)in the case of an arrangement made on or after 1st January 2004, a financial sector incentive (bond market) company; or [S 350/2005 wef 03/12/2003] [S 350/2005 wef 03/12/2003] [S 268/2009 wef 01/01/2009] (ba)where the debt securities are issued during the period from 1 January 2014 to 31 December 2023 and are not issued under a programme, any one of the following is satisfied:(i)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)a financial sector incentive (bond market) company;(B)a financial sector incentive (capital market) company;(C)a financial sector incentive (standard tier) company;(ii)if the issuer is a Singapore-based issuer —(A)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)a financial sector incentive (bond market) company;(B)a financial sector incentive (capital market) company;(C)a financial sector incentive (standard tier) company;[S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (c)where the debt securities are issued during the period from 10th May 1999 to 31st December 2023 under a programme —(i)the programme as a whole is arranged by an approved bond intermediary, the arrangement of which is completed on or before 31st December 2003;(ii)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 by a financial sector incentive (bond market) company;[S 240/2016 wef 01/01/2014] (iii)the programme as a whole is arranged by a financial sector incentive (bond market) company;(iv)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 on or after 1 January 2014 by a financial sector incentive (capital market) company or a financial sector incentive (standard tier) company; or[S 240/2016 wef 01/01/2014] (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;[S 350/2005 wef 03/12/2003] [S 268/2009 wef 01/01/2009] [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (d)where the debt securities are issued during the period from 10th May 1999 to 31st December 2023 by a new issuer who joins an existing programme which does not satisfy the requirement in sub-paragraph (c) —(i)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;[S 240/2016 wef 01/01/2014] (ii)the participation of the new issuer in the programme is arranged by a financial sector incentive (bond market) company, 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;[S 240/2016 wef 01/01/2014] (iii)the participation of the new issuer in the programme is arranged by a financial sector incentive (bond market) company, and that programme as a whole was previously arranged by an affiliate of any financial sector incentive (bond market) company; or[S 240/2016 wef 01/01/2014] (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 that programme as a whole —(A)was previously arranged by an affiliate of any financial sector incentive (bond market) company; or(B)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;[S 350/2005 wef 03/12/2003] [S 268/2009 wef 01/01/2009] [S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (e)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 —(i)financial institutions in Singapore where their staff based in Singapore have a leading and substantial role in the distribution of the debt securities;(ii)approved bond intermediaries; or(iii)financial sector incentive (bond market) companies;[S 350/2005 wef 03/12/2003] [S 52/2006 wef 01/01/2005] [S 268/2009 wef 01/01/2009] [S 240/2016 wef 01/01/2014] (f)where the debt securities are issued during the period from 1 January 2014 to 31 December 2023 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:(i)a financial sector incentive (bond market) company;(ii)a financial sector incentive (capital market) company;(iii)a financial sector incentive (standard tier) company.[S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (1A) The arrangements referred to in paragraph (c) of the definition of “qualifying debt securities” in section 13(16) of the Act are —(a)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 —(i)the lead manager is a financial sector incentive (bond market) company; or(ii)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;[S 240/2016 wef 01/01/2014] (aa)where the Islamic debt securities are issued during the period from 1 January 2014 to 31 December 2023 and are not issued under a programme, any one of the following is satisfied:(i)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)a financial sector incentive (bond market) company;(B)a financial sector incentive (capital market) company;(C)a financial sector incentive (standard tier) company;(ii)if the issuer is a Singapore-based issuer —(A)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)a financial sector incentive (bond market) company;(B)a financial sector incentive (capital market) company;(C)a financial sector incentive (standard tier) company;[S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (b)where the Islamic debt securities are issued during the period from 1 January 2005 to 31 December 2023 under a programme —(i)the programme as a whole is arranged by an approved bond intermediary, the arrangement of which is completed on or before 31st December 2003;(ii)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 by a financial sector incentive (bond market) company;[S 240/2016 wef 01/01/2014] (iii)the programme as a whole is arranged by a financial sector incentive (bond market) company;(iv)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 on or after 1 January 2014 by a financial sector incentive (capital market) company or a financial sector incentive (standard tier) company; or[S 240/2016 wef 01/01/2014] (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;[S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (c)where the Islamic debt securities are issued during the period from 1 January 2005 to 31 December 2023 by a new issuer who joins an existing programme which does not satisfy the requirement in sub-paragraph (b) —(i)the participation of the new issuer in the programme is arranged by a financial sector incentive (bond market) company, 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;[S 240/2016 wef 01/01/2014] (ii)the participation of the new issuer in the programme is arranged by a financial sector incentive (bond market) company, and that programme as a whole was previously arranged by an affiliate of any financial sector incentive (bond market) company; or[S 240/2016 wef 01/01/2014] (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 that programme as a whole —(A)was previously arranged by an affiliate of any financial sector incentive (bond market) company; or(B)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;[S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (d)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 —(i)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(ii)financial sector incentive (bond market) companies; and[S 52/2006 wef 01/01/2005] [S 240/2016 wef 01/01/2014] (e)where the Islamic debt securities are issued during the period from 1 January 2014 to 31 December 2023 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:(i)a financial sector incentive (bond market) company;(ii)a financial sector incentive (capital market) company;(iii)a financial sector incentive (standard tier) company.[S 240/2016 wef 01/01/2014] [S 869/2018 wef 27/12/2018] (2) 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.[S 350/2005 wef 03/12/2003] [S 52/2006 wef 01/01/2005] Determination of exempt income, and deductions4A.—(1) In determining the income of a person to be exempted from tax under section 13(1)(bc) or (bd) of the Act —(a)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 [S 521/2013 wef YA 2013 & Sub Ys/A] [S 268/2009 wef 16/02/2009] Waiver of withholding of tax in respect of interest paid to or discount derived by non-resident person What is a debt instrument?(4) Debt instrument The term “debt instrument” means a bond, debenture, note, or certificate or other evidence of indebtedness. To the extent provided in regulations, such term shall include preferred stock.
What is debt instrument class 11?A debt instrument is a fixed-income asset that legally obligates the debtor to provide the lender interest and principal payments.
What are the three types of debt instruments?Different forms of debt instruments may include credit cards, credit lines, loans, and bonds.
What are debt instruments for accounting?(b) Debt instruments
These are usually bonds or loan notes, or other instruments which are likely to carry interest and a capital element of repayment. There are three possible classifications for categorising debt instruments – amortised cost, FVOCI or FVPL.
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