Income Tax (Payment by Bank in Singapore to Bank outside Singapore — Section 13(4) Exemption) Notification 2024

No. S 769

Income Tax Act 1947

Income Tax
(Payment by Bank in Singapore to Bank
outside Singapore — Section 13(4) Exemption)
Notification 2024

In exercise of the powers conferred by section 13(4) of the Income Tax Act 1947, the Minister for Finance makes the following Notification:

Citation and commencement

1.  This Notification is the Income Tax (Payment by Bank in Singapore to Bank outside Singapore — Section 13(4) Exemption) Notification 2024 and is deemed to have come into operation on 1 April 2021.

Definitions

2.  In this Notification —

“bank in Singapore” means —

(a) a bank that holds a licence granted under section 7 or 79 of the Banking Act 1970; or

[S 770/2024 wef 31/12/2021]

(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 1970;

[S 770/2024 wef 31/12/2021]

[S 770/2024 wef 01/07/2021]

“bank outside Singapore” means a financial institution that is licensed or approved (or exempt from licensing or approval) to carry on banking business outside Singapore, by a financial supervisory authority of the jurisdiction in which it carries on its banking business;

“qualifying payment” means any income referred to in section 12(6) of the Act.

Exemption

3.—(1)  Subject to sub‑paragraphs (2), (3) and (4), where a qualifying payment is made by a bank in Singapore to a bank outside Singapore, the qualifying payment is exempt from tax if the qualifying payment —

(a) is liable to be made at any time during the period from 1 April 2021 to 31 December 2031 (both dates inclusive) under —

(i) a contract which took effect before 1 April 2021;

(ii) a contract which was extended or renewed, where the extension or renewal took effect before 1 April 2021; or

(iii) a debt security which was issued before 1 April 2021;

(b) is liable to be made under a contract which takes effect on a date which falls within the period from 1 April 2021 to 31 December 2031 (both dates inclusive);

(c) is liable to be made —

(i) under a contract which is extended or renewed, where the extension or renewal takes effect on a date which falls within the period from 1 April 2021 to 31 December 2031 (both dates inclusive); and

(ii) on or after the date on which the extension or renewal takes effect;

[S 770/2024 wef 04/11/2022]

(ca) is liable to be made —

(i) under a contract which is varied, where the variation takes effect on a date which falls within the period from 4 November 2022 to 31 December 2031 (both dates inclusive); and

(ii) on or after the date on which the variation takes effect; or

[S 770/2024 wef 04/11/2022]

(d) is liable to be made under a debt security which is issued on a date which falls within the period from 1 April 2021 to 31 December 2031 (both dates inclusive).

[S 770/2024 wef 03/10/2024]

(2)  The exemption in sub‑paragraph (1) only applies —

(a) if the bank outside Singapore is not resident in Singapore and does not have a permanent establishment in Singapore; or

(b) if the bank outside Singapore is not resident in Singapore and carries on an operation in Singapore through a permanent establishment in Singapore, and —

(i) the contract under which the qualifying payment is made is not entered into through that operation; or

(ii) the debt security under which the qualifying payment is made is not acquired by the bank outside Singapore through that operation.

(3)  The exemption in sub‑paragraph (1) does not apply to any qualifying payment made by a bank in Singapore in connection with an arrangement mentioned in section 33(1) of the Act.

(4)  The exemption in sub-paragraph (1) does not apply to any qualifying payment liable to be made —

(a) under a contract mentioned in sub-paragraph (1)(b), (c) or (ca), that is varied with effect from a date on or after 1 January 2032; and

(b) on or after the date on which the variation takes effect.

[S 770/2024 wef 03/10/2024]

Made on 1 October 2024.

LAI CHUNG HAN

Permanent Secretary (Development),
Ministry of Finance,
Singapore.

[AG/LEGIS/SL/134/2020/12]