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Further or double deduction for qualifying expenditure on issue of debentures and making available debentures for secondary trading

Income Tax Act 1947

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—(1) Where the Comptroller is satisfied that qualifying expenditure in connection with —(a)an issue of post‑seasoning debentures offered in reliance on an exemption under the Post‑seasoning Debentures Regulations within 5 years starting from the date of issue of the corresponding seasoned debentures, being a date falling within the period between 19 May 2016 and 18 May 2021 (both dates inclusive);(aa)an issue of qualifying debentures (other than post‑seasoning debentures mentioned in paragraph (a)) during the period between 19 May 2016 and 18 May 2021 (both dates inclusive); or(b)making available potential seasoned debentures for secondary trading within 5 years starting from the date of their issue (being a date falling within the period between 19 May 2016 and 18 May 2021 (both dates inclusive)),has been incurred on or after 19 May 2016 by a person carrying on a trade or business in Singapore, that person is to be allowed —(c)where the expenditure is allowable as a deduction under section 14, a further deduction of the amount of such expenditure; or(d)where the expenditure is not allowable as a deduction under section 14, a deduction equal to twice the amount of such expenditure.(1A) Where the Comptroller is satisfied that qualifying expenditure has been incurred on or after 19 May 2021 by a person carrying on a trade or business in Singapore in connection with —(a)an issue of post‑seasoning debentures offered in reliance on an exemption under the Post‑seasoning Debentures Regulations within 5 years starting from the date of issue of the corresponding seasoned debentures that is a date falling within the period between 19 May 2021 and 31 December 2026 (both dates inclusive), being post‑seasoning debentures that are credit‑rated as at the date they are issued;(b)an issue of qualifying debentures (other than post‑seasoning debentures mentioned in paragraph (a)) during the period between 19 May 2021 and 31 December 2026 (both dates inclusive), being debentures that are credit‑rated as at the date they are issued; or(c)making available potential seasoned debentures for secondary trading within 5 years starting from the date of their issue that is a date falling within the period between 19 May 2021 and 31 December 2026 (both dates inclusive), being debentures that are credit‑rated as at the date they are so made available,that person is to be allowed —(d)where the expenditure is allowable as a deduction under section 14 — a further deduction of the amount of the expenditure; or(e)where the expenditure is not allowable as a deduction under section 14 — a deduction equal to twice the amount of the expenditure.(2) The maximum amount of qualifying expenditure that may be allowed a deduction under this section is —(a)subject to paragraphs (b) and (c), $500,000 for each issue of qualifying debentures or making available of potential seasoned debentures for secondary trading;(b)subject to paragraph (c), $500,000 for both the issue of potential seasoned debentures and the making available of the same debentures for secondary trading; and(c)$1,000,000 per person, irrespective of the number of times the person issues qualifying debentures or makes available potential seasoned debentures for secondary trading.(3) It is a condition for allowing a deduction to a person under this section in respect of an issue of potential seasoned debentures, that they are made available for secondary trading within a period of one year starting from the date of their issue (called in this section the window period).(4) If the condition in subsection (3) is not satisfied, the total deductions under this section already allowed to the person in respect of that issue are treated as the person’s income for the year of assessment relating to the basis period in which the first day after the end of the window period falls.(5) Subsections (3) and (4) do not affect the right of the person to be allowed a deduction under this section in relation to making available the potential seasoned debentures for secondary trading after the window period, except that the deduction may only be allowed in the year of assessment relating to the basis period in which those debentures are so made available.(6) In this section —“credit‑rated”, in relation to qualifying debentures, means qualifying debentures that are given at least one credit rating by Fitch Ratings, Moody’s, or Standard & Poor (S&P) Global;“offering document” means a prospectus, an offer circular, an information memorandum, a pricing supplement or any other document issued to investors in connection with an offer of debentures;“post‑seasoning debenture”, “retail investor” and “seasoned debenture” have the meanings given to those expressions in the Post‑seasoning Debentures Regulations;“Post‑seasoning Debentures Regulations” means the Securities and Futures (Offers of Investments) (Exemption for Offers of Post‑seasoning Debentures) Regulations 2016;“potential seasoned debentures” means debentures the offering documents for the offer of which include a statement to the effect that the debentures are intended to be made available on a securities exchange for trading by retail investors;“product highlights sheet” —(a)in relation to an offer of straight debentures, has the meaning given to it in the Straight Debentures Regulations; or(b)in relation to an offer of post‑seasoning debentures, has the meaning given to it in the Post‑seasoning Debentures Regulations;“qualifying debentures” means —(a)potential seasoned debentures;(b)post‑seasoning debentures offered in reliance on an exemption under the Post‑seasoning Debentures Regulations; or(c)straight debentures offered in reliance on an exemption under the Straight Debentures Regulations;“qualifying expenditure” means —(a)in relation to an issue of potential seasoned debentures, any of the following that are incurred in connection with the issue, and for the purpose of allowing the debentures to be made available for secondary trading, or for the purpose of the subsequent issue of post‑seasoning debentures:(i)professional fees for conducting due diligence;(ii)origination, underwriting and distribution fees;(iii)advertising and marketing expenses;(b)in relation to the making available of potential seasoned debentures for secondary trading, any of the expenditure mentioned in paragraph (a)(i), (ii) and (iii) that are incurred in connection with making available the debentures for secondary trading; or(c)in relation to an issue of post‑seasoning debentures or straight debentures, any of the following that are incurred in connection with the issue:(i)professional fees for conducting due diligence;(ii)professional fees for the drafting and preparation of, and the printing costs of —(A)the product highlights sheet for the offer pertaining to the issue, in the case of an issue of post‑seasoning debentures; or(B)the product highlights sheet and simplified disclosure document for the offer pertaining to the issue, in the case of an issue of straight debentures;(iii)origination, underwriting and distribution fees;(iv)advertising and marketing expenses,but excludes trustee fees, agency fees and Central Depository fees;“securities exchange” has the meaning given by section 2(1) of the Securities and Futures Act 2001;“simplified disclosure document” and “straight debenture” have the meanings given to those expressions in the Straight Debentures Regulations;“Straight Debentures Regulations” means the Securities and Futures (Offers of Investments) (Exemption for Offers of Straight Debentures) Regulations 2016.(7) In this section, a person makes available potential seasoned debentures for secondary trading if the person makes them available on a securities exchange for trading by retail investors.[14ZA

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