New Broad-Based Withholding Tax Exemption for Banks

08 Apr 2011

The Monetary Authority of Singapore (“MAS”) has issued a tax circular (FDD Cir 02/2011) titled “Tax Exemption on Payments Falling under Section 12(6) of the Income Tax Act Made to Non-Residents (Excluding Permanent Establishments in Singapore) by Banks, Finance Companies and Certain Approved Entities” (“Circular”).

The Circular contains details of a new broad-based tax exemption in respect of interest and other qualifying payments under section 12(6) of the Income Tax Act (“interest payments”) liable to be made by banks, finance companies and approved financial institutions (“banks”) to non-residents.

This tax exemption was announced in the 2011 Budget Statement to help banks access a wider range of funding sources. It came into effect on 1 April 2011.

To read the update, please click here.