| Under the existing tax exemption
scheme for syndicated offshore credit and underwriting
facilities, income earned from the underwriting of syndicated
offshore debt securities are exempted from tax. One
of the conditions for granting the tax exemption is
that the issue must be underwritten by financial institutions
in Singapore.
As borrowers in the region become more
sophisticated and their credit standing becomes more
acceptable in the financial markets, the debt papers
of reputable issuers would not need to be underwritten
by financial institutions. To encourage such borrowers
to issue bonds and other debt securities in Singapore,
the requirement that the debt issues must be underwritten
by financial institutions will be removed with immediate
effect. All fees earned by financial institutions in
arranging offshore debt issues will therefore be exempted
from tax irrespective of whether the issues are underwritten
by financial institutions or not. |
