Page 9 - RSM Budget 2021 Highlights

CORPORATIONS AND BUSINESSES

Double Tax Deduction for Qualifying Comments
Upfront Cost Attributable to Retail Bond  The extension of about five and a half years of
Issuance the double tax deduction for qualifying upfront
bond issuance cost would likely encourage
Current more of corporate bond offerings to retail
Currently bond issuers who carry on a trade or investors.
business in Singapore are allowed to claim a tax
deduction of up to 200% on qualifying upfront cost  The restriction of the DTD to rated retail bonds
incurred on or after 19 May 2016 that is attributable is appropriate to safeguard the interest and limit
to retail bonds issued during the period from 19 May the risk of retail investors in bonds.
2016 to 18 May 2021 (both dates inclusive) under the
Seasoning Framework and Exempt Bond Issuer
Framework.

The Double Tax Deduction (“DTD”) scheme is
scheduled to lapse after 18 May 2021.

Proposed changes
To promote rated retail bond issuances, the DTD
scheme will be extended for qualifying upfront cost
incurred on or after 19 May 2021 that is attributable to
rated retail bonds (instead of all retail bonds) issued
during the period from 19 May 2021 to 31 December
2026 (both dates inclusive) under the Seasoning
Framework and Exempt Bond Issuer Framework.
The refinement of the DTD scheme seeks to provide
investors with access to rated retail bonds. Credit
rating improves market transparency by providing
timely and independent assessments of the
creditworthiness of bond issuers.

All other conditions of the DTD scheme remain the
same.

MAS will provide further details of the changes by 31
May 2021.

Effective date
The DTD scheme is extended to cover qualifying
upfront cost incurred and attributable to rated retail
bonds issued during the period from 19 May 2021 to
31 December 2026.

8 | RSM