Page 9 - RSM Budget 2022 Highlights

CORPORATIONS AND BUSINESSES

Withholding Tax Exemption for the Financial Effective date
Sector The WHT exemption for payment under (a) to (d)
which are scheduled to lapse after 31 December 2022
Current
is now extended till 31 December 2026.
Interest payments made by a tax resident or
permanent establishment in Singapore to non-tax
residents are subject to WHT at a rate of 15% in Comments
general.  The extension of the WHT exemption regime
shows the Government’s intention to
There is a range of WHT exemptions for the financial strengthen Singapore’s financial hub status by
sector which applies to different financial institutions providing certainty and competitive edge to
for payments made under different types of financial players in the financial sector.
transactions.
 The WHT exemption for payments on over-
WHT exemption for the following payments are the-counter financial derivatives made by a
scheduled to lapse after 31 December 2022:
financial institution in Singapore to any non-
a) Payments made under cross currency swap resident person (excluding any permanent
transactions by Singapore swap counterparties establishment in Singapore) was previously
to issuers of Singapore dollar debt securities. extended to 31 December 2026 as announced in
Budget 2021.
b) Interest payments on margin deposits made
under all derivatives contracts by approved
exchanges, approved clearing houses,
members of approved exchanges and members
of approved clearing houses.

c) Specified payments made under securities
lending or repurchase agreements by specified
institutions.

d) Payments made under interest rate or currency
swap transactions by MAS.
e) Payments made under interest rate or currency
swap transactions by financial institutions.

Proposed changes
To continue supporting the competitiveness of our
financial sector, the WHT exemption for payments (a)
to (d) will be extended till 31 December 2026. This will
cover payments made under a contract or
agreement that takes effect on or before 31
December 2026.

To rationalise the WHT exemption for the financial
sector, the WHT exemption for payment (e) will be
allowed to lapse after 31 December 2022. Such
payments can be covered under the existing WHT
exemption for payments on over-the-counter
financial derivatives.

MAS will provide any consequential details by 31 May
2022.

BUDGET 2022 HIGHLIGHTS | 7