| Tax incentive |
- Tax exemption for income derived by an ASPV from asset securitisation transactions.
- Withholding tax exemption for payments to non-residents or non-Singapore permanent establishments for over-the counter (OTC) financial derivatives connected to a securitisation transaction. This exemption also applies for the entire duration of OTC financial derivatives contracts entered into during the qualifying period.
- Stamp duty relief on the transfer of assets into the ASPV for approved transactions.
- Recovery of Goods and Services Tax (GST) on the ASPV's business expenses at a fixed rate of 76%.
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| Qualifying transactions |
- Asset securitisation transactions undertaken by the ASPV must be approved by the MAS. These may involve the transfer of trade receivables, interest-bearing instruments, rights to any other income quantifiable in advance or any other rights, assets or properties approved by the MAS, excluding immovable property in Singapore.
- In the circular, the MAS announced that insurance-related risks may also be transferred to an ASPV, and the capital restriction may be relaxed for SPRVs (see details below).
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| Qualifying conditions |
The following conditions must be met throughout the incentive period:
- The ASPV must be:
- a Singapore-incorporated company with no more than $10,000 issued and paid-up capital. From 5 November 2007, this restriction may be relaxed for SPRVs registered under the Insurance Act, subject to approval;
- a Singapore tax resident;
- held in trust for charitable organisations/institutions where the trust is administered by a Singapore trust company; and
- set up to conduct asset securitisation activities with no profit-making motive and no other non-incidental trade/business may be carried out.
- Debt securities issued by ASPVs must meet certain conditions. One of these was that ASPVs were only allowed to issue QDS. From 16 February 2008, this restriction has been removed although non-QDS tranches will be subject to normal tax rules.
- The MAS will also consider other factors including the extent to which related functions are carried out in Singapore.
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| Administrative requirements |
- For income tax purposes, the ASPV must submit an annual declaration confirming that it has met the qualifying conditions and an undertaking that related party transactions for OTC financial derivatives transactions were carried out at arm's length.
- For GST purposes, a quarterly statement is required for GST claims even though the ASPV is not required to register for GST.
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