Tax deductions for banks' Basel III issues
Additional Tier 1 instruments to be treated as debt for tax purposes, to level field for S'pore-incorporated banks
Add BT as a preferred sourceLOCAL banks which have been selling debt to boost their capital in order to fall in line with stricter regulatory requirements gained more clarity yesterday on the tax treatment for their funding instruments.
The government said: "To provide tax certainty and maintain a level playing field for Singapore-incorporated banks which issue Basel III Additional Tier 1 instruments, such instruments - other than shares - will be treated as debt for tax purposes.
"Hence, distributions on such instruments will be deductible for issuers, and taxable in the hands of investors, subject to existing rules."
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