SINGAPORE Law and Practice Contributed by: Lee Xin Mei, Cheryl Tan, Eugene Lee and Benjamin Liew, Rajah & Tann Singapore LLP
6.4 Construction of Bankruptcy-Remote Transactions Where there are contractual prohibitions or other restrictions against assignments or transfers of the underlying assets, a trust structure can be used in the alternative. This would involve having the originator declare a trust over the underlying assets in favour of the SPE. The SPE obtains an equitable interest in the assets. However, unlike an equitable assignment, this interest cannot be converted to a legal interest by delivery of notice. 6.5 Bankruptcy-Remote SPE See 6.2 SPEs . Singapore stamp duty is a documentary tax generally imposed on instruments that effect the transfer of immovable property in Singa - pore, shares of Singapore incorporated compa - nies and shares of foreign companies that have a share register in Singapore. A transfer of receivables that do not involve any interest in the aforementioned assets is gen - erally not subject to stamp duty in Singapore. However, it should be noted that any mortgage, agreement for mortgage or debenture of such assets, as well as the transfer or assignment of any mortgage or debenture may be subject to stamp duty if they are executed or received in Singapore. 7.2 Taxes on Profit Singapore generally adopts a territorial basis of taxation. Any income accrued or derived in Sin - gapore, as well as any income earned from any source outside Singapore (ie, foreign-sourced income) that is received or deemed to be 7. Tax Laws and Issues 7.1 Transfer Taxes
received in Singapore will be taxable. The ascer - tainment of the source of income is a practical hard matter of fact and the broad guiding prin - ciple is to examine what the taxpayer has done to earn the profits in question and to identify the location where those activities that the taxpayer has engaged in took place. Where the income is considered to be sourced in Singapore, companies are subject to corporate income tax at the prevailing rate of 17%, subject to any applicable tax exemptions. Please see 1.3 Applicable Laws and Regula- tions for tax concessions that apply in the con - text of a securitisation transaction. 7.3 Withholding Taxes Withholding tax is applicable in Singapore in respect of certain types of payments such as: • interest, commission, fee or any other pay - ment in connection with any loan or indebted - ness or with any arrangement, management, guarantee, or service relating to any loan or indebtedness which are: (a) borne, directly or indirectly, by a person resident in Singapore or a permanent establishment in Singapore (except in respect of any business carried on outside Singapore through a permanent establishment outside Singapore or any immovable property situated outside Singapore); or (b) deductible against any income accruing in, or derived from, Singapore; or • any income derived from loans where the funds provided by such loans are brought into or used in Singapore. Such payments, where made to a person not known to the paying party to be a resident in
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