• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/7/2014

Singapore - Tax treatment of increased Basel III capital requirements 

July 7: The Monetary Authority of Singapore issued guidance concerning the income tax treatment of Basel III Additional Tier 1 (AT 1) instruments issued by Singapore-incorporated banks.

Under the minimum requirements of the Basel III capital standards, banks are required to hold at least 6% of their risk-weighted assets in the form of Tier 1 capital (i.e., common equity Tier 1 and AT 1 capital). However, the Monetary Authority requires that by 2015, Singapore-incorporated banks must satisfy capital requirements that are greater than the Basel III minimum requirements. Accordingly, AT 1 instruments (other than shares) issued by banks for these purposes will be treated as debt for income tax purposes.

Read a July 2014 report(PDF 180KB) prepared by the KPMG member firm in Singapore: Income Tax Treatment of Basel III Additional Tier 1 (AT 1) Instruments

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