The Inland Revenue Authority of Singapore (IRAS) delivered the second edition of the e-Tax Guide on Tax Deduction for Borrowing Costs other than Interest Expenses on 18 August 2014. The previous edition was published on 21 June 2007.
The e-Tax Guide has been updated to expand the list of deductible borrowing costs. With effect from the year of assessment (YA) 2014, the list of deductible borrowing costs as prescribed under the Income Tax (Deductible Borrowing Costs) Regulations 2008 will also include the following items:
- Conversion/amendment fees: fees payable to the lender to convert the interest rate specified in the loan agreement which is applicable at the point of the conversion to a lower interest rate (prior to YA 2014, conversion fees referred to fees payable to the lender to convert the interest rate charged from a prime based rate to a lower snap rate); and
- Front – end/back-end fees: fees payable to the lender either at the beginning or at the end of the term of borrowing and fees equivalent to the interest that the borrower would otherwise be required to pay to the lender under the loan agreement.
