PART VIII 2
FOREIGN LOANS FOR PRODUCTIVE EQUIPMENT
2 From year of assessment 1967.
—(1) Where a company engaged in any industry is desirous of raising a loan of not less than $200,000 from a non-resident person (referred to in this Part as a foreign lender) by means of a financial agreement whereby credit facilities are granted for the purchase of productive equipment for the purposes of its trade or business, the company may apply to the Minister for a certificate certifying that foreign loan to be an approved foreign loan.
(2) The Minister may, where he thinks it expedient to do so, consider an application for a foreign loan certificate in respect of a foreign loan of less than $200,000.
(3) The application shall be in such form and with such particulars as may be prescribed, and shall be accompanied by a copy of the financial agreement.
(4) Where the Minister is satisfied as to the bona fides of such an application and that it is expedient in the public interest to do so, he may issue a certificate certifying the loan specified in the application as an approved foreign loan.
(5) Every certificate issued under subsection (4) shall be in such form and contain such particulars as may be prescribed, and shall be subject to such conditions as the Minister thinks fit.
58. Any productive equipment purchased and financed from an approved foreign loan shall not be sold, transferred, or otherwise disposed of without the prior written permission of the Minister, unless the loan has been repaid in full.
—(1) Notwithstanding section 43(1)(b) of the Income Tax Act (Cap. 134), the Minister may, subject to subsection (2), if he is satisfied that it is expedient in the public interest to do so, by an endorsement to that effect on the approved foreign loan certificate, exempt from tax or authorise that tax at such concessionary rate as specified in the certificate be levied and paid upon any interest on an approved foreign loan payable to a foreign lender.
(2) Where a company has contravened section 58 or any conditions imposed by the Minister under section 57(5), the amount which, but for subsection (1), would have been deductible by the company from the interest paid by it to the foreign lender under section 45 of the Income Tax Act shall be deemed to have been deducted from that interest and shall be a debt due from the company to the Government and be recoverable in the manner provided by section 89 of the Income Tax Act (Cap. 134).
(3) No action shall be taken by the Comptroller to recover any debt under subsection (2) without the prior sanction of the Minister.
—(1) Subject to subsection (3), section 59 shall apply to any additional interest payable on an approved foreign loan by reason of any arrangement whereby the period within which the loan must be repaid in full has been extended.
(2) The rate of interest payable in respect of any such extended period shall not, without the prior sanction of the Minister, be higher than the rate of interest specified in the certificate relating to the approved foreign loan.
(3) Any company making any such arrangement shall give notice thereof in writing to the Minister within 30 days from the date on which the arrangement is made.