Aircraft Leasing Scheme
The Aircraft Leasing Scheme (ALS) is aimed at encouraging companies to develop aircraft leasing capabilities and grow the aircraft leasing industry in Singapore.
• An approved aircraft leasing company is eligible for a concessionary tax rate of 8% on income derived from the leasing of aircraft or aircraft engine and qualifying ancillary activities.
• An approved aircraft leasing company is also eligible for withholding tax exemption on interest and qualifying related payments on loans obtained for the purchase of aircraft or aircraft engines.
• The incentive period is limited to five years. Extension of the incentive may be considered, subject to the company’s commitment to undertake further expansion plans on its aircraft leasing activities.
• The company is required to maintain a separate account in respect of any non-qualifying activity undertaken during the incentive period. The income from the non-qualifying activity is not eligible for the incentive.
To qualify for the ALS, companies must establish substantive activities and perform strategic functions in Singapore. Key activities include identifying and acquiring aircraft/aircraft engines to be leased, negotiating the leasing terms, management of leases of aircraft/aircraft engines, services relating to the management of such leases (e.g. arranging for the operation and maintenance of aircraft/aircraft engines/facilities) and financing the acquisition of aircraft/aircraft engines.