Who is eligible?
The tax exemption applies to:
• resident and non-resident individual¹

who earn interest from deposits (in Singapore dollars or foreign currencies) in any:
• standard savings account,
• standard current account, and/or
• standard fixed deposit account

opened with any:
• approved bank and/or licensed finance company in Singapore.

When will you start to enjoy the tax exemption?
The tax exemption on interest earned will be implemented in two phases as follows:

* For a resident individual
**Deposits from standard savings, current and/or fixed deposit accounts with approved banks and/or licensed finance companies
+ Applicable to interest earned from deposits from standard savings, current and/or fixed deposit accounts with approved banks and/or licensed finance companies

How does the tax exemption work?

Step 1: Determine the total amount of Interest that you have earned.
Add up the interest that you have earned from ALL your standard savings, current and/or fixed deposit accounts with approved banks and/or licensed finance companies in Singapore.

For joint accounts, you will need to divide the interest earned equally among all the joint account holders to determine how much interest is due to each joint account holder.

For trust accounts, the interest earned will be added to the total interest earned from all standard savings, current and/or fixed deposit accounts of the trustee.

Step 2: Calculate how much of your interest earned is taxable.
A benchmark interest² will be used to determine the amount of interest earned that is taxable.

Hence, for the year ending 31 Dec 2003:

The above only applies to interest earned from 1 Jan 2003 to 31 Dec 2004. From 1 Jan 2005, all interest earned from all your standard savings, current and/or fixed deposit accounts with approved banks and/or licensed finance companies in Singapore - regardless of the amount - will be exempt from tax.

How can you maximise your tax savings?
With the changes in the tax treatment of interest earned, you can take advantage of higher interest for your savings by opening a UOB FlexiDeposit account. UOB FlexiDeposit is a simple savings account that gives you the opportunity to enjoy three times the interest on your savings³.

Based on the partial tax exemption form 1 Jan 2003 to 31 Dec 2004, the table below illustrates how much more you can earn with a deposit of S$200,000 in a UOB FlexiDeposit account.



* Based on UOB FlexiDeposit interest rates and interest rates of a competitor bank as at 23 Feb 2004.
**Assuming 22% tax rate: (0.22 x S$152.98) = S$33.65
   Benchmark interest for the year ending 31 Dec 2004 is assumed to be S$152.98 for illustrative purpose only.

With the changes in tax exemption, there's an even more compelling reason to deposit your money with UOB FlexiDeposit. So why not choose the higher interest earning account today.

1. Interest earned on deposit by non-resident individuals remains exempt from tax.
2. The benchmark interest is based on the interest earned from the deposit of S$100,000 in a POSB savings account with DBS Bank held throughout the year. The benchmark interest for the year ending 31 December 2003 is S$152.98. IRAS will publish the benchmark interest for the year ending 31 December 2004 on its website by end-January 2005.
3. Against the prevailing rate of a competitor bank for a deposit of S$100,000.