Articles

Budget 2025

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Budget 2025

We summarised the key proposed tax changes announced during the Budget 2025 that may be relevant to businesses as follows.

  1. Corporate Income Tax (CIT) rebate and cash grant for Year of Assessment (YA) 2025
  2. CIT listing rebate for new corporate listings in Singapore
  3. Extend the Double Tax Deduction for Internationalisation Scheme (DTDi)
  4. Tax deduction for payment made under approved Cost-Sharing Agreement (CSA) for innovation
    activities
  5. Extend the Mergers and Acquisitions Scheme (M&A)
  6. Tax deduction for payment under Employee Equity-Based Remuneration (EEBR) schemes from YA
    2026
  7. Enhancement to tax exemption under Section 13W on gains from disposal of shares by companies
  8. Extension and enhancement of various Maritime Sector Incentive (MSI) schemes
  9. Qualifying project debt securities (QPDS) Scheme
  10. Concessionary tax rate (CTR) for fund manager listings in Singapore
  11. Tax exemption for fund managers managing funds which invest substantially in Singapore-listed
    equities
  12. Extension and enhancement of tax concessions for Real Estate Investment Trusts listed on the
    Singapore Exchange (S-REITs)
  13. Extension of tax concessions for Real Estate Investment Exchange-Traded Funds listed on the
    Singapore Exchange (S-REIT ETFs)
  14. Extension of tax exemption of qualifying foreign-sourced income from qualifying offshore
    infrastructure projects/assets received by approved entities listed on the Singapore Exchange
  15. Extension and refinement of Insurance Business Development (IBD) scheme
  16. Introduction of additional CTR for the Financial Sector Incentive (FSI) Scheme
  17. Venture Capital Fund Incentive and Venture Capital Fund Management Incentive
  18. Extend GST remission for S-REITs and Singapore-listed Registered Business Trusts in the
    infrastructure business, ship leasing and aircraft leasing sectors
  19. Personal Income Tax Rebate
  20. Increase in Senior Worker CPF Contribution Rates
  21. Enhancement to Workfare Skills Support (WSS) Scheme
  22. Rationalise the Central Provident Fund cash top-up relief
  23. Extend and enhance the Land Intensification Allowance (LIA) scheme
  24. Allow the WHT concession for non-tax-resident arbitrators and non-tax-resident mediators
    to lapse
  25. Extend the Enhanced Cap for the Market Readiness Assistance Grant

For the full details, please download our budget commentary.

Budget 2021

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Budget 2021

We summarised the key proposed tax changes announced during the Budget 2021 that may be relevant to businesses as follows.

  1. Extend the Year of Assessment (YA) 2020 enhancements to the carry-back relief scheme
  2. Extend the option to accelerate:
    (i) the write-off of cost of acquiring plant and machinery (P&M), and
    (ii) the deduction of expenses incurred on renovation and refurbishment (R&R)
  3. Enhancement of Double Tax Deduction for Internationalisation (DTDi) Scheme
  4. Extension of 250% tax deduction for qualifying donations made to Institutions of Public Character (IPCs)
  5. Extension of the Business and IPC Partnership Scheme (BIPS)
  6. Extend the Not-for-Profit Organisation (NPO) tax incentive
  7. Allow the Automation Support Package (ASP) to lapse, but retain the 100% Investment Allowance (IA) scheme to support automation
  8. Extend and enhance the Investment Allowance (Energy Efficiency) (IA-EE) Scheme
  9. Withdraw the Accelerated Depreciation Allowances for Highly Efficient Pollution Control Equipment (ADA-PCE) Scheme
  10. Goods and Services Tax (GST) on imported low-value goods and non-digital services
  11. Updates to the zero-rating provision for media sales
  12. Extend and refine the double tax deduction (DTD) for qualifying upfront costs attributable to retail bonds under MAS’ Seasoning Framework and Exempt Bond Issuer Framework
  13. Extend and rationalise the withholding tax (WHT) exemptions for the financial sector
  14. Extend the WHT exemption on payments made for structured products and over-the counter (OTC) financial derivatives
  15. Allow the Insurance Business Development-Specialised Insurance (IBD-SI) scheme to lapse after 31 August 2021

For the full details, please download our budget commentary.

What are my tax obligations if I invest into a Variable Capital Company?

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What are my tax obligations if I invest into a Variable Capital Company?

Pay your tax

The Variable Capital Company (“VCC”) was gazetted on 20 January 2020.  With so much hype at the moment around the VCC, what are the tax considerations for you as an investor when you buy into a VCC?

The VCC is conceptually a corporate entity of a single or multiple ‘pooled’ funds that is managed by a Singapore fund manager.  In essence, it is a corporate structure with investors as ‘shareholders’ who can buy into and exit their holdings at any one point.  It is an alternative to other existing investment vehicles for the asset management industry. 

A VCC can be set up as a standalone fund or an umbrella fund.  An umbrella fund is a single legal entity with several distinct sub-funds which, in effect, are treated as individual investment funds.  In other words, an umbrella VCC is a Collective Investment Scheme (“CIS”) with its investments assigned to the relevant sub-funds.  A share in an umbrella VCC will be referenced to the share of the sub-fund.  The value of the shares will be proportionate to the Net Asset Value (“NAV”) of the VCC or that of the relevant sub-fund. 

Generally, shares in a VCC have the same characteristics as shares in a company, with a couple of modifications and exceptions, such as: –

  • entitlement to assets and liabilities that are legally quarantined within each sub-fund;
  • rights to receive dividends out of capital, without the need for distributable profits;
  • the ability to exit by way of share redemption, etc.

For the full details, please download the full article.

An Introduction to the Singapore Asset Management Industry Tax Implications

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An Introduction to the Singapore Asset Management Industry Tax Implications

Singapore Asset Management Industry has grown by more than 5% to S$3.4 trillion in 20181 according to Monetary Authority of Singapore. One of its key success factors lies in the certainty of tax treatment and business friendly tax regime including having an attractive income tax rate of 17%.

A typical fund structure comprises of at least a Fund Management Company (“FMC”) and a fund as the investment pooling vehicle and investors. A fund is prima facie carrying on a business of trading in investments and in the absence of a tax incentive, the income arising from these investments will generally be chargeable to income tax.

Funds have a choice of investment vehicles including a Limited Partnership, a Trust, a Corporate entity and the new Variable Capital Company (“VACC”). There is currently a grant for funds wishing to set up as a VACC where the Monetary Authority of Singapore (“MAS”) will co-fund up to 70% of the eligible expenses incurred on incorporating or registering a VCC, paid to Singapore-based service providers. The grant is capped at S$150,000 for each application, with a maximum of three VCCs per FMC.

For the full details, please download the full article.

Budget 2018

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Budget 2018

Budget 2018 was about preparing for Singapore future where Minister Heng Swee Kiat highlighted on the following challenges: –

  1. global uncertainty from trade wars and potential change in global power;
  2. technology disruption; and
  3. the aging population.

This Budget was forward looking in terms of raising more revenue for the anticipated increase in spending to meet the future challenges and cater to the short term needs of businesses by providing tax breaks in line with making relevant investments and overseas expansionary plans for businesses.

For the full details, please download our budget commentary.

Budget 2016

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Budget 2016

Singapore budget 2016 offers a more targeted approach to tackle global headwinds. The tax changes are aimed at specific industries that are hardest hit by the global slowdown. We highlight some of the Budget 2016 changes as follows:-

  1. Enhancing the corporate tax rebate
  2. The Productivity and Innovation Credit (PIC) Scheme
  3. Introduction of the Automation Support Package
  4. Mergers and Acquisition (M&A) Scheme
  5. Extending section 13Z to grant certainty on tax treatment on disposal of equity
  6. investments held for at least 24 months
  7. Extending the double tax deduction (DTD) for Internationalisation of business
  8. Enhancing the Land Intensification Act (LIA)
  9. Writing down allowance for Intellectual Property Rights
  10. Introduction of an anti-avoidance provision for IPR transfer under Section 19B of the ITA
  11. Extending and enhancing the Finance Treasury Centre (“FTC”) tax incentive
  12. Asset management – Extending and refining the tax incentive for Approved Trustee Companies
  13. Insurance
  14. Global Trader Programme (Structured Commodity Finance)
  15. Maritime Sector
For the full details, please download our budget commentary.