Page 13 - Budget-2018-Highlights-en-flip

TAX INCENTIVES
Extension and Enhancement of Financial
Sector Incentive Scheme
Current
The Financial Sector Incentive (“FSI”) scheme
accords concessionary tax rates of 5%, 10%, 12%
and 13.5% on income from qualifying banking and
financial activities, headquarters and corporate
services, fund management and investment
advisory services.
The FSI scheme is scheduled to lapse after 31
December 2018.
The trading in loans and their related collaterals,
excluding immovable property, is a qualifying
activity that is accorded a concessionary tax rate of
13.5%.
Proposed changes
To further strengthen Singapore’s position as a
leading financial centre, the FSI scheme will be
extended till 31 December 2023.
The scope of trading in loans and their related
collaterals is expanded to include collaterals that are approved on or after 20 February 2018.
prescribed infrastructure assets or projects6. The
change will apply to income derived on or after 1
January 2019 in respect of new and renewal awards
approved on or after 1 June 2017.
All other conditions of the scheme remain the same.
MAS will release further details of the change by
May 2018.
Effective date
The FSI scheme will continue till 31 December 2023.
Comments
 The extension of the FSI scheme is much
anticipated by the financial sector industry.
 Maintaining the FSI scheme also enhances
Singapore’s attraction as one of the world’s best
financial centres.
Enhancement to Section 13X Enhanced-
Tier Fund Scheme
Current
Tax exemption under the Enhanced-Tier Fund
scheme is available for companies, trusts and limited
partnerships, subject to qualifying conditions.
Proposed changes
To cater for more diverse fund structures, tax
exemption under the Enhanced-Tier Fund scheme
will be extended to all fund vehicles constituted in all
forms. Besides companies, trusts and limited
partnerships, all fund vehicles will be able to qualify
for the Enhanced-Tier Fund scheme if they meet all
qualifying conditions.
All other conditions of the scheme remain the same.
MAS will release further details of the change by
May 2018.
Effective date
The change will take effect for new awards
Comments
 The Government reviews all tax incentive
schemes periodically. Modifications and
enhancements are made to them as necessary
so as to ensure that they remain relevant and
competitive.
 The global fund industry is evolving constantly.
With the changes announced, hopefully more
global mandates from sophisticated
international investors will be given to our
Singapore-based fund managers.
BUDGET 2018 HIGHLIGHTS | 11