Global

Details

  • Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/16/2013

Singapore - Tax incentives for financial sector, debt market 

August 16: The Monetary Authority of Singapore published guidance concerning tax changes to certain financial sector regimes (or “schemes”)—the financial sector inventive, the qualifying debt securities (QDS), and QDS Plus schemes.

Financial sector incentive (FSI) scheme

Under the FSI scheme, income from activities of eligible taxpayers may be subject to income tax, at a rate of 5%, 10% or 12%.


The new guidance related to changes concerning several functions under the FSI scheme (including those relating to the stand tier, headquarters, fund management, bond markets, equities markets, credit facilities syndication, and derivatives markets).

Qualifying debt securities and QDS Plus

Under the QDS and QDS Plus schemes, qualifying income derived by investors from qualifying debt securities may be tax exempt or subject to a concessionary tax rate. Both of these schemes are extended five more years, to 31 December 2018.


The changes to QDS scheme concern a determination as to whether a debt security is “substantially arranged” by financial institutions in Singapore. The new rules will be effective in 2014.


The changes to QDS Plus scheme concern the qualification of debt securities with standard termination clauses under the scheme, effective 28 June 2013.


Also, effective 28 June 2013, the lead manager or arranger of debt securities under the QDS or QDS Plus schemes will have to submit only a return on the debt securities to the Monetary Authority of Singapore.


Read an August 2013 report [PDF 294 KB] prepared by the KPMG member firm in Singapore: Enhancements to the Financial Sector Incentive Scheme and tax incentives for promoting the
debt market




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