49.

A cardinal principle underlying the GST is that it is a tax on domestic consumption of goods and services. Under present tax rules, the provision of trustee services by a trustee to the trust is standard-rated if the trustee representing the trust is situated in Singapore. This treatment applies even where the settlors and beneficiaries of a trust are all or mostly foreign.

50.

In order to put Singapore trustees on a more competitive footing with offshore trustees, I have decided to zero-rate trustee services in cases where at least 80 per cent of the settlors and beneficiaries are non-resident, and at least 80 per cent of the assets of the trust were originally contributed by settlors who are non-resident. This measure will also facilitate the development of our private banking industry, where trusts are likely to play an increasingly substantial role.