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3.46 As we upgrade our manufacturing sector,
we must also spur our services sector to become
our second engine of growth. In financial services,
the development of world-class trustee and custodian
services in Singapore is integral to Singapore's
development as a wealth management centre. To
support this, I have decided to introduce the
following changes.
3.47 Firstly, I have decided to extend income
tax exemption to foreign trusts administered by
all trust companies in Singapore, and not just
those administered by Approved Trustee Companies
(ATCs) from YA 2004.
3.48 Secondly, by 1 June 2003, the existing lists
of designated investments and specified income
under the ATC scheme will be replaced with an
exclusion list.
3.49 Thirdly, to reduce compliance costs for
trust companies currently having to comply with
different sets of conditions for the purpose of
income tax exemption for foreign trusts and the
zero-rating of trustee services provided to foreign
trusts, I have decided to align the set of conditions
for both from 1 June 2003.
3.50 Lastly, the current GST relief provision
in respect of trustee services will be extended
to trust administration services provided by a
Singapore trust company to a foreign trust of
which it is not the trustee from 1 June 2003.
3.51 Apart from improving the tax environment
for trusts, the government is conducting a comprehensive
review of the Singapore Trustees Act. We must
bring our trust laws up to date so that they are
relevant to today's needs and supportive of financial
sector activity. This is critical in developing
the trust industry. The revised legislation will
be tabled in FY 2003.
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