| 2.26 In financial services, we
are steadily becoming a full-service global financial
centre. The Banker magazine has ranked Singapore
first as “financial centre of the future”.
I will take further measures to promote our wealth
management, capital market and treasury activities.
I will just highlight the key changes.
2.27 A critical mass of asset managers and advisors
is located here, with assets under management
fast approaching $1 trillion. To further support
growth in the asset and wealth management industries,
I will make the following changes:
- First, the Designated Unit Trust scheme will
be enhanced to allow other types of funds such
as Restricted Authorised Schemes to qualify for
the DUT status.
- Second, qualifying domestic trusts and their
underlying holding companies will be exempt from
tax on their locally-sourced investment income
as well as foreign-sourced income, to the extent
that it mirrors the tax exemption enjoyed by individuals.
Beneficiaries will also enjoy tax exemption on
trust distributions made from such income.
- Third, the scope of the Approved Trustee Company
scheme and the tax exemption scheme for foreign
trusts will be expanded to include a wider range
of settlors and beneficiaries of the trusts.
- Lastly, I will introduce a new tax incentive
scheme which exempts from tax resident funds with
foreign investors.
2.28 To encourage the development of our capital
market and treasury activities, I will make the
following tax changes:
- I will grant tax exemption on foreign-sourced
interest and trust distributions received by REITs
listed on SGX (known as S-REITS). For S-REITs
and their special purpose companies (SPCs) set
up to hold overseas non-residential properties,
I will also allow recovery of GST incurred on
the setting up of SPCs and the acquisition and
holding of overseas non-residential properties
by SPCs.
- I will expand the Qualifying Debt Securities
(“QDS”) scheme to cover discount debt
securities with tenure of more than one year.
- I will expand the scope of activities qualifying
for the Finance and Treasury Centre incentive
to include trading and arranging of derivative
products, subject to counter-party restrictions.
- I will introduce a 5% concessionary tax rate
on clearing income for qualifying clearing members
of a Singapore Over-The-Counter (OTC) derivatives
clearing facility for five years. This will reinforce
our position as a major oil-trading, ship-broking
and financial hub.
2.29 To further promote Islamic Financing activities,
I will harmonise the tax treatment of four Shariah-compliant
financial products with the conventional products
to ensure a level playing field with respect to
tax.
2.30 To support the growth of the captive insurance
industry, which contributes to Singapore's position
as an insurance hub, I will grant income tax exemption
for approved captive insurance companies, for
a period of 10 years.
2.31 A brief description of all the tax changes
for the financial sector can be found in Annex
A. MAS will release the details shortly.
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