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Public Consultations

Public Consultation on Proposed Legislative Amendments for the Corporate Income Tax Treatment of Variable Capital Companies (VCCs)

06 Mar 2019


  1. The Ministry of Finance is seeking public feedback on the proposed amendments to the Income Tax Act ("ITA"), which will be amended via the Variable Capital Companies (Miscellaneous Amendments) Bill 2019. The consultation period is from 6 to 21 March 2019.

  2. We invite you to comment on the drafting of legislative amendments which will give effect to the proposed tax policy changes. Your views on the drafting will help us improve the clarity of the legislative amendments.


  1. The Variable Capital Companies Act 2018 (“VCC Act”) was passed by Parliament on 1 October 2018. The VCC Act provides for the incorporation and operation of a new corporate structure for investment funds, and is expected to come into operation in the second half of 2019. The VCC structure will complement and expand the existing suite of fund structures in Singapore. The introduction of VCCs strengthens Singapore’s position as a full-service international fund management centre, and provides opportunities to fund managers and fund servicing professionals such as fund administrators, lawyers, and accountants.

  2. As stated during the second reading of the Variable Capital Companies Bill in Parliament on 1 October 2018, the tax framework for VCCs is to be separately set out via legislative amendments to the relevant tax legislation.


  1. The proposed tax treatment, formulated in consultation with the industry, recognises the unique characteristics of VCCs, which combine the advantage of a single legal entity at the umbrella VCC fund level, with segregation of assets and liabilities at the sub-fund level. The legislative amendments are expected to come into effect in the second half of 2019.

  2. Salient aspects of the proposed legislative amendments for consultation are as follows:

    1. To ease compliance burden, an umbrella VCC only needs to file a single Corporate Income Tax return to the Inland Revenue Authority of Singapore, regardless of the number of its sub-funds.

    2. Tax incentives under sections 13R and 13X of the ITA will be extended to VCCs. In the case of an umbrella VCC, these tax incentives will be granted at the umbrella level.

    3. Deductions and allowances for umbrella VCCs will be applied at the sub-fund level for determination of the sub-fund's chargeable or exempt income.

    4. Where applicable, an umbrella VCC will enjoy start-up partial tax exemption which will be applied once at the umbrella level, regardless of the number of sub-funds the umbrella VCC may have. Subject to conditions, a VCC will enjoy the start-up tax exemption for its first three years of assessment ("YAs"). In the case of an umbrella VCC, the first three YAs are determined with reference to its date of incorporation and not the date of registration of its sub-funds.

  3. The summary table provides a brief description of the tax changes and explains the amendments to the ITA in detail.

  4. The public consultation pertaining to the VCC tax treatments which will be effected by proposed amendments to the Goods and Services Tax Act and the Stamp Duties Act was launched on 14 February 2019 and ended on 1 March 2019.


  1. We appreciate your understanding to ensure that the consultation is productive and focused. Respondents are requested to observe these guidelines:

    1. Kindly identify yourself and the organisation you represent (if any) so that we may follow up with you to clarify your comments if needed.

    2. Be clear and concise in your comments.

    3. Focus your comments on how the legislative amendments can be better written to make them clearer and to make compliance easier.

    4. Use the prescribed template provided to organise your feedback.

    5. As far as possible, please explain your points with illustrations, examples, data or alternative formulations of the amendments.

  2. These draft legislative amendments are released only for the purpose of consultation and should therefore not be used for individuals’ or business decisions as it does not represent the final legislation. All comments received during the consultation will be reviewed. If accepted, comments will be incorporated into the Variable Capital Companies (Miscellaneous Amendments) Bill 2019 for introduction in Parliament.


  1. The public consultation is from 6 to 21 March 2019. Any comment received after 21 March 2019 will not be considered.


  1. We encourage all interested parties to submit your comments, using the prescribed template, through:

    1. email to (preferred mode); or

    2. fax to 6337 4134; or

    3. post to:

      Ministry of Finance
      100 High Street, #10-01
      The Treasury
      Singapore 179434
      Attention: Tax Policy Directorate


  1. We will publish a summary of comments received on the Ministry of Finance’s website, together with our responses, by May 2019. The identities of respondents will not be disclosed in the summary.


  1. For reference, here is the link to download the relevant documents for this public consultation.