Industry Specific Tax Incentives in Singapore

Some of the key tax incentives include:

• Trading Income.Capital gains and income made by financial service companies trading investments for and on behalf of their non-resident clients are often tax exempt both in the hands of the financial services company and in the hands of the non-resident client. The effect of this incentive is to make Singapore an attractive location for foreigners to base their investments.
• Fee Income.Concessionary tax rates are levied on profits earned by financial services companies in respect of income earned billing clients for investment services rendered.
• Withholding tax exemption for Over-The-Counter (OTC) financial derivatives payments:合格的金融机构享有扣缴税收免税，就符合新加坡居民既不是新加坡居民也不是新加坡的常设机构的所有款项。预扣税豁免被设定为2021年3月到期。

Liberalization of the Withholding Tax Exemption Regime for Banks:With effect from April 1 2011, interest and other qualifying payments that are made to all non-resident persons in relation to their trade or business will be granted a withholding tax exemption. The withholding tax exemption will be applicable to payments liable to be made between 1 April 2011 and 31 March 2021, for contracts which take effect before 1 April 2011; and payments liable to be made on contracts which take effect on or after 1 April 2011 to 31 March 2021. According to Budget 2012, the withholding tax exemption (which was previously not extended to permanent establishments) will also apply to permanent establishments in Singapore. This change will take effect for payments to be made from 17 Feb 2012 to 31 Mar 2021 (for contracts already in force before 17 Feb 2012); and all payments arising from contracts effective on or after 17 Feb 2012 to 31 Mar 2021. This exemption is applicable to:

• All banks licensed under the Banking Act or approved under the MAS Act,
• Finance companies licensed under the Finance Companies Act, and
• Approved financial institutions licensed under the Securities and Futures Act that engage in lending as part of their regulated activity of dealing in securities in Singapore

Singapore has emerged as the most popular Asian location for fund management companies. The key factors spurring the growth include attractive tax benefits and the relatively short time taken to register a fund in the city-state.

离岸资金的免税

Singapore-ba离岸基金管理sed fund manager is exempt from Singapore tax on specified income from designated investments, provided the offshore fund is a qualifying fund. Specified income refers to profits, gains, dividends and interest from designated investments. Designated investments include traditional investments such as stocks, shares, securities, bonds, deposits, futures contracts etc.

A qualifying fund is one that:

• 不是100%的实益拥有新加坡投资呢ors including Singapore resident individuals, Singapore resident corporate entities and Singapore-based permanent establishments of non-residents,
• Does not have a Singapore presence, and
• Can only be in the form of companies, trusts or individual accounts.

合格的投资者还享有税收资金资金的收入免税。合格的投资者是：

• An individual investor
• A bona fide non-resident non-individual investor that:
  • does not have a Singapore presence or business activity (other than a fund manager), or
  • has a Permanent Establishment in Singapore but does not use funds from its operation in Singapore to invest in the qualifying fund.

• Certain specified Singapore government entities
• 新加坡居民企业投资者拥有不超过30％或50％（如果基金有10个或更多投资者）的资格赛基金。

船体基金的免税

2006年，新加坡政府介绍了新加坡驻地基金计划，下述上述海上基金的免税计划扩展到新加坡的资金，但须遵守以下条件：

• The fund vehicle must only be a company,
• The fund must be constituted in Singapore and have its administration performed in Singapore, and
• 该基金必须得到MAS的批准。

这个方案提高了基金管理的尘埃ry in Singapore as it offers an additional advantage of Singapore’s extensive treaty network that helps to reduce tax liability in treaty countries that the fund invests in.

增强层基金管理计划

With effect 1 April 2009 to 31 March 2014, an enhanced tier has been introduced to the existing fund management incentives for funds with a minimum size of S$50 million, at the point of application, amongst other conditions. Under the enhanced tier there will are no restrictions imposed on the residency status of the fund vehicles as well as that of investors. The enhanced tier also applies to funds that are constituted in the form of Limited Partnerships. Additionally, the 30% or 50% investment limit imposed on resident non-individual investors has been lifted for funds that come under this enhanced tier.

Concessionary Tax Rate for Fund Managers

根据“金融部门的基金经理奖励计划，新加坡的基金经理以10％的费用收入征税，符合某些条件和MAS批准。该计划适用于雇用至少三项基金管理或投资咨询专业人士的基金经理。专业人士的基本月收入必须超过3,500美元。

根据全球贸易商计划，批准的全球贸易公司授予优惠税率为5％-10％的5％-10％，这取决于公司的营业额和商业支出。全球交易员现状通常仅授予其各自产业的知名球员，以经过验证的国际贸易，采购和合格产品运输的经历记录。以下衍生工具根据GTP方案符合条件：

• Exchange-traded and over-the- counter (OTC) commodity derivatives in a commodity which is in the approved GTP company’s list of approved commodities; and
• Exchange-traded and OTC freight derivatives.

Derivative instruments such as interest-rate swaps and forex derivatives are not covered under the GTP. According to the 2011 Budget, the existing list of qualifying derivative instruments under the GTP will be expanded to include all derivative instruments. This enhancement will apply to income from qualifying trades in the new qualifying derivative instruments, derived by a GTP company from Year of Assessment 2012. A sunset clause will be introduced for the GTP scheme viz. 31 March 2021. Companies can be approved as a GTP company or GTP (Structured Commodity Finance) company on or before 31 March 2021. The GTP company can enjoy the benefits under the various enhancements during their award tenure of up to five years.

The Maritime and Port Authority of Singapore (MPA) has developed a number of incentive schemes to encourage shipping companies to grow and enhance their business further. The Maritime Sector Incentive (MSI) outlines incentives for companies engaged in international shipping operations, maritime (ship or container) leasing, shipping support services.

Maritime Sector Incentive (MSI) scheme

• Maritime Sector Incentive – Approved International Shipping Enterprise (MSI-AIS) Award：International shipping companies that have established worldwide networks, a strong track record, and are committed to expanding their shipping operations in Singapore are eligible for a tax exemption on qualifying shipping income for either a 10-year renewable period; or a 5-year non-renewable period, with the option of graduating to the 10-year renewable award at the end of the 5-year period.
• Maritime Sector Incentive – Maritime Leasing (MSI-ML) Award：Entities with a strong track record that exhibit a commitment to expand shipping and container financing operations in Singapore can choose to apply for the MSI-ML award on or before 31 May 2016. Under the MSI-ML award, Ship or container leasing companies, funds, business trusts or partnerships can enjoy tax concessions for up to 5 years on their qualifying leasing income. Furthermore, an approved manager of the asset-owning entity can enjoy a concessionary tax rate of 10% on its qualifying management income.
• Maritime Sector Incentive – Shipping-Related Support Services (MSI-SSS) Award：An approved MSI-SSS company can enjoy a concessionary tax rate of 10% on the incremental income derived from the provision of the following qualifying approved shipping-related support services for a period of 5 years:
  • Ship broking;
  • 转发货运协议（FFA）交易;
  • Ship management;
  • Ship agency;
  • Freight forwarding and logistics services; and
  • Corporate services rendered to qualifying approved related parties who are carrying on business of shipping – related activities

• Withholding tax exemptions：
  • Entities under the International Shipping Operations category of MSI will, subject to conditions, enjoy automatic withholding tax exemption on qualifying payments made in respect of qualifying foreign loans taken to finance the purchase or construction of both Singapore-flagged and foreign-flagged ships, without having to apply for such exemption on a case-by-case basis during the period from 1 June 2011 to 31 May 2016. The entities that qualify for this exemption include:
    • MSI运输企业（新加坡船舶登记处）（MSI-SRS）;
    • MSI-Approved International Shipping Enterprise (MSI-AIS) companies; and
    • MSI-MARITIME租赁（船舶）[MSI-ML（船舶）]实体。
    • Qualifying entities will, subject to conditions, enjoy automatic withholding tax exemption on qualifying payments made in respect of qualifying foreign loans taken to finance the purchase of qualifying containers and inter-modal equipment during the period from 17 Feb 2012 to 31 May 2016. The entities that qualify for this exemption include those that are awarded the following status under the MSI-Maritime Leasing (Container) award:
      • MSI-ACIE; and
      • MSI-ACIE (Local ASPV).

Other Incentives

• 在支持海事行业的业务方面的高度遵守：自2010年7月1日起，将扩大GST零评级，包括全部用于国际旅行的快乐和娱乐船。此外，无论船舶是否呼叫新加坡以外的港口，它都将适用于供应的所有商品（包括商店和商品）或安装在合格船上。无论船舶是否呼叫新加坡以外的港口，零评级也延伸到货物或乘客的运输或乘客。
• Established international shipping companies with worldwide networks and a good track record, once approved, are exempt from tax on income from the operation of their ships outside of Singapore for a period of 10 years.
• 由2012年2月17日,纳税人bareboat, voyage and time charter payments to non-residents for the use of ships will no longer have to withhold tax.
• 根据“街区转移计划（BTS），可以在新加坡以外的贷款人贷款上支付的贷款所支付的利息授予扣缴免税，以获得新加坡标记的船舶。这款扣缴税豁免是在2009年1月1日至2013年12月1日期间的任何日期注册的船舶（SRS）注册的船舶。
• Qualifying ship operators and ship lessors can avail of a tax exemption on gains derived from:
  • Disposal of vessels registered with the Singapore Registry of Ships (SRS) and vessels owned or operated under the MSI-AIS award;
  • The sale of vessels which would subsequently be leased back to shipping companies;
  • 在特殊目的公司（SPC）中销售100％股权，该公司拥有在MSI-AIS奖下的SRS或船舶中注册的船只;
  • 处理建设和新建筑合同的船只处置;和
  • Gains from the disposal of foreign vessels.

• Tax deduction for Inbound Tourism Promotion：Approved companies, subject to satisfying certain eligibility criteria, can deduct twice the amount of qualifying expenditure incurred in participating in overseas fairs or missions, from their taxable income.
• 参加当地贸易展览的税收扣除：Approved companies, subject to satisfying certain eligibility criteria, can deduct from their taxable income, twice the amount of qualifying expenditure incurred in participating in international trade-oriented exhibitions that are held in Singapore.

Event organizing Singapore companies that can bring mega events to Singapore are eligible for a 10% concessionary tax rate on the income derived from mega events.

To develop Singapore as an e-commerce hub, well-established e-commerce companies are eligible for a reduced tax rate of 10% for a period of five years on the income derived from e-commerce transactions with parties outside Singapore.

Income derived from approved investments of approved venture companies is eligible for a reduced tax rate of 0%-10% for a period as approved by authorities.

• Captive Insurance Tax Incentive Scheme：Under this scheme, insurers can enjoy tax exemption on qualifying income derived from the carrying on of offshore insurance business for a period of 10 years. This scheme is valid until 31 March 2018.
• 海防船体和责任保险税收激励计划：Under this scheme, insurers can enjoy tax exemption on qualifying income derived from the carrying on of marine hull and liability insurance business for up to 10 years. A sunset clause will be introduced for the scheme and will apply until 31 Mar 2016.
• Specialized Insurance Tax Incentive Scheme：Under this scheme, insurers can enjoy tax exemption on qualifying income derived from the carrying on of qualifying offshore specialized insurance business for a period of five years. The specialised insurance business lines under this scheme are Terrorism, Political, Energy, Agriculture Insurance and Aviation and Aerospace risks. The scheme is valid until August 2016.

The Singapore government has introduced two specific schemes in order to encourage companies to use Singapore as their regional or global headquarters base.

• Regional Headquarters Award：Under the (RHQ) Award, qualifying companies can enjoy a concessionary tax rate of 15% for five (3+2) years on incremental qualifying income from abroad, instead of the regular新加坡企业税速率为17％。换句话说，如果申请人公司在激励期间的第三年满足所有最低要求的情况下，它将在合格收入享受2年的额外工作税率15％。该方案适用于所有在新加坡拥有亚太总部的公司。
• International Headquarters Award：This tax incentive scheme is open to all entities that havesetup a company in Singaporein order to carry out their headquarter activities. More specifically, companies that commit to exceed the minimum requirements of the Regional Headquarters Award, can enjoy an even lower concessionary tax rate ranging from 5% to 15% on incremental income from qualifying activities.

Qualifying processing services companies are taxed at a concessionary rate of 5% on income derived from the provision of prescribed services to financial institutes. The tax break is given for a period of 5-10 years.

Approved law firms in Singapore will enjoy a 10% concessionary tax rate on incremental income from qualifying international legal services for 5 years. The incentive is valid from 1 April 2010 to 31 March 2015. This will include all legal services connected to land and goods outside Singapore, and intangible legal services provided to overseas clients. Furthermore, approved law firms can avail of a 50% tax exemption on incremental qualifying income derived from international arbitration cases heard in Singapore.

• Development and Expansion Incentive (DEI)：The DEI encourages Singapore-based companies to move into high value-addition business activities, expand their operations in the country, and procure advanced machinery and equipment by offering a reduced tax in the range of 5%-10% on incremental income derived from qualifying activities.
• Investment Allowance:Companies may claim capital allowance on plant and equipment used overseas in connection with their trade or business, subject to meeting certain conditions. Budget 2012 saw the introduction of a new Integrated Investment Allowance Scheme that will provide an additional allowance on fixed capital expenditure incurred for productive equipment placed overseas on approved projects with effect from YA 2013.
• Pioneer Incentive Scheme:Companies from the manufacturing or services sector that engage in activities that raise overall industry standards may be eligible for full corporate tax exemption on qualifying profits for up to 15 years.
• Productivity and Innovation Credit (PIC) Scheme:The PIC scheme is a tax benefit scheme that was first introduced in 2010 to encourage companies to engage in innovative and productive activities. Under the scheme, businesses can enjoy up-to 400% deduction or allowances on up to $400,000 of expenditure incurred in each of the following qualifying innovative activities. The qualifying activities include Research & Development; Intellectual Property registration; Intellectual Property acquisition; Design activities, Automation through technology or software; and training of employees. Note businesses will be allowed to combine the $400,000 expenditure cap per year for YA 2013 to YA 2015 into a new ceiling of $1,200,000 over the three years. Businesses with a low taxable income, can choose to convert up to S$300,000 of the tax deductions and allowances credited to them into a cash grant, up to a maximum of S$21,000 each year. Businesses can also exercise an option to convert upto S$100,000 of their expenditure into a non-taxable cash payout at a conversion rate of 30%. The cash payout rate will be increased from 30% to 60% for up to S$100,000 of qualifying expenditure from YA 2013 to YA 2015. Earlier the PIC benefits were applicable only to R&D activities performed in Singapore. However, effective YA 2011 PIC benefits will also extend to R&D done overseas.