Income Tax (Concessionary Rate of Tax for Approved Fund Managers) Regulations

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Income Tax Act

(CHAPTER 134, Section 43A)

Income Tax (Concessionary Rate of Tax for Approved Fund Managers) Regulations

Rg 7

G.N. No. S 233/1988

REVISED EDITION 1990

(25th March 1992)

[2nd September 1988]

Citation

1. These Regulations may be cited as the Income Tax (Concessionary Rate of Tax for Approved Fund Managers) Regulations.

Concessionary rate of tax

2. Tax shall be payable by a fund manager approved under section 43A of the Act at the rate of 10% on its fees and commissions —

(a)	derived on or after 7th March 1986 from managing the funds of a foreign investor for the purpose of any designated investments; and
(b)	derived in or after the basis period for the year of assessment 1993 from the provision of investment advisory services to a foreign investor in relation to any designated investments. [S 494/1992 wef 04/12/1994]

Definitions

3. In these Regulations —

“designated investments” means —

(a)

stocks and shares denominated in any foreign currency of companies not incorporated and not resident in Singapore;

(b)

securities, other than stocks and shares, denominated in any foreign currency (including bonds, notes, certificates of deposit, treasury bills) issued by foreign governments, foreign banks outside Singapore and companies not incorporated and not resident in Singapore;

(c)

futures contracts denominated in any foreign currency held in any futures exchange;

(d)

any immovable property situated outside Singapore;

(e)

certificates of deposit, notes and bonds issued by Asian Currency Units in Singapore;

(f)

Asian dollar bonds approved under section 13(1)(v) of the Act;

(g)

deposits in Singapore with banks approved under section 13(6) of the Act;

(h)

foreign currency deposits with financial institutions outside Singapore;

(i)

stocks, shares, bonds and other securities listed on the Stock Exchange of Singapore or on the Kuala Lumpur Stock Exchange and other stocks, shares, bonds and securities issued by companies incorporated and resident in Singapore;

(j)

Singapore Government securities;

[S 494/1992 wef 04/12/1994]

[S 503/1993 wef 17/12/1993]

(k)

foreign exchange transactions in currencies other than Singapore dollars carried out in or after the basis period for the year of assessment 1992; and

[S 494/1992 wef 04/12/1994]

[S 503/1993 wef 17/12/1993]

(l)

transactions in currencies other than Singapore dollars carried out on or after 1st April 1993 in interest rate or currency contracts on a forward basis, interest rate or currency options and interest rate or currency swaps with —

(i)	an Asian Currency Unit of a financial institution;
(ii)	a person who is neither a resident of nor a permanent establishment in Singapore; or
(iii)	a branch office outside Singapore of a company resident in Singapore; [S 503/1993 wef 17/12/1993]

“foreign investor” —

(a)

in relation to an individual, means an individual who is not resident in Singapore and not a citizen of Singapore and who is the beneficial owner of the funds managed by the approved Fund Manager;

(b)

in relation to a company, means a company not resident in Singapore and in the case of —

(i)	a company with not more than 50 shareholders, the whole of its issued capital is beneficially owned, directly or indirectly, by shareholders who are not citizens of Singapore and not resident in Singapore; and
(ii)	a company with more than 50 shareholders, not less than 95% of its issued capital is beneficially owned, directly or indirectly, by persons who are not citizens of Singapore and not resident in Singapore; and

(c)

in relation to a trust fund, means a trust fund where at least 95% of the value of the fund is beneficially held, directly or indirectly, by foreign investors referred to in paragraph (a) or (b) and, unless waived by the Minister or such other person as he may appoint, where —

(i)	the fund is created outside Singapore; and
(ii)	the trustees of the fund are neither citizens of Singapore nor resident in Singapore. [S 494/1992 wef Y/A 1988 & subsq. Ys/A]

Application

4. These Regulations shall not apply where a foreign investor (other than an individual) —

(a)	has a permanent establishment in Singapore (other than an approved fund manager);
(b)	carries on a business in Singapore; [S 494/1992 wef Y/A 1988 & subsq. Ys/A]
(c)	beneficially owns more than 20% of the issued capital of any company incorporated in Singapore; or [S 494/1992 wef Y/A 1988 & subsq. Ys/A]
(d)	has 20% or more of its issued capital beneficially owned, directly or indirectly, by a company which falls within paragraph (a), (b) or (c),

unless approval is granted by the Minister or such person as he may appoint.

[S 494/1992 wef Y/A 1988 & subsq. Ys/A]

Fund manager to maintain records

5. The approved fund manager shall keep and maintain such records of the particulars of foreign investors as may be required by the Minister for the purposes of these Regulations.

Determination of income chargeable to tax

6. For the purposes of regulation 2, the Comptroller shall determine —

(a)	the income chargeable to tax of an approved fund manager having regard to such expenses, capital allowances and donations allowable under the Act as are, in his opinion, to be deducted in ascertaining such income; and
(b)	the manner and extent to which any losses arising from the activities specified in that regulation may be deducted under section 37(2) of the Act in ascertaining the chargeable income of the approved fund manager.

[G.N. Nos. S 233/1988; S 12/1989]

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