Tax

How to apply for tax incentive schemes?


  • According to MAS (Pages),
    last updated on 14 May 2019

    The Financial Sector Incentive (FSI) Scheme applies to licensed financial institutions, from large universal banks, fund managers to capital market players.

    Interested Applicants will have to demonstrate plans to anchor and grow their operations in Singapore. Successful incentive applicants are subject to annual reviews which takes into consideration the following:

    • Headcount growth in key business functions.
    • Growth or expansion in business activities, for example through new product lines, new functions or expansion of geographical market coverage.
    • Economic contributions to other sectors.
    • Incentivised income is commensurate with economic activities performed in Singapore.

    According to IRAS,

    Claiming GST on Expenses for Qualifying Funds
    Funds (including Variable Capital Companies (“VCCs”)) may incur GST when the fund procures services (e.g. fund management service) from GST-registered businesses. A GST remission is granted until 31 Dec 2024 to allow funds that meet qualifying conditions to claim the GST incurred.

    To simplify the rules for claiming GST incurred, funds that meet all the qualifying conditions are allowed to claim GST incurred on expenses, with the exception of disallowed expenses under the regulations 26 and 27 of the GST (General) Regulations, at an annual fixed recovery rate.

    Qualifying conditions

    To qualify for the GST remission, the funds must:

    1. be managed by a prescribed fund manager in Singapore; and
    2. satisfy the conditions for specific income tax concessions as at the last day of their preceding financial year*.

    *The commencement date of the GST remission for the fund is the effective date of the GST remission or the date that the fund is granted approval for the specific income tax concession, whichever is later. The end date of the GST remission for the fund is the last day that the fund qualifies for the specific income tax concession.

    An administrative concession is granted to allow newly set-up funds to claim the GST incurred in the first year provided they meet the specific income tax concession at the end of the first year.