Tax for VCCs

How are taxes computed for an umbrella VCC?


The chargeable income or exempt income of an umbrella VCC is the sum of the chargeable income or exempt income of its sub-funds. The income of a sub-fund is determined as if it were a VCC.

In line with the requirement under the VCC Act for the segregation of assets and liabilities of sub-funds, any expense, capital expenditure, loss or donation of a sub-fund will not be available for deduction against the income of another sub-fund or any other income of the umbrella VCC. This effectively quarantines any such amount and prevents such amounts from being utilised against the income of another sub-fund or the umbrella VCC. The availability of such amounts for offset against future income is subject to a shareholding test.

There is no group relief system for umbrella VCCs.

Certain common tax rules are applied separately at the umbrella and sub-fund levels:

  • Unabsorbed capital allowances, losses and donations — sub-fund level
  • Shareholding test — sub-fund level
  • Partial tax exemption, start-up tax exemption and corporate tax rebate — VCC level
  • Exemption of gains or profits from disposal of ordinary shares — sub-fund level
  • Modification of provisions for VCCs redomiciled in Singapore — sub-fund level
  • Tax credits — sub-fund level


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