9 July 2012

Income Tax (Exemption of Income of Approved Persons Arising from Funds Managed by Fund Manager in Singapore) (Amendment) Regulations 2012 was published on 28 June 2012.

With the exception of regulations 5(d) and 8(a), the Regulation is deemed to have come into operation on 7 July 2010. Regulation 5(d) is deemed to have come into operation on 1 April 2010 and Regulation 8(a), on 1 April 2009.

The Regulations amend:

• The title of the principal Regulations, “The Income Tax (Exemption of Income of Approved Persons Arising from Funds  Managed by Fund Manager in Singapore) Regulations 2010 (G.N. No. S 414/2010)” by deleting the words ‘‘OF APPROVED PERSONS”.
• Regulation 1 (Citation and commencement) of the principal Regulations, by deleting the words ‘‘of Approved Persons’’. 
• Regulation 2 (Definitions) of the principal Regulations, by inserting, immediately after the words ‘‘a private equity fund,’’ in the definition of ‘‘committed funds’’, the words ‘‘a real estate fund or an infrastructure fund,’’.
• Regulation 3 (Exemption from tax under section 13X of Act) of the principal Regulations:

(a) by inserting, immediately after the words ‘‘exempt from tax’’ in paragraph (1), the words ‘‘, pursuant to section 13X(1)(a) of the Act,’’

(b) by inserting, immediately after the words ‘‘a private equity fund,’’ in paragraph (2)(b)(ii), the words ‘‘a real estate fund or an infrastructure fund,’’

(c) by deleting the words ‘‘of the’’ immediately before the word ‘‘trustee’’ in paragraph (2)(c)

(d) by deleting the words ‘‘13R or 13W’’ in paragraph (2)(c)(i) and substituting the words ‘‘13R, 13W or 13Y’’, and

(e) by deleting the words ‘‘section 13X’’ in the regulation heading and substituting the words ‘‘section 13X(1)(a)’’.

• Regulations 4 (No deduction in respect of loss arising from designated investments and 5 (Determination of income exempted from tax) of the principal Regulations, where they are substituted with:

4. Notwithstanding anything in these Regulations, no deduction shall be allowed under the Act to an approved person, or a company, trustee or partner referred to in section 13X(1)(b) of the Act, as the case may be, in respect of any loss arising from —

(a) the sale, maturity, redemption or transfer of both legal and beneficial ownership (other than sale or by way of a securities lending and repurchase arrangement) of any designated investments  if any gains or profits realised from such sale, maturity, redemption or transfer would have been exempt from tax under regulation 3 or 3A, as the case may be; and

(b) any transactions other than those falling under paragraph (a) in respect of any designated investments if any gains or profits from such transactions would have been exempt from tax under regulation 3 or 3A, as the case may be.

5. In  determining the income of an approved person, or a company, trustee or partner referred to in section 13X(1)(b)  of the Act, that is to be exempt from tax under regulation 3 or 3A, the following shall apply:

(a)  there shall be deducted from that income any expenses and donations allowable under the Act which are attributable to that income;  and the following shall be disregarded:

(i)  any balance of the expenses;  or

(ii)  in the case of —

(A)  an approved person that is a partner of an approved limited partnership; or

(B)  a partner of a limited partnership referred to in section 13X(1)(b) of the Act,

any excess of his share of the expenses over his share of the specified income of the partnership;

(b)  there shall be deducted from that income any allowances under section 19, 19A, 20, 21 or 22 of the Act attributable to that income  notwithstanding that no claim for those allowances has been made;  and the following shall be disregarded:

(i)  any balance of the allowances;  or

(ii)  in the case of —

(A)  an approved person that is a partner of an approved limited partnership; or

(B)  a partner of a limited partnership referred to in section 13X(1)(b) of the Act,

any excess of his share of the allowances  over his share of the specified income of the partnership.’’. 

• Regulation 6 (Recovery of tax from partner of approved limited partnership) of the principal Regulations where:

– paragraph (1) (a) and (b) are substituted with the following sub-paragraphs:

(a)  where the partner or former partner is a company, an amount equal to the aggregate of the relevant amount for every year of assessment  relating to a basis period any time during which any such condition is not complied with; and

(b)  where the partner or former partner is an individual, an amount equal to the aggregate of the full amount of the partner or former partner’s share of the specified income of  the approved  limited partnership that is exempt from tax under regulation 3 for every year of assessment relating to a basis period  any time during which any such condition is not complied with.’’; and

– the following paragraph is inserted:

‘‘(4)  This regulation shall apply in relation to a limited partnership that is the approved master fund or approved feeder fund of an approved master-feeder fund structure, as it applies in relation to an approved limited partnership.’’. 

• Regulation 7 (Annual declaration) where:

(a)  the words ‘‘in question’’ in paragraph (2) are deleted; and

(b)  by inserting, immediately after paragraph (2), the following paragraphs:

‘‘(3)  A company or the trustee of a trust fund, where the company or trust fund is the approved master fund of an approved  master-feeder fund structure, shall, within 4 months  after the end of the basis period of the company or the trustee of the trust fund (in relation to his income as such trustee) or within such time as the Comptroller or the Monetary Authority of Singapore  may specify, submit a declaration to the Comptroller and the Monetary Authority of Singapore, in such form as the Comptroller or the Monetary Authority of Singapore may specify, that the following conditions have been met for the basis period:

(a)  the conditions subject to which the master-feeder fund structure had been approved for the purposes of section 13X of the Act; and

(b)  the conditions specified in regulation 3A(2)(a), (c), (d) and (e).

(4)  The general partner or, if he is not personally present in Singapore, the attorney, agent, manager or factor of a limited partnership that is the approved master fund of an approved master-feeder fund  structure, shall, within 4 months after the end of the last day of the period to which the account of the limited partnership is made up, or within such time as the Comptroller or the Monetary Authority of Singapore may specify, submit a declaration to the Comptroller and the Monetary Authority of Singapore, in such form as the Comptroller or the Monetary Authority of Singapore may specify, that the following conditions have been met for the basis period:

(a)  the conditions subject to which the master-feeder fund structure had been approved for the purposes of section 13X of the Act; and

(b)  the conditions specified in regulation 3A(2)(a), (c), (d) and (e).’’.

A new regulation 3A, ‘‘Exemption from tax under section 13X(1)(b) of Act” has also been inserted in the principal Regulations.

Source: e-Gazette