The Monetary Authority of Singapore released details on revisions to the financial sector incentive (FSI) schemes—changes that aim to enhance the financial intermediation and deepen capabilities in key financial services and banking activities in Singapore.
Under the FSI schemes, income derived by the FSI award holders from qualifying activities has been subject to Singapore income tax at concessionary rates of 5%, 10% or 12% (depending on the awards granted). Under the latest revisions, the FSI schemes will be streamlined to remove currency, counterparty, and investment instrument restrictions. Also, the concessionary tax rate for certain FSI scheme holders (standard tier) will increase from 12% to 13.5%. The changes apply to new and renewal awards approved on or after 1 June 2017.
Existing various FSI award holders will continue on their current awards with the existing scope of qualifying activities and tax rate, until the expiration of their awards (subject to meeting the terms and conditions of the awards). Thereafter, they may apply for renewal under the new FSI schemes if they meet the eligibility conditions.
The latest revisions to the FSI schemes are part of the Singapore government’s ongoing periodic review of tax incentives to determine that they remain competitive and relevant. The FSI schemes are under constant review, with feedback from the relevant stakeholders taken into account with respect to enhancements to the various awards under the FSI schemes.
Read a June 2017 report [PDF 329 KB] prepared by the KPMG member firm in Singapore
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.