Proposed Amendments to Singapore's Foreign Source Income Exemption Regime
On 6 June 2023, the Singapore Ministry of Finance (MoF) released the draft Income Tax (Amendment) Bill 2023 for public consultation, aiming to modify the foreign source income exemption (FSIE) regime in Singapore to align with international tax standards.
Key Amendments:
- Applicability: The proposed changes primarily affect entities within Multinational Groups, excluding financial institutions and entities eligible for specified tax incentives.
- Taxation of Gains: Gains from the sale of foreign assets received in Singapore by entities lacking economic substance will be subject to taxation.
- Criteria for Exemption: To qualify for FSIE, entities (except pure equity holding entities) must meet cumulative criteria:
- Conduct a trade, business, or profession in Singapore.
- Manage operations in Singapore (by employees or other personnel).
- Demonstrate reasonable economic substance in Singapore, considering factors like employee qualifications, business expenses, and key decision-making.
Implementation Timeline:
The amendments are proposed to apply to gains from the sale of foreign assets received in Singapore from 1 January 2024 onwards.
Amicorp's Advisory Services:
Amicorp offers comprehensive support to multinational businesses to navigate these regulatory changes:
- Impact Assessment: Evaluate implications of economic substance requirements on existing structures.
- Structural Optimization: Review and optimize tax/legal frameworks.
- Alternative Structures: Recommend efficient structures like Variable Capital Company (VCC) Funds.
- Corporate Support: Provide corporate secretarial services and ensure operational management in Singapore.
- Compliance Services: Assist with accounting, tax reporting, and regulatory compliance.
For more details on how Amicorp can assist your organization with the proposed FSIE regime changes in Singapore, please contact our team here.
Related News
UAE Corporate Tax - Know what you need to do
The UAE introduced a new corporate tax regime that will be effective for the financial years commencing on or after June 1, 2023. It forms part of the UAE’s commitment to meeting international best practices and ensures it maintains its status as a leading global hub for business and is aligned with international standards for tax transparency and preventing harmful tax practices.
Foreign-Sourced Income Exemption Regime introduced in Hong Kong
A new amendment bill approved by the Hong Kong government to introduce a new foreign-sourced income exemption (FSIE) regime has come into force. The FSIE Regime, which came into effect on 1 January 2023, puts in place an economic substance requirement and nexus requirement for certain specified foreign-sourced income of MNE entities.
Malta takes steps to attract further business investment
Malta has become an attractive destination for foreign investors looking to establish or relocate their businesses to the island. This has been buoyed by a variety of incentives, tax credits, and grants to support businesses that are operating in the country.