1. GST Remission for Funds

Quick Recap

The GST remission initiative was introduced during Budget 2009 where prescribed funds can, through a Statement of Claims ("SOC"), recover GST on expenses1 incurred without the funds having to register for GST. Qualifying funds will also enjoy the certainty of input tax recovery at a fixed rate2.

 

To qualify, a fund must fulfil certain conditions.

 

Find out more at: www.rsmchiolim.com.sg/edm/GST-Quick-Alerts_GST-Remission-for-Funds.html

 

Updates

Following the Budget 2014, the GST remission has been extended for another 5 years until 31 March 2019. The remission is also available to a Section 13CA Fund effective 1 April 2014.

 

2. Belonging Status of a Fund

Quick Recap

Up till 31 March 2014, funds incorporated outside Singapore were regarded as belonging outside Singapore.

 

Updates

Effective 1 April 2014, the Inland Revenue Authority of Singapore ("IRAS") has revised its views on the belonging status of a fund. Please refer to the table below.

 

Belonging status of funds3 considered to be: Up till 31 March 2014 Effective 1 April 2014
In Singapore If it was incorporated in Singapore
  • If it has an administration office (MAS/IRAS has not specifically clarified what constitutes this) with  employees in Singapore; or

  • It relies wholly4 on a Singapore fund manager (“SFM”) to carry on its business activities; or

  • Its board of directors conduct meetings at a fixed place in Singapore on a regular basis.
Outside Singapore If it was incorporated outside Singapore (e.g. Cayman, BVI, Netherlands)
  • If it has an administration office (MAS/IRAS has not specifically clarified what constitutes this) with  employees outside Singapore; or

  • It does not rely wholly4on a SFM to carry on its business activities; or

  • Its board of directors conduct meetings at a fixed place outside Singapore on a regular basis.

 

What should you do?

Funds

Qualifying funds which previously have not considered seeking GST remission should tap on the remission to reduce its operating costs through the recovery of GST incurred on its expenses1.

 

Fund Managers

Fund managers which provide services to funds incorporated outside Singapore should now re-assess the belonging status of the funds to determine if they are required to charge GST at 7% on their services provided to the funds.

 

Fund managers which have previously obtained IRAS' approval to be exempted from GST registration are required to reassess the need to register for GST (i.e. whether they are still making substantially zero-rated supplies in order to continue being exempted from GST).

 

Taking the Next Step

We specialise in advising funds on the GST remission on expenses incurred. We also assist fund managers in analysing their business arrangements and establishing the appropriate GST treatment of its services provided to funds. Additionally, we help to determine if they are liable for GST registration.

 

 

Contact our team of GST professionals:

 

Richard Ong, Director & Head
Accredited Tax Advisor (GST)
T +65 6594 7821
richardong@rsmchiolim.com.sg
  Huang Yanlin, Manager
Accredited Tax Advisor (GST)
T +65 6594 7306
huangyanlin@rsmchiolim.com.sg
     
Lee Meow Ling, Manager
T +65 6594 7305
leemeowling@rsmchiolim.com.sg
  Victor Poon, Assistant Manager
Accredited Tax Practitioner (GST)
T +65 6594 7304
victorpoon@rsmchiolim.com.sg

 


1 Includes management fees, trustee fees, fund administration fees, custodian fees, sub-custodian fees, depository fees, registrar fees, printing and distribution costs, audit fees, tax agent fees and legal fees.

 

2 Year 2009: 93%, Year 2010: 92% , Year 2011: 91%, Year 2012: 90% ,Year 2013: 87% and Year 2014: 90%.

 

3 Refers to all funds other than trust funds. A trust fund is treated as belonging in Singapore if its trustee belongs in Singapore.

 

4 A SFM is considered to be wholly carrying on the fund’s business activities if:
   - it has the overall responsibility to oversee or carry out activities of the fund; and
   - it is the only contracting fund manager of the fund.