2015 - Budget 2015 - Key Takeaway for Maritime Sector
MSI-AIS, MSI-SRS, MSI- SSS – Scope of tax-exempted income and qualifying activity enhanced
Approved foreign branches of MSI-Approved International Shipping Enterprise (MSI-AIS) entities can now remit their qualifying profits and enjoy tax exemption.
Likewise MSI-AIS and MSI- Singapore Registered Ships (MSI SRS) award, under which qualifying incomes are exempt, have been expanded to cover mobilization fees, demobilization fees, holding fees and incidental container rental income derived in the course of qualifying shipping operations.
Existing MSI-Shipping-related Support Services (MSI-SSS) award recipients can now renew their award tenure for another five years, subject to qualifying conditions and higher economic commitments. The MSI-SSS awardees presently enjoy 10% concessionary tax rate on incremental qualifying income derived from carrying out approved shipping-related support services.
The definition of qualifying activities for the purpose of MSI-AIS, MSI-SRS and MSI-SSS will be updated in line with the current scenario in the sector.
MSI-Maritime Leasing (MSI-ML) award will now include income derived from finance leases treated as a sale. Presently ship-leasing companies enjoy tax exemption on qualifying incomes and container-leasing companies enjoy 10% or 5% concessionary tax rate on qualifying incomes. Both categories enjoy 10% concessionary tax rate on qualifying income derived from managing an approved investment enterprise in their specific segment.
Withholding Tax Exemption – Enhanced
Automatic withholding tax exemption has been expanded to cover finance leases, hire-purchase arrangements and loans used to finance equity injection or inter-company loans to wholly owned Special Purpose Vehicles (SPVs) for the purchase/ construction of vessels, containers and intermodal equipment. The withholding tax exemption will also be extended to qualifying payments made, or qualifying loans taken, on or before 31 May 2021.