Singapore Budget 2014 impact on the financial services sector revealed

Banks and fund managers quite relieved.

The Singapore budget for 2014 assists the financial services sector, particularly the banking and fund management industries, in several key ways, according to Ernst & Young partners.

Mr. Desmond Teo, Partner, Financial Services Tax, Ernst & Young Solutions LLP says: “The proposed tax rules governing the Basel III Additional Tier I debt instruments presents a huge relief for the Singapore-incorporated banks who were under a cloud of uncertainty.”

Ms. Amy Ang, Partner, Financial Services Tax, Ernst & Young Solutions LLP says: “The authorities have recognised the contributions made by the fund industry and to continue to consolidate Singapore's leading role in wealth management, the existing tax incentive schemes for funds managed by fund managers in Singapore will be refined and extended.”

Here are the rest of the comments from both Ernst & Young financial services tax partners:

Mr. Desmond Teo, Partner, Financial Services Tax, Ernst & Young Solutions LLP says: “The MAS continues to keep its ears close to the ground and level the playing field for Singapore trustees which seek to act for offshore trust funds.”

Mr. Desmond Teo, Partner, Financial Services Tax, Ernst & Young Solutions LLP says: “The changes to the basis of valuation for the computation of investor ownership levels for the fund tax incentive schemes are welcomed after much lobbying.”

Mr. Desmond Teo, Partner, Financial Services Tax, Ernst & Young Solutions LLP says: “The fund management industry remains a focus of the MAS and its support is welcomed.”

Mr. Desmond Teo, Partner, Financial Services Tax, Ernst & Young Solutions LLP says: “The changes to the DUT and offshore trust funds has rationalized the tax regime and are well thought through.”

Ms. Amy Ang, Partner, Financial Services Tax, Ernst & Young Solutions LLP says: “The proposed certainty to treat hybrid instruments issued for the purpose of meeting the Additional Tier-1 capital requirement under Basel III as debt is a welcomed move to the financial industry. This removes one key grey issue faced by the Singapore-incorporated banks when issuing such hybrid instruments. It remains to be seen if similar basis will be adopted by the Singapore Revenue on similar issue of hybrid instruments by other companies.”

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