Updates on Fund Tax Incentive Schemes – Section 13O and 13OA

Section 13O Scheme
(Exemption of income of approved companies arising from funds managed by a fund manager in Singapore)

[NEW Scheme] – Section 13OA Scheme for limited partnership (“LP”) funds

With effect from 1 January 2025, the new section 13OA of the ITA will extend the S13O scheme to funds constituted as LPs registered under the Limited Partnerships Act 2008 (the “S13OA scheme”). Specifically, a partner of such LP approved under the S13OA scheme (a “S13OA fund”) can avail of tax exemption on his share of SI in respect of DI derived by the approved S13OA fund, subject to meeting the relevant conditions.

This enhancement caters to smaller private equity (“PE”) and venture capital (“VC”) funds, which are commonly structured as LPs. It also strengthens the value proposition of setting up fund vehicles in the form of LPs. The conditions of the S13OA scheme are as follows:

  • The new and updated requirements and grace periods, including the 30/50 rule applicable to a S13O fund listed in the tables above will also apply to a S13OA fund.
  • The General Partner of the S13OA fund will be held responsible for meeting the incentive conditions. The incentive conditions will not be applied at each of the partners’ level; instead the conditions will be applied at the LP fund level (i.e. no look-through).


View the full article in PDF here.

 

CONTACT US

Contact our Tax Advisory Specialists for a Discussion

Edwin Leow
Co-Advisory Leader
Head of Tax
edwinleow@sg.cla-ts.com
Shaun Zheng
Director, Asset Management and
Private Wealth Services Tax Lead
shaunzheng@sg.cla-ts.com
Aaron Zhou
Manager,
Chinese Clients Tax Lead
aaronzhou@sg.cla-ts.com
Else Guo
Manager,
Private Wealth Tax Specialist
elseguo@sg.cla-ts.com

 

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