§ 13OA — Exemption of income of partners of limited partnership arising from funds managed by fund manager in Singapore

13OA.—(1) Subject to such conditions as may be —(a)

prescribed by regulations;

(b)

specified in the letter of approval of the limited partnership; or

(c)

specified from time to time by the Minister or an authorised body and either notified to the limited partnership or published in a manner that the Minister or authorised body reasonably believes will bring the conditions to the notice of the limited partnership,

there is exempt from tax such income as the Minister may by regulations prescribe of a partner of a limited partnership registered under the Limited Partnerships Act 2008, and approved by the Minister or an authorised body (called in this section an approved limited partnership) arising from funds managed —

(d)

in Singapore by a fund manager; or

(e)

by a person approved by the Minister or authorised body.

(2) The approval of a limited partnership under subsection (1) is subject to such conditions as the Minister or an authorised body may impose.

(3) The Minister or an authorised body may at any time add, vary or delete a condition of an approval under subsection (2).

(4) Any addition, variation or deletion of a condition under subsection (3) must be given to the approved limited partnership or published in a manner that the Minister or authorised body reasonably believes will bring the addition, variation or deletion to the attention of the approved limited partnership.

(5) No approval may be granted under subsection (1) after 31 December 2029.

(6) Where —(a)

income of a partner (X) of an approved limited partnership (Y) has been exempt from tax under subsection (1) in any year of assessment; and

(b)

X, either alone or together with X’s associates, beneficially owns on the relevant day equity interests in Y the value of which is more than the prescribed percentage of the total value of all equity interests in Y on the relevant day,

then X is liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the formula

where —

(c)

A is the percentage which the value of the equity interests in Y beneficially owned on the relevant day by X bears to the total value of all equity interests in Y on the relevant day;

(d)

B is the amount of Y’s income as reflected in its certified statement of accounts for the basis period relating to that year of assessment; and

(e)

C is the tax rate specified in section 43(1)(a) applicable to that year of assessment.

(7) Subsection (6) does not apply to X if —(a)

the Comptroller permits X to take steps to reduce the beneficial ownership of X and X’s associates of equity interests in Y within such period as the Comptroller may specify, being a period of no more than 3 months from the relevant day; and

(b)

by the end of the specified period, the value of the equity interests beneficially owned by X and X’s associates is no more than the prescribed percentage of the total value of all equity interests in Y on the relevant day.

(8) Despite subsection (6), where —(a)

income of a partner (X) of an approved limited partnership (Y) has been exempt from tax under subsection (1) in any year of assessment;

(b)

X, either alone or together with X’s associates, beneficially owns on the relevant day any equity interests in Y; and

(c)

X is a non-bona fide entity,

then X is not liable to pay the penalty mentioned in subsection (6), but a person (X1) that —

(d)

beneficially owns on the relevant day equity interests in X; and

(e)

is not himself, herself or itself a non-bona fide entity,

is liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the formula specified in subsection (9), if (and only if) the total of —

(f)

the value of the equity interests in Y beneficially owned by X1 on the relevant day; and

(g)

the value of the equity interests in Y beneficially owned by the associates of X1 on the relevant day,

exceeds the prescribed percentage of the total value of all the equity interests in Y, on that day.

(9) The formula for the penalty in subsection (8) is as follows:

where —

(a)

A is the percentage which the value of the equity interests in Y beneficially owned on the relevant day by X1 bears to the total value of all equity interests in Y on the relevant day;

(b)

B is the amount of Y’s income as reflected in its certified statement of accounts for the basis period relating to that year of assessment; and

(c)

C is the tax rate applicable to that year of assessment as specified in section 43(1)(a).

(10) Subsection (7) applies, with the necessary modifications, to X1 as it applies to X as if the reference to subsection (6) were to subsection (8).

(11) For the purposes of subsections (8)(d), (f) and (g) and (9), if —(a)

an entity beneficially owns (including by virtue of one or more applications of this subsection) equity interests of an entity (called in this subsection a first level entity); and

(b)

the first level entity beneficially owns equity interests of another entity (called in this subsection a second level entity),

then the firstmentioned entity is taken to beneficially own equity interests of the second level entity; and the percentage which the value of those equity interests bears to the total value of all equity interests of the second level entity is computed in accordance with the formula

where —

(c)

A is the percentage which the value of equity interests of the first level entity beneficially owned by the firstmentioned entity bears to the total value of all equity interests of the first level entity; and

(d)

B is the percentage which the value of equity interests of the second level entity beneficially owned by the first level entity bears to the total value of all equity interests of the second level entity.

(12) The Minister or an authorised body may at any time, in the discretion of the Minister or authorised body and subject to such conditions as the Minister or authorised body may impose, remit or refund, wholly or in part, the penalty that is payable or paid by a person under subsection (6) or (8); and section 92(2B) to (2E) applies, with the necessary modifications, to any non-compliance with any such condition as it applies to the non-compliance with a condition imposed under section 92(2).

(13) Regulations made under this section may —(a)

provide for the determination of the amount of income of a partner of any approved limited partnership to be exempt from tax;

(b)

provide for the circumstances under which a person would be considered to be an associate for the purposes of this section;

(c)

exempt any person or class of persons from subsection (6) or (8);

(d)

provide for the revocation, or the suspension for a period specified by the Minister or an authorised body, of an approval granted under subsection (1) (including one that is granted before the date of commencement of the regulations) for non-compliance with a condition of the approval, and for any revocation to take effect from any date, including (if it is just and reasonable to do so) —(i)

a date before the date of the non-compliance with the condition; or

(ii)

if the condition is to be complied with over a period of time, before the date of commencement of that period; and

(e)

make provision generally for giving full effect to or for carrying out the purposes of this section.

(14) To avoid doubt, where —(a)

an exemption had been allowed under this section on the income of partner of a limited partnership;

(b)

the exemption would not have been allowed had the limited partnership not been approved under subsection (1) on the date the income accrued to or was derived or received by the partner; and

(c)

the approval is revoked under regulations made under subsection (13)(d) with effect from or before that date,

the Comptroller may make an assessment or additional assessment under section 74 on the partner.

(15) Where the approval of a limited partnership under subsection (1) is suspended pursuant to regulations made under subsection (13)(d), the limited partnership is treated as not an approved limited partnership during the period of suspension.

(16) In this section —“certified statement of accounts”, in relation to a limited partnership, means its profit and loss account and balance sheet that are certified as true and correct by its precedent partner;

“equity interest” —(a)

in relation to a company — means any issued security of that company;

(b)

in relation to a partnership or a limited partnership — means a share in the profits of the partnership; or

(c)

in relation to any other person — means such right or interest as may be prescribed;

“issued security”, in relation to a company, means —(a)

any issued debenture of, or issued stock or share in, the company;

(b)

any right, option or derivative in respect of any such debenture, stock or share; or

(c)

such other security of the company as may be prescribed;

“non-bona fide entity” has the meaning given by section 13O(8);

“relevant day” means —(a)

the last day of the basis period of the approved limited partnership for the year of assessment mentioned in subsection (6) or (8), as the case may be; or

(b)

if within that basis period the approved limited partnership ceases to be so approved, the last day it was so approved;

“value”, in relation to equity interests of X that is a company, means the net asset value of the equity interests in X as at the relevant day.[Act 35 of 2024 wef 01/01/2025]

—(1) Subject to such conditions as may be —(a)

prescribed by regulations;

(b)

specified in the letter of approval of the limited partnership; or

(c)

specified from time to time by the Minister or an authorised body and either notified to the limited partnership or published in a manner that the Minister or authorised body reasonably believes will bring the conditions to the notice of the limited partnership,

there is exempt from tax such income as the Minister may by regulations prescribe of a partner of a limited partnership registered under the Limited Partnerships Act 2008, and approved by the Minister or an authorised body (called in this section an approved limited partnership) arising from funds managed —

(d)

in Singapore by a fund manager; or

(e)

by a person approved by the Minister or authorised body.

(2) The approval of a limited partnership under subsection (1) is subject to such conditions as the Minister or an authorised body may impose.

(3) The Minister or an authorised body may at any time add, vary or delete a condition of an approval under subsection (2).

(4) Any addition, variation or deletion of a condition under subsection (3) must be given to the approved limited partnership or published in a manner that the Minister or authorised body reasonably believes will bring the addition, variation or deletion to the attention of the approved limited partnership.

(5) No approval may be granted under subsection (1) after 31 December 2029.

(6) Where —(a)

income of a partner (X) of an approved limited partnership (Y) has been exempt from tax under subsection (1) in any year of assessment; and

(b)

X, either alone or together with X’s associates, beneficially owns on the relevant day equity interests in Y the value of which is more than the prescribed percentage of the total value of all equity interests in Y on the relevant day,

then X is liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the formula

where —

(c)

A is the percentage which the value of the equity interests in Y beneficially owned on the relevant day by X bears to the total value of all equity interests in Y on the relevant day;

(d)

B is the amount of Y’s income as reflected in its certified statement of accounts for the basis period relating to that year of assessment; and

(e)

C is the tax rate specified in section 43(1)(a) applicable to that year of assessment.

(7) Subsection (6) does not apply to X if —(a)

the Comptroller permits X to take steps to reduce the beneficial ownership of X and X’s associates of equity interests in Y within such period as the Comptroller may specify, being a period of no more than 3 months from the relevant day; and

(b)

by the end of the specified period, the value of the equity interests beneficially owned by X and X’s associates is no more than the prescribed percentage of the total value of all equity interests in Y on the relevant day.

(8) Despite subsection (6), where —(a)

income of a partner (X) of an approved limited partnership (Y) has been exempt from tax under subsection (1) in any year of assessment;

(b)

X, either alone or together with X’s associates, beneficially owns on the relevant day any equity interests in Y; and

(c)

X is a non-bona fide entity,

then X is not liable to pay the penalty mentioned in subsection (6), but a person (X1) that —

(d)

beneficially owns on the relevant day equity interests in X; and

(e)

is not himself, herself or itself a non-bona fide entity,

is liable to pay to the Comptroller, in such manner and within such reasonable time as may be determined by the Comptroller, a penalty to be computed in accordance with the formula specified in subsection (9), if (and only if) the total of —

(f)

the value of the equity interests in Y beneficially owned by X1 on the relevant day; and

(g)

the value of the equity interests in Y beneficially owned by the associates of X1 on the relevant day,

exceeds the prescribed percentage of the total value of all the equity interests in Y, on that day.

(9) The formula for the penalty in subsection (8) is as follows:

where —

(a)

A is the percentage which the value of the equity interests in Y beneficially owned on the relevant day by X1 bears to the total value of all equity interests in Y on the relevant day;

(b)

B is the amount of Y’s income as reflected in its certified statement of accounts for the basis period relating to that year of assessment; and

(c)

C is the tax rate applicable to that year of assessment as specified in section 43(1)(a).

(10) Subsection (7) applies, with the necessary modifications, to X1 as it applies to X as if the reference to subsection (6) were to subsection (8).

(11) For the purposes of subsections (8)(d), (f) and (g) and (9), if —(a)

an entity beneficially owns (including by virtue of one or more applications of this subsection) equity interests of an entity (called in this subsection a first level entity); and

(b)

the first level entity beneficially owns equity interests of another entity (called in this subsection a second level entity),

then the firstmentioned entity is taken to beneficially own equity interests of the second level entity; and the percentage which the value of those equity interests bears to the total value of all equity interests of the second level entity is computed in accordance with the formula

where —

(c)

A is the percentage which the value of equity interests of the first level entity beneficially owned by the firstmentioned entity bears to the total value of all equity interests of the first level entity; and

(d)

B is the percentage which the value of equity interests of the second level entity beneficially owned by the first level entity bears to the total value of all equity interests of the second level entity.

(12) The Minister or an authorised body may at any time, in the discretion of the Minister or authorised body and subject to such conditions as the Minister or authorised body may impose, remit or refund, wholly or in part, the penalty that is payable or paid by a person under subsection (6) or (8); and section 92(2B) to (2E) applies, with the necessary modifications, to any non-compliance with any such condition as it applies to the non-compliance with a condition imposed under section 92(2).

(13) Regulations made under this section may —(a)

provide for the determination of the amount of income of a partner of any approved limited partnership to be exempt from tax;

(b)

provide for the circumstances under which a person would be considered to be an associate for the purposes of this section;

(c)

exempt any person or class of persons from subsection (6) or (8);

(d)

provide for the revocation, or the suspension for a period specified by the Minister or an authorised body, of an approval granted under subsection (1) (including one that is granted before the date of commencement of the regulations) for non-compliance with a condition of the approval, and for any revocation to take effect from any date, including (if it is just and reasonable to do so) —(i)

a date before the date of the non-compliance with the condition; or

(ii)

if the condition is to be complied with over a period of time, before the date of commencement of that period; and

(e)

make provision generally for giving full effect to or for carrying out the purposes of this section.

(14) To avoid doubt, where —(a)

an exemption had been allowed under this section on the income of partner of a limited partnership;

(b)

the exemption would not have been allowed had the limited partnership not been approved under subsection (1) on the date the income accrued to or was derived or received by the partner; and

(c)

the approval is revoked under regulations made under subsection (13)(d) with effect from or before that date,

the Comptroller may make an assessment or additional assessment under section 74 on the partner.

(15) Where the approval of a limited partnership under subsection (1) is suspended pursuant to regulations made under subsection (13)(d), the limited partnership is treated as not an approved limited partnership during the period of suspension.

(16) In this section —“certified statement of accounts”, in relation to a limited partnership, means its profit and loss account and balance sheet that are certified as true and correct by its precedent partner;

“equity interest” —(a)

in relation to a company — means any issued security of that company;

(b)

in relation to a partnership or a limited partnership — means a share in the profits of the partnership; or

(c)

in relation to any other person — means such right or interest as may be prescribed;

“issued security”, in relation to a company, means —(a)

any issued debenture of, or issued stock or share in, the company;

(b)

any right, option or derivative in respect of any such debenture, stock or share; or

(c)

such other security of the company as may be prescribed;

“non-bona fide entity” has the meaning given by section 13O(8);

“relevant day” means —(a)

the last day of the basis period of the approved limited partnership for the year of assessment mentioned in subsection (6) or (8), as the case may be; or

(b)

if within that basis period the approved limited partnership ceases to be so approved, the last day it was so approved;

“value”, in relation to equity interests of X that is a company, means the net asset value of the equity interests in X as at the relevant day.[Act 35 of 2024 wef 01/01/2025]