Key dates
- 2026-08-19
- MAS published the announcement of the proposed tax exemption, Hedge Fund Investment Programme and Investment Management Track.
- 2027-01-01
- The proposed tax exemption is expected to apply from Year of Assessment 2027; the precise income-period mechanics and legislative commencement remain to be confirmed.
Suggested considerations
- Firms should inventory existing carried-interest, performance-fee, incentive-allocation and other profit-participation arrangements and identify whether returns are received directly or indirectly for fund-management services.
- Tax and legal teams may wish to map each relevant fund against Sections 13D, 13O, 13OA, 13U and 13V of the Income Tax Act 1947 and retain evidence of Singapore-based management and applicable economic-substance conditions.
- Firms should avoid treating the announcement as an immediately available exemption and should monitor Budget 2027 and subsequent legislation or administrative guidance for the effective scope, rate, thresholds, attribution rules and documentation requirements.
- Compliance teams may wish to review fund, management-company, partnership and individual remuneration agreements so that the commercial basis for any profit-related return is clearly documented and distinguishable from ordinary salary or bonus remuneration.
- Asset managers considering Singapore expansion should assess whether participation in the Hedge Fund Investment Programme or the proposed Investment Management Track could support their business and talent strategy, while awaiting eligibility and application details.
- Immigration and HR teams may wish to identify senior investment professionals whose compensation is materially linked to investment performance and assess the potential implications once revised ONE Pass criteria are published.
- Firms should continue applying existing tax, licensing, employment, payroll, conduct, books-and-records and anti-avoidance requirements; this announcement does not displace those obligations.
What changed
MAS and the Ministry of Finance plan to introduce a tax exemption from Year of Assessment 2027 for qualifying profit-related returns arising from fund-management services. The exemption is intended to cover a contractual share of profits of funds qualifying under Sections 13D, 13O, 13OA, 13U or 13V of the Income Tax Act 1947, where the funds are managed by Singapore-based fund managers and the returns are received directly or indirectly by corporate entities, partnerships or individuals for providing fund-management services.
Compliance impact
The immediate compliance impact is limited because the announcement is a policy announcement rather than a final rule and does not impose a new obligation or provide complete eligibility criteria. The potential tax, structuring, remuneration and immigration impact is nevertheless material for Singapore-based managers and senior investment professionals, particularly because eligibility may depend on fund-tax status, Singapore economic substance and the contractual character of performance-linked returns.